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
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.
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
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
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].