Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-15-01836/USCOURTS-ca7-15-01836-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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In the 

United States Court of Appeals 

For the Seventh Circuit ____________________

Nos. 15‐1836 & 15‐1845

HOLLI HAMMARQUIST, et al., individually and on behalf  

of all others similarly situated,

Plaintiffs‐Appellants,

v.

UNITED CONTINENTAL HOLDINGS, INC. AND UNITED AIRLINES,

INC.,

Defendants‐Appellees.

____________________

Appeals from the United States District Court for the

Northern District of Illinois, Eastern Division.

Nos. 13‐cv‐01509 & 12‐cv‐06244 — John Z. Lee, Judge.

____________________

ARGUED OCTOBER 1, 2015 — DECIDED JANUARY 6, 2016

____________________

Before POSNER, MANION, and HAMILTON, Circuit Judges.

MANION, Circuit Judge. Following its merger with

Continental Airlines in 2010, United Airlines has made a

number of changes—not all of them welcome—to its

frequent‐flier rewards program. We previously addressed

the fallout in Lagen v. United Continental Holdings, Inc., 774

Case: 15-1836 Document: 34 Filed: 01/06/2016 Pages: 14
2 Nos. 15‐1836 & 15‐1845

F.3d 1124 (7th Cir. 2014), where a member of United’s

MileagePlus rewards program claimed that United breached

a contract by reducing his anticipated program benefits.

While by no means commending United’s decision to

disappoint its most loyal customers, we concluded that the

abridgement of benefits was not a breach of contract because

the Program Rules allowed United to change the benefits at

any time.

As in Lagen, the plaintiffs in this case responded to

United’s modification of their anticipated MileagePlus

benefits by suing United for breach of contract. And relying

on Lagen, the district court granted summary judgment to

United, finding that the Program Rules authorized United to

amend the program benefits at will.

On appeal, the plaintiffs insist that their case is different

from Lagen, and that this time the Program Rules do not give

United the upper hand. But the principal difference between

this case and Lagen does not help the plaintiffs, as we shall

see, nor do the remaining differences suffice to establish a

breach of contract. In view of our holding in Lagen, and

because the undisputed evidence demonstrates that United

was authorized to modify its rewards‐program benefits at

any time, we affirm the district court’s entry of summary

judgment for United.

I. BACKGROUND

A. United’s MileagePlus Rewards Program

The plaintiffs are members of United’s frequent‐flier

program called MileagePlus. Enrollment in MileagePlus is

free, and enables members to receive benefits for traveling

on United flights or patronizing United’s business

Case: 15-1836 Document: 34 Filed: 01/06/2016 Pages: 14
Nos. 15‐1836 & 15‐1845 3

associates. The MileagePlus program includes several

enhanced or “premier” status levels that offer additional

benefits beyond those available to ordinary MileagePlus

members.1 The premier status levels of MileagePlus are

collectively referred to as the MileagePlus Premier Program.

All plaintiffs qualified for 2012 premier status in 2011.

Premier status is awarded annually for the year

following the calendar year in which a member qualifies. By

qualifying in 2010, for instance, a member would receive

premier status for 2011. Members who qualify for premier

status in a certain year also receive premier benefits for the

remainder of that calendar year and for the duration of the

following calendar year. The benefits received each year,

however, are not the benefits associated with the premier

status of a single calendar year. Rather, the particular

premier benefits received in a given year correspond to the

benefits available under the annual Premier Program that is

in effect in the program year in which the benefits are

received. Thus, by qualifying for 2011 premier status in 2010,

a member would first receive the benefits offered under the

2010 Premier Program for the remainder of 2010, followed

by the benefits offered under the 2011 Premier Program

beginning in 2011.

Additional details pertaining to the Premier Program are

located on the premier status webpages of United’s website.

The benefits listed on the premier status webpages in 2011

were the benefits associated with the 2011 Premier Program.

Dist. Ct. Dkt. 97‐14 at 7 (2011 premier status webpages

                                                  1 Before 2012, United also called these levels the “elite” status levels.

Case: 15-1836 Document: 34 Filed: 01/06/2016 Pages: 14
4 Nos. 15‐1836 & 15‐1845

explaining that the benefits presented were “for 2011 elite

status”).2

B. The MileagePlus Program Rules

By enrolling in MileagePlus, all members agreed to be

bound by the MileagePlus Program Rules. In 2011 the

Program Rules governed participation in the entire

MileagePlus program, including the program’s premier

status levels. Dist. Ct. Dkt. 97‐1 at 14 (2011 Program Rules

explaining that the “provisions [of the Program Rules] form

the basis of the MileagePlus® Program” and that

“participation in the Program will be governed by these

provisions”). To reinforce the point, the premier status

webpages explicitly notified members that “[u]nless

otherwise stated, the terms and conditions set forth in

Mileage Plus Program Rules are applicable to the Premier

program.” Just beneath this language, consumers were

further advised that premier benefits were “subject to

change from year to year.”

General Condition No. 1 of the 2011 Program Rules

authorized United to freely modify the MileagePlus

program benefits without notice:

MileagePlus membership and its benefits are

offered at the discretion of United Airlines and

its affiliates, and United has the right to ...

change the Program Rules, regulations,

benefits, conditions of participation or mileage

levels, in whole or in part, at any time, with or

                                                  2 Citations to the district court docket are from Case No. 1:12‐cv‐

06244.

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Nos. 15‐1836 & 15‐1845 5

without notice, even though changes may

affect the value of the mileage or certificates

already accumulated.

In addition, United had “the sole right to interpret and apply

the Program Rules.”

C. United’s Program Modifications

After its 2010 merger with Continental, United

announced that MileagePlus would be the single rewards

program for the merged airlines and that certain

amendments to the upcoming 2012 program were

anticipated. In September 2011 United provided additional

information about the adjustments to the new 2012 program,

which included a number of changes to the program’s

premier status levels. In some cases, these changes meant

that members who qualified for 2012 premier status would

receive fewer benefits in 2012 under the 2012 Premier

Program than the benefits that were available to premier

members in 2011 under the 2011 program.

In 2012 and 2013, the plaintiffs (whose cases were

eventually consolidated) filed this diversity action against

United in the Northern District of Illinois, alleging that

United breached a contract by changing the benefits of

premier membership for the 2012 program year. The district

court granted summary judgment for United because the

undisputed evidence showed that the MileagePlus Program

Rules authorized United to modify the benefits associated

with the program’s premier status levels at any time. The

plaintiffs appeal.

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6 Nos. 15‐1836 & 15‐1845

II.  ANALYSIS

We review the district court’s grant of summary

judgment de novo, construing all facts and reasonable

inferences in the light most favorable to the nonmoving

party. Harden v. Marion Cty. Sheriff’s Dep’t, 799 F.3d 857, 861

(7th Cir. 2015). Summary judgment is required if the movant

shows that “there is no genuine dispute as to any material

fact and the movant is entitled to judgment as a matter of

law.” Fed. R. Civ. P. 56(a).

To prevail on a breach‐of‐contract claim in Illinois (it is

undisputed that the substantive law of Illinois governs this

action), the plaintiffs must show that there was a contract

between the parties, and that United breached the contract

by failing to adhere to its terms. Zirp‐Burnham, LLC v. E.

Terrell Assocs., Inc., 600, 826 N.E.2d 430, 439 (Ill. Ct. App.

2005). The parties do not dispute that the plaintiffs’

membership in MileagePlus was a contractual relationship

governed by the Program Rules. But the parties disagree

over the extent to which the Program Rules specifically

governed the MileagePlus premier status levels, and in

particular the modification of premier benefits. While United

maintains that the Premier Program was merely a part of the

overall MileagePlus program and therefore subject to

General Condition No. 1 of the Program Rules, the plaintiffs

argue that the Premier Program was separately governed by

an alternative modification provision that prohibited United

from changing the 2012 program benefits in 2011.

We conclude that the plaintiffs failed to establish a

breach of contract based on United’s modification of the

2012 Premier Program benefits. The undisputed evidence

confirms that United was authorized to change the program

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Nos. 15‐1836 & 15‐1845 7

benefits at any time, or at least from year to year. Nor is

there any evidence that United offered benefits under the

2012 Premier Program that it subsequently failed to provide.

Under these circumstances, no reasonable jury could return

a verdict for the plaintiffs.

A. United was authorized to change the Premier

Program benefits at any time.

The record establishes (1) that all members of the

MileagePlus program, regardless of status, agreed to be

bound by the MileagePlus Program Rules, and (2) that

General Condition No. 1 of the Program Rules allowed

United to modify the program benefits “at any time,” with

or without notice. In the absence of any additional

agreement between the parties, these facts permit only one

conclusion: United was allowed to modify the program

benefits associated with the premier status levels of

MileagePlus “at any time,” so its decision to do so for the

year 2012 was not a breach of contract.

Naturally, the plaintiffs attempt to avoid this conclusion

by arguing that their qualification for premier status gave

rise to an additional, independent contract for premier

benefits—one to which General Condition No. 1 of the

Program Rules did not apply. We recently considered a

similar argument in Lagen. There, the plaintiff sued United

for breach of contract after it downgraded the putative

“lifetime” benefits associated with the exalted “Million‐Mile

Flyer” status level of MileagePlus. 774 F.3d at 1125–27. The

plaintiff argued that his participation in the Million‐Mile

Flyer Program generated a separate agreement that was

exempt from the general modification provision of the

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8 Nos. 15‐1836 & 15‐1845

Program Rules, which, as here, allowed United to change the

program benefits at any time. Id.

Yet the evidence all pointed in the opposite direction: the

Million‐Mile Flyer Program was simply a component of

MileagePlus, not a free‐standing contract for Million‐Mile

Flyer benefits. Id. at 1127. In particular: (1) only members of

MileagePlus were eligible to receive Million‐Mile Flyer

status; (2) information about the Million‐Mile Flyer Program

was situated “under the umbrella” of MileagePlus on

United’s website; and (3) a member’s Million‐Mile Flyer

status was indicated on his ordinary MileagePlus

membership card. Id. In light of these facts, the plaintiff

failed to establish the existence of a separate agreement for

benefits apart from the agreement governed by the

MileagePlus Program Rules. Because those rules expressly

allowed United to change the program benefits at any time,

we concluded that United did not breach a contract by

altering the benefits associated with the Million‐Mile Flyer

status level of MileagePlus. Id.

As in Lagen, there is no evidence in this case that the

plaintiffs’ enhanced status levels within the MileagePlus

program formed an independent contract that was exempt

from the general modification provision of the MileagePlus

Program Rules. It is undisputed that premier status was

awarded only to members of MileagePlus and was reflected

on the ordinary MileagePlus membership card. Nor is there

any question that the Premier Program was “under the

umbrella” of MileagePlus as delineated on United’s website.

All the evidence thus points in one direction: the premier

status levels of the MileagePlus program were simply a

subordinate part of that program whose benefits United

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Nos. 15‐1836 & 15‐1845 9

could legitimately alter at any time. Despite the plaintiffs’

best efforts to distinguish this case from Lagen, our holding

in Lagen effectively paralyzes the plaintiffs’ primary

argument on appeal.

And where this case does differ from Lagen, the

difference is anything but helpful to the plaintiffs. As the

dissent in Lagen made clear, United’s greatest obstacle to

summary judgment in that case was its explicit

advertisement of “lifetime” benefits in connection with the

Million‐Mile Flyer Program—a representation that seemed

to be directly at odds with United’s reserved right to modify

the benefits at any time. By contrast, United did not

advertise “lifetime” benefits under the Premier Program, nor

did it otherwise make any comparable representations that

would appear inconsistent with the possibility of future

modifications. To the contrary, the premier status webpages

indicated that the Premier Program was subject to the

Program Rules, which authorized United to change the

program benefits on a whim. In sum, the advertisement of

putative “lifetime” benefits in Lagen was the strongest fact

supporting the plaintiff’s claim for breach of contract—and it

is a fact not present here.

But this does not end the matter. The plaintiffs do not

simply argue that General Condition No. 1 did not apply to

the Premier Program on grounds that the latter was a

separate contract not governed by the Program Rules. They

also argue that, even assuming the Program Rules did

govern the Premier Program as a general matter, United’s

authority to modify premier benefits was independently

governed by a conflicting modification provision—one

specific to the Premier Program—that contractually

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10 Nos. 15‐1836 & 15‐1845

supplanted the otherwise applicable General Condition No.

1.  

In support of this argument, the plaintiffs rely on the

premier status webpages’ dual representations that the

Program Rules applied to the Premier Program “unless

otherwise stated,” and that premier benefits were “subject to

change from year to year.” By the plaintiffs’ logic, a

provision authorizing the changing of benefits from year to

year is “entirely inconsistent” with a provision allowing

changes at any time. The plaintiffs thus assert that the

Premier Program’s “year to year” provision effectively

stated otherwise than General Condition No. 1 of the

Program Rules. As a result, they argue that United was not

allowed to change premier benefits at any time, but “only

‘from year to year.’”

There are several problems with this argument. For one

thing, despite their acknowledgment that the Program Rules

unambiguously applied to the Premier Program “unless

otherwise stated,” none of the evidence relied upon by the

plaintiffs suggests that United ever “stated” that General

Condition No. 1. did not apply to the Premier Program.

More importantly, in describing the potential for future

modifications, the webpages simply declared that premier

benefits could change “from year to year”—not that they

could change only from year to year—and the mere fact that

benefits may be changed from year to year does not mean

that they may not also be changed at more frequent intervals

as well. The plaintiffs have thus failed to identify anything in

the Premier Program that is inconsistent with United’s

reserved right to modify the program benefits at any time.

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Nos. 15‐1836 & 15‐1845 11

Simply put, the record does not support a reasonable

inference that United implicitly excluded General Condition

No. 1. from the annual Premier Program merely by relating

that the corresponding program benefits could be expected

to change on an annual basis. And even if the Premier

Program is (unreasonably) interpreted to allow changes only

from year to year, United would still be entitled to summary

judgment, for its modification of premier benefits from 2011

to 2012 was just that: a change of benefits from year to year.

Either way, United was authorized to change the benefits for

the year 2012, and United cannot be said to have breached a

contract by doing exactly what the contract authorized.

B. United never agreed to provide the 2011 Premier

Program benefits under the 2012 Premier Program.

In September 2011 United announced the newly revised

benefits associated with the 2012 MileagePlus program’s

premier status levels, and the plaintiffs do not dispute that

United faithfully provided the premier benefits identified in

the September 2011 announcement. Instead, in an apparent

last‐ditch effort to establish a breach, the plaintiffs argue that

their qualification for the 2012 Premier Program entitled

them to receive, in 2012, the benefits that were previously

offered in 2011 under the 2011 Premier Program.

This argument is as devoid of evidentiary support as it is

counterintuitive. There is no evidence that United expressed

an intention to offer the benefits of 2011 premier status in

2012 under the 2012 Premier Program, let alone that it

contractually bound itself to do so. Indeed, United did not

even so much as identify the benefits of 2012 premier status

until it unveiled the newly amended benefits for that year in

September 2011. True, the premier status webpages in 2011

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12 Nos. 15‐1836 & 15‐1845

also listed a differing set of premier benefits prior to

September of that year, but those benefits were expressly

identified as the “benefits for 2011 elite status”; the

webpages gave no indication of what the forthcoming

benefits for 2012 premier status would be.3

The plaintiffs appear perplexed that a premier status

earned in 2011 should not also deliver the benefits of the

2011 Premier Program. But this is easily explained by the

fact that members qualified for premier status in the year

preceding the year for which the status was granted. The

Premier Program’s prospective operation means that

members who qualified for premier status in 2011 did not

earn 2011 premier status, but 2012 premier status, along with

the corresponding benefits available under the 2012 Premier

Program. In other words, the record establishes that

qualification for 2012 premier status entitled members to

receive, in 2012, the benefits under the program in effect

during the year for which they qualified (2012)—not the

benefits under the program in effect during the year in which

they qualified (2011).4

                                                  3 Starting nearly a year before the September 2011 announcement,

United’s website also included a series of regular updates heralding the

“new world‐class” MileagePlus program of 2012. Not surprisingly, there

is no evidence that the much anticipated benefits of the “new” premier

status levels of 2012 were contractually required to be nothing but a drab

carbon copy of the benefits offered under the expired program of the

previous year.

4 As noted above, qualifying for 2012 premier status in 2011 also

entitled members to receive the benefits associated with 2011 premier

status for the remainder of 2011. The plaintiffs do not allege that they did

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Nos. 15‐1836 & 15‐1845 13

At bottom, the plaintiffs’ argument on appeal is that

United breached a contractual promise to provide them with

premier benefits in 2012 that matched the premier benefits

previously available in 2011. The undisputed evidence

shows that United never made that promise, and United

cannot be liable for breaching a contract that it did not make.

III.  CONCLUSION

As the district court appropriately observed, the

plaintiffs may have understandably hoped that United

would continue to offer in 2012 the same premier benefits

that it offered in 2011. But there is no evidence that United

contracted to offer the same benefits each year. On the

contrary, the evidence demonstrates that United was

allowed to change the Premier Program benefits whenever it

wanted, or at least on a yearly basis. As a result, nothing in

the record before the district court would allow a reasonable

jury to conclude that United breached a contract by

modifying the Premier Program benefits for the year 2012.

The district court properly granted summary judgment for

United, and we affirm.

AFFIRMED.

                                                 

not receive the appropriate benefits in 2011 following their qualification

for 2012 premier status.

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14 Nos. 15‐1836 & 15‐1845

HAMILTON, Circuit Judge, concurring. I join Judge Man‐

ion’s opinion for the court affirming summary judgment for

United. I continue to believe that Lagen was wrongly decided

because of the clear conflict in that case between United’s

promise of “lifetime” benefits and its attempt to reserve the

right to change its mind about those lifetime benefits at any

time for any reason. In doctrinal terms, the plaintiff in Lagen

offered substantial evidence that United had offered to mod‐

ify the terms of its MileagePlus contract to extend those life‐

time benefits to Million Mile Flyers, and qualifying members

accepted that offer by flying one million miles on United. See

774 F.3d at 1128–32 (Hamilton, J., dissenting). In this case,

however, plaintiffs have offered no comparable evidence

that conflicts with or shows a modification of United’s reser‐

vation of the right to modify MileagePlus benefits at any

time and for any reason. The reservation of rights therefore

controls.

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