CHICAGO – A federal judge has dismissed a case against The Boeing Company and former CEO Dennis A. Muilenberg for the second time involving an investment firm’s claim that the company and ex-CEO mis-represented the safety of 737 Max 8 jets after two deadly crashes in 2018 and 2019.
Chief United States district judge, Virginia M. Kendall, of the United States District Court for the Northern District of Illinois granted Boeing’s second Motion to Dismiss on standing grounds after also issuing a previous dismissal in the lawsuit.
Plaintiff, Value Recapture Partners LLC, (“Value Recapture”) writes, Judge Kendall, “brings this action against Defendant, The Boeing Company, and its former CEO Dennis A. Muilenburg (“Boeing”) for violations of Section 10(b) of the Securities Exchange Act, 15 U.S.C. § 78j, and Rule 10b-5 of 17 C.F.R. § 240.10b-5. Value Recapture alleges that Boeing and Muilenburg made false and misleading statements about the October 2018 and March 2019 crashes of two 737 MAX airplanes, the subsequent Federal Aviation Administration grounding, and the recertification and return to service of the 737 MAX fleet. Following the Court’s dismissal of Plaintiff’s First Amended Complaint (“FAC”), Boeing now moves to dismiss Value Recapture’s Second Amended Complaint (“SAC”). It offers the same three arguments from the first Motion to Dismiss: (1) that Value Recapture lacks standing to assert securities-fraud claims as an assignee, (2) that Plaintiff’s claims are time-barred, and that (3) if the Court were to reach the merits, Plaintiff failed to state a claim for securities fraud. For the reasons below, the Court grants Boeing’s second Motion to Dismiss.”
In her ruling, Kendall attests, Value Recapture initially filed this case on December 6, 2023. The Court dismissed the First Amended Complaint on February 17, 2026, because of lack of standing. Value Recapture subsequently filed the Second Amended Complaint on March 6, 2026. The claims in the SAC largely mirror Value Recapture’s claims from its FAC In re the Boeing Company Aircraft Securities Litigation, 1:19-cv-02394, filed April 19, 2019, and pending in this District.
The ruling goes on to describe, “Because Value Recapture’s claims resolve themselves largely on procedural grounds, the Court declines to review the full scope of the merits of the SAC. As a general matter, though, the claims focus on Boeing and Muilenburg’s allegedly false and misleading statements surrounding the October 2018 and March 2019 crashes of two 737 MAX airplanes designed and manufactured by Boeing. Where this case diverges from the Class Action and related litigation is Value Recapture’s ability to bring suit under the Securities Exchange Act. As such, this Section focuses on the information key to this specific resolution. The following facts are set forth in the SAC, which the Court accepts as true for purposes of a motion to dismiss. See Lavalais v. Village of Melrose Park, 734 F.3d 629, 632 (7th Cir. 2013).”
“While the SAC provides more detail about the process of the assignment than the Court reviewed at the first motion to dismiss,” Kendall explains, “the determinative facts remain the same. Value Recapture still lacks 10b-5 standing to bring this lawsuit.”
The dismissal on legal standing revolved around a 1975 case cited as Blue Chip.
Summarizing the precedent, Kendall writes, “Blue Chip v. Manor Drug Stores guides the Court’s standing analysis with respect to Rule 10b-5. 421 U.S. 723 (1975). Adopting the so-called Birnbaum Rule, Blue Chip restricted 10b-5 actions to purchasers or sellers of securities. The Court highlighted Congress’ concerns with blackmail, nuisance, and strike suits and the resulting decision to circumscribe the possible plaintiff class, as well as the evidentiary problems inherent in allowing a non-purchaser or non-seller to bring a 10b-5 action. Smith v. Ayres, 977 F.2d 946, 949-51 (5th Cir. 1992). Blue Chip, however, noted two exceptions where certain plaintiffs could benefit from pseudo-exceptions to the Birnbaum Rule: (1) actual shareholders who allege they decided not to sell their shares because of securities violations, and (2) ‘shareholders, creditors, and perhaps others related to an issuer who suffered loss in the value of their investment due to corporate or insider activities in connection with the purchase or sale of securities’ that could potentially bring a derivative action on behalf of the corporate issuer if the latter itself is a purchaser or seller of securities.”
In Kendall’s conclusion, she ruled, “To hold that Value Recapture—who acquired these claims several years after the alleged fraud and never directly purchased or sold securities—has standing runs contrary to the Supreme Court’s priorities articulated in Blue Chip and diverges from the majority view that the policy considerations from Blue Chip foreclose the claims of purported assignees. See Soderberg, 652 F. Supp. at 563-64 (‘Recent case law interpreting § 10(b) is virtually unanimous in concluding that the federal cause of action does not attach automatically to the security itself and pass to the next purchaser.’)”
Kendall announced, “accordingly, Boeing’s motion to dismiss is granted with prejudice on standing grounds. The Court grants defendant’s motion to dismiss with prejudice,” signed on October 15, 2026.
Aviation and travel analyst, Gary Leff, writes about the dismissal, a firm that never bought Boeing stock sued the company for securities fraud over the 737 MAX crashes. It bought recovery rights from funds whose purchases came after both crashes and the grounding. That company may only have owned stock after the crashes and for about a month.
Leff notes, Boeing and Muilenburg had already settled Securities and Exchange Commission proceedings over misleading statements following the crashes, agreeing to pay $200 million and $1 million.