Rhode Island’s general treasurer filed a class action lawsuit against The Boeing Company on Tuesday, alleging it betrayed the trust of the state’s pensioners. 

What You Need To Know

  • Rhode Island General Treasurer James A. Diossa filed a class against lawsuit against The Boeing Company on Tuesday

  • Filed in a U.S. District Court in Virginia, the suit alleges the company betrayed the trust of the state's pensioners by making false and misleading statements about its planes' safety

  • The suit alleges Boeing's safety issues caused the value of its stock to plummet

  • The lawsuit comes less than a month after a Boeing 737 Max 9 plane experienced a midflight blowout of a door plug

The suit names President and CEO David Calhoun, former President and CEO Dennis Muilenburg and Chief Financial Officer Brian West as co-defendants.

“The disregard for safety displayed in these series of events involving Boeing aircrafts are deeply concerning,” General Treasurer James A. Diossa said in a statement. “We believe that this case has the potential to effect changes in Boeing’s practices to protect passengers and ensure their safety in the future.”

Filed in a U.S. District Court in Virginia, the civil case comes less than a month after a door plug blew out on a Boeing 737 Max 9 midflight and a string of other mishaps raised concerns about the company’s planes. The suit alleges Boeing issued false and misleading statements to the market about its safety lapses.

The suit alleges Boeing assured investors it was focused on safety after Max plane crashes in 2018 and 2019 killed 346 people.

Since the Jan. 5 incident, United Airlines and Alaska Airlines reported finding loose bolts on some Max 9 planes. Last Wednesday, a Delta Air Lines Boeing 757 lost a nose wheel before takeoff.

The Rhode Island lawsuit said the problems had caused Boeing’s stock price to plummet 19.5% from $249 per share prior to the Alaska Airlines incident to $200.52 on Jan. 16.

The Federal Aviation Administration grounded all 737 Max 9 planes for nearly a month and is currently investigating the airplane maker’s manufacturing and production lines to determine if the company failed to ensure completed products conformed to its approved design and were safe to fly.

Following the Jan. 5 incident involving an Alaska Airlines flight in Oregon, Boeing has also increased inspections throughout its build process at its factory in Washington state as well as Spirit AeroSystems in Kansas, which reportedly makes 70% of the Max 9 fuselage.

Last Thursday, the company suspended production at its Washington state 737 factory for production, delivery and support workers to participate in quality improvement sessions. Similar "quality stand-downs" are scheduled for additional Boeing factories and assembly sites for all of the company’s airplanes to provide hands-on training and collaborate on what needs to be done to improve quality.