Class Action – Attorney’s Fees

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7^th Circuit Court of Appeals

Case Name: Adam J. Levitt, et al. v. Southwest Airlines Company

Case No.: 17-3541

Officials: FLAUM, MANION, and HAMILTON, Circuit Judges.

Focus: Class Action – Attorney’s Fees

This is the third appeal regarding attorney fees to stem from a class action against Southwest Airlines after it stopped honoring in‐flight drink vouchers for customers who bought “Business Select” fares. We thought the case was over after the first appeal, In re Southwest Airlines Voucher Litigation (Southwest I), 799 F.3d 701 (7th Cir. 2015), because the settlement made the customers whole by giving them a replacement voucher. At least, it made whole the small group of customers who submitted claims.

After the appeal, class counsel—Siprut PC—requested additional fees. The district court awarded them. Markow, the objector, appealed but dismissed the appeal after Southwest tripled the relief to the class—by giving two additional vouchers for every one claimed—to narrow the gap between the amount of supplemental fees Siprut would receive and the value of the relief the class would actually receive. The district court approved that agreement. Objector Markow then moved for fees and an incentive award. The district court denied the motion, reasoning that requiring Siprut to pay Markow’s fees out of Siprut’s supplemental fee award “undoes the settlement.” In re Southwest Airlines Voucher Litigation (South‐ west II), 2017 WL 5295372, at *5 (N.D. Ill. Nov. 13, 2017). Markow has appealed. We reverse and remand. Unless the parties to a class action settlement agreement, including objecting parties, expressly agree otherwise, settlement agreements should not be read to bar objectors from requesting fees for their efforts in adding value to a settlement

Reversed and Remanded

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.