American Airlines ESG Lawsuit May Move Ahead, According to Court Filing

“Counsel and the parties shall be ready for trial on two days’ notice at any time during this four-week period,” Judge Reed O’Connor wrote in the order filed August 9. “The Court, having considered the status report submitted by the parties, finds that the following schedule should govern the disposition of this case.”

The class action complaint was brought by a former pilot in June. The plaintiff alleged the airlines’ 401(k) plan scarified performance for environmental, social and governance factors. 

The lawsuit is Spence et al. v. American Airlines et al, and was brought before U.S. District Court for the Northern District of Texas.  

O’Connor provided a summary of critical dates in the order, scheduling the first action on the roster, initial expert designation and report, for October 30, 2023.

“The Court has attempted to adhere to the schedule requested by the parties,” O’Connor wrote.

Completion of discovery is scheduled for January 26, 2024. Additional motions to dismiss and for summary judgment or summary adjudication of issues must be filed by February 24, 2024; pretrial disclosures May 15, 2024, and objections are due 14 days after that; pretrial materials due May 30, 2024; exchange of exhibits June 10, 2024; and pretrial conference to be set if necessary.   

Attorneys for American Airlines filed a motion to dismiss the lawsuit on August 4, arguing that the ESG-related funds in question were only available through the self-directed brokerage window and that the plaintiff had not invested in the funds listed in his complaint. 

“If the judge set a trial date after a motion to dismiss was filed, then it appears that the motion will be denied,” says Douglas Neville, Employee Retirement Income Security Act attorney, officer and practice group leader at St. Louis-based law firm Greensfelder, Hemker & Gale PC. “I would expect that the judge will issue an order denying the motion.”

Defendants Fidelity Investments and Edelman Financial Engines were severed from the lawsuit in July.

O’Connor ordered the parties to jointly select a mediator and mediate on or before December 27, 2023.

The judge also instructed that the individual parties and their counsel, along with representatives of their liability insurance providers (if they have such coverage) shall participate in person, not by telephone or other remote means, O’Connor wrote in the order.

Within seven days after the mediation, the parties are required to jointly prepare and file a written report, signed by counsel for each party, detailing the date on which the mediation was held, the people present including the capacity of any representative, and a statement informing the court of the effect of their mediation and whether this case has been settled by agreement of the parties, the order adds.

“This case could go either way in terms of settlement,” explains Neville. “The case doesn’t seem to be very strong, so American [Airlines] may not be inclined to settle. But going to trial can be costly, so settlement is always a possibility to avoid the expense and inconvenience of litigation.”

Neither the attorneys for the plaintiffs nor the counsel for defendants responded to requests for comment. Representatives for American Airlines did not reply to a request for comment.

The plaintiff is represented by Hacker Stephens LLP and Sharp Law LLP; the defendant is represented by attorneys with the law offices of Kelly Hart & Hallman LLP and O’Melveny & Myers LLP.