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In re Southwest Airlines Voucher Litigation

United States District Court, Seventh Circuit

December 6, 2013

In re: SOUTHWEST AIRLINES VOUCHER LITIGATION

MEMORANDUM OPINION AND ORDER

MATTHEW F. KENNELLY, District Judge.

Gregory Markow, a class member who objected to the attorney's fee and incentive award elements of the class-wide settlement in this case, has moved to intervene. The Court grants the motion with certain limitations, as described below.

The history of the case is discussed extensively in the Court's decisions approving the settlement and awarding attorney's fees. See In re Southwest Airlines Voucher Litig., No. 11 C 8176, 2013 WL 4510197 (N.D. Ill. Aug. 26, 2013) (" Southwest I "); In re Southwest Airlines Voucher Litig., No. 11 C 8176, 2013 WL 5497275 (N.D. Ill. Oct. 3, 2013). The Court will review the history only to the extent required to provide the background for Markow's motion.

The lawsuit concerned Southwest's unilateral decision to stop honoring drink vouchers that it had given to travelers who purchased certain premium-priced tickets. The plaintiffs contended that this constituted a breach of contract. After a significant period of contested litigation, the parties engaged in mediation, conducted by retired judge Wayne Andersen. They first agreed to a class-wide settlement of the plaintiffs' claims, including a process for class members to obtain replacement drink vouchers, incentive awards for the two named plaintiffs, and injunctive relief regarding future voucher programs. After the parties concluded negotiations on the class members' claims, they attempted to mediate the issue of attorney's fees for class counsel. They were unable to reach agreement on a figure to propose but ultimately agreed that class counsel could request a fee of as much as $7, 000, 000 and that Southwest would not object to a fee of $1, 750, 000.

The Court preliminarily approved the settlement and a form of notice to the class. The notice described the settlement and told class members that they could object by filing a written objection with the court, including the specific reasons for the objection. The notice also provided the date and time for the hearing regarding whether the Court should approve the settlement. See Pls.' Mot. for Final Approval (dkt. no. 125), Ex. 3.

At a later date, class counsel and Southwest reached a further agreement regarding attorney's fees. Specifically, Southwest agreed not to oppose a fee request of up to $3, 000, 000. Plaintiffs then filed a fee petition seeking that amount. See Pls.' Mot. for Attorneys' Fees (dkt. no. 103).

Markow, represented by counsel, filed an objection. See Obj. to Proposed Settlement (dkt. no. 105). In his objection, Markow challenged the proposed attorney's fee award and incentive awards to the named plaintiffs. Markow further argued that the Court should not infer approval of the settlement from the low number of objections, contending that the procedure for objections was unnecessarily onerous. He did not contend, however, that the relief proposed for class members was inadequate. Markow's later written submissions likewise focused on the fee request and included no contention that the relief proposed for class members was inadequate. See Markow's Resp. to Def.'s Resp. to Pl.'s Mot. for Attorney's Fees (dkt. no. 120); Markow's Not. of Pertinent Authority (dkt. no. 131); Resp. to Markow to Southwest Airline Co.'s Not. of Pertinent Authority (dkt. no. 134-135); Markow's Nots. of Pertinent Authority (dkt. nos. 137 & 138).

At the fairness hearing, Markow's counsel Melissa Holyoak made an oral presentation that focused entirely on the proposed fee award. See May 21, 2013 Tr. at 5-15. Indeed, Markow's counsel specifically stated, in response to a direct question by the Court, that Markow objected only to the proposed fee award and incentive awards, but not to the relief proposed for the class:

THE COURT:... [D]o you have a view on anything other than the attorney's fees on the part that the class members are getting?
MS. HOLYOAK: We did, and I can rely on the papers for that, but, yes, I did - we did object to the incentive awards.
Oh, to the amount?
THE COURT: Yes. Forget the incentives. I'm just talking about the whole thing about giving them a coupon.
MS. HOLYOAK: No, not to that.
THE COURT: You don't have a problem with that. You object to the incentive awards and ...

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