Boeing's lawyers are arguing for a settlement that is being opposed by the families of those killed in the 737 Max crashes

FORT WORTH, Texas – Relatives of passengers who died in two Boeing 737 Max plane crashes gathered in a Texas federal court on Friday to listen as their lawyers asked a judge to throw out a deal between the plane maker and prosecutors and the company to bring to trial.

Their lawyers argued that Boeing's penalty – mainly a fine of about $244 million – would be too small for misleading regulators about a flight control system that malfunctioned before the crashes. They accused Boeing and the Justice Department of distorting facts and ignoring that 346 people died in the crashes.

U.S. District Judge Reed O'Connor asked a Boeing lawyer why he should accept the prepackaged plea deal and a sentence negotiated by a defendant.

Boeing's attorney, Ben Hatch, said Boeing is “a pillar of the national economy and national defense” and should know the punishment before agreeing to plead guilty to conspiracy to commit fraud, a felony. Otherwise, he said, the company could be excluded from federal contracts.

“All of the company's employees, the company's shareholders and a global and domestic supply chain… they will all be put into doubt if the verdict is not known,” Hatch said.

The response stunned and angered the victims' families.

“Boeing is too important to the economy – they are too big to be jailed. That's what he says,” said Michael Stumo, whose daughter Samya died in the second accident, after the hearing. “It allows them to kill people without consequences because they are too big and because their shareholders don’t like it.”

The government joined Boeing in asking the judge to accept the deal reached in July.

Sean Tonolli, deputy chief of the Justice Department's fraud division, said the conspiracy charge is the most serious offense prosecutors can bring — they cannot prove that Boeing's deception of regulators caused the crashes. And going to court is risky, he said.

“We are confident in our cause, but we don't assume that we might not win,” he said.

The judge, who received written arguments from all sides before the hearing in Fort Worth, asked questions but gave no indication whether he was leaning one way or the other. He has previously expressed sympathy for the passengers' families, writing about “Boeing's egregious criminal conduct” in a 2023 ruling.

“You've given me a lot to think about,” O'Connor told all the attorneys as the hearing ended Friday. “I will get an expulsion as soon as possible.”

In July, Boeing agreed to plead guilty to a single felony count of conspiracy to defraud for allegedly deceiving Federal Aviation Administration regulators formulating pilot training requirements for the Max.

The FAA approved minimal computer-based training for Boeing 737 pilots before they could fly the Max, the latest version of the 737. This helped Boeing by avoiding the need for training in flight simulators, which would have increased airlines' costs of operating the Max.

Airlines began flying the Max in 2017. The first crash occurred in October 2018 in Indonesia, followed by the second in Ethiopia in March 2019.

The settlement requires Boeing to pay a fine of up to $487.2 million. However, the penalty would be cut in half by crediting the company with $243.6 million it paid as part of a $2.5 billion settlement in 2021 to avoid criminal prosecution. The Justice Department ruled in May that Boeing violated the terms of that settlement, leading to the new settlement.

Boeing, based in Arlington, Virginia, would also invest $455 million in compliance and safety programs and be subject to a three-year suspended sentence.

The case is one of a number of problems that the manufacturer is struggling with most.

Talks with striking factory workers who assemble some of the company's best-selling planes collapsed this week. The company withdrew its offer and S&P Global Ratings placed the company on its credit watch list, citing increased financial risk due to the labor unrest.

On Thursday, the company filed a complaint alleging unfair labor practices against the International Association of Machinists and Aerospace Workers. Boeing said in its complaint to the National Labor Relations Board that the union's public portrayal was misleading and made it difficult to find a solution.