7th Circuit Reconsidering Southwest Drink Voucher Settlement

On Feb. 11, a group of objecting Class Members asked the 7th U.S. Circuit Court of Appeals to reconsider the $58 million Southwest Airlines drink voucher class action settlement, stating that coupon vouchers awarded to participating Class Members could not justify the $1.7 million paid to plaintiffs’ counsel in attorney’s fees.

According to the drink voucher class action lawsuit, airline customers and Class Members Jeffrey Markow and Alison Paul have challenged the Southwest class action settlement, a settlement which resolved claims that the airline refused to honor certain airline drink vouchers in 2010 with promises by Southwest to give millions of drink coupons to affected Class Members. When a federal judge originally approved the deal, the class counsel’s attorney’s fees were cut from $3 million to $1.7 million.

However, objecting Class Members claim that the Illinois federal court did not fairly divide the settlement amongst the Class and their legal representatives. The drink voucher class action settlement was then appealed to a three-judge panel at the 7th Circuit. According to the Southwest Airlines drink voucher class action lawsuit, the objecting plaintiffs allege that the lower court signed off on the attorney’s fees before seeing how many drink coupons were redeemed, which allegedly resulted in a huge profit for attorney’s unequal to the relief (or lack thereof) experienced by the Southwest Class. Additionally, the plaintiffs argue that the $1.3 million in attorneys’ fees previously cut by the judge did not benefit the Class, as that money reverted back to the airline.

However, objecting plaintiffs and Class Members have met some resistance from the 7th Circuit, as U.S. Circuit Judge David Hamilton of the three-judge panel stated that the Class Members of the Southwest Airlines drink voucher class action settlement received exactly what they asked for in their class action lawsuit, that being the drink vouchers. As such, the judge did not feel as this was a situation in which the Class received minimal relief in order to benefit their attorneys. According to Judge Hamilton, “This class got all it plausibly could have expected out of this lawsuit.”

The plaintiffs filed this Southwest Airlines drink voucher class action lawsuit a few years ago, claiming that the airline breached a contract with consumers in August 2010 when Southwest announced that it would no longer accept drink vouchers lacking an expiration date. This act allegedly voided all vouchers previously issued to Southwest flyers.

Southwest originally reached a drink voucher class action settlement in December 2012 which would provide a free replacement voucher that Class Members could receive by submitting a claim to the Southwest Airlines drink voucher class action settlement. With an estimated 5.8 million vouchers unredeemed and each voucher valued at about $5 each, then the drink voucher class action settlement fund could be valued anywhere from $29 million to $58 million. This court gave final approval for the Southwest Airlines class action settlement in August of the same year.

However, in the following year, some Class Members objected to the drink voucher settlement, claiming that the Southwest settlement is considered a “coupon settlement” under the Class Action Fairness Act and stiffs Class Members of adequate relief while awarding the Class counsel.

Despite Judge Hamilton’s remarks, the Southwest Airlines drink voucher class action settlement is still under advisement by the appellate court.

The Class is 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.