Southwest Drink Voucher Settlement Should Be Upheld, Plaintiffs Urge

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Plaintiffs have urged an appeals court to uphold the Southwest Airlines voucher class action settlement and reject an objector’s argument that the deal is a “coupon settlement” under the Class Action Fairness Act (CAFA) because the entire premise of the class action lawsuit was to recover the value of previously issued Southwest drink vouchers.

The Southwest Airlines voucher class action settlement received final approval in August 2013 after the court found the deal was fair, reasonable and adequate. The court noted that this class action settlement was different from other settlements that offered coupons or vouchers to Class Members because the “underlying loss involved a voucher” and the Southwest Airlines settlement “does not substitute a coupon for pecuniary loss.”

In its decision to grant final approval to the Southwest drink voucher settlement, the court noted that because the Class Members had received vouchers that could only be redeemed on Southwest flights, the deal didn’t require them to establish any further business relationship than they would have had to in order to “receive the benefit of their drink vouchers” in the first place.

Gregory Markow objected to the Southwest drink voucher settlement, arguing that under CAFA, the attorneys’ fees should be based on the percentage of Southwest vouchers that are actually redeemed, as the Southwest Airlines class action settlement is a “coupon settlement” and does not provide monetary compensation to Class Members. This designation of CAFA is designed to prevent attorneys from enriching themselves when Class Members receive only coupons from a class action settlement.

In response, the plaintiffs’ attorneys argued that the Southwest drink voucher class action settlement did not constitute a “coupon settlement” because the deal would provide Class Members with the same benefits they were denied by Southwest Airlines’ policy change.

“This is a case about drink vouchers,” according to the plaintiffs. “Call them coupons, call them vouchers, call them anything else – but the case relates to pieces of paper that were issued by Southwest in conjunction with the purchase of Business Select airfare tickets, and which entitled purchasers of those airfare tickets the right to redeem the pieces of paper … for alcoholic beverages, which ordinarily cost $5 apiece.”

“The factual predicate for this case is that Southwest one day announced it would no longer honor those Vouchers, and instead would only honor more recently-issued Vouchers that expressly stated they could be used on the date of that flight only,” the plaintiffs argue. “Thus, Class Members who had paid for and accumulated stashes of previously-issued Vouchers – were denied the opportunity to redeem those vouchers.”

“Achieving a settlement that restores the very thing taken from Class Members should not be subject to the CAFA stigma, when the obvious point of the Coupon Settlement provisions in CAFA is to deter class counsel from selling out his Class by settling a case for a bunch of lousy coupons (which may end up benefitting the defendant in many ways) and exorbitant fees,” the plaintiffs continue.

Under the terms of the Southwest Airlines drink voucher settlement, Class Members are eligible to receive one drink voucher to replace any voucher that was not redeemed prior to Aug. 1, 2010. The deadline to file a claim for the Southwest drink voucher class action settlement passed on Sept. 2, 2013.

More information about the status of the Southwest drink voucher class action settlement was not immediately available. Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also mark this article as a “Favorite” using your free Top Class Actions account to receive notifications when this article is updated.

Class Members of the Southwest drink voucher class action settlement are represented by Joseph Siprut, Gregg Barbakoff and Gregory Jones of Siprut PC.

The Southwest Airlines Drink Voucher Class Action Lawsuit is In re: Southwest Airlines Voucher Litigation, Case No. 13-3264, in the 7th U.S. Circuit Court of Appeals.