Maxwell Yim, Adam Cohen, and Colum Weiden are Partners at Fried, Frank, Harris, Shriver & Jacobson LLP. This post is based on a Fried Frank memorandum by Mr. Yim, Mr. Cohen, Mr. Weiden, Gail Weinstein, Philip Richter, and Steve Epstein, all at Fried Frank, and is part of the Delaware Law Series; links to other posts in the series are available here.
In In re Boeing (Aug. 14, 2026), the Delaware Court of Chancery, at the pleading stage of litigation, dismissed Caremark claims brought against directors and officers of The Boeing Company (the “Company”) after alleged manufacturing process defects led to a dramatic, mid-flight mechanical failure of a Boeing airplane, which followed two earlier catastrophic accidents due to alleged manufacturing defects in Boeing airplanes. The allegations included years-long, ongoing violations by the Company of manufacturing safety laws and regulations.
In two separate incidents in 2018 and 2019, a Boeing MAX 737 airplane crashed in mid-flight—resulting in hundreds of lives lost; the Company paying billions of dollars in fines and settlements; and the Company committing to regulators, the U.S. Department of Justice and stockholders to revamp its safety systems and culture. The recent incident occurred in 2024—when a Boeing MAX-9 737 airplane reached 15,000 feet, the mid-cabin door plug flew off, leaving a gaping hole in the airplane. The airplane made a safe emergency landing, and eight people sustained minor injuries. The Plaintiffs sued, claiming that Company directors and officers breached their oversight duties under Caremark by having ignored in bad faith numerous “red flags” of the Company’s continued airplane manufacturing safety issues. The court dismissed the case, holding that the Defendants did not face a substantial likelihood of liability under Caremark, and therefore demand on the Company’s board of directors (the “Board”) to bring the derivative lawsuit was not excused.
