A Texas business court judge has handed American Airlines an early win in its bid to squeeze more than $100 million out of JetBlue over the collapse of the carriers' 2020 Northeast Alliance. Yesterday, Judge Jerry Bullard in Fort Worth refused to toss American's contract suit, clearing the case to move ahead into discovery and what now looks like months of number crunching and accounting arguments between the two airlines.
Judge Confirms Texas Has Jurisdiction
Judge Jerry Bullard ruled that the lawsuit belongs in Texas because JetBlue intentionally sought benefits from the state, operated thousands of flights there, hired workers in Texas and leased airport space in the state, according to Reuters. Rejecting JetBlue's bid to dismiss American's complaint, Bullard kept the airline's contract claims alive and narrowed the fight to what the parties owe each other after the unwinding of the Northeast Alliance.
What American Says JetBlue Owes
American contends that once the alliance was dismantled, the airlines ran an audit and reconciliation process that showed JetBlue owed money under their Mutual Growth Incentive Agreement, and that JetBlue has refused to pay, as detailed in American's filing and reported by Business Travel News. When American first sued in April 2025 it pegged the shortfall at about $1 million. The dispute has since ballooned into a far larger accounting fight that turns on how the payments should be valued. JetBlue has said it is cooperating with the unwind process while still challenging American's calculations.
Who Is In The Room For Each Side
American is represented by David Tolley and Michael Bern of Latham & Watkins and Dee Kelly of Kelly Hart & Hallman. JetBlue is represented by Michael Hanin and Joshua Naftalis of Pallas Partners and Paul Schuster and Warren Harris of Bracewell, according to Reuters. The case is pending in the Texas Business Court, Eighth Division, as American Airlines v. JetBlue Airways, No. 25-BC08A-0007, and court filings now claim more than $100 million in damages.
How It Ties Back To The NEA Fight
The contract clash follows the U.S. Department of Justice's 2021 challenge to the Northeast Alliance, where federal prosecutors argued that the arrangement would cut competition in New York and Boston and ultimately hurt travelers, according to a Justice Department press release. The NEA was later found to violate antitrust law, and American's attempts to overturn that result on appeal failed, setting up this follow-on private fight over how the partnership was dismantled and which airline owes what, as reported by Bloomberg.
Next Up: Discovery And A Long Grind
By denying JetBlue's motion to dismiss, Bullard has pushed the case into discovery, where both sides are expected to demand documents on accounting methods, revenue allocation and the reconciliation that followed the NEA unwind. Outside counsel had already flagged in earlier filings, reported by Law360, that a full-blown discovery fight would significantly raise the stakes. With nine-figure damages now on the table, the case is poised for aggressive motion practice and could also drive settlement talks before any trial.
American's lawsuit highlights how messy it can be to unravel complex revenue-sharing deals in the airline industry, and it tests how much deference courts will give to the airlines' internal accounting versus stepping in to scrutinize the process. The Texas Business Court is expected to set a schedule for discovery and further briefing as the two carriers gear up for what could be a lengthy legal showdown.
