Epstein Becker Green concluded a favorable class action settlement for a leading in-flight Internet service provider. In 2014, the client was sued in a putative class action in the Eastern District of New York. The claims against the client centered on its monthly subscription, pursuant to which its customers are afforded access to the Internet on all flights equipped with the client’s devices and agree to have their credit cards charged each month until they take steps to cancel the service. The complaint alleged that the client did not sufficiently apprise customers of the recurring nature of the charge, and sought restitution, requesting nearly $24 million in charges on behalf of the class.
After the judge denied the client’s motion for stay or dismissal in favor of arbitration, Epstein Becker Green appealed the case to the U.S. Court of Appeals for the Second Circuit. In response, the judge set a hearing for class certification two months hence. In the face of both the likely success of the appeal and extensive discovery demands that we served on the class certification issue, plaintiffs’ counsel requested that the matter be stayed so that the parties could conduct a formal mediation. After two days of meditation, a settlement was brokered in which the client offered promotional codes to affected class members to settle the action. Because so-called “coupon settlements” warrant higher scrutiny under the Class Action Fairness Act and current case law, the court required three hearings for approval, including the submission of expert reports on the particular sophistication of the client’s customers. Final approval was granted in April 2016, the time for appeal has expired, and the settlement is now final.
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