Mixed Signals from Illinois Governor on Whether He’ll Sign Punitive Damages Bill

After signaling that he would sign a newly passed bill that would allow for punitive damages in wrongful death cases, Illinois Governor J.B. Pritzker is now waffling on whether or not he will sign it.

David Calhoun
CEO Boeing

The bill, HB 219, passed the Illinois Senate on May 18 by a vote of 37 to 19 and passed the Illinois House by a vote of 75 to 40.

The lead sponsor of the bill, Representative LaShawn Ford, said at the time that the Governor was supportive of the bill and “he will sign it.”

But this week, Alex Gough, a spokesperson for the Governor, told Corporate Crime Reporter that “that piece of legislation is currently under review.” 

“We don’t have a specific idea on the timing, but would expect some action will be taken within the next month,” Gough said.

Under Illinois law, a bill becomes law without the Governor’s signature sixty days after it is forwarded to him. Gough says the bill was sent to the Governor on June 16 – so he has until August 16 to veto it – or it becomes law.

Under current law, those injured by corporate wrongdoing can recover punitive damages, but the survivors of those killed by corporate wrongdoing cannot.

Ford introduced the bill after family members of those who died in the two Boeing MAX crashes approached legislators in Springfield with a plea to change the law. 

Under current law, the Boeing family victims cannot pursue punitive damages against Boeing in Illinois, because the law only allows for punitive damages for injuries, not death.

The family members’ lawsuits were brought against Boeing in federal court in Chicago, because that was where Boeing was based – until the aerospace giant moved its headquarters to Crystal City, Virginia in 2022.

Meanwhile, the criminal and punitive damages cases against Boeing for the deaths of 346 in the two Boeing 737 MAX crashes are proceeding apace.

Last week a UK inquest into the Boeing 737 MAX crashes conducted by coroner Penelope Schofield found three British people who died in the Ethiopian Airlines Flight 302 plane crash on March 10, 2019 were “unlawfully killed” and that Boeing’s conduct should “constitute the crime of manslaughter.”

Whether a prosecutor in the UK picks up the coroner’s determination and prosecutes Boeing is an open question.

In the United States, Boeing victims are heading to an oral argument before the Fifth Circuit Court of Appeals on July 25, 2023. 

They are challenging a February 9, 2023 federal district court ruling in Texas that while the Justice Department violated the Crime Victims Rights Act (CVRA) by not conferring with them before cutting a deferred prosecution agreement with Boeing in January 2021, there was no available remedy.

“Without holding a hearing or inquiring into the facts, the district court accepted at face value the government’s representations that it had simply made a mistake about the ‘crime victim’ status of the crash victims,” the victims’ lawyer Paul Cassell wrote in a brief to the Fifth Circuit.

“The district court also pointed to what it called the government’s ‘historic engagement’ with the victims’ families after they filed their lawsuit, noting the government met with the families to listen to their concerns. The district court acknowledged that ‘it is true the government violated the crime victims’ rights under the CVRA, including the right to confer with counsel for the government before a DPA was executed.”

Yet “the fact that these rights were offended does not necessitate the remedies the [families] propose,” the district court ruled.

Cassell called on the Fifth Circuit to afford the victims “the CVRA rights that Congress promised them.” 

“The families ask this Court to direct the district court to afford them their rights to confer, by excising from the deferred prosecution agreement the immunity provisions blocking Boeing’s prosecution,” Cassell wrote. “This relief will then afford the families their CVRA right to confer with the prosecutors handling the case. The families also ask for other remedies to enforce their CVRA rights.”

“The district court did not follow Congress’s command that it ‘shall ensure’ that the families were afforded their CVRA rights,” Cassell wrote.

In its brief, the Justice Department argues that the “shall ensure” language means only that courts shall ensure that victims receive their rights “prospectively.”

Cassell countered that “if accepted, the government’s argument would defang the CVRA and transform it into a toothless paper tiger.”

Boeing argues in its brief that the CVRA merely “takes courts as it finds them and expects them to enforce its provisions through existing authorities and subject to existing limitations.”

To which Cassell replies – “If Congress wanted to limit the judicial enforcement provision in that way, it could have written it that way. Instead, it added into law unqualified and mandatory language – ‘shall ensure.’”

Separately, in federal court in Chicago, Shanin Specter, the lawyer for the estate of Samya Stumo, who died in the Boeing Ethiopian crash four years ago, called on a federal judge to lift an almost year-long stay on the case seeking punitive damages from the companies involved, former Boeing CEO Dennis Muilenburg and current CEO David Calhoun.

“A new 737 MAX airplane manufactured by Boeing, with components made by Rockwell Collins, Inc. and Rosemount Aerospace, Inc., crashed on October 29, 2018, killing 189 people,” Specter wrote. “Almost immediately, it was known by these companies, Boeing CEO and Chair Dennis Muilenburg and Boeing lead director David Calhoun that the crash occurred because the 737 MAX tended to pitch up due to new engine placement, that the new Rockwell software program designed to adjust the plane downward relied upon a single faulty Rosemount sensor and therefore activated too readily, that these systemic problems were not explained to pilots and regulators, and that more crashes were likely.” 

“After the crash, defendants failed to act to ground the defective planes and recklessly exposed others to the known likelihood of more catastrophic crashes,” Specter wrote. 

“As a result, a second 737 MAX crashed on March 10, 2019, killing 157, including 24-year-old Samya Stumo. The Delaware Chancery Court found that Mr. Calhoun knowingly, falsely and publicly represented that the Board was: (1) independent; (2) exercised appropriate oversight; (3) met very quickly after the first crash; (4) evaluated the safety risks; and (5) recommended grounding the MAX 8 planes.” 

“The Court further found that Calhoun knew all this should have been done. Calhoun is still CEO of Boeing despite these findings. Unrepentant, Mr. Calhoun blames Mr. Muilenburg for decisions that led to the crash.  Mr. Muilenburg was fired but received a huge severance.”

“To establish the punitive liability of Messrs. Muilenburg and Calhoun needed, discovery is relatively narrow and focuses on two areas of inquiry: (1) What did they know and when did they know it? and (2) What did they do and not do?”

Specter noted they would need the relevant communications and the depositions of Muilenburg and Calhoun. 

“The Stumos’ discovery as to Rosemount and Rockwell is also relatively narrow and focuses on the following two areas of inquiry: (1) What did Rosemount and Rockwell know about the faulty MCAS software and AoA sensors and when did they know it? and (2) What did they do and not do?”

“In particular, the Stumos have requested the deposition of Scott Schramm, an engineer at Rockwell, and a 30(b)(6) deposition of Rockwell and Rosemount regarding communications between Boeing, Rockwell and Rosemount after the Lion Air Crash and prior to the Ethiopian Airlines Crash.” 

“As to the discovery of Rosemount, the Stumos are seeking the production of documents relating to communications between Boeing and Rosemount from the Lion Air crash to ET 302, which may lead to the identification of pertinent depositions from Rosemount. To date, this discovery has not occurred nor have these pertinent depositions been taken. There is a real concern as to dimming witness memories and spoliation that would unfairly prejudice the Stumos.”

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