Joshua Lichtenstein Discusses Federal Judge Ruling in ESG Investing Case in Financial Times and Politico, Among Others

In The News
January 14, 2025

In articles published in the Financial Times, Politico and Bloomberg Law and Investment News, ERISA and benefits partner Joshua Lichtenstein, who heads the firm’s ERISA fiduciary practice, discussed a federal judge ruling in a class action lawsuit that American Airlines violated the law by selecting an investment manager that incorporates environmental, social and governance (ESG) goals in handling the company’s retirement funds.

A reason to think that the Spence v. American Airlines Inc. case in the Northern District of Texas may have a wide effect is that while ostensibly about ESG, the case does not involve any ESG funds or ESG products. The ruling is solely focused on the Investment Manager’s proxy voting practices and alleged pro-ESG shareholder engagement.

“This is a case that finds a breach of the duty of loyalty just based on the fact that non-ESG funds included ESG considerations as part of their proxy voting decisions. And that will be true of nearly every 401(k) plan in America. And a sizable award to the plaintiffs could prompt copycat litigation,” said Joshua.