A critical signal as to the likelihood of US Government criminal prosecution of Boeing or any of Boeing’s employees may arrive this week when an international panel of aviation experts publishes the long-awaited report of the Joint Authorities Technical Review (JATR) in connection with Federal Aviation Administration (FAA) certification of the Boeing 737 MAX. Although actual criminal prosecution of Boeing is rather unlikely, criminal prosecution of employees, including possibly for involuntary manslaughter, could be the subject of active debate inside the Department of Justice.
Experienced aviation attorney Brenda Roubidoux Taylor [hyperlink to: https://www.dickinson-wright.com/our-people/brenda-roubidoux-taylor?tab=0] stresses that “overshadowing this question of possible criminal prosecution is the aviation industry’s longstanding tenet against criminalizing aviation accidents and the related actions of its professionals.” Taylor points to the Flight Safety Foundation’s memorializing this position in its 2006 Joint Resolution signed by top global aviation safety groups against the criminalization of aviation accidents. [hyperlink to: https://flightsafety.org/files/resolution_01-12-10.pdf] Taylor, formerly in-house counsel for a leading regional airline, stresses that “the larger aviation community steadfastly believes that threatening aviation professionals with criminal investigations or prosecutions will undermine long-standing self-reporting initiatives, such as the Aviation Safety Action Program (ASAP), that encourage aviation professionals to report voluntarily safety issues and incidents without fear of discipline.” The viable threat of criminal prosecution could disincentivize cooperation by those involved in aviation incidents or accidents; going forward, they may opt to “lawyer-up” rather than cooperate with investigators. Taylor, again referencing the 2006 Joint Resolution, notes that “this ‘free flow of information’ from those within the industry is critical for determining the cause of and preventing aircraft accidents and incidents.”
United States criminal enforcement involving the U.S. aviation industry has produced only a handful of DOJ criminal investigations and prosecutions. The higher profile cases include the 1996 ValuJet crash in the Florida Everglades killing all 110 onboard (three individuals acquitted and federal conviction of company overturned); the 2000 Alaska Airlines crash into the Pacific Ocean killing all 88 on board (federal investigation dropped due to lack of evidence); the 2005 Platinum Jet collision into a building during takeoff from Teterboro Airport with no fatalities (two convictions for conspiracy to commit wire fraud and to defraud the FAA, and making false statements); and the 1980’s Eastern Air Lines maintenance practices whistleblower-driven investigation with no fatalities (one conviction for conspiracy and obstructing a FAA investigation into the airline). These investigations resulted in few indictments, and even fewer convictions.
As to the Boeing 737 MAX, DOJ has scattered a few clues as to its investigative thought process over the past few months. The breadcrumbs, through its subpoenas, reflect interest in – at a minimum the role or work of – a former Boeing flight-controls engineer, at least one person involved with the 737 MAX’s development, and pilot unions for several major commercial airlines. That is in addition to the understandable interest in records relating to the Boeing 787 Dreamliner production.
Potential charges against Boeing employees and other individuals range from involuntary manslaughter to various forms of obstructing the investigation. The source of this menu of potential charges is an analysis only of publicly available documents and informative investigative reporting. Likely under consideration at DOJ are:
Involuntary Manslaughter: Shortly after the Lion Air crash on October 29, 2018, Boeing issued a service bulletin to airlines [hyperlink to: https://theaircurrent.com/aviation-safety/boeing-nearing-737-max-fleet-bulletin-on-aoa-warning-after-lion-air-crash/] describing certain procedures for 737 MAX pilots to follow if the pilots experience an erroneous indication from an Angle of Attack (AOA) sensor. If during the development of this service bulletin a Boeing test pilot, simulator operator, or engineer observed clear indications that the procedures were ineffective to recover from an uncommanded nose down stabilizer trim but did not report it, then that could give rise to negligent or grossly negligent conduct resulting in death and satisfy the definition of involuntary manslaughter under federal criminal law. [hyperlink to: https://www.law.cornell.edu/uscode/text/18/1112]
Destruction of Evidence: If, during and as part of Boeing’s internal post-accident investigation of the 737 MAX, any Boeing employee or contractor directed the destruction of or personally destroyed records of testing or data from test flights or flight simulations, then such conduct would be actionable criminally. Boeing has a highly experienced, knowledgeable and trustworthy internal investigation team that unquestionably would have issued timely and correct preservation instructions. However, just because lawyers and investigators send the correct signals does not mean that the rank and file – of those effected directly – heed counsel’s instruction. Destruction, alteration or falsification of evidence is its own offense, independent of the obstruction of justice and false statements statutes, and carries a maximum sentence of 20 years. [hyperlink to: https://www.law.cornell.edu/uscode/text/18/1519]
Obstruction of Congress: Following the Lion Air and Ethiopian Airlines accidents, the House Committee on Transportation and Infrastructure commenced an investigation into the FAA’s aircraft certification process. In fact, upon commencing its investigation, the Committee set up a whistleblower page on its website inviting information. [hyperlink to: https://transportation.house.gov/news/press-releases/chair-defazio-announces-whistleblower-webpage] Congressional investigations are very much part of the fabric of Congressional committee business. While the current investigation by various Congressional committees of the Trump Administration, the President, and Special Counsel Robert Mueller’s report have brought renewed attention to Congressional authority to hold criminally liable those who obstruct Congressional investigations, such charges have a long history in District of Columbia jurisprudence. Withholding documents and providing false or misleading information (such as manipulating data or withholding data) in response to Congressional subpoenas, or lying during investigative testimony, if any of those acts occurred, would form the basis for charging obstruction of a Congressional inquiry. [hyperlink to: https://www.law.cornell.edu/uscode/text/18/1505]
Conspiracy to Defraud the United States: A possible omnibus charge against Boeing could be circumventing the FAA certification process by concealing material facts about the Maneuvering Characteristics Augmentation System (MCAS) software and overall design of the 737 MAX from the FAA, if that occurred. Such a charge could be the omnibus allegation to resolve any criminal investigation as to the corporation. Conspiring to defraud the United States [hyperlink to https://www.law.cornell.edu/uscode/text/18/371] essentially means, in this context, conspiring for the purpose of impairing, obstructing or defeating the lawful function of ensuring federal aviation safety. Boeing employees known as “Authorized Representatives”, signed on behalf of the FAA certifying that Boeing technology met the safety standards under federal regulation. The expectation is that Authorized Representatives operate completely independent of Boeing without influence by Boeing in their decision-making. On an individual level, an Authorized Representative even could be charged, if the specific employee had a role in conspiring to defraud the FAA and Boeing customers by certifying the faulty MCAS software. The same theory could apply to Boeing upper management.
False Statements: The most common false statements charge in federal criminal enforcement of corporate conduct is lying to federal law enforcement agents, such as the FBI or inspectors general, or lying to civil regulatory enforcement authorities, such as staff of the SEC’s Division of Enforcement. Lying by anyone to FAA investigators, if that occurred, would implicate the false statements statute, because the statute prohibits false statements in connection with any matter within the jurisdiction of the Executive Branch of the US Government. [hyperlink to: https://www.law.cornell.edu/uscode/text/18/1001] The FAA is a component of the Department of Transportation, thus within the Executive Branch.
Wire Fraud: A less likely but nevertheless potential charge is wire fraud, [hyperlink to: https://www.law.cornell.edu/uscode/text/18/1343] the use of a wire communication to advance a scheme to defraud involving a material deception with the intent to deprive another of either property or honest services. Such a charge could present against a Boeing employee with primary responsibility for communicating and coordinating with the FAA and making false and fraudulent representations to the FAA in order to gain FAA certification of the 737 MAX. The interaction of the Authorized Representatives with the FAA could implicate consideration of the wire fraud statute.
Where then does that leave Boeing, particularly if DOJ charges certain Boeing employees? More than 100 years ago, the United States Supreme Court wrote that “we see no good reason why corporations may not be held responsible for and charged with the knowledge and purposes of their agents, acting within the authority conferred upon them.” [hyperlink to: https://supreme.justia.com/cases/federal/us/212/481/] Thus, the Supreme Court established the fundamental principle of corporate criminal liability — the acts of officers, directors, employees and agents are the source of corporate liability. Nevertheless, an actual criminal prosecution of a major corporation is rare, particularly given both the collateral consequences of such prosecutions and the swift remedial responses that major corporations undertake. So, while the liability of any individuals, if any, can result in mirror charges against Boeing, we are much more likely to see a quick resolution.
For Boeing and the individuals responsible, the time-tested corporate enforcement strategy of throw officers and employees under the bus as part of a corporate resolution certainly could come into play. In evaluating a corporation’s compliance program and in considering how to resolve criminal charges against a corporation, prosecutors consider remedial measures adopted by the corporation. [hyperlink to: https://www.justice.gov/criminal-fraud/page/file/937501/download] Such remedial measures include discipline of responsible persons. For example, Boeing President, Chairman and CEO Dennis Muilenberg, who is an aerospace engineer by training, could be imputed with a technical understanding and appreciation of problems with the MCAS system. If Muilenberg or any other senior official involved in preparing and issuing the service bulletin knew that the publication simply was applying a bandage to a catastrophic problem, then prosecutors could be expecting that Boeing deliver evidence of such knowledge to serve as the basis for a prosecution of the individual.
Experience dictates that the deal-making is well underway, and at the corporate level for Boeing likely is well-advanced. Needless to say, before prosecutors bring any case or seek a guilty plea there will be a determination as to whether there is evidence to warrant criminal charges against the company and individuals. Nevertheless, as Taylor observed, in her more than 10 years working in the commercial airline industry, “This investigation will set a new standard for compliance and enforcement. Major regulatory reforms, such as we haven’t seen since the 2009 Colgan Air accident, will follow in the U.S. aviation industry.”
