Oct 1, 2013, 3:03 pm
Last edit by: Ari
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• • • • •
[Please post
NLY status updates and relevant Q&A here.]Plaintiff: George Lagen, on behalf of himself and all others similarly situated
Defendant: United Continental Holdings, Inc. and United Airlines, Inc.
Filed In The United States District Court For The Northern District Of Illinois Eastern Division
Case No. 1:12-cv-04056
Filed: 05/24/2012
Judge Harry D. Leinenweber
Magistrate Judge Young B. Kim
Proposed class: All persons, as of midnight, December 31, 2011, who were members of the Million Mile Program under United Airlines’ Mileage Plus frequent flyer program.
Filings/rulings can be found on www.pacer.gov (requires registration)
12 June 2012 - Amended Class Action Complaint filed
Spring 2013 - Court denies United's request to close case
Spring 2013 - Plaintiff files for suit to become a class action, United asks Judge before he decides if there could be limited discovery (which typically happens after case becomes class-action). Judge allows it.
August 2013 - Depositions/Limited Discovery completed and transcripts were handed over to the court.
22 October 2013 - Pursuant to an order of the Court, both sides filed cross-motions for summary judgment:
Plaintiff contends that he is a United pre-merger Million Miler, that United promised Million Miler fliers certain lifetime benefits on its web site, including two regional upgrades every year and Premier Executive status, which provided certain delineated benefits (e.g., 100% mileage bonus). Plaintiff cites deposition testimony from United stating "lifetime" means: "as long as they were really able to fly … as long as someone is coming on a plane and alive and capable of flying." Plaintiff concludes by stating that United has breached its contract with its pre-merger Million Miler fliers by reducing the lifetime benefits they were promised.
United contends in its motion that Million Miler is part of the MileagePlus program, that United reserved the right to make any changes it wishes to the MileagePlus program, and that the changes it made that plaintiff now complains of are therefore contractually permissible. United does not admit, and does not address, the "lifetime" benefit statements that it made on its website.
23 January 2014 - Judge denies Plaintiff's motion for summary judgment and grants United's cross-motion for summary judgment. Judgment entered in favor of United.
The Judge begins his Opinion with a quote from Job: “The Lord giveth and the Lord taketh away” and then holds that Plaintiff has not produced any evidence that UA made him an offer to participate in a separate MM program.
The Court noted that: “The sum total of his evidence is vague references to ‘electronic and written correspondence’ from United, which, in both instances postdates his qualification as a Million Mile flyer and was not directed to him; and a 1997 Newsletter from United announcing the creation of the program he could not remember receiving. However the card he did receive from United, admitting him to MililionMile Flyer Program, shows that his new status is clearly a status within the Mileage Plus Frequent Flyer Program, as does the form letters United sent to applicants advising them of their admission to the MillionMile Flyer program. In fact, Plaintiff in his Complaint alleges that the MillionMile Flyer program was part of the Mileage Plus program. He has not produced any document that comes close to substantiating that the programs were separate and distinct."
Bottom line: The Court agreed with United's position that the Plaintiff had not proved the existence of a separate contract between itself and the Million Milers.
Full decision: http://media.wandr.me/MMerOpinion.pdf
20 February 2014
Plaintiff filed a notice of appeal of the trial court's decision. The record on appeal is due by March 13, 2014.
Appeal docs available at:
- http://media.wandr.me/UAL-MM-Appeal-filed-2-20-14.pdf
- http://media.wandr.me/UAL-MM-letter-of-appeal.pdf
8 September 2014
Oral arguments were heard by a three judge panel. Links to the original MP3 of the Court's recording and also some transcription can be found around post 2350 and for several more following that.
http://www.flyertalk.com/forum/23496499-post2361.html
22 December 2014
Affirmed over a dissent.
http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2014/D12-22/C:14-1375:J:Wood:aut:T:fnOp:N:1474449:S:0
Million Miler Sues United [Judgment for UA Jan 2014] Judgment Affirmed Dec 2014
Sep 29, 2013, 6:08 am
#1846
Join Date: Apr 2008
Posts: 2,358
One can hardly use the Enron fiasco as a valid comparison to the demotions and breach made to the UA lifetime benefits earned by million-milers. Those responsible at Enron, were convicted of felonies for their behavior.
The UA demotions and breach, although ethically wrong and actionable, do not rise to the level of a criminal event.
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Sep 29, 2013, 9:51 am
#1847
Join Date: Oct 2012
Location: NYC
Programs: AADULtArer
Posts: 5,683
They are both prime examples of caveat emptor. Lifetime benefits from any corporation in the modern era of M&A are not something any prudent person counts on. This lawsuit will bring no relief, of course, but perhaps those who made the bad bet are just making another.
Given the path that UA can issue you two LPUs (Lifetime Premier Upgrades) and attach them to fare bucket FU=0 except on Ash Wednesdays after Leap Years is one way they can resolve it without giving up anything. Hyperbole for humour only....
Enron's accounting methodologies (mark-to-market) were approved by the SEC in 1992 , btw. These guys were no more crooks than most of the rest of Wall Street - not to go down that road..Anderson was the real crook here, playing role of auditor.
Given the path that UA can issue you two LPUs (Lifetime Premier Upgrades) and attach them to fare bucket FU=0 except on Ash Wednesdays after Leap Years is one way they can resolve it without giving up anything. Hyperbole for humour only....
Enron's accounting methodologies (mark-to-market) were approved by the SEC in 1992 , btw. These guys were no more crooks than most of the rest of Wall Street - not to go down that road..Anderson was the real crook here, playing role of auditor.
Last edited by LaserSailor; Sep 30, 2013 at 12:45 pm
Sep 29, 2013, 10:12 am
#1848
Suspended
Join Date: Jun 1999
Location: Los Angeles
Programs: Loyal to Myself
Posts: 8,303
They are both prime examples of caveat emptor. Lifetime benefits from any corporation in the modern era of M&A are not something any prudent person counts on. This lawsuit will bring no relief, of course, but perhaps those who made the bad bet are just making another.
Given the path that UA can issue you two LPUs (Lifetime Premier Upgrades) and attach them to fare bucket FU=0 except on Ash Wednesdays after Leap Years is one way they can resolve it without giving up anything. Hyperbole for humour only....
Enron's accounting methodologies were approved by the SEC, btw. These guys were no more crooks than most of the rest of Wall Street - not to go down that road..
Given the path that UA can issue you two LPUs (Lifetime Premier Upgrades) and attach them to fare bucket FU=0 except on Ash Wednesdays after Leap Years is one way they can resolve it without giving up anything. Hyperbole for humour only....
Enron's accounting methodologies were approved by the SEC, btw. These guys were no more crooks than most of the rest of Wall Street - not to go down that road..
There's a great story in here about United turning their best friends into active enemies, and if it is told well, it will hurt them in another court, one that operates by different rules.
No one except the counterparties have access to all of the actual facts of this case, and no one can know how a judge will interpret those facts. Conjecture is, of course, worth no more or less than it's basis. History is against the plaintiff, but who can know what will come out if the case survives the next batch of motions?
What is somewhat more certain, however, is that every story written about this suit will create additional impressions among frequent travelers that United's management is untrustworthy with regards to their marketing promises, and among analysts that United's RASM will be pressured moving forwards.
One could assign the airline's general shrinking of overall capacity as part of a model to find additional profitability by matching capacity to demand more efficiently, and this works in the short term, but investors will then expect the new found profitability to be scaled. And that may prove harder when a formerly loyal base of very frequent travelers is not just neutral, but has an active distaste for the airline. This is a thought an analyst may consider.
These conjectures will be tested in the court of public opinion.
Sep 29, 2013, 10:39 am
#1849
FlyerTalk Evangelist
Join Date: Jul 2007
Location: DFW
Programs: UA Pleb, HH Gold, PWP General Secretary
Posts: 23,199
Sometimes lawsuits, of course, have a collateral purpose, which is to pressure an organization by illuminating their actions, and subjecting them to scrutiny. But you know this.
There's a great story in here about United turning their best friends into active enemies, and if it is told well, it will hurt them in another court, one that operates by different rules.
No one except the counterparties have access to all of the actual facts of this case, and no one can know how a judge will interpret those facts. Conjecture is, of course, worth no more or less than it's basis. History is against the plaintiff, but who can know what will come out if the case survives the next batch of motions?
What is somewhat more certain, however, is that every story written about this suit will create additional impressions among frequent travelers that United's management is untrustworthy with regards to their marketing promises, and among analysts that United's RASM will be pressured moving forwards.
One could assign the airline's general shrinking of overall capacity as part of a model to find additional profitability by matching capacity to demand more efficiently, and this works in the short term, but investors will then expect the new found profitability to be scaled. And that may prove harder when a formerly loyal base of very frequent travelers is not just neutral, but has an active distaste for the airline. This is a thought an analyst may consider.
These conjectures will be tested in the court of public opinion.
There's a great story in here about United turning their best friends into active enemies, and if it is told well, it will hurt them in another court, one that operates by different rules.
No one except the counterparties have access to all of the actual facts of this case, and no one can know how a judge will interpret those facts. Conjecture is, of course, worth no more or less than it's basis. History is against the plaintiff, but who can know what will come out if the case survives the next batch of motions?
What is somewhat more certain, however, is that every story written about this suit will create additional impressions among frequent travelers that United's management is untrustworthy with regards to their marketing promises, and among analysts that United's RASM will be pressured moving forwards.
One could assign the airline's general shrinking of overall capacity as part of a model to find additional profitability by matching capacity to demand more efficiently, and this works in the short term, but investors will then expect the new found profitability to be scaled. And that may prove harder when a formerly loyal base of very frequent travelers is not just neutral, but has an active distaste for the airline. This is a thought an analyst may consider.
These conjectures will be tested in the court of public opinion.
Sep 29, 2013, 3:38 pm
#1850
Join Date: Apr 2008
Posts: 2,358
For the record, the SEC does not approve "accounting methodologies" for any company.
In the United States and many foreign countries, Generally Accepted Accounting Principles are used in preparation of financial statements, plain and simple. Outside CPAs (or equivalent) report and render an opinion on financial statements.
SEC oversees financial statements that are submitted to them but does not "approve" the financial statements nor the methods used to prepare them.
The fact that Enron submitted its financial statements to the SEC, only means that Enron submitted false financial statements.
UA has not done anything criminal or even remotely similar to what Enron did. That is why I take issue with your using Enron as an example of a caveat while discussing UA's demotion of the Million-Mile program.
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Sep 29, 2013, 4:26 pm
#1851
Moderator: United Airlines
Join Date: Jun 2007
Location: SFO
Programs: UA Plat 1.995MM, Hyatt Discoverist, Marriott Plat/LT Gold, Hilton Silver, IHG Plat
Posts: 66,854
-
For the record, the SEC does not approve "accounting methodologies" for any company.
In the United States and many foreign countries, Generally Accepted Accounting Principles are used in preparation of financial statements, plain and simple. Outside CPAs (or equivalent) report and render an opinion on financial statements.
....
-
For the record, the SEC does not approve "accounting methodologies" for any company.
In the United States and many foreign countries, Generally Accepted Accounting Principles are used in preparation of financial statements, plain and simple. Outside CPAs (or equivalent) report and render an opinion on financial statements.
....
-
The Financial Accounting Standards Board (FASB) is a private, not-for-profit organization whose primary purpose is to develop generally accepted accounting principles (GAAP) within the United States in the public's interest. The Securities and Exchange Commission (SEC) designated the FASB as the organization responsible for setting accounting standards for public companies in the U.S. It was created in 1973, replacing the Committee on Accounting Procedure (CAP) and the Accounting Principles Board (APB) of the American Institute of Certified Public Accountants (AICPA).
....
The FASB is not a governmental body. The SEC has legal authority to establish financial accounting and reporting standards for publicly held companies under the Securities Exchange Act of 1934. Throughout its history, however, Commission policy has been to rely on the private sector for this function to the extent that the private sector demonstrates ability to fulfill the responsibility in the public interest.
....
The FASB is not a governmental body. The SEC has legal authority to establish financial accounting and reporting standards for publicly held companies under the Securities Exchange Act of 1934. Throughout its history, however, Commission policy has been to rely on the private sector for this function to the extent that the private sector demonstrates ability to fulfill the responsibility in the public interest.
Sep 29, 2013, 4:51 pm
#1852
Join Date: Apr 2008
Posts: 2,358
Thank you for your information. However, your information does not alter what I previously stated.
I wrote, "For the record, the SEC does not approve "accounting methodologies" for any company."
What you presented does not change what I said.
Perhaps you posted what you did to confirm that the SEC does not "approve accounting methodologies" to quote the other poster.
If the SEC had time to "approve" all companies that submit financial statements, SEC would need a staff of thousands just to "approve" a sample of filings.
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Sep 29, 2013, 5:02 pm
#1853
Moderator: United Airlines
Join Date: Jun 2007
Location: SFO
Programs: UA Plat 1.995MM, Hyatt Discoverist, Marriott Plat/LT Gold, Hilton Silver, IHG Plat
Posts: 66,854
....I wrote, "For the record, the SEC does not approve "accounting methodologies" for any company."
What you presented does not change what I said.
Perhaps you posted what you did to confirm that the SEC does not "approve accounting methodologies" to quote the other poster. ...
What you presented does not change what I said.
Perhaps you posted what you did to confirm that the SEC does not "approve accounting methodologies" to quote the other poster. ...
The SEC has legal authority to establish financial accounting and reporting standards for publicly held companies but has chosen to leave it to the public sector.
Sep 29, 2013, 10:36 pm
#1854
Join Date: Jul 2004
Location: Chicago USA
Programs: *A Junkie, SQ PPS, Skywards Gold, 2 Million Mile Flyer;*wood LT Plat, BA MM
Posts: 1,762
While I really do respect your very polite posts in this thread why do you insist on this hyperbole. From above in the thread what was on the web for years was:
So: your Lifetime Benefit A was PE status for life and your Lifetime Benefit B was 2 Regional Upgrades at the end of every year. (The SWUs were a one time thing that you already got.) If we can agree that these were A and B, then clearly UA dropped B and there is real question as to whether that was legal - I think it shouldn't be as do you. The remaining question then is not about benefits - it is about whether PE for life should translate to PG for life in the new program or perhaps PP. That is the only real question that the suit can address beyond the Upgrades. They promised you a status level that was named PE which no longer exists so the best they can do is to give you some status level that does now exist and there are 2 possible choices - PG or PP. In the interest of focusing all the general angst around this issue I really wish folks would realize that given the text of what pmUA promised - this is the question.
There are 2 ways to decide what PE should be:
- By qualification definition: i.e., to be a PE you had to fly 50K and the equivalent now is PG.
- By implied benefits: PE gave you certain rights (e.g., 100% bonus) and PP provides benefits closer to those.
Personally I think of tiers as defined by their qualifications since their associated benefits can and have changed over the year but I accept that the other alternative is what many here believe. In either case, this entire issue really comes down to only these 2 issues regarding pmUA's promises
the regional upgrades and the PE to new program mapping
All the rest of the stuff really isn't relevant.
So: your Lifetime Benefit A was PE status for life and your Lifetime Benefit B was 2 Regional Upgrades at the end of every year. (The SWUs were a one time thing that you already got.) If we can agree that these were A and B, then clearly UA dropped B and there is real question as to whether that was legal - I think it shouldn't be as do you. The remaining question then is not about benefits - it is about whether PE for life should translate to PG for life in the new program or perhaps PP. That is the only real question that the suit can address beyond the Upgrades. They promised you a status level that was named PE which no longer exists so the best they can do is to give you some status level that does now exist and there are 2 possible choices - PG or PP. In the interest of focusing all the general angst around this issue I really wish folks would realize that given the text of what pmUA promised - this is the question.
There are 2 ways to decide what PE should be:
- By qualification definition: i.e., to be a PE you had to fly 50K and the equivalent now is PG.
- By implied benefits: PE gave you certain rights (e.g., 100% bonus) and PP provides benefits closer to those.
Personally I think of tiers as defined by their qualifications since their associated benefits can and have changed over the year but I accept that the other alternative is what many here believe. In either case, this entire issue really comes down to only these 2 issues regarding pmUA's promises
the regional upgrades and the PE to new program mapping
All the rest of the stuff really isn't relevant.
Beautifully said, and of course I appreciate a good conversation about this.
For myself, just myself, the lifetime benefits were:
- LIFETIME BENEFIT A: 2nd tier for life, which was PE.
PROOF: Because my colleagues were already MM on AA and told me I was stupid for wasting time on UA (I was the only one flying UA out of all my colleagues!). I told one of them when I was at 600K lifetime miles in a NY cab, "yeah, but you have 3rd tier for life, whereas if I hold out, I will have 2nd tier for life. United is the crown jewel of Million Miler Programs" See for me, I was always a 1K every year since joining MP, I never saw things in terms of 25K, 50K, 100K, just status levels - Premier, Premier Executive and 1K. Remember, this is just me.
- LIFETIME BENEFIT B: 100% mileage bonus
- LIFETIME BENEFIT C: upgrades clearing 72 hours
- LIFETIME BENEFIT D: two regional upgrades
For me, and again, I speak for myself - but I am sure others feel the same way, it was all about the tier status, not the mileage holder. Which doesn't seem to stick with CO's a Infinite Elites as well. Also, CO's MMilers got bumped up to Gold, yet remained in 3rd tier. When you look at it all around the PM UA MM got screwed whereas the CO MM and Elites gained (and I am happy for them). And you know what? I don't want anything more than what was promised to me.
I apologize if there's a small little part of you that can't stand me for writing it over and over, maybe my explaining it from my perspective might help.
The lifetime benefit of being Premier Executive was of value to the MM program because it was the 2nd tier in the MP program. And I know that was the intention United had when they established that, because all the other MM programs gave third tier status.
In reality Premier Executive was the top tier in the 80's until they created the Premier Executive 1K sometime in the early 90's I believe. So as we see our loyalty getting lower and lower on the totem pole you can only think of what Continental did with the Infinite Elites that at the time probably flew a lot LESS miles. And even in the merger gave them a promotion. So Continental set a precedent of elevating their most loyal fliers by always making them top tier. I guess their answer was when they took over United they were going to keep that promise to Infinite Elites but screw the United Million Mile fliers by demoting them.
You are right - the VALUE in the PM UA MM program was the 2nd tier for life. CO was third tier for life. CO/UA elevated everyone from the CO side and screwed the UA folks.
Last edited by iluv2fly; Sep 30, 2013 at 2:57 am Reason: merge
Sep 30, 2013, 12:31 pm
#1855
FlyerTalk Evangelist
Join Date: Sep 2002
Location: Between AUS, EWR, and YTO In a little twisty maze of airline seats, all alike.. but I wanna go home with the armadillo
Programs: CO, NW, & UA forum moderator emeritus
Posts: 35,429
where did UA actually offer "2nd tier" for life. Instead, UA said you would receive PE for life. Those are very different statements. Your continued looking at what was offered in a different way from what UA specified does not constitute any sort of commitment or promise on UA's part.With regard to B and C, those were benefits of the status provided in A and were not specifically and individually stipulated as a benefit.
With regard to D, those were specifically stipulated separately by UA, and that benefit has indeed gone away.
Last edited by Xyzzy; Sep 30, 2013 at 12:49 pm
Sep 30, 2013, 12:44 pm
#1856
Join Date: Oct 2012
Location: NYC
Programs: AADULtArer
Posts: 5,683
The analogy to Enron was purely for the purposes of identifying a bad horse in a race. Apologies to the mods for causing thread drift.
Huh? I hope that isn't the type of argument going on in this case....
The lifetime benefit of being Premier Executive was of value to the MM program because it was the 2nd tier in the MP program. And I know that was the intention United had when they established that, because all the other MM programs gave third tier status.
Sep 30, 2013, 1:37 pm
#1857
Join Date: Oct 2011
Location: BUR / LAX
Programs: UA MM/Gold; WN A-list; HH something depending; Marriott Gold
Posts: 1,552
That's my recollection as well, and makes sense when you consider that pmUA required BIS miles and promised the 2nd tier -- that was a trade off I made and bargained for. Harder to get MM, but more exclusive and worth more to compensate for the extra costs (vs credit card miles, bonuses, etc).
Sep 30, 2013, 2:00 pm
#1858
FlyerTalk Evangelist
Join Date: Sep 2002
Location: Between AUS, EWR, and YTO In a little twisty maze of airline seats, all alike.. but I wanna go home with the armadillo
Programs: CO, NW, & UA forum moderator emeritus
Posts: 35,429
mised or specified a particular ordinal.
Last edited by Xyzzy; Sep 30, 2013 at 2:09 pm
Sep 30, 2013, 3:27 pm
#1859
Join Date: Apr 2008
Posts: 2,358
Please note the below highlighted excerpt from a UA document that was applicable to UA customers who attained million-mile status. The excerpt discusses the benefits that are offered to those who attain million-mile status (the old fashioned UA method):
"-LIFETIME PREMIER EXECUTIVE (1P) STATUS INCLUSIVE OF ALL PREMIER EXECUTIVE BENEFITS."
Although there is no longer a Premier Executive, the language is clear that million-milers would receive listed benefits, retain the title of PE and would receive "all Premier Executive Benefits" which included as a benefit, second tier.
When a UA document states "inclusive of all PE benefits" the documents means, precisely that, inclusive of ALL benefits, nothing more, nothing less.
UA changing the name of the title "Premier Executive" does not change the substance of the initial promises made by UA. After all, most of us know that a rose by any other name is still a rose.
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Sep 30, 2013, 3:49 pm
#1860
Suspended
Join Date: Nov 2002
Location: Toronto YYZ UA-1K 1MM,QFgold
Programs: Royal Ambassador/ SPG Platinum 75/Marriott gold
Posts: 14,283
any idea when this might get a resolution and can someone update the first post with me information> ? MOD step in 