Boeing asks Delaware court to throw out investors’ 737 MAX lawsuit By Reuters

By Eric M. Johnson

SEATTLE (Reuters) – Boeing (NYSE:) Co asked a Delaware court to throw out a shareholders’ lawsuit over the safety of its 737 MAX, saying the board engaged in “robust and well-established” oversight of the design and certification of the plane.

In an amended complaint unsealed in February, New York State Comptroller Thomas DiNapoli, who heads the state pension fund, and other investors argued that Boeing’s board breached its fiduciary duties and acted with gross negligence by failing “to monitor the safety of Boeing’s 737 MAX airplanes.”

The lawsuit, filed in Delaware Chancery Court, also alleges that the board did not develop any tools to evaluate and monitor airplane safety until after both 737 MAX crashes and the fleet was grounded.

In its motion to dismiss the complaint, made public on Monday, Boeing said the plaintiffs ignore “the robust systems that had long been in place” to keep the board informed about significant risk issues.

“Boeing’s Directors maintained this high scrutiny, moreover, during a period in which commercial aircraft, and Boeing’s in particular, achieved ever higher levels of safety,” Boeing said, “a trend that cannot be squared with Plaintiffs’ simplistic narrative about a ‘safety-engineering culture’ that had been ‘intentionally dismantled.'”

Boeing had management briefings at the board and an internal corporate audit group to evaluate risks, as well as a mechanism to receive reports on employee ethics and compliance complaints, Boeing said.

A Boeing representative did not immediately respond to a request for comment.

A lawyer representing the plaintiffs declined to comment.