737 MAX crash victim families press U.S. on Boeing settlement

By David Shepardson

WASHINGTON (Reuters) - Relatives of passengers killed in two Boeing 737 MAX crashes pressed U.S. Justice Department lawyers on Friday to unwind a 2021 deal that allowed the U.S. planemaker to escape criminal prosecution.

U.S. District Judge Reed O'Connor in Texas ruled last month that people killed in two Boeing 737 MAX crashes are legally considered "crime victims" and said he would decide what remedy should be imposed.

The crashes in 2018 and 2019 in Indonesia and Ethiopia, which cost Boeing more than $20 billion, led to a 20-month grounding for the best-selling plane and prompted Congress to pass legislation reforming airplane certification.

Families and their lawyers met for about five hours with government lawyers on Friday with some participating virtually from around the world.

The families argued the U.S. government "lied and violated their rights through a secret process," and asked O'Connor to rescind Boeing's immunity from criminal prosecution, which was part of the 2021 $2.5 billion Boeing settlement over fraud conspiracy charges related to the plane's flawed design, and to arraign Boeing on the felony charges.

Nadia Milleron, mother of a 24-year-old killed in the second Boeing MAX crash, said she was disappointed in the meeting and said the Justice Department was "supporting a deal with Boeing that was made secretly, illegally, omits input from victims and lets Boeing off the hook."

Both Boeing and the Justice Department oppose reopening the deferred prosecution agreement that included $500 million in victim compensation, a $243.6 million fine and $1.7 billion in compensation to airlines.

The Justice Department said in a court filing it does not oppose an arraignment for Boeing but opposes undoing the agreement, saying it "would impose serious hardships on the parties and the many victims who have received compensation."

The department said without the agreement it would lose its leverage to make Boeing follow through with public safety reforms.

Boeing said in a court filing it opposes any effort to reopen the agreement, calling it "unprecedented, unworkable, and inequitable.... An investigated party has the right to finality and to the benefits of a resolution it negotiated with the government."

Boeing noted it has been complying with the agreement for nearly two years.

The Justice Department said on Friday after the meeting it takes its obligations to victims seriously.

(Reporting by David Shepardson; Editing by Josie Kao)