Judge Rejects Attempt by United to Dismiss Million Miler Lawsuit

Photograph ©istockphoto.com by ChuckStryker.

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?!?

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Comments (Showing 7 of 7)

  • privacylawyer at 12:18pm February 01, 2013

    your analysis is right. when you look at the equities, you look at how a person has reasonably relied on the promises and changed their behavior because of it. In this case, the contract was fully performed by the litigant – he flew 1 million miles. The rest is UA’s obligations.

    the right to change terms is integral to the issue – was it reasonable for him to think that the perks/benefits wouldn’t change given that UA said they might?

    The case will turn on that, IMHO.

  • CO FF at 1:19pm February 01, 2013

    But the underlying contract always said “these benefits can change”…

  • privacylawyer at 8:45pm February 01, 2013

    it’s tricky. if United reserved the right to change benefits (their obligations) they could conceivably cancel all benefits, and there may not be a contract at all. otherwise, you earn your million miles and they kill all benefits the next day, and you are then denied your “bargain.”

    if there is no legally binding contract, because there is no consideration (United doesn’t have to give you anything, hypothetically), then you look to equitable recourse. this is what I described above.

  • dgcpaphd at 11:27pm February 01, 2013

    With respect to Lagen, the article omitted the fact that million-milers were promised “lifetime” benefits. The promises were in writing. Nonetheless, the written promises were breached by the UA management.

    See this screen shot of one of the “lifetime” promises. The screen shot came from united.com:

    [IMG]http://i1170.photobucket.com/albums/r521/whtviper1/E7219C51-33FB-4460-AA1E-BF2F0A086CA7-29610-000018CEF8B3918C_zpsc04620c0.jpg[/IMG]

  • dgcpaphd at 11:31pm February 01, 2013

    Here is the copy of the screen shot that would not show in my post. Note that the screen shot says million-milers will get these specific benefits for life:

    As a Million Miler, will I continue to receive 2 Regional
    Upgrades for life?
    Yes. We are committed to providing Million Mile Flyers, our most loyal
    members, with lifetime benefits in recognition of their travels on
    United. Among those benefits are two Regional Upgrades, awarded
    annually to the member.
    Recent articles Related articles
    As a Million Miler, will I continue to
    receive 2 Regional Upgrades for
    life?
    What will happen to my Million Mile
    Program lifetime status and
    Continental Infinite Elite status
    benefits? Will I continue to receive
    them in the future?

  • dgcpaphd at 11:33pm February 01, 2013

    more screen shots:

    What will happen to my Million Miler Program lifetime status
    and Continental Infinite Elite status benefits? Will I continue
    to receive them in the future?
    You will continue to receive your benefits as you always have.

  • PainCorp at 12:00am February 02, 2013

    I think you’ve beaten that horse to death, dgcpaphd. We know about the screen shot, bringing it up constantly won’t change anything.

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