American Alliance for Equal Rights v. Southwest Airlines Co — Entry #68: Memorandum Opinion and Order

Case 3:24-cv-01209-D       Document 68       Filed 05/14/25      Page 1 of 10     PageID 867


                     IN THE UNITED STATES DISTRICT COURT
                     FOR THE NORTHERN DISTRICT OF TEXAS
                               DALLAS DIVISION

AMERICAN ALLIANCE FOR                          §
EQUAL RIGHTS,                                  §
                                               §
                     Plaintiff,                §
                                               §
VS.                                            §    Civil Action No. 3:24-CV-1209-D
                                               §
SOUTHWEST AIRLINES CO.,                        §
                                               §
                     Defendant.                §

                                  MEMORANDUM OPINION
                                      AND ORDER

       In this action challenging defendant Southwest Airlines Company’s (“Southwest’s”)

¡Lánzate! Travel Award Program (“Award Program”), Southwest has unconditionally

surrendered to the entry of judgment for complete relief in favor of plaintiff American

Alliance for Equal Rights (“Alliance”). For the reasons that follow, the court raises sua

sponte its intention to enter a final judgment in Alliance’s favor, and it grants both sides 14

days to oppose this proposed disposition.

                                               I

       In May 2024 Alliance sued Southwest, alleging that two Alliance members were

unable to participate in Southwest’s now-shuttered Award Program because they are not

Hispanic. Alliance challenges certain provisions of the Award Program as discriminatory,

in violation of the Civil Rights Act of 1866, 42 U.S.C. § 1981 et seq. (“§ 1981”), and Title

VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d et seq. (“Title VI”). Alliance prays


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for declaratory and injunctive relief, nominal damages of $0.01, and reasonable costs and

attorney’s fees.

       After Alliance filed suit, Southwest executed a covenant that unconditionally and

irrevocably eliminated the challenged Award Program provisions and tendered to Alliance

the sum of $0.01, together with a letter requesting voluntary dismissal of this lawsuit.

Alliance rejected the offer, and Southwest moved to dismiss Alliance’s claims as moot. In

American Alliance for Equal Rights v. Southwest Airlines Co. (“Alliance I”), 2024 WL

5012055 (N.D. Tex. Dec. 6, 2024) (Fitzwater, J.), the court dismissed Alliance’s claims for

declaratory and injunctive relief on the ground that they had been mooted by the covenant,

id. at *2, but it concluded that Alliance’s claims for nominal damages had not been mooted

by Southwest’s unaccepted settlement offer, id. at *5 (citing Campbell-Ewald Co. v. Gomez,

577 U.S. 153, 156 (2016)). At that point, the case appeared to be ripe for resolution on the

merits “with little to no discovery on summary judgment motions.” Am. All. for Equal Rts.

v. Sw. Airlines Co. (“Alliance II”), 2025 WL 295741, at *2 (N.D. Tex. Jan. 24, 2025)

(denying Southwest’s motion to certify for interlocutory appeal the court’s memorandum

opinion and order in Alliance I).

       As anticipated, without having taken any discovery, Alliance has moved for partial

summary judgment on its § 1981 claim.1 Southwest, in turn, has moved the court to forgo


       1
       Alliance represents that, if its motion is granted, it will withdraw its remaining Title
VI claim.

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the merits and enter judgment in Alliance’s favor for nominal damages of $0.01 and

reasonable costs and attorney’s fees. Although neither motion has been fully briefed,2 in

light of Southwest’s unconditional surrender to the entry of judgment for complete relief in

Alliance’s favor, the court now raises sua sponte that it intends to forgo the merits and sua

sponte enter final judgment in Alliance’s favor for nominal damages of $0.01 and reasonable

costs and attorney’s fees.

                                               II

       When a defendant unconditionally surrenders to the entry of final judgment for all the

relief that the plaintiff could have recovered had it prevailed on the merits, but the plaintiff

resists the entry of such judgment, a district court can exercise its inherent authority to

manage its docket efficiently and expeditiously, forgo deciding the case on the merits, and

sua sponte enter final judgment for complete relief in favor of the plaintiff.3

                                               A

       “[A] court has discretion to halt a lawsuit by entering judgment for the plaintiff when

the defendant unconditionally surrenders and only the plaintiff’s obstinacy or madness

prevents her from accepting total victory.” Genesis Healthcare Corp. v. Symczyk, 569 U.S.


       2
        Alliance has filed a response in opposition. With leave of court, the United States
has filed a statement of interest.
       3
         The court sometimes refers to the entry of final judgment in favor of the plaintiff for
all of the relief that the plaintiff could have recovered had it prevailed on the merits as
“complete relief” or “total victory,” and to a plaintiff who resists the entry of such judgment
as the “obstinate plaintiff.”

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66, 85 (2013) (Kagan, J., dissenting), analysis adopted, at least in part, by Campbell-Ewald,

577 U.S. at 162.

              [A] party [cannot] force his opponent to confess to having
              violated the law, as it is always open to a defendant to default
              and suffer judgment to be entered against him without his
              admitting anything—if he wants, without even appearing in the
              case. And if the defendant has thus thrown in the towel there is
              nothing left for the district court to do except enter judgment.

Chathas v. Local 134 Int’l Brotherhood of Elec. Workers, 233 F.3d 508, 512 (7th Cir. 2000)

(Posner, J.) (citation omitted); see also Uzuegbunam v. Preczewski, 592 U.S. 279, 303-04

(2021) (Roberts, C.J., dissenting) (suggesting that “[w]here a plaintiff asks only for a dollar,

the defendant should be able to end the case by giving him a dollar, without the court needing

to pass on the merits of the plaintiff’s claims” and agreeing with amicus United States’s

argument that “the defendant should be able to end the litigation without a resolution of the

constitutional merits, simply by accepting the entry of judgment for nominal damages against

him.”); id. at 293-94 (Kavanaugh, J., concurring) (agreeing with the same).

                                               B

       A district court may forgo the merits and sua sponte grant the obstinate plaintiff total

victory pursuant to its “inherent authority.”4 District courts “possess certain ‘inherent


       4
        Although the proposition that a district court may forgo the merits and grant the
obstinate plaintiff total victory is not novel, see supra § II(A), and courts have done so, there
has not emerged a persuasive articulation of the source of a district court’s authority. See,
e.g., Ward v. Santa Fe Indep. Sch. Dist., 393 F.3d 599, 603 (5th Cir. 2004) (dismissing for
lack of standing plaintiff’s appeal from judgment in his favor where district court forwent
merits and sua sponte granted plaintiff complete relief); S. Orange Chiropractic Ctr., LLC

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powers,’ not conferred by rule or statute, ‘to manage their own affairs so as to achieve the

orderly and expeditious disposition of cases.’” In re Highland Cap. Mgmt., L.P., 105 F.4th

830, 839 (5th Cir. 2024) (quoting Goodyear Tire & Rubber Co. v. Haeger, 581 U.S. 101, 107

(2017)); see also Link v. Wabash R.R. Co., 370 U.S. 626, 630-31 (1962). Among them is


v. Cayan LLC, 2016 WL 1441791, at *5 (D. Mass. Apr. 12, 2016) (entering judgment in
obstinate plaintiff’s favor without identifying authority to do so); Witt v. GC Servs. Ltd.
P’ship, 2015 WL 273838, at *2 (D. Colo. Jan. 20, 2015) (purporting to rely on Justice
Kagan’s Genesis Healthcare dissent). So far as the court is aware, only the Second Circuit
has attempted an explanation:

              Our decisions appear to recognize that where a defendant
              surrenders to “complete relief” in satisfaction of a plaintiff’s
              claims, the district court may enter default judgment against the
              defendant—even without the plaintiff’s agreement thereto—and
              then, after judgment is entered, the plaintiff’s individual claims
              will become moot for purposes of Article III.

Radha Geismann, M.D., P.C. v. ZocDoc, Inc., 909 F.3d 534, 542 (2d Cir. 2018) (cleaned up)
(collecting cases).
        The conclusion that a district court has inherent authority to grant an obstinate
plaintiff total victory finds support in Justice Kagan’s Genesis Healthcare dissent:

              Nor does a court have inherent authority to enter an unwanted
              judgment for Smith on her individual claim, in service of wiping
              out her proposed collective action. To be sure, a court has
              discretion to halt a lawsuit by entering judgment for the plaintiff
              when the defendant unconditionally surrenders and only the
              plaintiff’s obstinacy or madness prevents her from accepting
              total victory. But the court may not take that tack when the
              supposed capitulation in fact fails to give the plaintiff all the law
              authorizes and she has sought.

Genesis Healthcare, 569 U.S. at 85 (Kagan, J., dissenting) (emphasis added).


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“the inherent authority to manage their dockets and courtrooms with a view toward the

efficient and expedient resolution of cases.” Dietz v. Bouldin., 579 U.S. 40, 47 (2016); see

also Johnson v. Lumpkin, 74 F.4th 334, 342 (5th Cir. 2023) (describing such authority as

“firmly established”), cert. denied, 144 S. Ct. 829 (2024). This authority, however, is not

unlimited. See NASCO, Inc. v. Calcasieu Television & Radio, Inc., 894 F.2d 696, 702 (5th

Cir.1990) (“[Inherent authority] is not a broad reservoir of power, ready at an imperial hand,

but a limited source; an implied power squeezed from the need to make the court function.”),

aff’d, 501 U.S. 32 (1991)). Its exercise (1) “must be a reasonable response to the problems

and needs confronting the court’s fair administration of justice,” and (2) “cannot be contrary

to any express grant of or limitation on the district court’s power contained in a rule or

statute.” Dietz, 579 U.S. at 45 (internal quotation marks omitted). The sua sponte entry of

final judgment for complete relief in favor of an obstinate plaintiff fits comfortably within

these limits.

                                              C

                                              1

       First, 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. A plaintiff’s obstinacy when confronted with the defendant’s

unconditional surrender can result in increased costs and delay, the twin enemies of justice.

See id. at 45 (citing Rule 1) (describing “the just, speedy, and inexpensive resolution of


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disputes” as “paramount”); Dondi Props. Corp. v. Com. Sav. & Loan Ass’n, 121 F.R.D. 284,

286 (N.D. Tex. 1988) (en banc) (citing Rule 1) (“We attempt to carry out our responsibilities

in the most prompt and efficient manner, recognizing that justice delayed, and justice

obtained at excessive cost, is often justice denied.”).5 When in response to an opponent’s

complete and unconditional surrender a plaintiff holds out for a decision on the merits rather

than accept total victory in terms of the remedy awarded, the litigation drags on, potentially

at great cost, through discovery, motion practice, and (possibly) trial. These costs are borne

by the parties, the court, and other litigants from whom the court’s limited resources are

diverted. And this occurs despite the fact that the plaintiff is not entitled to a decision on the

merits. See Ward v. Santa Fe Indep. Sch. Dist., 393 F.3d 599, 603-04 (5th Cir. 2004). A

decision on the merits is not an end in itself, but a means by which a plaintiff can recover the

relief prayed for. Once a judgment entitles the plaintiff to all of the relief for which it sues,

victory is total. See Campbell-Ewald, 577 U.S. at 163-65.

       Total victory is just that: all that the plaintiff would be entitled to if it prevailed on the

merits. Entry of judgment in the plaintiff’s favor awarding a legally available remedy that

the plaintiff seeks is a reasonable response. The plaintiff is granted all that it could have


       5
        Indeed, United States judges have an ethical obligation to “dispose promptly of the
business of the court.” Code of Conduct for United States Judges, 175 F.R.D. 363, 367,
Canon 3(A)(5) (1998); see also id. at 370, Canon 3 cmt. Canon 3(A)(5) (“In disposing of
matters promptly, efficiently and fairly, a judge must demonstrate due regard for the rights
of the parties to be heard and to have issues resolved without unnecessary cost or delay. A
judge should monitor and supervise cases so as to reduce or eliminate dilatory practices,
avoidable delays and unnecessary costs.”).

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recovered had it prevailed on the merits, and all stakeholders are relieved of further cost and

delay.

                                              2

         Second, the court is not aware of any contrary rule or statute.6 Although the Rules

contemplate that a district court can act sua sponte, see Fed. R. Civ. P. 12(h)(3) and 56(f),

and they provide for the entry of judgment against a defaulting defendant, see Rule 55,

neither these nor any other rules impose an implicit limitation that prohibits a court from

forgoing the merits and sua sponte entering judgment for complete relief in the plaintiff’s

favor when the defendant unconditionally surrenders. See Nat. Gas Pipeline Co. of Am. v.

Energy Gathering, Inc., 2 F.3d 1397, 1407-08 (5th Cir. 1993) (“[W]here the rules directly

mandate a specific procedure to the exclusion of others, inherent authority is proscribed.”);

Chambers v. NASCO, Inc., 501 U.S. 32, 49 (1991) (“The Court’s prior cases have indicated

that the inherent power of a court can be invoked even if procedural rules exist which

sanction the same conduct.”); id. at 47 (“‘[W]e do not lightly assume that Congress has

intended to depart from established principles’ such as the scope of a court’s inherent

power.”).


         6
        Although the court is raising sua sponte its intention to enter a final judgment in
Alliance’s favor, and therefore has not had the benefit of the parties’ briefing on the matter,
the court is granting the parties leave to oppose the court’s proposed disposition. Thus the
parties will have the opportunity to raise any contrary rule or statute if one exists.

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                                              III

       Forgoing the merits and entering final judgment sua sponte in Alliance’s favor for

nominal damages of $0.01 and reasonable costs and attorney’s fees is an appropriate exercise

of inherent authority because Southwest has unconditionally surrendered, and the entry of

such judgment would grant Alliance total victory. Southwest represents in its motion for

entry of judgment that it surrenders to entry of judgment in Alliance’s favor for $0.01 in

nominal damages and reasonable costs and attorney’s fees, provided the court does not reach

the merits. This is unconditional surrender to all of the relief that Alliance could recover if

it prevailed on the merits. See Compl. (ECF No. 1) ¶ 53 (praying for, inter alia, “[n]ominal

damages of $0.01” and “[r]easonable costs and expenses of this action, including attorneys’

fees, under 42 U.S.C. §1988 and any other applicable laws”); Uzuegbunam, 592 U.S. at 290-

92 (characterizing nominal damages as compensatory, backward-looking relief, rather than

a mere artifice for obtaining a retrospective declaratory judgment); Ward, 393 F.3d at 604-05

(rejecting contention that nominal damages are a means of securing a judicial declaration of

illegality and explaining that a ruling on the merits is not “relief” to which any plaintiff is

entitled); 42 U.S.C. § 1988(b) (making eligible for an award of reasonable attorney’s fees

prevailing parties in any action to enforce, inter alia, § 1981 and Title VI).

                                          *    *    *

       Accordingly, the court raises sua sponte that it intends to exercise its inherent

authority to enter final judgment in Alliance’s favor for nominal damages of $0.01 and


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reasonable costs and attorney’s fees. Because the court has raised this proposed disposition

sua sponte, it grants both parties leave to file an opposition within 14 days of the date this

memorandum opinion and order is filed.

       SO ORDERED.

       May 14, 2025.


                                           _________________________________
                                           SIDNEY A. FITZWATER
                                           SENIOR JUDGE


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