Boeing crash fight to set price on victims’ minutes of terror

Bloomberg

The amount of money Boeing Co and its insurers will pay to the families of those who perished aboard two doomed jets will be dictated in part by one particularly grim calculation: How long did the victims know they were plunging to their deaths.
That measure is just one part of an expanding legal fight to determine financial liability after Boeing 737 Max crashes in Ethiopia and Indonesia that killed 346 people in the span of five months. The passengers’ families also could win damages for grief, sorrow, loss of companionship — and paychecks that will never be earned.
While settling all those claims could cost $1 billion, according to a Bloomberg Intelligence estimate based on prior cases, legal experts agree the payouts could be even higher if evidence shows Boeing knew about flaws in the planes before the tragedies. That’s already prompted investor lawsuits claiming the company hid safety risks.
“The bottom line is Boeing’s exposure is much more substantial than in any other case that I’ve been a part of in my quarter-century of representing families’’ in plane-crash cases, said Brian Alexander, a New York aviation lawyer for victims of the Ethiopian Airlines jet that went down March 10. “You get into ‘What did you know and when did you know it.’”
The Ethiopian disaster, following the October crash of a Lion Air flight, led to the worldwide grounding of the 737 Max, the revamped version of a plane model that accounts for a third of Boeing’s operating profit.
Among multiple investigations is a US Justice Department probe of how American regulators certified a flawed part of the plane’s flight-control system.
While the precise causes of the crashes are still being determined, the preliminary evidence is raising the liability risk for Boeing, said Robert Rabin, a Stanford University law professor.
That’s because it could be considerably more expensive to go to trial. Cases involving airliner crashes rarely are decided by juries because companies want to avoid the risk of big damage awards as well as the bad publicity of fighting claims by multiple victims.
“There is a tendency for defendants to settle and get on with their business,” Rabin said.
A Boeing spokesman, Peter Pedraza, declined to comment on the company’s legal strategy.
Most of the lawsuits have been filed in Chicago, where Boeing is headquartered. Juries in the city have been generous to plaintiffs.
Last year, two of the largest US personal-injury verdicts were in Chicago: a $50 million obstetric medical malpractice award and a $45 million verdict over the death of a child.
For Boeing, there’s also the risk of unpredictably large jury awards related to the length of time that victims were in fear before the crash, a form of compensation permitted under Illinois law. Such claims are no guarantee of a windfall for victims’ families.
In a case against Pan Am in the early 1980s, parents of a crash victim were awarded just $15,000 for the anguish their son suffered when the plane rolled, with the wing hitting a tree before impact.
The Ethiopian flight crashed six minutes after takeoff, and Lion Air went down in the Java Sea about 11 minutes into flight. In both instances, preliminary reports show the pilots struggled for several minutes to regain control of planes that were in uncontrolled dives and reached speeds of almost 600 miles an hour. That suggests the victims knew their fate, some of their lawyers contend.
“There’s a better chance of recovery if it took minutes rather than seconds for the plane to crash,’’ said Joe Power, a personal-injury lawyer in Chicago representing some Ethiopian victims. Damages assessed against Boeing would be paid out by its insurers, except for what amounts to a large deductible common for major manufacturers.