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Court upholds dismissal of Boeing investor lawsuit, considers sanctions against plaintiffs’ attorneys

Judge Posner criticized the lawyers for quoting the testimony of an anonymous witness who later changed his story

It’s having troubles in the air, but Boeing Co. got a courtroom win on Tuesday when an appeals court upheld both the dismissal of a class action investor suit against the company and suggested sanctions against the plaintiffs’ attorneys.

San Diego law firm Robbins Geller Rudman & Dowd filed the class action suit in 2009 on behalf of a pension fund that accused Jim McNerney, Boeing’s CEO, and Scott Carson, who headed the company’s commercial airplanes division, of misleading investors regarding the testing and delivery schedule of its 787 Dreamliner aircraft.

The Federal Aviation Administration grounded the all U.S. Dreamliners in January, after problems with the fleet’s lithium-ion batteries caused several onboard fires.

Central to the plaintiffs’ case was testimony from an anonymous witness, identified in the lawsuit as a chief Boeing engineer who had worked on the Dreamliner’s wing-stress tests. That witness was later identified as Bishnujee Singh, who worked for a Boeing contractor, and who, at deposition, denied nearly everything that he had supposedly told a Robbins Geller private investigator.

U.S. District Court Judge Suzanne Conlon dismissed the suit in May 2011, and the 7th Circuit agreed on Tuesday. The appeals court went one step further, and remanded the question of whether to sanction Robbins Geller to the district court.

Writing for the court, Judge Richard Posner said that lawyers at Robbins Geller should have talked to the witness themselves, rather than relying on a private investigator, before quoting his testimony. He also noted that the firm misrepresented Singh’s title, and that "it is highly improbable that he either was involved in the tests or was privy to internal communications with top officials of the company."

Robbins Geller maintains that Singh’s original testimony was accurate, and that he changed it during deposition to stay on Boeing’s good side.

Read more at Thomson Reuters.

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Alanna Byrne

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