Jackson Walker Defends American Airlines Federal Credit Union in 401(k) Management Suit

August 4, 2021 | Client Results

On July 19, 2021, the Fifth Circuit Court of Appeals affirmed, reversed, and vacated parts of the district court’s decision in a suit brought by two former American Airlines employees who sought to certify a 20,000-member class action.


The employees filed suit in February 2016 against American Airlines (AA), its pension administration committee (PAAC), and Jackson Walker client American Airlines Federal Credit Union (AAFCU), claiming that the inclusion of an AAFCU investment option in the plan was a breach of the airline’s fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA). As a result, the suit alleged, participants lost returns they would have received if the investment option were replaced with another choice, such as a stable value fund.

One month after denying the class certification, U.S. District Judge John McBryde on August 5, 2020, granted AAFCU’s motion for summary judgment.

Appellate Decision

In its opinion, the Fifth Circuit affirmed, reversed, and vacated parts of Judge McBryde’s order.

First, the Court affirmed the District Court’s ruling that the plaintiffs lacked standing to bring their claims against AA or the PAAC—and included AAFCU among that list.

Similarly, the Court reversed that portion of the District Court’s order finding that the plaintiffs had standing to assert their claims against AAFCU. The Court also remanded the case back to the District Court with instructions to dismiss for lack of standing.

Finally, the Court affirmed the District Court’s refusal to approve the settlement, and found that the plaintiffs failed to meet their burden.

AAFCU was represented by Jackson Walker partners Jonathan D. NeermanEdwin M. Buffmire, and Peter C. Hansen. For more information about the suit, view Jackson Walker’s August 2020 announcement and the following Law360 articles (subscription required):

Meet Our Team

Jonathan D. Neerman is experienced in all phases of litigation at the trial and appellate levels in federal and state courts, and in various alternative dispute resolution forums. Jonathan handles high-stakes disputes under the ERISA statute. He represents the employer/sponsors of retirement plans, as well as product and service providers to such plans, when the plans’ fiduciaries are alleged to have caused the plans to pay excessive fees, select poor-quality investments, or engage in “prohibited transactions.”

Edwin M. Buffmire represents clients in antitrust, class action, trade secret, and other complex and sensitive disputes in Texas and across the nation. He has built successful strategies for clients in a variety of industries, including obtaining dismissals for insurers in three class actions, defending an energy client against allegations of anticompetitive conduct in the natural gas industry, securing two full defense verdicts at trial for a securities brokerage firm against RICO claims, and defending media clients against a putative nationwide class asserting conspiracy allegations.

Peter C. Hansen focuses on complex trial work and appellate litigation matters in state and federal court, with an emphasis on presentation of legal issues and preservation of error. Peter served as a briefing attorney to Justice Eva Guzman of the Supreme Court of Texas. He also worked on appellate matters for two years as a law clerk with the Office of the Solicitor General of Texas. Peter was a legislative fellow at the Texas Attorney General’s Office during the 2011 legislative session.

Meet JW

Founded in 1887, Jackson Walker continues to advance the world of business by helping companies of all sizes navigate today’s increasingly complex, interconnected legal landscape. Both public and private companies have turned to Jackson Walker to represent them in a variety of cases concerning employee benefits, including disputes about breaches of fiduciary duty concerning the administration of ERISA plans. To explore the Firm’s experience handling ERISA litigation and defending against class actions, visit our Trial & Appellate Litigation and Employee Benefits & Executive Compensation (ERISA) practice pages.