Posted Dec 12, 2012 05:23 pm CST
Updated: A Chicago lawyer who sued Southwest Airlines over a change to its free-drink coupon policy has agreed to a settlement valued at up to $58 million.
The class action suit by Adam Levitt had claimed Southwest breached a contract with passengers when it decided in 2010 that it would not honor unused $5 drink vouchers without an expiration date. The settlement is valued at between $29 million and $58 million, the Chicago Daily Law Bulletin reports.
The vouchers were given to passengers who purchased Business Select seats with the airline.
A motion (PDF) for preliminary approval of the settlement was granted last week, Levitt’s lawyer, Joseph Siprut, tells the ABA Journal in an email. Siprut told the Chicago Daily Law Bulletin that the settlement is “a grand-slam victory for the class.”
Siprut told the Law Bulletin that class members can recover without the actual physical voucher. “All you have to do is fill out the claim form and attest to the fact that you had ‘X’ number of vouchers that you never had a chance to redeem,” Siprut said.
Former ABA President H. Thomas Wells Jr., a partner at Maynard Cooper & Gale in Birmingham, Ala., represented Southwest Airlines. Southwest had obtained dismissal of all consumer fraud counts in the class action, and the breach of contract claim was the only remaining count at the time of settlement. “We were confident that if the case were litigated, Southwest would have prevailed,” Wells tells the ABA Journal in an email.
The coupons at issue were intended to be used only when passengers were flying on a Business Select fare, he said, and contained the same information as the boarding passes, including the date and confirmation number. Customers know they can’t use their boarding pass on another day for another flight, Wells says, yet the plaintiffs argued they should be able to use their drink coupons on other flights since there was no explicit expiration date.
The $58 million settlement value is based on the fact that the airline sold about 11.6 million Business Select tickets for the period in question, and the coupons were valued at $5 each. The figure assumes no one used their free drink coupons. The actual value will be based on claims filed for replacement drink coupons.
Updated on Dec. 13 to include information from H. Thomas Wells, the lawyer for Southwest.