Northern District Of Illinois Narrows Securities Fraud Class Action Against Leading Commercial Jetliner Manufacturer 

On March 31, 2026, Judge Manish S. Shah of the United States District Court for the Northern District of Illinois granted in large part and denied in part a motion to dismiss claims under the Securities Exchange Act of 1934 against an airplane manufacturer (the “Company”) and four of its former officers. College Retirement Equities Funds v. The Boeing Company, No. 22 CV 3845 (N.D. Ill. Mar. 31, 2026). Plaintiffs alleged defendants made a series of misrepresentations regarding two crashes in 2018 and 2019 of an upgraded model of one of the Company’s jetliners and the Company’s responsive measures in order to return the fleet to service. In a prior decision ruling on a motion to dismiss, which we covered here, the Court held that a significant number of the challenged statements were not actionable for failure to allege falsity or scienter, and that several of the remaining challenged statements were not adequately linked to any loss event by a corrective disclosure. Plaintiffs amended their complaint to attempt to cure these deficiencies and added supplemental allegations regarding alleged misstatements linked to a third alleged malfunction involving the same line of aircraft in 2024. Although the Court held that plaintiffs cured one set of alleged misstatements, it dismissed with prejudice claims based on all other alleged misstatements.

The Court first addressed the 89 alleged misstatements challenged in the prior motion to dismiss and largely reaffirmed its prior rulings. For the vast majority of alleged misstatements—which consisted of alleged statements about the plane’s superior capabilities, the imprimatur of safety and quality that the FAA’s certification stamped upon the plane, the plane’s safety generally, and the Company’s core values that the Court previously found to be insufficiently specific or material or inactionable corporate puffery—the Court held that plaintiffs failed to cure the previously identified deficiencies, and dismissed claims based on those statements for the same reasons as before.

The Court turned next to alleged misstatements that existing safety procedures were adequate for flight crews to address the software malfunction that allegedly caused the 2018 and 2019 crashes. Though the Court initially found plaintiffs plausibly pleaded the falsity of these alleged statements, it dismissed them for failure to plead scienter. In response, plaintiffs supplemented their complaint with allegations that the CEO helped prepare an operational bulletin that identified the software malfunction as a safety issue and was briefed on the issue before he made the alleged misstatements attributable to him. The Court found this raised a strong inference that the Company and its CEO knowingly, or at least recklessly, told flight crews to follow existing procedures to deal with the software malfunction when they knew those procedures did not adequately address the problem. The Court also reaffirmed the actionability of statements it had previously permitted to proceed, which defendants did not challenge.

The Court then addressed the 251 newly alleged statements arising from a 2024 incident in which a door plug allegedly blew off a Company aircraft mid-flight, allegedly forcing an emergency landing. The Court found that none were sufficiently alleged to support an Exchange Act claim, due to failure to plead falsity or scienter.

As an initial matter, the Court found that a significant number of these alleged statements were too vague, aspirational, and loosely optimistic for a reasonable investor to have placed value upon them within the mixture of available market information. For example, the Court found that plaintiffs failed to satisfy Rule 9(b)’s particularity standard with respect to alleged misstatements containing general affirmations of safety and quality in the years leading up to, and after, the 2024 incident, and with respect to statements amounting to “general declarations about the importance of acting lawfully and with integrity.” The Court also found that other alleged statements—including those enunciating the Company’s commitment to invest in safety, prioritize stability, and increase production stability—were forward-looking statements bereft of any complementary allegations that defendants made them with actual knowledge of their falsity and thus were inactionable under the Private Securities Litigation Reform Act’s safe-harbor provision, 15 U.S.C. § 78u-5. The Court also found that plaintiffs failed to plausibly plead that other alleged statements were actually false, including the Company’s statement about production rate and delivery timing.

However, the Court found falsity with respect to two categories of newly alleged misstatements: (1) defendants’ proclamations about newly implemented safety and reporting processes, which allegedly had not actually been implemented at the time they were announced; and (2) defendants’ touting of the Company’s FAA recertification process as “methodical, systematic, and disciplined,” and “one of the most rigorous certification efforts in aviation history,” given that Company officials allegedly coached test pilots during simulator testing contrary to protocol. Yet the Court still dismissed claims based on these alleged misstatements for failure to plead scienter. It found that plaintiffs’ theory relied too heavily upon the notion that safety and control problems were pervasive, without any accompanying allegations that defendants were aware of the specific problems at issue, including allegations that planes were being produced and delivered at too fast a rate to adequately confirm their safety and reliability and that Company personnel at certain facilities were taking shortcuts in manufacturing.

The Court accordingly allowed plaintiffs to proceed with their Section 10(b) and Rule 10b-5 claim against the Company and Section 20(a) claim against the CEO based on a limited set of statements concerning the adequacy of existing procedures to deal with the software malfunction at issue. But the Court dismissed all remaining claims with prejudice, finding any further amendment would be futile.