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

A judge overseeing the complaint brought by a former pilot has set a potential trial date; the airline has said ESG-related investments were only available as a self-directed option.


The judge assigned to a lawsuit against American Airlines in Texas federal court has slated a trial date to begin on June 24, 2024, a scheduling order in the case shows.  

“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. 

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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. 

Advisory M&A

Cetera seals Securian deal with 91% retention; Sequoia adds wealth manager with practice area focused on clients with special needs; UBS snags $640M Ohio-based wealth manager; and more.

Cetera Retains 91% of Advisers as Securian Deal Closes

Cetera Financial Group has retained more than 91% of the 1,0000 financial professionals it acquired in a deal announced in January for Securian Financial Group’s retail wealth and trust businesses.

In an announcement that the deal, which is Cetera’s largest in company history, has been completed, Cetera said the staff retention brings it more than t $50 billion in client assets. The group is now also a “distinct” team within Cetera Advisor Networks called Cetera Wealth Management Group, according to the announcement.

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“The Cetera team has partnered with us to execute a strategic, expert onboarding and integration process that minimized business disruption and will position us for great success,” Kjirsten Zellmer, president of Cetera Wealth Management Group, said in a statement. “Cetera’s financial stability and growth potential, with Mike Durbin and Adam Antoniades at the helm, position us as a true disruptor in a commoditized and crowded space.”

Cetera’s purchase of certain assets related to Securian Financial Services, Inc., as well as the equity of Securian Trust Company N.A., have been made a standalone entity called Cetera Trust Company N.A., according to the firm.

Cetera was founded in 2010 and has more than 8,000 financial professionals overseeing $330 billion in assets under administration and $116 billion in assets under management.

Sequoia Financial to Acquire Wealth Manager Affinia

Sequoia Financial Group LLC has entered into an agreement to acquire Affinia Financial Group LLC, a wealth manager with $418 million in assets under management and a practice focused on clients with special needs. The firms expect the transaction to close this month.

Burlington, Massachusetts-based Affinia manages wealth for high net worth individuals, families, trusts, and estates. Affinia was started in 2019 and has a team of ten, including co-founders John Nadworny and Cynthia Haddad, according to the announcement. In addition, more than half of the households Affinia works with include clients with special needs.

“We look for partners that are making a meaningful impact within specific communities and share our passion for client service, philosophy, and values,” Tom Haught, founder and CEO of Sequoia, said in a statement. “Affinia’s work with families who have members with special needs is an important addition to our firm.”

Upon completion of the transaction, Affinia’s clients will have access to a broader range of investment options, including private market investments, and support from Sequoia’s wealth planning team.

Sequoia, which was founded in 1991, has more than 200 people and $16 billion in AUM.

UBS Hires $640 Million Adviser Team in Ohio

UBS Wealth Management USA, a division of UBS AG, has brought on a four-person adviser team, BG Wealth Management, from Pepper Pike, Ohio.

The acquisition brings on client assets of $640 million with a focus on tailored investment strategies and wealth management advice. The team is led by Charlie Bergman, formerly of KSB Group at Merrill, and a financial adviser at Morgan Stanley. Financial adviser Justine Greenwald will be joining UBS after a previous role at Merrill, where she worked with small businesses, individuals, and families.

Client Associates Lisa Moavero and Alona Porat will also come over in the transaction.

Integrated Partners Adds $225M Colorado-Based RIA

Integrated Partners has added $225 million RIA PRISM Financial Strategies to its advisory.

PRISM will join the firm with lead Jeff Engelman, managing partner and financial strategist, who held prior positions with wirehouses, including Morgan Stanley. Advisers Shelly Schell and Amy Shroff, who have a focus area on serving women investors, will also come over in the deal, according to the announcement.

“Our team will greatly benefit from access to Integrated’s full suite of services, including the dedicated Business Owner Solutions, Corporate and Group Benefits, and Family Office divisions,” Engelman said in a statement.

Integrated has more than 200 advisers working out of 116 regional offices in the U.S.

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