Illinois Court Approves Settlement in Landmark Frequent Flyer Lawsuit

Fri. July 6, 2001 12:00 AM by XPresspress

Chicago, IL - Ending 13 years of litigation in two separate class action lawsuits, Judge Lee Preston has approved a settlement affecting four million American Airlines AAdvantage frequent flyers. The lawsuits involved changes to the AAdvantage program implemented in 1988 and 1995. The suit had traveled twice to the United States Supreme Court and the Illinois Supreme Court and resulted in a precedent-setting decision that preserved the right of airline passengers and others to bring breach of contract claims against airlines.

Michael B. Hyman, of Much Shelist Freed Denenberg Ament & Rubenstein, P.C., Chicago, one of the lead attorneys, said "These hard-fought, far-reaching lawsuits show that airline passengers can fight back, and that consumers have a collective commanding voice when diligent and dedicated counsel lead the charge."

Judge Preston, in his order, stated that, "[W]hen analyzed against the actual claims of the plaintiffs in Wolens and Gutterman, the settlement terms confer upon the class members a substantial degree of the value they claim they lost as a result of American's changes to the program. Settlement affords both the Wolens and the Gutterman class members opportunity to claim the type of awards they allege they were denied as a result of American's changes to the AAdvantage Program, and while the miles-off certificates and dollars-off discounts do not correspond in every instance to what the plaintiffs allege they lost, the benefits provide plaintiffs a significant portion of their claimed damages."

Judge Lee Preston, of the Circuit Court of Cook County, also noted that "plaintiffs' counsel performed high quality legal services which significantly benefited the class from which important national issues of law were resolved."

The relief in these cases has been estimated to exceed $100 million. The settlement was approved only after a thorough and lengthy hearing by the court, which overruled objections raised by class members in approving the settlement.

American introduced the AAdvantage program in 1981 to encourage customers loyalty and attract customers. In May 1981, the program instituted capacity controls on miles already earned by members of the program. Plaintiffs claimed that the miles vested when they were accrued and American diminished the value of the miles by limiting the availability of seats for frequent flyer tickets. Then in 1995, American raised the number of mileage credits needed to claim a domestic Plan AAhead coach awards from 20,000 to 25,000 mileage credits. Plaintiffs alleged the change breached the program contract because American was obligated to keep the rules the same as to each of those members for as long as the members held miles in their accounts. This claim affected only miles accumulated in 1992 and 1993.

Class members have already been notified of the lawsuit and the deadline for making claims has long passed. The Court's Order becomes final in 30 days, if there is no appeal.