Hall judge OKs Lufthansa settlement

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WASHINGTON -- Lufthansa's settlement proposal to end its involvement in the Sarah Hall class-action suit was approved by the court as "in the best interests of the plaintiff class" despite objections voiced by ARTA and the Justice Dept.'s antitrust division.

Lufthansa is the first airline named in the suit, which alleges anticompetitive practices, to settle.

In his 17-page ruling, Judge W. Earl Britt of the U.S. District Court for the Eastern District of North Carolina, Southern Division, granted final approval to the proposal.

Lufthansa will create a bonus program, enabling all agencies that don't have a Lufthansa contract to earn up to a $100 bonus for each Lufthansa transatlantic roundtrip ticket sold beginning Jan. 1.

Additionally, beginning Jan. 1, Lufthansa will also make its Web fares available to all agents to view and book at www.lufthansa-usa.com.

The ruling follows a Sept. 2 fairness hearing in Raleigh, N.C., during which the pros and cons of the settlement were argued before the judge.

Judge Britt called the settlement "fair, adequate, reasonable, and in the best interests of the plaintiff class."

The judge essentially disagreed with 10 objections raised by ARTA that, among other things, travel agents were not represented fairly during the negations with Lufthansa. Two co-plaintiffs in the case are ARTA members.

But the judge decided that "class counsel have no duty to seek authorization from the class representatives in order to negotiate or agree to a settlement."

ARTA also filed with the court some 800 objections from travel agents.

But the judge ruled that the objections represented "less than two percent of the class."

Days before the fairness hearing, the Justice Dept. sent a letter to the lawyers representing Hall and Lufthansa raising antitrust concerns about the bonus program because it would, in the department's view, require agents and Lufthansa to "agree among themselves" on pricing, and that would violate antitrust laws. It recommended modifying the settlement.

The judge ruled that the court would not reject the settlement offer because the Justice Dept. "merely 'ask[s] ...[the parties] to reach an alternative settlement".

To contact reporter Michael Milligan, send e-mail to [email protected].

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