In In Re Southwest Airlines Voucher Litigation, Case No. 13-3264 (7th Cir. Aug. 20, 2015), the U.S. Court of Appeals for the Seventh Circuit upheld a fee award to class counsel in a class action that resulted in a "coupon settlement" - a settlement in which the defendant agrees to issue coupons to the class members. In upholding the fee award, the Seventh Circuit also discussed the propriety of a number of settlement provisions and practices that are frequently at issue in class action settlement negotiations. While not a workplace class action, this decision should be of interest to any employers who are involved in class action litigation because it provides guidance about how courts in the Seventh Circuit and beyond will view certain class action settlement provisions and practices.
Case Background
Southwest Airlines issued vouchers to its "Business Select" passengers that could be redeemed for one free in-flight alcoholic beverage. Some passengers saved their beverage vouchers so they could use them on later flights. In August 2010, Southwest Airlines announced that these vouchers could only be used on the flight covered by the "Business Select" ticket. The plaintiffs filed a class action against Southwest Airlines for breach of contract, unjust enrichment, and violations of state consumer fraud laws.
The district court dismissed the unjust enrichment and consumer fraud claims as being preempted by the Airline Deregulation Act. The parties subsequently agreed to settle the remaining breach of contract claim on a...
