A petition to vacate the proposed class arbitration awards in the case of JetSmarter could lead to more filings, say several lawyers
“It’s never over till it’s over,” said the late Yankees’ Hall of Fame catcher Yogi Berra. And, the city so nice they named it twice is at the center of one former JetSmarter member’s effort to vacate the current class action arbitration against the jet-sharing company that is currently moving through the system in Florida.
A petition filed in the United States District Court, Southern District of New York is seeking to scuttle a proposed class action arbitration settlement that is due to be approved as soon as early July.
Derek Milosavljevic had previously sought over $2 million in damages from JetSmarter through the courts in California instead of arbitration mandated in his membership agreement. He cited in part paid social media promotions using Kim Kardashian and other celebrities that allegedly weren’t properly disclosed.
Milosavljevic is now making the case that the Fort Lauderdale-based digital private jet company can’t enter into a class action arbitration settlement because a class action via arbitration was not permitted in the JetSmarter membership agreement he agreed to.
Motion to Vacate
Milosavljevic made his initial filing on April 12 in New York, and on May 28 JetSmarter sought to have the petition dismissed or moved to Florida. Subsequently, Milosavljevic filed on June 3 an amended petition providing more rationale that the Empire State was the proper venue.
He cited quotes from the aviation company’s management that the state was a key location of members, plus his owns travels, using free seats on private jets from his JetSmarter membership to and from New York.
Both parties apparently asked the courts to cancel a hearing scheduled for yesterday, however, one lawyer who spoke with Private Jet Card Comparisons said it’s possible more motions to disavow the pending class action arbitration in Florida could be in the works.
In addition to asserting that JetSmarter’s own membership agreements explicitly barred class action via arbitration, Milosavljevic is taking issue with an opt-out provision in the class action agreement making qualifying class members explicitly opt-out to preserve their rights.
The opt-out provision is problematic, said one lawyer, in that without taking action, class members it is asserted would lose future rights against JetSmarter.
JetSmarter Prohibition against Class Action Arbitration
Another lawyer said clauses to prohibit class action arbitrations are generally meant to make it harder for possible plaintiffs to pursue arbitration.
They would generally be responsible for their legal costs even if they won unless there was a provision that the defendant pays if it loses, which we are told was not part of JetSmarter’s membership agreements.
According to the court documents, “Petitioner Derek Milosavljevic (“Petitioner”), appearing pro se, hereby petitions this Court, pursuant to Section 10 of the Federal Arbitration Act (“FAA”), 9 U.S.C § 10, to vacate two arbitration awards, which purport to deprive Petitioner and thousands of similarly-situated consumers in New York and across the country of their rights to seek redress through the courts or their own individual arbitrations, including a separate action brought by Petitioner and currently pending before the American Arbitration Association. Respondent is JetSmarter, Inc.”
“Manifest disregard for the law and contract”
Milosavljevic asserts Ellen L. Leesfield, the arbitrator, “Exceeded her authority, exhibited manifest disregard for the law and contract.”
Should Milosavljevic be successful, or should other JetSmarter members or former members take similar actions, it wouldn’t necessarily open the way for lawsuits against the company to be successful. However, it could force JetSmarter to spend the money to defend itself in potentially hundreds of individual claims via arbitration instead of the single class action.
In April, a federal court in Florida granted JetSmarter’s motion to compel arbitration in a lawsuit filed by two Florida residents who were seeking to use the court system instead.
Neither Milosavljevic nor officials from Vista Global, which recently completed its acquisition of JetSmarter, returned a request for comment.
In April CNBC reported JetSmarter is possibly the target of an FBI investigation, something the company has denied.
What’s next for JetSmarter?
Two lawyers said they believe there will be more attempts to stop the class action arbitration, although it’s not clear if time is running out.
One lawyer said it’s possible a judge could after the fact find that the class action was unlawful.
She believes the fact that Milosavljevic and JetSmarter jointly asked the New York court to postpone yesterday’s meeting may mean that the private jet company would prefer to work out a settlement in the case.
“Right now, they have allocated $6 million (half would to attorney’s and administration) for the class action, and clearly that was an amount of money they thought was better than having to possibly defend more lawsuits and individual class actions,” she said. “It would make sense to settle with Milosavljevic and hope nobody else files similar petitions.”