Law360 (May 26, 2023, 9:04 PM EDT) – Delta Air Lines Inc. has reached a class settlement with customers who sued the airline for refunds for flights canceled during the coronavirus pandemic, agreeing to pay them cash awards or offer flight credits equal to the cost of their canceled tickets with interest, as well as more than $2 million in attorney fees, according to a motion filed Friday.
Angela Dusko brought the suit on behalf of herself and other ticket holders whom the airline allegedly offered credits for possible future travel instead of refunds for canceled flights, something Dusko said violated Delta’s contractual promise to either accommodate passengers on the next available flight or offer refunds.
Though Delta denied that it had violated any contract with customers, the airline reached a settlement with Dusko and her class, according to an unopposed motion for preliminary approval filed by the customers in the U.S. District Court for the Northern District of Georgia. The customers, seeking preliminary approval from the court for the settlement, described it as “more than reasonable,” considering that class members will “essentially recover all of the damages that they could have recovered at trial.”
“The settlement represents an extraordinary result for the settlement class, as it provides settlement class members with the damages that they were likely to recover at trial, avoiding further delay in providing relief and further protracted litigation with uncertain results,” the motion said.
Under the terms of the settlement, the motion said, class members will be able to claim cash awards or flight credits equal to the cost of their canceled ticket, plus 7% interest, and their counsel will receive $2,285,000 for attorney fees and up to $80,000 for litigation costs. Delta will also pay all settlement administration costs, the motion said.
“These separate payments ensure that settlement class members receive 100% of the direct settlement payments they claim,” the motion said.
The exact dollar amount that Delta would pay out if the settlement is approved by the court is currently unknown, as prices for the tickets held by each class member may differ.
Class members include all U.S. ticket holders who received a credit for a non-refundable ticket, purchased with dollars on a flight scheduled to depart between March 2020 and the end of April 2021, that Delta canceled. The class also includes ticket holders who requested a refund for their ticket but didn’t receive one and had an unused credit or partial credit as of Jan. 13.
If the settlement is approved, class members will be notified either by email, postcard or long-form notice, per the motion. Delta will retain Epiq Class Action & Claims Solutions Inc., a third-party settlement administrator, to send out the notices, and it will begin doing so within 45 days after the settlement is approved.
In order to claim their settlement funds, class members need to submit a claim form within 105 days after preliminary approval is given. Those who do not wish to participate in the settlement can opt out up to 35 days before a hearing on final approval of the settlement.
“Plaintiff and settlement class members who do not timely and validly opt out of the settlement class will be bound by the terms of the settlement, including the releases that discharge the released claims against the settlement class members, class representative and Delta,” the motion said.
The released claims are “narrowly tailored” and relate only to Delta’s cancelation of flights scheduled to depart between March 2020 and the end of April 2021 and its subsequent failure to issue refunds requested by ticket holders holding nonrefundable tickets on those flights, the motion said.
According to court records, the suit was first brought in April 2020 by Elliot Daniels, who alleged that Delta failed to provide full refunds for his twice-canceled flight to Cairo, which had been scheduled for April 1. In response to the first cancelation on March 11, 2020, Daniels said he was offered the option to either rebook his trip with a new departure date or cancel his flight and receive a refund.
Daniels opted to rebook, according to the suit, but the flight was again canceled. He said he requested the refund that had been offered to him previously but was told that he could only receive a voucher for travel credit valid for one year from his original booking date. Daniels’ case was consolidated with two similar cases making similar allegations in July 2020, and Dusko filed the class complaint later that month.
In her second amended class action complaint, Dusko accused Delta of putting “its concern for its own financial stability ahead of its consumers” by breaching its contract of carriage, which she said states that a full refund will be given for any canceled flight.
In a motion to dismiss filed in June 2021, Delta said the plaintiffs failed to show how it failed to uphold its end of the contract, saying it had paid out more than $3 billion in refunds due to the pandemic and honored tickets already purchased before the outbreak.
Counsel for the parties did not immediately respond to requests for comment on Friday. Plaintiff Angela Dusko is represented by Annick M. Persinger and Hassan A. Zavareei of Tycko & Zavareei LLP, Roy E. Barnes and J. Cameron Tribble of Barnes Law Group LLC, Jeffrey Ostrow of Kopelowitz Ostrow Ferguson Weiselberg Gilbert, and Melissa S. Weiner of Pearson Warshaw LLP.
Delta Air Lines Inc. is represented by David L. Balser, Charles G. Spalding Jr. and Julia C. Barrett of King & Spalding LLC.
The case is Daniels v. Delta Air Lines Inc., case number 1:20-cv-01664, in the U.S. District Court for the Northern District of Georgia.
–Editing by Karin Roberts.