Gusinsky v. Reynolds et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
VLADIMIR GUSINSKY, derivatively on
behalf of Nominal Defendant
SOUTHWEST AIRLINES CO.,
Plaintiff,
v.
CHRISTOPHER P. REYNOLDS,
DAVID CUSH, DAVID J. GRISSEN,
DAVID P. HESS, DOUGLAS H.
BROOKS, GREGG A. SARETSKY, LISA
M. ATHERTON, PATRICIA A.
WATSON, PIERRE R. BREBER,
RAKESH GANGWAL, ROBERT E.
JORDAN, ROBERT L. FORNARDO,
SARAH FEINBERG, EDUARDO F.
CONRADO, and ELAIN MENDOZA,
Defendants.
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Civil Action No. 3:25-CV-1816-K
MEMORANDUM OPINION AND ORDER
Before the Court is the State of Texas’ Motion to Intervene (Doc. No. 43) and
Supplement to the Motion (Doc. No. 47) (together, the “Motion”). Having carefully
considered the Motion, the relevant portions of the record, and the applicable law, the
Court GRANTS the State of Texas’ Motion.
I. 	Relevant Background
Plaintiff 	Vladimir 	Gusinsky, 	a 	shareholder 	of 	Southwest 	Airlines 	Co.
(“Southwest”), 	brought 	this 	derivative 	action 	against 	Defendants 	on 	behalf 	of
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Southwest, the Nominal Defendant in this case. See generally Pl.’s Compl. (Doc. No. 1).
Defendants are members of Southwest’s Board of Directors. Id. at 1. Plaintiff alleges
breach of fiduciary duty against all Defendants. Id. at 40–41. Specifically, Plaintiff
alleges that “Defendants failed to act in the best interests of the Company, eliminated
the Bags Fly Free policy, approved the 2025 Proxy Statements, and adopted the Bylaw
Amendments 	to 	entrench 	themselves.” 	Id. 	at 	41. 	Plaintiff 	further 	alleges 	that
“Defendants adopted the Amended Bylaws for the sole purpose of reducing their risk
of being held accountable to [Southwest] or its shareholders[.]” Id. Prior to this case,
Defendants approved an amendment and restatement of Southwest’s bylaws, which in
relevant part state that “[n]o shareholder may institute or maintain a derivative
proceeding unless that shareholder . . . beneficially owns at least three (3) percent of
the outstanding shares of the corporation.” Id. at 35. Related to these amendments,
Plaintiff also seeks declaratory relief under 28 U.S.C. § 2201, alleging that Southwest’s
amended bylaws violate the Texas Constitution. Id. at 41–42. Plaintiff claims that this
amendment to Southwest’s bylaws (quoted above), as applied to Plaintiff, violates the
Texas Constitution’s prohibition against retroactive application of laws and its “Open
Courts” provision. Id. at 42.
In response, Defendants filed their Motion to Dismiss Under Rule 12(b)(1),
12(b)(6), 23.1, and Based Upon Statutory Bar and Bylaw and Brief in Support (the
“Motion to Dismiss”) (Doc. No. 17). In their Motion to Dismiss, Defendants argue
that Plaintiff’s claims must be dismissed because Texas Senate Bill 29 (“SB 29”), signed
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by Governor Greg Abbott prior to this case, authorizes Texas corporations to prohibit
derivative lawsuits from a shareholder if the shareholder’s beneficial ownership in the
corporation is less than three percent. See Defs.’ Mot. to Dismiss at 1 (emphasis added).
According to Defendants’ Motion to Dismiss, SB 29 was signed on May 14, 2025, and
Defendants adopted the amended bylaws two days later. Id. Defendants state that,
because Plaintiff’s beneficial ownership percentage falls below three percent, he is
barred from bringing this derivative suit. See id. at 1–2. Further, other filings related to
SB 29 have been submitted to the Court. Multiple non-parties filed amicus curiae briefs
in support of SB 29’s application to this case and Defendants’ Motion to Dismiss. See
Doc. Nos. 29, 30, 36.
On October 3, 2025, Plaintiff filed his Rule 5.1 Notice of Constitutional
Question (the “5.1 Notice”) challenging the constitutionality of SB 29 and Texas
Business Organizations Code § 21.552(a)(3). See generally 5.1 Notice (Doc. No. 41).
“[P]laintiff challenges the constitutionality of the retroactive application of changes
made to § 21.552(a)(3) by [SB 29] to this action.” Id. at 2. That same day, the State
of Texas filed its Motion to Intervene. See generally Mot. to Intervene (Doc. No. 43).
The State of Texas seeks to intervene by filing its Intervenor Motion to Dismiss for
Failure to State a Claim (the “Intervenor Motion to Dismiss”) (Doc. No. 43-1). See id.
at 2. The State of Texas later filed its Supplement to the Motion. See generally Suppl.
to the Mot. (Doc. No. 47). Plaintiff is unopposed to intervention but is opposed to the
Intervenor Motion to Dismiss. See Suppl. Certificate of Conf. at 1 (Doc. No. 46).
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II. 	Analysis
The State of Texas asserts that because “the constitutionality of SB 29 has been
directly placed at issue [by Plaintiff’s 5.1 Notice] . . ., intervention as a matter of right
is now required by 28 U.S.C. § [2403].” Suppl. to the Mot. at 1–2. For the following
reasons, the Court GRANTS the Motion.
The court must allow intervention for anyone who “is given an unconditional
right to intervene by a federal statute.” FED . R. CIV. P. 24(a)(1). 28 U.S.C § 2403 states
that “[i]n any action, suit, or proceeding in a court of the United States to which a
State 	or 	any 	agency, 	officer, 	or 	employee 	thereof 	is 	not 	a 	party, 	wherein 	the
constitutionality of any statute of that State affecting the public interest is drawn in
question, the court . . . shall permit the State to intervene for presentation of evidence,
if evidence is otherwise admissible in the case, and for argument on the question of
constitutionality.” 28 U.S.C. § 2403(b). Within 60 days of the filing of a notice of
constitutional question regarding a state statute, the state attorney general may
intervene in the case. See F ED . R. CIV. P. 5.1(c).
“[I]n federal court proceedings drawing into question the constitutionality of a
state statute, the court must . . . afford the state an opportunity to intervene on the
constitutional issues.” Baker v. Wade, 743 F.2d 236, 242 (5th Cir. 1984) (citing §
2403). Here, Plaintiff unequivocally calls into question the constitutionality of SB 29,
a Texas state statute. See 5.1 Notice at 2. The State of Texas timely filed the present
Motion. See FED . R. CIV. P. 5.1(c). In its Motion, the State of Texas makes clear its
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motive for intervention: to argue that SB 29 is constitutionally valid. See Mot. to
Intervene & Suppl. to the Mot. Further, SB 29, a state statute regulating the ability of
shareholders to assert derivative claims, clearly “affect[s] the public interest.” 28 U.S.C.
§ 2403. The Court finds that the State of Texas is entitled to intervention as a matter
of right under § 2403. Accordingly, the Court GRANTS the Motion.
III. 	Conclusion
For the foregoing reasons, the Court GRANTS the Motion. The Clerk is
DIRECTED to add the State of Texas as an intervening party to this case. The Clerk
is also DIRECTED to enter the State of Texas’ Intervenor Motion to Dismiss,
submitted as Doc. No. 43-1, as of the date of this Order. The Parties’ briefing
deadlines for the Intervenor Motion to Dismiss are set as of the date of this Order,
in accordance with this Court’s Local Civil Rules.
SO ORDERED.
Signed November 17th , 2025.
____________________________________
ED KINKEADE
UNITED STATES DISTRICT JUDGE
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