The Lord Giveth and the Lord Taketh Away
This is apparently the lesson which consumers are meant to learn when dealing with things like airline loyalty programs. In a ruling published today the Honorable Harry D. Leinenweber opened the report with the above verse from the Book of Job as part of the explanation for why the claimant’s case was being dismissed. United Airlines has won their case filed by George Lagen, a Million Miler (MMer) who was seeking to reverse the changes in the program which occurred as part of the merger between United and Continental. Lagen was seeking class action status for the case, hoping to represent all MMers in realizing compensation from the carrier in some form or another.
On the one had, the Court did acknowledge that the lifetime benefits changed and even goes so far as to say there was a material reduction:
The Court will presume knowledge of the specifics of the so-called “Lifetime Benefits” which were extensively described in the Court’s earlier ruling. Suffice to say that they were materially reduced.
The case made it further than some guessed it would, with discovery having been performed and motions for summary judgment filed by both sides. The judge ruled on those motions, denying that of Lagen and granting that of United. The case is closed.
The Plaintiff contends that it has been able to prove the existence of a separate contract between the Million Miler class and United, and United contends that it has not. The Court agrees with United that Plaintiff has not proved the existence of a separate contract between it and the Million Milers. Accordingly, the Court denies Plaintiff’s Motion for Summary judgment and grants United’s Cross-Motion for Summary Judgment.
The opinion also notes that Lagen failed to produce any substantial documentation of the claim that the MMer program is separate from the MileagePlus program and the contract governing that program:
The record shows that Plaintiff has not produced any evidence that United made him (and other putative class members) an offer to participate in a separate MillionMile Flyer program
that was separate and apart from the MileagePlus program. The sum total of his evidence is vague references to “electronic and written correspondence” from United which, in both instances,
postdates his qualification as a Million Mile Flyer and was not specifically directed to him; and a 1997 Newsletter from United announcing the creation of the program he could not remember
receiving.…
In fact, Plaintiff in his Complaint alleges that the MillionMile Flyer program was part of the Mileage Plus program. He has not produced any document that comes close to substantiating that the programs were separate and distinct.
And so, given that they are part of the same program, the T&Cs of the MileagePlus program prevail. And that includes the right of United to “change the Program Rules, regulations, benefits, conditions of participation or mileage levels, in whole or in part, at any time, with or without notice, even though changes may affect the value of the mileage or certificates already accumulated.” They did, and the customers are stuck with those changes.
Oh, and Lagen would appear to be on the hook for United’s court costs (subtle, but very real difference) legal fees. This could prove to be a pricey little game, though I’m not entirely certain what costs are included or not in that part of the claim.
This is the second big win for loyalty programs in the legal area this month. Delta’s win over Kwok on the case about how to calculate the number of miles earnt for a flight came out just recently as well.
If you wish to read the whole opinion from Judge Leinenweber and don’t have access to PACER you can download a copy of the PDF here.
Related Posts:
- A frequent flyer loser loses a lawsuit
- United responds to “lifetime” benefits lawsuit
- Lawsuit filed over United’s “lifetime” elite benefits
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Ouch! I suspect United has expensive lawyers 😉
“Costs” typically do not include lawyer fees: http://www.law.cornell.edu/uscode/text/28/1920.
Hi Seth,
The plaintiff would NOT be stuck with United’s legal fees. There’s nothing in the decision to suggest that. Generally, in the U.S., each party is responsible for their own legal fees.
Statutory “court costs,” however, are a different story, and are usually a very modest amount. The judgment states that defendant is entitled to “costs.” In a case like this, I’d imagine it would not be more than a few thousand dollars, if that much.
It is also up to the prevailing party to seek costs and United might be happy enough to have been successful that they will not bother to do so.
One U.S. District Court prepared a pretty good guide about court costs. You can check it out at: http://www.mied.uscourts.gov/Rules/BillOfCosts200711.pdf
I don’t get too excited over MM and similar “lifetime” schemes, for this very reason. When I do hit that milestone, fine, I’ll take what I can get for however long I can. But alas, nothing is certain in life but death and taxes.
I’m a .85 million mile United flyer giving Spirit a try for the first time in a few weeks. A few years ago I wouldn’t have even checked the price, but if loyalty means nothing to them…
If you were never looking at comparison prices anyways then you’re the fool, not them. Blind loyalty at any price is not a good for the consumer, though it is for the company. And why would you take that approach??
As for the Spirit flight, they’re fine. It is quite clear what you’re buying (not much, but typically cheap). As long as you’ve accounted for all the fees and such and the VERY tight pitch you’ll be fine. Or you won’t. But that’s part of the fun of being a consumer: You get to make that choice.
Exactly. Cannot believe so many slavishly stick with one brand, be it clothing, cars, sports teams, airlines etc etc etc etc. But that’s why Madison Avenue got so famous – by convincing nitwits to buy something that’s not in their best interest …