*

Boeing ( BA ) had agreed to plead guilty during Biden

administration

*

Lawyer for 737 MAX crash victims' families say they will

file

appeal

*

Justice Department defends agreement, saying it avoided

prolonged legal proceedings

(Adds government statement in paragraph 5, lawyer for families

planning appeal)

By David Shepardson

WASHINGTON, Nov 6 (Reuters) - A U.S. judge approved a

request by the Trump administration's Justice Department to

dismiss a criminal case against Boeing ( BA ), allowing the

planemaker to avoid prosecution on a charge stemming from two

fatal 737 MAX plane crashes that killed 346 people, but he

harshly criticized the government's decision.

Judge Reed O'Connor, of the U.S. District Court in Fort

Worth, Texas, disagreed with the department that dismissing the

case, which had been pursued by the Biden administration and

initially resulted in an admission of guilt, was in the public

interest.

O'Connor said in 2023 that "Boeing's ( BA ) crime may properly

be considered the deadliest corporate crime in U.S. history."

But on Thursday the judge said he had no authority to

reject the government's decision to make a deal with Boeing ( BA ),

even though he said it "fails to secure the necessary

accountability to ensure the safety of the flying public."

Boeing ( BA ) said it would honor the obligations of its agreement

with the Department of Justice.

"We are also committed to continuing the significant efforts

we have made as a company to strengthen our safety, quality, and

compliance programs," it added.

The Justice Department rejected the judge's criticism.

"Rather than allow for protracted litigation, this agreement

provides finality for the victims and requires Boeing ( BA ) to act

now," a spokesperson said. "We are confident that this

resolution is the most just outcome."

BOEING HAD AGREED TO PLEAD GUILTY

Boeing ( BA ) last year had agreed to plead guilty to a criminal

fraud conspiracy charge after the fatal 737 MAX crashes in

Indonesia and Ethiopia in 2018 and 2019.

But the finalization of an agreement was delayed when

O'Connor, who has a record of ruling in favor of conservative

causes, raised questions over an element of the Biden

administration's deal. It said the Justice Department would

follow its "commitment to diversity and inclusion" when

selecting an independent monitor to audit Boeing ( BA ).

After U.S. President Donald Trump took power, the

Justice Department reversed course in May and dropped the demand

for a guilty plea.

Admitting to a criminal charge would have potentially

threatened Boeing's ( BA ) ability to secure lucrative government

contracts with the likes of the U.S Defense Department and NASA,

although government agencies could waive any restrictions.

In September, O'Connor held a three-hour hearing to consider

objections to the deal, questioning the government's decision to

drop a requirement that Boeing ( BA ) face oversight from an

independent monitor for three years and instead hire a

compliance consultant.

He heard anguished objections from relatives of some of

those killed in the crashes in Indonesia in 2018 and Ethiopia in

2019 to the non-prosecution agreement.

A lawyer for the families said on Thursday they would

quickly file an appeal.

O'Connor, in his ruling on Thursday, noted the government's

position appeared to have shifted over time.

"Boeing ( BA ) committed crimes sufficient to justify prosecution,

failed to remedy its fraudulent behavior on its own during the

(deferred prosecution agreement) which justified a guilty plea

and the imposition of an independent monitor, but now Boeing ( BA )

will remedy that dangerous culture by retaining a consultant of

its own choosing," he said.

O'Connor said the families were correct in asserting that

"this agreement fails to secure the necessary accountability to

ensure the safety of the flying public."

The government argued Boeing ( BA ) has improved and the Federal

Aviation Administration is providing enhanced oversight. Boeing ( BA )

and the government argued O'Connor had no choice but to dismiss

the case in light of their non-prosecution agreement.

Under the deal, Boeing ( BA ) agreed to pay an additional $444.5

million into a crash victims' fund to be divided evenly per

victim of the two fatal 737 MAX crashes, on top of a new $243.6

million fine and over $455 million to strengthen the company's

compliance, safety, and quality programs.

In September, the FAA proposed fining Boeing ( BA ) $3.1 million

for a series of safety violations, including actions tied to the

January 2024 Alaska Airlines 737 MAX 9 mid-air emergency, and

for interfering with safety officials' independence.