Boeing faces a legal catch-22 in upcoming Max fraud arraignment

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Boeing is staring down a legal conundrum: how to plead — guilty or not guilty — to a retroactive arraignment later this week on a federal fraud charge related to the company’s development of the 737 Max, its flight control system and the twin crashes of the model in 2018 and 2019.

The latest chapter in the legal saga stemming from the crashes in Indonesia and Ethiopia centers on the January 7, 2021 agreement with the U.S. Department of Justice — crammed into the final days of the Trump Administration. Boeing escaped criminal prosecution and agreed to pay a fine along with agreeing to make significant changes to its internal operations and governance.

Related: New document in 737 Max investigation points to chaos, pressure in MCAS development

While the DOJ exonerated Boeing for systemic wrongdoing, the centerpiece of the Deferred Prosecution Agreement (full text) was the company’s unambiguous acceptance of responsibility 3Per DPA: “The Company admits, accepts, and acknowledges that it is responsible under United States law for the acts of its officers, directors, employees, and agents as charged in the Information, and as set forth in the Statement of Facts, and that the allegations described in the Information and the facts described in the Statement of Facts are true and accurate.” for the DOJ’s alleged fraud. This related to Boeing technical pilots’ statements and actions to the Federal Aviation Administration’s Airplane Evaluation Group during the initial certification of the 737 Max and the Maneuvering Characteristics Augmentation System (MCAS) at the center of both crashes.

A federal judge in October ruled that the families of the Max crash victims were not included in the DPA process and as a consequence were denied their rights as victims of crime. The judge ordered that Boeing be retroactively arraigned on the charge. That will require the company to appear in court in Fort Worth, Texas for the procedural hearing on January 26.

Related: Boeing’s MCAS on the 737 Max may not have been needed at all

Now the plane maker must be formally arraigned on fraud charges laid out by the Department of Justice and its DPA. As part of that arraignment, Boeing must enter a plea of either guilty or not-guilty. It is likely that the company will attempt to walk a fine legal line, maintaining its previous acknowledgement of accountability with the DOJ without admitting guilt in a court of law. Whether it will be able to sustain this argument without drawing additional legal scrutiny from the DOJ, the presiding judge or the victims’ families is another question.

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