American Airlines Inc. violated federal law by filling its 401(k) plan with funds from investment companies that pursue environmental, social, and corporate governance goals, a Texas federal judge ruled Friday in the biggest victory yet for opponents of the strategy.

Defined contribution plans using environmental, social and governance principles have suffered a setback and could face more litigation risk, following a Texas federal judge’s Jan. 10 ruling against American Airlines and its 401 (k) plan fiduciaries, some ERISA attorneys warn.

A federal judge in Texas on Friday said American Airlines violated federal law by basing investment decisions for its employee retirement plan on environmental, social and other non-financial factors.

This was the first challenge to a DC plan sponsor’s use of environmental, social and governance principles, and the judge’s ruling adds to the efforts by certain politicians and legislatures to claim ESG principles adversely affect retirement plan investments.

Berkshire coal plants emit more nitrogen oxide gases than any other coal-fired fleet in the country. Despite big investments in renewable energy, the company has resisted efforts by regulators to make coal plants cleaner.

A federal judge in one of the country’s most conservative district courts ruled Friday that American Airlines unlawfully incorporated environmental and sustainable governance (ESG) factors into its employee retirement plan.