LONDON – After two years of litigation, US carrier American Airlines has agreed to pay $7.5 million as settlement of a class action suit which accused it of backtracking on promises of free checked bags on flights for certain customers.
A preliminary approval motion was filed on Friday in the Texas federal court, with the parties reaching the settlement arrangement out of court – just two weeks before the trial was to commence.
The origin for the class action law suit stemmed back to February 2021, when passengers sued the airline for allegedly failing to honour a promise that certain customers would be permitted one or more checked bags on a flight at no cost.
The complainants alleged that the airline failed to honour this promise and charged baggage fees upon their arrival at the airport. These instances occurred over a period between 2013 and 2021.
American Airlines, Inc. (“American”) have now agreed to pay a minimum of $7.5 million to provide full 100% refunds to Settlement Class Members who filed timely, valid claims.
There is no limit or cap on the amount of money American will pay over and above the $7.5 million minimum, and American will additionally pay the settlement administration costs and attorneys’ fees.
The preliminary approval motion stated that over the two years since the process began, Counsel for the class action thoroughly investigated and analyzed American’s customer disclosures and checked baggage policies.
Counsel spoke with American customers about their experiences, and investigated those customer complaints and other pertinent public information. Class Counsel also extensively researched and analyzed the legal issues regarding the claims pled and American’s defenses and potential defenses.
Moreover, Class Counsel conducted extensive formal discovery in this case, including reviewing more than 50,000 pages of internal documents and data produced by American Airlines.
In putting forward the out of court settlement proposal, it stated:
“Rather than risk trial and appeal, which could lead to class members getting zero or less-than-full compensation at an uncertain time later, the settlement gives nearly every settlement class member a guaranteed opportunity now to get 100% compensation.”
It is estimated by Class Counsel that the settlement classes consist of over 2.8 million airline customers.
During this preliminary approval stage, the Court must make a preliminary determination of the fairness, reasonableness, and adequacy of the settlement terms and must direct the preparation of notice of the certification, proposed settlement, and date of the final fairness hearing.
The case is listed as: Katherine M. Cleary et al. v. American Airlines Inc., case number 4:21-cv-00184, filed in the U.S. District Court for the Northern District of Texas.