In a case on which The Gate first reported last May, a lawsuit claims that United Airlines removed some of the benefits it promised to bestow upon members who earned and achieved million miler status in the MileagePlus frequent flier loyalty program, thereby breaching its contract with them — and although other parts of the lawsuit were dismissed, it appears that the litigant has been granted the opportunity to pursue his claim of breach of contract.
Earlier today, United States District Judge Harry Leinenweber refused the request of United Continental Holdings Incorporated — the parent company of United Airlines, which cited that the litigant had no legal standing on which to sue based upon its right to modify the MileagePlus frequent flier loyalty program at any time — to dismiss the lawsuit on the grounds that the contract United Airlines had with Million Miler members supposedly differed from the contract with other members of the MileagePlus frequent flier loyalty program, which includes the following disclaimer:
MileagePlus membership and benefits, including the Premier Program, are offered at the discretion of United Airlines and its affiliates, and United has the right to terminate the Program and/or the Premier Program or to change the Program Rules, regulations, benefits, conditions of participation or mileage levels, in whole or in part, at any time, with or without notice, even though changes may affect the value of the mileage or certificates already accumulated.
United may, among other things, withdraw, limit, modify or cancel any award; increase the mileage, cash required, applicable co-pays or number of certificates required for any award; modify or regulate the transferability of awards or benefits; add an unlimited number of blackout dates; or limit the number of award seats available to any or all destinations. Members, in accumulating mileage or certificates, may not rely upon the continued availability of an award or award level, and members may not be able to obtain all offered awards or use awards to all destinations or on all flights.
FlyerTalk members — including a number of attorneys — have been fiercely debating this lawsuit for months.
I am not a lawyer, but if United Airlines is allowed to change its policies pertaining to lifetime benefits after a contract has been reached, that would potentially send strong reverberations and repercussions throughout the frequent travel loyalty program industry. I know that if I put in a significant amount of money, time and effort into achieving lifetime elite status with an entity, only to have even one of the benefits since rescinded, my trust in that entity would be greatly reduced — if not eliminated altogether — regardless of the law.
A contract is basically a voluntary agreement between two or more parties, consisting of an offer and acceptance with mutual consideration. United Airlines offered lifetime Million Miler elite status with certain benefits which attracted litigant George Lagen and compelled him with the incentive to earn that lifetime elite status fairly and squarely as according to the rules and policies set forth by United Airlines. There is the offer and acceptance, but what is the consideration? United Airlines receives enough business from Lagen for him to become a Million Miler; Lagen receives elite status and its benefits for a lifetime. Case closed, right?
United Airlines then reportedly reduced some of the benefits of having elite status for a lifetime. What if those benefits were important enough for Lagen that had he known that he would not have had them for a lifetime after all, he may not have invested the money, time and effort to earn them in the first place?
In my opinion, Lagen followed all of the rules and is therefore entitled to the benefits for a lifetime as promised to him by United Airlines. I agree with the federal judge that the aforementioned disclaimer makes more sense in applying to other aspects of the MileagePlus frequent flier loyalty program members and not necessarily for Million Miler members. For example, if I invested the time, money and effort to earn and attain elite status — for which one needs to qualify every year — only to have changes implemented at the discretion of United Airlines, I have the choice of simply not qualifying for elite status for the next year, as it may no longer be worth my while.
Imagine spending ten years to achieve Million Miler elite status for a lifetime. What if some of the benefits were rescinded within a year of achieving it? Is that fair? Would it be fair even if they were rescinded ten years after achieving elite status for a lifetime?
Even when the benefits are abused, breach of contract can be questionable. Consider the case of American Airlines against at least one customer who purchased lifetime AAirpasses for $400,000.00 for him and a companion to be passengers in the premium class cabin anytime they wanted. American Airlines revoked the lifetime passes, claiming that the customer “flew too much” and abused that privilege by helping hopeless strangers fly home, flying a priest to meet the Pope and booking flights using fictitious names. Steve Rothstein — who is the customer in question — filed a lawsuit against American Airlines for revoking that right.
Was American Airlines within its rights to revoke those lifetime AAirpasses? If it can be proven that Rothstein violated the contract, I would say yes. The potential fraud element — where he reportedly used fictitious names to book flights — certainly would be a breach of contract, in my opinion. If Rothstein simply “flew too much”, then I believe American Airlines had no right to revoke those lifetime AAirpasses and therefore breached the contract with Rothstein.
What exactly is the threshold of “too much flying”? If there is indeed a threshold, should it not be clearly disclaimed before a contract is agreed upon by both parties? Can an establishment evict a patron for consuming too much food from its buffet at which you can eat as much as you want? Is it not too late to “call a do-over” when things seem to be unexpectedly worse than anticipated and not in your favor after all?
Does United Airlines have the right to rescind benefits it originally bestowed for a “lifetime” upon Million Miler members — or is the paring back of benefits a breach of contract, as alleged by litigant George Lagen? Should this develop into a class-action lawsuit in which the plaintiffs win, how will the verdict affect the frequent travel loyalty programs of airline and lodging companies which offer lifetime elite status and lifetime programs?
More importantly — when entering into a formal contract of any kind — what does lifetime really mean?!?