Southwest Airlines likely to pay 1 cent to end DEI-related lawsuit

By Jonathan Stempel

(Reuters) - A U.S. judge signaled he will order Southwest Airlines (NYSE:LUV) to pay 1 cent to end a lawsuit by a conservative group alleging that a now-defunct program awarding free flights to Hispanic college students was discriminatory.

U.S. District Judge Sidney Fitzwater on Wednesday rejected a request by Edward Blum’s American Alliance for Equal Rights to address the merits of its case, after Southwest "unconditionally surrendered" by scrapping its ¡Lánzate! program.

Blum has tried for decades to remove racial considerations from parts of American life, including a successful push to essentially end affirmative action in college admissions.

U.S. President Donald Trump, meanwhile, has made removing diversity, equity and inclusion policies from society a hallmark of his second White House term.

Southwest’s ¡Lánzate! program had since 2004 provided assistance to 1,500 Hispanic undergraduate and graduate students who lived at least 200 miles (322 km) from campus.

Fitzwater said it would waste time and money to keep litigating whether the program violated a Civil War-era law barring racial bias in contracting, because the plaintiff achieved "total victory" after Southwest effectively gave up.

"Granting an obstinate plaintiff total victory upon the defendant’s unconditional surrender is a reasonable response to the problems and needs confronting the court’s fair administration of justice," the Dallas-based judge wrote.

Fitzwater gave both sides until May 28 to object.

Southwest, based in Dallas, had no immediate comment on Thursday. Lawyers for the plaintiff did not immediately respond to requests for comment.

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While the plaintiff had sought 1 cent in damages, its lawyers said the case’s merits should be addressed because it concerned "issues of substantial public importance" regarding intentional ethnic discrimination by a major company.

"Southwest cannot avoid liability by paying the Alliance via a judgment that’s not really a judgment, any more than it could avoid liability by paying the Alliance via no judgment," the lawyers wrote.

The case is American Alliance for Equal Rights v Southwest Airlines Co, U.S. District Court, Northern District of Texas, No. 24-01209.

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