By David Shepardson
(Reuters) -U.S. District Judge Reed O'Connor should reject a "sweetheart" plea deal the Justice Department struck with Boeing (NYSE:BA), relatives of 15 of the 346 people killed in two fatal 737 MAX crashes said on Thursday.
Late Wednesday, the planemaker finalized an agreement to plead guilty to a criminal fraud conspiracy charge and pay at least $243.6 million after breaching a 2021 deferred prosecution agreement.
Family members said in a court filing in Texas that they will submit a comprehensive objection to the plea deal by next week, arguing that there are a number of issues, including its "outdated and misleading statement of facts," use of "inaccurate sentencing guidelines" and "ambiguous restitution commitment" by Boeing.
The families cited O'Connor's statement in a February 2023 ruling: "Boeing's crime may properly be considered the deadliest corporate crime in U.S. history."
Spokespeople for Boeing and the Justice Department declined to comment on the families' filing.
The DOJ told Boeing earlier this month it could accept a settlement that branded the planemaker a felon or fight the charge in court. The Justice Department said in May that Boeing had breached its obligations in the agreement that shielded the planemaker from criminal prosecution stemming from misrepresentations about a key software feature tied to fatal 737 MAX crashes in 2018 and 2019 in Indonesia and Ethiopia.
The planemaker allowed potentially risky work at its factories and did not ensure key airplane record-keeping was accurate or complete, the Justice Department said as it outlined why it believed Boeing had violated the 2021 deferred prosecution agreement.
Boeing on July 7 agreed in principle to plead guilty to conspiring to defraud the Federal Aviation Administration after the government said the planemaker knowingly made false representations about key software for the 737 MAX.
The Justice Department has a separate criminal probe ongoing into the Alaska Airlines jet that was missing four key bolts.
The plea agreement raises serious concerns for the victims' families, lawyers said in Thursday's filing, questioning the "unexplained calculation" of the fine and the lack of acknowledgement by the company that its crime killed 346 people.
As part of the guilty plea deal, Boeing agreed to pay the maximum fine of $487.2 million and the DOJ recommended the court credit its previous 2021 payment of $243.6 million against that, which was required by 2021 deal.
The deal agreed this month also imposes an independent monitor, who will have to publicly file annual progress reports, to oversee the firm's compliance.
The families argued that O'Connor rather than the Justice Department should select the independent monitor. DOJ broke with precedent in the deal in specifying the department, rather than Boeing, would select the firm.