Southwest Airlines to pay 1 cent in lawsuit over Hispanic scholarship program
Show Caption
Hide Caption
The companies standing up to Trump on DEI
Companies like Costco and Levi's are rejecting the White House's position on diversity, equity and inclusion.
A U.S. judge signaled he will order Southwest Airlines LUV.N 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.
Workplace diversity: What is DEI and why is it so divisive? What you need to know.
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.
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.
Reporting by Jonathan Stempel in New York; Editing by Bill Berkrot
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
11 minutes ago
- CNBC
CNBC Daily Open: OpenAI CEO, who sparked AI frenzy, worries about AI bubble
There's a bubble forming in the artificial intelligence industry, according to OpenAI CEO Sam Altman. "Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes," Altman said. "I'm sure someone's gonna write some sensational headline about that. I wish you wouldn't, but that's fine," he added. (Apologies to Altman.) Altman's AI company is currently in talks to sell about $6 billion in stock that would value OpenAI at around $500 billion, CNBC confirmed Friday. In another conversation, Altman warned that the U.S. may be underestimating the progress that China is making in AI. Given the above premises, should investors be more cautious about OpenAI? Altman was not posed this question, but one wonders whether his opinion would also be "yes." Outside pure-play AI companies, the money is, likewise, still flowing. Intel is receiving a $2 billion injection of cash from Japan's SoftBank. It's a much-needed boost to the beleaguered U.S. chipmaker. Intel has fallen behind foreign rivals such as TSMC and Samsung in manufacturing semiconductors that serve as the brains for AI models. But going by Altman's views, the investment in Intel might not be a good bet by SoftBank CEO Masayoshi Son. Not everyone agrees with Altman, of course. Wedbush's Dan Ives told CNBC on Monday that there might be "some froth" in parts of the market, but "the actual impact over the medium and long term is actually being underestimated." And Ray Wang, research director for semiconductors, supply chain and emerging technology at Futurum Group, pointed out that the AI industry is not heterogeneous. There are market leaders, and then there are companies that are still developing. In the real world, bubbles delight because they reflect their surroundings in a play of light. But the bubble Altman described could be one doesn't show the face of its meeting paves the way for trilateral talks with Putin. At the White House meeting, the U.S. president also discussed security guarantees for Ukraine — which would reportedly involve a purchase around $90 billion of American weapons by Kyiv. Intel is getting a $2 billion investment from SoftBank. Both companies announced the development Monday, in which SoftBank will pay $23 per share for Intel's common stock. Shares of Intel jumped more than 5% in extended trading. The artificial intelligence market is in a bubble, says Sam Altman. Separately, the OpenAI CEO said he's "worried about China," and that the U.S. may be underestimating the latter's progress in artificial intelligence. U.S. stocks close mostly flat on Monday. The three major indexes made moves that were less than 0.1 percentage pointsin either direction as investors await key U.S. retail earnings. Asia-Pacific markets were mixed Tuesday. SoftBank shares fell as much as 5.7%. [PRO] Opportunities in one area of the European market. Investors have been pivoting away from the U.S. as multiple European indexes outperform those on Wall Street. But one pocket of Europe still remains overlooked, according to analysts. American money pours into Europe's soccer giants as club valuations soar European soccer is a bigger business than ever, with clubs in the continent's five top leagues raking in 20.4 billion euros ($23.7 billion) in revenue in the 2023-2024 season. American investors have been eyeing a piece of that pie. U.S. investors now own, fully or in part, the majority of soccer teams in England's Premier League. That now includes four of the traditional Big Six clubs, with Chelsea, Liverpool, Manchester United and Arsenal all attracting U.S. investment.
12 minutes ago
Judge issues injunction preventing Trump's FTC from investigating watchdog Media Matters
WASHINGTON -- A federal judge has issued an injunction preventing the Trump administration's Federal Trade Commission from investigating Media Matters for America, the liberal media watchdog group that had alleged the spread of hate speech on X since Elon Musk acquired the social media platform. U.S. District Court Judge Sparkle L. Sooknanan ruled Friday that the FTC's probe of Media Matters, 'purportedly to investigate an advertiser boycott concerning social media platforms,' represents a clear violation of the group's freedom of speech. 'It should alarm all Americans when the government retaliates against individuals or organizations for engaging in constitutionally protected public debate,' Sooknanan wrote. Even before the FTC got involved, Media Matters has been defending itself against a lawsuit by Musk following the organization's November 2023 story that, following Musk's purchase of the social media site once known as Twitter, antisemitic posts and other offensive content were appearing next to advertisements there. Sooknanan said the injunction halting any FTC probe was merited because Media Matters is likely to succeed on its claim that the FTC is being used to retaliate against it for a critical article on a Trump supporter. 'The court's ruling demonstrates the importance of fighting over folding, which far too many are doing when confronted with intimidation from the Trump administration,' said Angelo Carusone, chairman and president of Media Matters.
28 minutes ago
Las Vegas tourism is down. Some blame Trump's tariffs and immigration crackdown
LAS VEGAS -- Tourism in Las Vegas is slumping this summer, with resorts and convention centers reporting fewer visitors compared to last year, especially from abroad, and some officials are blaming the Trump administration's tariffs and immigration policies for the decline. The city known for lavish shows, endless buffets and around-the-clock gambling welcomed just under 3.1 million tourists in June, an 11% drop compared to the same time in 2024. There were 13% fewer international travelers, and hotel occupancy fell by about 15%, according to data from the Las Vegas Convention and Visitors Authority. Mayor Shelley Berkley said tourism from Canada — Nevada's largest international market — has dried up from a torrent 'to a drip.' Same with Mexico. 'We have a number of very high rollers that come in from Mexico that aren't so keen on coming in right now. And that seems to be the prevailing attitude internationally,' Berkley told reporters earlier this month. Ted Pappageorge, head of the powerful Culinary Workers Union, called it the 'Trump slump.' He said visits from Southern California, home to a large Latino population, were also drying up because people are afraid of the administration's immigration crackdown. 'If you if you tell the rest of the world they're not welcome, then they won't come,' Pappageorge said. Canadian airline data shows fewer passengers from north of the border are arriving at Harry Reid International Airport in Las Vegas. Air Canada saw its passenger numbers fall by 33% in June compared to the same time a year ago, while WestJet had a 31% drop. The low-cost carrier Flair reported a whopping 62% decline. Travel agents in Canada said there's been a significant downturn in clients wanting to visit the U.S. overall, and Las Vegas in particular. Wendy Hart, who books trips from Windsor, Ontario, said the reason was 'politics, for sure.' She speculated that it was a point of 'national pride' that people were staying away from the U.S. after President Donald Trump said he wanted to make Canada the 51st state. 'The tariffs are a big thing too. They seem to be contributing to the rising cost of everything,' Hart said. At downtown's Circa Resort and Casino, international visits have dipped, especially from Canada and Japan, according to owner and CEO Derek Stevens. But the downturn comes after a post-COVID spike, Stevens said. And while hotel room bookings are slack, gaming numbers, especially for sports betting, are still strong, he said. 'It's not as if the sky is falling,' he said. Wealthier visitors are still coming, he said, and Circa has introduced cheaper package deals to lure those with less money to spend. 'There have been many stories written about how the 'end is near' in Vegas,' he said. 'But Vegas continues to reinvent itself as a destination worth visiting.' On AAA's annual top ten list of top Labor Day destinations, Las Vegas slipped this year to the last spot, from number six in 2024. Seattle and Orlando, Florida — home to Disneyworld — hold steady in the top two spots, with New York City moving up to third for 2025. Reports of declining tourism were news to Alison Ferry, who arrived from Donegal, Ireland, to find big crowds at casinos and the Vegas Strip. 'It's very busy. It has been busy everywhere that we've gone. And really, really hot,' Ferry said. She added that she doesn't pay much attention to U.S. politics. Just off the strip, there's been no slowdown at the Pinball Museum, which showcases games from the 1930s through today. Manager Jim Arnold said the two-decade-old attraction is recession-proof because it's one of the few places to offer free parking and free admission. 'We've decided that our plan is just to ignore inflation and pretend it doesn't exist," Arnold said. 'So you still take a quarter out of your pocket and put it in a game, and you don't pay a resort fee or a cancelation fee or any of that jazz.' But Arnold said he's not surprised that overall tourism might be slowing because of skyrocketing prices at high-end restaurants and resorts, which 'squeezes out the low end tourist.' The mayor said the rising cost of food, hotel rooms and attractions also keeps visitors away. 'People are feeling that they're getting nickeled and dimed, and they're not getting value for their dollar,' Berkley said. She called on business owners to 'see if we can't make it more affordable' for tourists.
