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Washington, D.C. – This week, the trial began in Spence v. American Airlines, the first lawsuit against a  employer-sponsored defined contribution plan, challenging the plan’s use of responsible investing criteria to make investing decisions. The ruling could serve as a template for extreme politicians to attack responsible investing in these types of plans. 

To make matters worse, U.S. District Court Judge Reed O’Connor has been called “one of America’s worst judges” – a partisan, former U.S. Senate staffer for Republicans who, as a judge, routinely hands down judgements in favor of right-wing litigants.

“Responsible investing is popular and makes financial sense, something the private sector sees clearly,” said Unlocking America’s Future spokesperson Kyle Herrig. “Extremists are using the courts to push their radical agenda in the courts because they know people want to use every criteria possible when it comes to making financial decisions – including ESG.”

BACKGROUND: Spence V. American Airlines

The Trial Began This Week In Spence v. American Airlines, The First Challenge To A Private Defined Contribution Employer Pension Plan’s Use Of ESG Principles. A bench trial in Spence v. American Airlines, the first-ever challenge to a defined contribution sponsor’s use of environmental, social and governance principles began on June 24 in Fort Worth, Texas. Bryan Spence, a former pilot for American Airlines has accused the company and two of its retirement plan fiduciaries of harming investors and violating federal law by doing business with investment managers, including BlackRock, that have supported ESG principles through their actions, investments, and proxy voting. U.S. District Court Judge Reed O’Connor twice rejected defendants’ petitions to throw out the case. The judge also granted class-action status covering an estimated 100,000 participants and beneficiaries in two defined contribution plans.

A Ruling For The Plaintiffs In Spence v. American Airlines Could Serve As A Template For Right Wing Interests to Attack ESG Investing In Employer-Sponsored Pension Plans. The implications of this case could go far beyond the Northern District of Texas. A pro-plaintiff ruling could serve as a template for anti-ESG interest groups and right wing politicians to attack ESG investing in employer defined contribution plans in the same way some public pension plans have been challenged and restricted in red states.

Judge Reed O’Connor Has Been Called “One Of America’s Worst Judges.” The judge in Spence v. American Airlines, Reed O’Connor, has been called “one of America’s worst judges.” According to Vox, O’Connor is “a notoriously partisan former Republican Senate staffer, known for handing down poorly reasoned opinions giving major policy victories to right-wing litigants.” O’Connor is also known for issuing rulings favorable to Texas’s far-right extremist attorney general Ken Paxton. Rulings in O’Connor’s cases appeal to the United States Court of Appeals for the First Circuit, a far right court dominated by Trump appointees and MAGA loyalists.