A US District Court judge has approved a shareholder class action against Boeing (BOE, Washington National) led by Rhode Island Treasurer James A Diossa. Judge Leonie Brinkema of the Virginia Eastern District Court handed down her decision on March 7, 2025. The class action alleges serious safety lapses at Boeing and false and misleading statements or omissions to the market concerning those safety lapses.

Diossa is suing over violations of federal securities laws on behalf of Rhode Island employees' retirement system and other "similarly situated" shareholders. He alleges that Boeing and four other defendants, namely former CEO David Calhoun, former CEO Dennis Muilenburg, former CFO Gregory Smith, and current CFO Brian West, variously made false and/or misleading statements to shareholders between October 2019 and the date of the lawsuit's filing (January 24, 2024) about how the company was addressing safety concerns.

The complaint says these statements artificially inflated Boeing's stock price, inducing individuals or entities to buy shares, and when the truth about Boeing's problems emerged, the stock price declined and investors got burned.

"Boeing betrayed the trust of Rhode Island pensioners and must be held accountable for their actions," Diossa said last June.

While Brinkema agreed that the proposed class action met the established criteria and could proceed, she imposed some modifications around its scope. The judge ruled out allowing option holders to participate.

Significantly, the judge narrowed the class period timeframe. The complainants wanted a start date of September 30, 2019, when the defendants publicly said that Boeing was making steady progress on the return to service of the B737 MAX after two fatal crashes and a worldwide grounding.

But counsel for the defendants had argued in earlier hearings that any class action period should not start before January 7, 2021, when Boeing and the US Department of Justice announced they had reached a deferred prosecution agreement to resolve a criminal charge related to B737 MAX safety issues. Citing evidence that showed no statistically significant Boeing stock price increases during days when the alleged misstatements were made in 2019 or 2020, Brinkema agreed that January 7, 2021, was the appropriate start date for the class action period.

"Plaintiffs have also not sufficiently shown that the allegedly fraudulent statements during this period could have maintained safety-related inflation in Boeing’s stock price, given that the statements were made soon after the 2018 and 2019 crashes of B737 MAX aircraft," the judge's ruling reads.

She also agreed to end the class action period on January 8, 2024, saying any corrective stock price events after that date were likely to reflect the consequences of, and reactions to, the door plug incident earlier that month on an Alaska Airlines-operated B737-9.

"By January 8, 2024, it was clear that the Alaska Airlines incident resulted from the materialisation of safety-related risk at Boeing," the ruling reads.

With those modifications to the claim, Brinkema granted the class action application. The judge also set deadlines for expert reports over the next two months. Among other things, there is currently a May 9, 2025, deadline for completion of all discovery.