By Daniel Wiessner
(Reuters) - A U.S. judge on Friday said Southwest Airlines (NYSE:LUV) must face a lawsuit by a prominent affirmative action opponent claiming a now-defunct program that awarded free flights to Hispanic college students was racially discriminatory.
U.S. District Judge Sidney Fitzwater in Dallas said Southwest's elimination of the 20-year-old program and offer to pay Edward Blum's American Alliance for Equal Rights one cent - the amount of damages sought in the lawsuit - did not make moot claims that the airline discriminated against two students, one white and the other Asian.
Since 2004, Southwest's "¡Lánzate!" program helped 1,500 Hispanic undergraduate and graduate students who lived at least 200 miles (322 km) from their school.
The Dallas-based airline, which did not immediately respond to a request for comment on Friday, ended the program after the lawsuit was filed in May.
Southwest had argued that its offer to provide all relief sought by Blum's group made the entire lawsuit moot.
But Fitzwater disagreed, allowing the group to move ahead with claims Southwest violated a Civil War-era law barring racial bias in contracting.
Such a ruling could be cited in future cases over diversity and inclusion programs, which are facing increased scrutiny and a growing number of legal challenges.
"This decision is a powerful tool to prevent case-mooting tactics from discriminators nationwide," Blum said in a statement after the ruling.
The lawsuit is among the latest in a series of cases Blum has filed challenging corporate diversity programs after another group he founded last year convinced the conservative-majority U.S. Supreme Court to bar the consideration of race as a factor in college admissions.