The 7th U.S. Circuit Court of Appeals ruled on Tuesday to uphold the dismissal of a case by a lower court in a class action suit against Boeing Co and remanded it to consider if the law firm of Robbins Geller Rudman & Dowd should be sanctioned, according to Reuters.
Lawyers for plaintiffs are not permitted to take discovery until after surviving a motion to dismiss under the Private Securities Litigation Reform Act. In this case, Robbins Geller filed a lawsuit that accused the company of misleading investors about testing and delivery schedules for the 787 Dreamliner.
The case was permitted to move forward by U.S. District Judge Suzanne Conlon in Chicago. He reasoning was that allegations were based on a witness who Robbins Geller said spoke to a private investigator. In the lawsuit, the witness was described as a chief engineer from Boeing who worked on wing-stress tests for the Dreamliner plane.
The witness was identified as Bishnujee Singh and was employed by a Boeing contractor. When Singh was deposed, he denied all of the info reported by the private investigator of Robbins Geller. The lawsuit was then dismissed in March of 2011 by Conlon.
The opinion was for the court was written by Circuit Judge Richard Posner, who said that the firm’s failure to interview the witness before quoting him “puts one in mind of ostrich tactics.”
Even though Singh’s employer took part in wing tests for the Dreamliner planes, “it is highly improbable that he either was involved in the tests or was privy to internal communications with top officials of the company,” Posner wrote.
Plaintiffs in the case claimed that Singh lied during his deposition so he did not provoke Boeing. Posner wrote that was was “left unexplained is why he would not have wanted to remain in those good graces when he was interviewed by the investigator.”
Boeing released a statement that said it showed “it was the plaintiffs’ law firm that engaged in fraud – fraud on the court. Boeing looks forward to the hearings in the district court in which sanctions against the plaintiffs’ law firm will be considered.”