737 MAX crash victims' relatives ask court to rescind Boeing prosecution immunity

A Boeing 737 MAX airplane lands after a test flight at Boeing Field in Seattle, Washington, U.S. June 29, 2020. REUTERS/Karen Ducey

WASHINGTON, Dec 16 (Reuters) - Families of victims of the two 737 MAX crashes on Thursday said the U.S. Justice Department violated their rights when it struck a deferred prosecution agreement with Boeing in January.

Relatives filed a motion arguing the United States Government "lied and violated their rights through a secret process." They have asked a U.S. judge to declare that the order violated victims’ families rights to rescind Boeing's immunity from criminal prosecution that was part of a $2.5 billion agreement.

The Justice Department did not immediately comment. Boeing declined to comment.

The settlement allowed Boeing to avoid prosecution, includes a fine of $243.6 million, compensation to airlines of $1.77 billion and a $500 million crash-victim fund over fraud conspiracy charges related to the plane's flawed design.

The deferred prosecution agreement is a form of corporate plea bargain.

The Justice Department "chose to deliberately conceal its investigation and covertly negotiate with Boeing about resolving the case," the family members said.

They asked a U.S. judge to order that Boeing be publicly arraigned on the felony charges.

The Justice Department deal capped a 21-month investigation into the design and development of the 737 MAX following the two crashes, in Indonesia and Ethiopia in 2018 and 2019, respectively.

The crashes "exposed fraudulent and deceptive conduct by employees of one of the world's leading commercial airplane manufacturers," the Justice Department said in January.

In October, a former Boeing chief technical pilot for Boeing was charged with fraud for deceiving federal regulators evaluating the company's 737 MAX jet. He has denied wrongdoing.

The crashes, which have cost Boeing some $20 billion, prompted the U.S. Congress to pass legislation in December reforming how the FAA certifies new airplanes.

U.S. House Transportation Committee chairman Peter DeFazio said earlier the "settlement amounts to a slap on the wrist and is an insult to the 346 victims who died as a result of corporate greed."

Analysts noted the $1.77-billion airline compensation was already covered by accounting provisions and some had already been paid, meaning the remaining burden was relatively small.

The 737 MAX was grounded in March 2019, and the grounding was not lifted until November 2020, after Boeing made significant safety upgrades and improvements in pilot training.

The $243 million fine, which the Justice Department said was at the "low end" of the sentencing guidelines, represents the amount Boeing saved by not implementing full-flight simulator training.

Reporting by David Shepardson Editing by Bernadette Baum

Our Standards: The Thomson Reuters Trust Principles.