After fact discovery was substantially completed, the
Parties began discussing in earnest the possibility of
settlement. After weeks of back and forth discussions
between themselves, the Parties engaged in two full days
of arm’s length and often spirited mediation sessions
over the course of two weeks with the Mediator, Judge
Wayne Anderson (Ret.), in Chicago, Illinois. Judge
Andersen is a former federal judge on the United States
District Court for the Northern District of Illinois.
In
the court settlement agreement it stated “although both
sides believe their respective positions in the action
are meritorious, they have concluded that, due to the
uncertainties and expense of protracted litigation, it
is in the best interest of Plaintiffs, the putative
settlement Class, and Southwest to resolve this action
on the terms provided in the proposed Settlement
Agreement”.
Each Entitled Class Member1 shall receive one
Replacement Voucher for each and every Eligible Drink
Voucher an Entitled Class Member received prior to
August 1, 2010, in connection with the purchase of a
Business Select ticket or otherwise, that was not
redeemed by the Entitled Class Member. There is no limit
or cap on the number of Replacement Vouchers per
Entitled Class Member. Thus, the Settlement allows
Entitled Class to recover one hundred cents on the
dollar, a complete and total recovery. And, the Eligible
Vouchers are freely transferable. To become an Entitled
Class Member, and, thus, to receive one or more
Replacement Vouchers, the Class Member must submit a
claim that is timely, and valid as determined by the
Settlement Administrator.
During that roughly three-year time period, Southwest
sold 11.6 million Business Select tickets and, thus,
11.6 million Vouchers. Id. Although Southwest failed to
track exactly how many of those Vouchers were redeemed,
Southwest’s empirical and statistical modeling suggests
that approximately half, or 50%, of the Vouchers were
redeemed. Thus, as of August 1, 2010,
approximately 5.8 million Vouchers had not been redeemed
by Class Members. Each Voucher is valued at $5 the price
of a premium or alcoholic beverage on a Southwest flight
without a Voucher which means that the Settlement
provides for not less than $29 million worth of direct
benefits to the Settlement Class.
Despite their best efforts, to date, the Parties have
been unable to reach agreement on Attorneys’ Fees and
Expenses. Plaintiffs will submit a motion supporting
their request for attorneys’ fees pursuant to the
Court’s Preliminary Approval Order. Importantly, the
Attorneys’ Fees and Expenses will not be paid out of the
Settlement Class benefits achieved by the Settlement,
and will not dilute or reduce the Class benefits in any
way. Rather, Fees and Expenses will be paid directly by
Southwest, in addition to and separate from the
Settlement Class benefits.
If the Parties are ultimately unable to reach an
agreement as to Attorneys’ Fees and Expenses, then
the Parties respectfully request the Court decide
that issue, after briefing by the Parties, subject
to the following provisions: the Parties agree that
Southwest shall pay Class Counsel no more than $7
million in fees (the “Ceiling”), but no less than
$1.75 million in fees (the “Floor”), and will
request the Court to order an Attorneys’ Fees and
Expenses award that is either the Ceiling, the
Floor, or somewhere in between (See
Motion For Preliminary Approval Of Class Action
Settlement).
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