Boeing Pushes to Move Crash Suits From Hometown to Indonesia

(Bloomberg) -- Follow Bloomberg on LINE messenger for all the business news and analysis you need.

Faced with lawsuits over a plane crash half a world away, Boeing Co. is arguing it shouldn't have to defend itself in a courtroom a short walk from its corporate headquarters.

The world's largest planemaker has indicated in court filings that it's likely to request that cases on behalf of victims in the October crash of a 737 Max plane be moved from the federal courthouse in Chicago to Indonesia, where the plane went down and where most of the victims lived.

On Tuesday, a federal judge told the company it must make the request within 45 days, according to plaintiffs' lawyers. They say Boeing -- if it can shift the U.S. cases 10,000 miles away -- would skirt responsibility and lessen its financial liability.

“They don't want them to have justice,” said Steven Hart, a Chicago lawyer representing some of the plaintiffs from the Lion Air crash into the Java Sea on Oct. 29, killing all 189 people aboard.

Read more: Boeing's Lawsuit Risks Soar Around Second 737 Max Disaster

Boeing said there's precedent for such cases to be heard in the country where the incident took place.

“The disputes relating to the Lion Air Flight JT 610 accident should be heard and resolved by the courts of the nation with the greatest interest in the matter,” the company said when it disclosed its plan in a legal filing late last year. “That means the Indonesian courts, just as other cases arising out of Indonesian aviation accidents have been resolved by the Indonesian courts.”

One of the lawyers representing Boeing, Bates McIntyre Larson, said she could not comment on pending litigation.

Timothy Ravich, a professor of aviation law at the University of Central Florida who has represented defendants in aviation cases, said such change-of-venue requests aren't always granted. Boeing will argue that it should be heard in Indonesia because the plane crashed there and was flown by Indonesian pilots.

“They would say that's where the airline was, witnesses are there” and there may be questions about how well the pilots were trained in Indonesia, Ravich said, adding that company lawyers may also argue that it's more fair to the Indonesian victims to have their home courts preside over the cases.

No jury trials

Brian Kabateck, who is representing some of the Lion Air plaintiffs, said in an interview that it makes no sense to move the litigation to Indonesia because the 737 Max was designed, manufactured and sold in the U.S. The Indonesian judicial system doesn't offer the same protections as the U.S. system, he said, including no jury trials or punitive-damage awards.

“This is not like other airline crashes,” Kabateck said. “I've never had a case in which everything related to the aircraft happened here. So why shouldn't Boeing be held accountable where they designed and sold the plane?”

“Our justice system is based on the free flow of information -- depositions, pre-trial discovery and due process on both sides,” he added. “All these issues either don't exist in Indonesia or are murky.”

Hikmahanto Juwana, a law professor at the University of Indonesia, said it would be better for the plaintiffs to have the case heard in the U.S. If Boeing fails to fulfill any obligations dictated by a court verdict, it would be easier to enforce the ruling in the U.S. where most of the company's assets are located, Juwana said.

Lawyers for the Lion Air families said in an April 24 filing that Boeing should be forced as soon as possible to seek a formal request to move the cases so the litigation can proceed. Boeing lawyers made their intentions known about moving the cases in a filing that seeks to place the Chicago litigation on hold.

Victims' lawyers said they have a strong argument to keep the cases in the U.S. because there's an indication the U.S. Federal Aviation Administration contributed to the accidents by, in effect, giving Boeing the authority to certify its own product.

The issue is particularly important given the second crash on March 10 that killed 157 people in Ethiopia. New evidence is emerging about the aircraft's flight worthiness, including information from whistle-blowers that problems were identified before the crashes, Kabateck said, and that Boeing failed to correct them.

In the company's first-quarter earnings call last week, CEO Dennis Muilenburg didn't admit Boeing made any mistakes but in effect acknowledged it hadn't done enough. Referring to efforts to address the problems raised by the two crashes, he said: “We own it.”

--With assistance from Harry Suhartono and Thomas Kutty Abraham.

To contact the reporter on this story: Janan Hanna in Chicago at jhanna31@bloomberg.net

To contact the editors responsible for this story: Flynn McRoberts at fmcroberts1@bloomberg.net, Peter Blumberg

©2019 Bloomberg L.P.