Judge declares Boeing free from any punitive damages

In a major victory for Boeing, a federal judge in San Francisco ruled yesterday that families of those killed in the January 2000 crash of Alaska Airlines Flight 261 cannot seek punitive damages from the company.

The families can continue to pursue compensatory damages against Boeing as part of their negligence claims, U.S. District Judge Charles Breyer said in a brief written order, reiterating an oral ruling he issued Thursday.

But Breyer granted Boeing's motion to be freed of potential punitive damages in the crash that killed 88 people.

"The Court ... concludes ... that the record is insufficient to support a finding by a reasonable jury that Boeing's conduct manifested reckless or callous disregard for the rights of others," he wrote, referring to the proof required for punitive damages.

Alaska, a co-defendant in the case, is not liable for punitive damages because Flight 261 was an international flight, traveling from Puerto Vallarta, Mexico, to San Francisco and Seattle. Airlines cannot be sued for punitive damages under an international treaty.

Breyer's ruling could mean that no trial exploring the causes of the crash will be held.

Alaska's attorneys said that if Breyer ruled out punitive damages, Alaska would not contest liability in the crash and offer the families the chance to seek compensatory damages in trials that would primarily deal with monetary issues.

In that event, Alaska and Boeing would not have to point fingers at each other, and Alaska could later seek compensation from Boeing. The two companies already have agreed to cooperate in resolving the suits.

Even without punitive damages, however, compensatory damages could be massive because the families are seeking payment for the pre-impact pain and suffering of their relatives.

Flight 261 took two steep dives and flew upside down before the MD-83 plunged into the Pacific Ocean off Southern California on Jan. 31, 2000, killing all 83 passengers and five crew.

Other compensatory damages could include lost wages.

Jury selection in lawsuits involving 22 victims is set to begin June 3. The other 66 cases have been settled, virtually all for undisclosed sums.

Marc Topel, a San Francisco attorney representing the family of Stanford Poll, a Mercer Island man killed in the crash, said the remaining families will press for a full trial unless Alaska and Boeing jointly admit liability and take responsibility for the crash.

"The families ... deserve their day in court and will fight for it," Topel said.

In courtroom arguments Thursday, Topel said documents show Boeing and McDonnell Douglas, which built the MD-83 before the 1997 merger of the two companies, both knew for years that MD-80 series planes were vulnerable to a catastrophic crash.

The companies realized a key mechanism that failed in the crash was at risk of excessive wear, and that the plane lacked a required fail-safe system, Topel said.

Boeing attorney Robert Scoular argued there was no evidence warnings had been ignored. Scoular also maintained Alaska was solely responsible for the crash because it failed to perform required maintenance on the mechanism that failed.

Boeing spokeswoman Susan Bradley said yesterday the company was pleased with Breyer's ruling on punitive damages, calling it an important decision.

The National Transportation Safety Board (NTSB) in December found the primary cause of the crash was Alaska's failure to lubricate the jackscrew assembly, which controls the horizontal stabilizer in the tail section.

The board also found that the lack of a fail-safe system contributed to the crash but stopped short of recommending a new design.

Bradley said Breyer's ruling was consistent with the NTSB's findings and that Boeing now hopes that the remaining suits can be settled without a trial. She said the majority of the cases have been settled with "fair compensation."

In a post-crash analysis, Boeing itself wrote that the "basic design" of MD-80 planes doesn't include a backup system "for all potential mode failures," according to sealed court documents filed by the families' attorneys and obtained by The Seattle Times.

The design, inherited from McDonnell Douglas, does not meet Boeing's own engineering requirements, the analysis concluded.

The documents also include an e-mail after the crash in which a Boeing engineer wrote about the company's "quandary" over the lack of a fail-safe system.

The engineer wrote that, "we can fudge a little bit" and say the design meets the "letter of the law" in Boeing's requirements.

"But our conscience may be bothering us," the engineer added. "Are we really sure about our judgment? Do we feel good about this? Be honest!"

The engineer added, "We need to balance our economic discomfort against our safety discomfort."

Bradley said she couldn't comment on the documents, but a source close to Boeing said the post-crash analysis was written to include all possibilities, as part of the company's commitment to safety.

The e-mail, the source said, was part of a theoretical discussion among Boeing engineers and not related to a specific plane.

Steve Miletich: 206-464-3302 or smiletich@seattletimes.com