From: venky@thelonious.bellcore.com (G A Venkatesh)
Subject: Re: Airline Antitrust Litigation
Keywords: airlines antitrust litigation refund
Reply-To: venky@thelonious.bellcore.com (G A Venkatesh)
Organization: Bellcore, Morristown NJ
Distribution: usa
Date: Fri, 24 Jul 92 18:24:12 GMT

In article <1992Jul24.003250.2439@pasteur.Berkeley.EDU> tjoa@cory.Berkeley.EDU (Richard Tjoa) writes:
>>
>>I hope I can do the same thru my travel agent.  What carriers and destinations
>>are in this thing.
>
>Could you imagine the millions of people who are eligible?  Yow!  Carriers:
>Most of the major, non-bankrupt scheduled carriers.  (I think it also had
>something to do with the computer reservation systems that they owned, so
>it would be United and American, at the very least.  Continental, TWA and
>the REALLY bankrupt carriers are out of the question, so forget them...)
>
>If anyone hears from "the Committee", I'm sure we'd like to konw what they
>said.

I don't know what this committee is but yesterday I received an 
unsolicited legal notice in the mail apparently from the US district court in 
Atlanta. The more I read through it the more I am convinced that it is the 
best sales gimmick the airlines could ever have asked for. No, I am not crazy 
but read on.

The notice is for a class action suit against American, Continental, Delta,
Midway, Northwest, PANAM, TWA, United and USAir and the proposed settlements.
The class consists of people that purchased a ticket from any of these
airlines between Jan 1, 1988 and Jun 30, 1992 in and/or out of 34 listed
airports (all hubs and a few major ones).

The settlement is for a total of $458 million. But the catch? It is $408
million in certificates and $50 million in cash. The cash goes to the lawyers
and the court. The certificates will be divided amongst the people that
send in an attached claims form. The certificates may be upto $25/certificate.
The certificats savings are not significant.
For example, you can get $10 off at least $50 R/T fare, $25 off at least 
$250 R/T fare, $50 off at least $500 R/T fare, etc. (off any published fares
but not to be combined with any other certificates or coupons).

The certificates will be divided amongst 3 classes of claimants. There are
three corresponding forms. The first form is for people that have made less
than 5 purchases in that period. They will get upto a *maximum* of $100 in
certificates. No proof is required. They will just have to sign under penalty
of perjury that they bought at least one ticket.

The second form is for people that bought at least 5 tickets in that period.
Again no proof is required. They just have to give the *number* of flights
for each of the listed airports and sign. These people will be assumed to have
spent $2500 towards their purchase.

The third form is for people that have spent more than $2500. They must break
down the claimed purchase prices into several time periods and give a
*description* of the proof of purchase on which they base their claim. They
should be ready to be audited for such proof.

The airlines wouldn't care about the proofs since the total pay-off is
fixed.

The certificate amount is divided into two funds of $268,984,000 and 
$127,516,000. Everyone who claims gets a per-capita share from the
former fund. So to get the $100 maximum less than 268,984 people would have
to make a claim. The other fund will be used to pay the people filling the
last two forms on a pro-rated basis.

In return, the settlement is for "all claims against the Settling Defendants 
that members of the class have alleged or could have alleged in the lawsuit or
that arise out of any alleged act in furtherance of the alleged antitrust
conspiracy, including any claims for damages resulting from alleged 
overcharges with respect to ticket purchased *at any time in the past*".
Of course, the airlines will not admit to any wrong-doing.

________________

What this translates to for the airlines. A promotional campaign for
distributing coupons (not unlike the ones you get in junk mail for various
products) to encourage air travel. Each airline will distribute *its share* of 
the $408 million in coupons and pay *its share* of the $50 million cash for 
"marketing the promotion". Perhaps the airlines should have hired its own
lawyers to sue them and settle this way as a new marketing gimmick. Perhaps 
they did.

The Counsel for the Class makes a ton of money. People get their coupons.
Some will use them and many won't. Some might even be induced to travel to
use the coupons. The airlines will get a release from all claims from people
that didn't explicitly exclude them from the class (what this means for
claims or action in the future, I am not sure).

It is a cozy world.

venky
From: marzano@hp-ptp.ptp.hp.com (Lou Marzano)
Date: Tue, 28 Jul 1992 17:48:04 GMT
Subject: Re: Should I buy extended warranty on a CD changer?
Organization: HP Pacific Technology Park - Sunnyvale, Ca.