U.S. Magistrate Judge Donna Ryu in Oakland, California said Khairuldeen Makhzoomi could try to show that "Islamophobia," coming amid a "sensitive political climate," was a factor behind his removal, and that Southwest's claim he was removed because he appeared to make threats was pretextual.
Ryu said Makhzoomi could seek damages from Southwest for alleged violations of federal and California civil rights laws, but dismissed claims of negligence and intentional infliction of emotional distress.
The Dallas-based carrier had argued there was "at most a scintilla of evidence" suggesting racial animus, and said its employees acted reasonably in considering Makhzoomi a possible safety threat.
Southwest did not immediately respond to requests for comment. One of its lawyers declined to comment.
"The case is moving forward, and we look forward to trial," said Zahra Billoo, a lawyer for Makhzoomi. A trial is scheduled for Feb. 3, 2020.
The incident occurred on an April 6, 2016 Southwest flight awaiting takeoff to Oakland from Los Angeles.
Makhzoomi, then a 26-year-old public policy student at the University of California, Berkeley, had been talking with his uncle by cellphone after attending a dinner featuring United Nations Secretary General Ban Ki-moon.
Two police officers and Southwest customer service manager Shoaib Ahmed removed Makhzoomi from the plane after a woman who had been seated nearby became agitated, and reported having heard him use words associated with suicide martyrdom.
"I would say the fact that 'American' was said next to it, and I'm on a plane, I wasn't sure what to make of it," the woman, her name shielded by a pseudonym, said in a deposition.
Makhzoomi, a U.S. citizen who arrived in the country as an Iraqi refugee, denied making threatening statements, and denied Ahmed's claim that he had used the words bomb, ISIS, jihad and martyrdom on the plane.
Southwest's lawyers also represent Ahmed.
Makhzoomi was questioned by local law enforcement and the FBI before flying home on Delta Air Lines, after Southwest decided not to rebook him and instead refunded his ticket, court papers show.
The case is Makhzoomi v Southwest Airlines Co et al, U.S. District Court, Northern District of California, No. 18-00924.