Earl v. Boeing Co.

Earl v. Boeing Co.

Opinion

Andrew S. Oldham, Circuit Judge:

The plaintiffs in this class-action lawsuit allege that Boeing and Southwest Airlines defrauded them by, among other things, concealing a serious safety defect in the Boeing 737 MAX 8 aircraft. The district court certified four classes encompassing those who purchased or reimbursed approximately 200 million airline tickets for flights that were flown or could have been flown on a MAX 8. But plaintiffs have not plausibly alleged that any class member suffered [*4]  either physical or economic injury from Boeing's and Southwest's alleged fraud. Plaintiffs therefore lack Article III standing. We reverse and remand with instructions to dismiss for want of jurisdiction.

This is an interlocutory appeal of a district court order granting plaintiffs' motion for class certification. Plaintiffs seek to recover under RICO for alleged fraud by Boeing and Southwest Airlines in connection with the certification and marketing of the Boeing 737 MAX 8 aircraft.

We provide only a brief summary of the alleged fraud because the particulars are largely irrelevant to the dispositive legal issues in this appeal. According to plaintiffs, defendants have a unique and "symbiotic" business relationship. As part of that relationship, Southwest only flies variants of the Boeing 737 aircraft. When Boeing announced the new MAX 8 variant in 2011, Southwest was the launch customer.

Plaintiffs allege that behind the scenes, Southwest aggressively pressured Boeing to deliver the MAX 8 without requiring pilots to undergo significant additional training. Southwest wanted Boeing to convince the Federal Aviation Administration ("FAA") that the MAX 8 and a previous 737 variant—the 737 NG—were [*5]  so similar that pilots did not need to complete new flight-simulator training for the MAX 8. Instead, a short course on an iPad or computer would be sufficient. This abbreviated training program is called "Level B pilot training."

The defendants' effort to ensure Level B pilot training encountered various difficulties. Most relevant here, Boeing's decision to place more powerful engines closer to the fuselage and farther forward on the aircraft (to enhance fuel efficiency) meant that the MAX 8 handled differently from the 737 NG. So Boeing added the "Maneuvering Characteristics Augmentation System" ("MCAS") to the MAX 8. MCAS automatically adjusted the trim of the aircraft to make the MAX 8 mimic the handling and flight behavior of the 737 NG.

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