According to a press release dated November 13, 2009, the complaint charges Boeing and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Boeing is involved in the design, development, manufacture, sale and support of military aircraft, satellites, missile defense, human space flight, launch systems and services, and commercial jetliners, including the Dreamliner 787 (“787”), Boeing’s principal next generation commercial airplane, which has been eagerly awaited by the commercial airline market and the financial markets since it was first announced in 2004.
The complaint alleges that during the Class Period, defendants made false and misleading statements to the market concerning the results of the testing process for the 787 and the Company’s ability to meet the schedule for the first flight and delivery of the 787. Specifically, the complaint alleges defendants made these false and misleading statements in an effort to: (a) forestall further cancellations of orders for the 787, particularly as the orders for its competition, the Airbus A380, were gaining ground; (b) conceal from the market the material fact that the 787 had a structural problem in its design that would prevent the first flight of the 787 by June 30, 2009, and delivery in the first quarter of 2010; and (c) enable Boeing to make a positive presentation concerning the test results for the 787 and the schedule for the first flight and delivery of the 787 at the Paris Airshow, scheduled for June 15-18, 2009, at which Boeing hoped to receive additional orders for the 787 and beat out the showing made by the Airbus for its A380. On June 23, 2009, Boeing announced that the first flight of the 787 would be postponed due to a “need to reinforce an area within the side-of-body section of the aircraft” and that the first flight would be rescheduled. On this news, Boeing’s stock price fell 6.5% to close at $43.87 per share on June 23, 2009, and dropped a further 6% the next day to close at $41.32 per share.
On January 15, 2010, the Honorable Suzanne B. Conlon granted the motion to appoint the City of Livonia Employees' Retirement System as lead plaintiff and approved the lead plaintiff’s selection of Coughlin Stoia Geller Rudman & Robbins LLP as lead counsel. On February 22, 2010, the lead plaintiff filed an Amended Class Action Complaint. On March 25, 2010, the defendants filed a motion to dismiss the Amended Class Action Complaint, which Judge Conlon granted on May 26, 2010. The case has been dismissed without prejudice.
On June 22, 2010, the lead plaintiff filed a Second Amended Class Action Complaint. On July 2, 2010, the defendants responded by filing a motion to dismiss the Second Amended Class Action Complaint.
On August 10, 2010, the Court entered the Minute Entry before Honorable Suzanne B. Conlon. According to the court document, the Defendants motion to dismiss the second amended complaint 67 is denied. As explained in the courts order of June 22, 2010 62 , the added details in the second amended complaint satisfy the stringent pleading requirements of the Private Securities Litigation Reform Act of 1995. Defendant shall answer the second amended complaint by August 30, 2010.
On September 24, 2010, the defendants filed a motion to dismiss on the basis of fraudulent misrepresentations by plaintiffs' counsel, which was later denied on October 14, 2010, as lacking merit. On October 18, 2010, the plaintiff filed a motion to certify the class. On December 10, 2010, the defendants filed a motion for reconsideration on the order on the motion to dismiss. On January 6, 2011, the Honorable Suzanne B. Conlon denied the motion for class certification without prejudice.
According to the Memorandum Opinion and Judgment signed by the judge on March 7, 2011, the Defendants' motion for reconsideration of the August 10, 2010 and October 14, 2010 orders denying their motions to dismiss is granted. Plaintiffs' second amended complaint is dismissed with prejudice.
The plaintiffs appealed this decision to the U.S. Court of Appeals for the Seventh Circuit, where District Court’s Dismissal was affirmed, but the case was remanded for consideration of whether to impose Rule 11 sanctions.