Boeing must face Pilot Union’s 737 MAX suit in Texas court

The decision comes as the Covid-19 epidemic is grounding an increasing number of U.S. pilots and other airline employees. Boeing stock soared Wednesday after executives unveiled a plan for surviving the downturn and generating cash again next year.

The 737 MAX aircraft were a major sticking point in negotiations between Southwest Airlines Pilots Association and the airline, according to allegations filed by the union in October.

Boeing purposefully interfered in the collective bargaining agreement to ensure pilots would agree to operate the MAX 737, the union said.

The union sued Boeing in state court after fatal crashes of two 737 MAX aircraft resulted in the planes being universally grounded. The company withheld critical safety information, according to the complaint, which accused Boeing of fraud, negligence, and interference.

The suit seeks millions of dollars in damages for lost compensation on behalf of 10,000 airline pilots. Pilots are paid based on the time spent flying, the union said, and the grounding of the Max 737 forced Southwest to cancel 30,000 flights.

Boeing filed to remove the case to a federal court in 2019, claiming the U.S. District Court for the Northern District of Texas had jurisdiction under the Class Action Fairness Act and complete preemption.

The federal court disagreed.

Because there is only one named plaintiff, the case is not a class action, Chief Judge Barbara M. G. Lynn wrote for the court. And although the case will require interpretation of the collective bargaining agreement, the court doesn’t have federal question jurisdiction, the judge determined, remanding the case to a state district court in Dallas County.

Condon & Forsyth LLP and Wick Phillips Gould & Martin LLP represent the union. Carter Arnett PLLC and Kirkland & Ellis LLP represent Boeing.

Southwest declined to comment. The pilots’ union and Boeing didn’t immediately respond to requests for comment.

The case is Southwest Airlines Pilot Ass’n v. The Boeing Company, N.D. Tex., No. 3:19-cv-02680, 4/30/20. news.bloomberglaw.com