Boeing Co. won a U.S. appeals court ruling affirming the dismissal of an investor lawsuit accusing company officials of making misleading public statements about the readiness of its 787 “Dreamliner” aircraft.
In the unanimous ruling, the 7th U.S. Circuit Court of Appeals in Chicago also asked a trial court judge to consider punishing lawyers for the plaintiff, the $200 million Livonia (Mich.) City Employees Retirement System, for failing to adequately investigate statements allegedly made by a confidential source on whom they relied.
“The plaintiff's lawyers had made confident assurances in their complaints about a confidential source — their only barrier to dismissal of their suit — even though none of the lawyers had spoken to the source and their investigator had acknowledged that she couldn't verify what (according to her) he had told her,” U.S. Circuit Judge Richard A. Posner wrote in his 18-page ruling for the three-judge panel.
The confidential source later recanted when questioned under oath by Boeing lawyers, according to Mr. Posner.
Boeing's 787 jet entered service in 2011 after three years of delays caused by supply-chain interruptions, assembly problems and a machinists strike. The Federal Aviation Administration grounded the plane in January after overheated lithium ion batteries on some planes began emitting smoke.
The Livonia pension fund class action was filed in 2009 by class-action law firm Robbins Geller Rudman & Dowd. Darren Robbins and James Barz, both partners at the firm, didn't immediately reply to an e-mailed request for comment on the appeals court ruling. Mr. Barz also didn't immediately return a telephone message seeking comment.