Attorneys for agents would receive a $1 million upfront payment and
lead plaintiff Sarah Futch Hall would receive $100,000 as part of
the landmark antitrust-case settlement with Lufthansa, according to
recently filed court documents.
Although the outline of the deal was announced in late June, the
upfront payments to the attorneys and Hall were not made public
until the settlement agreement was filed with the court July 7.
The Lufthansa deal is the first that has been reached in the
class-action case against 17 airlines filed under the name of Hall,
owner of Travel Specialist in Wilmington, N.C.
The case is considered a bellwether for travel agents’ charges
that the airlines conspired to eliminate commissions.
Under terms of the settlement, Lufthansa would launch a
“Transatlantic Bonus Program.”
The program would call for travel agents to receive a bonus of
up to $100 on tickets booked through the airline. After the first
year, only travel agents who reached sales thresholds would be
allowed to participate.
Lufthansa has also agreed to compensate agencies that have gone
out of business for underpaid commissions on tickets booked through
the airline.
Although agents would not receive any benefit until they sold
Lufthansa tickets, the plaintiff attorneys will receive a $1
million down payment for their fees, which will ultimately equal 25
percent of the money the airline pays out under the Transatlantic
Bonus Program.
The attorneys will also receive 25 percent of the money paid to
defunct agencies, with the agencies receiving 75 percent of the
funds.
The settlement money for the attorneys will help pay the
expenses for the continuing litigation, said co-counsel Daniel
Shulman.
The $1 million “won’t even begin to cover expenses,” Shulman
said.
In addition to the $100,000 payment to Hall, the three other
lead plaintiffs, who have put in less time on the case, would split
$50,000.
Hall has spent more than 3,000 hours helping the case, Shulman
said.
“Sarah has put a lot of work into the case and she should be
compensated,” said Alexander Anolik, the attorney for ARTA, one of
the plaintiffs.
The proposed settlement had come under criticism when it was
first announced, despite it being the first indication that
airlines are willing to negotiate. ARTA’s board of directors voted
to denounce the agreement as nothing more than a “sales
promotion.”
But, ultimately, ARTA does not plan to formally oppose the deal
in court, Anolik said.
“At this point we’re waiting to see what happens with the rest
of the airlines,” Anolik said.
Other airlines are said to have entered into serious discussions
in connection with possible settlements in the case. The airlines
have not commented on the proposed Lufthansa settlement.
A formal hearing on the agreement has been delayed until Sept. 2
at the request of Judge W. Earl Britt.
Britt has already given the settlement his preliminary approval.
The judge has also moved the start of the trial to Feb. 2,
2004.
