Ellen Leesfield, the arbitrator overseeing the class action settlement between JetSmarter and its members, approved the agreement on July 11, 2019. The next step will take place on Aug. 22 when a judge in Miami-Dade County will need to decide whether or not to confirm the arbitrator’s decision.
In her ruling, Leesfield, a former judge, overruled several objections writing, “Plaintiffs and the class faced a multitude of serious, substantive defenses, any one of which could have precluded or drastically reduced prospects of recovery.” She also noted JetSmarter has “consistently denied liability and indicated an intention to vigorously pursue its potential defenses.”
As of June 27, settlement administrators received 1,567 claim forms and 101 requests for exclusion. Previous reports had indicated close to 12,000 current or former members of the jet sharing service could be eligible.
Cash payments are expected to range between $250 and $21,000 with nearly $3 million to be split between the class and a similar amount going to the lawyers who represented the plaintiffs.
There were only three objections on behalf of nine class members, according to the final ruling.
An objection by Guillaume Ravix who said he had lost $9,000 and wasn’t happy with a projected $450 payment was overruled because he is now likely to receive over $1,000 based on the number of claims submitted.
Another objection, by Juan Pablo Capello who objected to “excessive” attorney’s fees, was overruled with Leesfield saying the $3.125 million pay was “reasonable and warranted” using two different standards for calculations.
The third objection by Paul S. Rothstein and Matthew Weiss stating that JetSmarter memberships prohibited class arbitration was overruled. In this case, Leesfield wrote that when joining members consented to allow agreements to be modified. She said by allowing the class arbitration to proceed, “it can be construed as in effect an amendment to the membership agreement.”
Ironically, the litigation continues even though the name of the onetime unicorn was relegated to a tagline by its new owner.
Thomas Flohr’s Vista Global purchased the online broker earlier this year in a play to integrate its tech-savvy and then merged it with XOJET, which it bought in 2018. The new brand goes by XO, powered by JetSmarter technology although most branding seems to be simply XO.
A former member who had sued JetSmarter for more than $2 million but had his lawsuit dismissed made a last-ditch effort to derail the arbitration. In April Derek Milosavljevic had a appealed to a New York judge to vacate the class action arbitration against the jet-sharing company, however, in early July he withdrew his motion.
The end of August court date with a judge is not necessarily part of all arbitration arrangements, according to the American Arbitration Association.
It says, “Many parties will voluntarily follow the arbitrator’s decision; however, the AAA and the arbitrator do not have the authority to actually make a party do what the award says. Instead, if a party wins in the arbitration and the other party does not do what the award says, the winning party may go to court to ‘confirm’ the arbitration award.”
Under AAA rules, parties to AAA cases agree that the arbitration award can be entered as a judgment in any federal or state court with jurisdiction. This means that the court can enforce it like it was any other court judgment.
A number of former members who were trying to compel JetSmarter into litigation through the court system instead of arbitration have seen their efforts fail in recent months.
Judges have been siding with JetSmarter, sending litigants to arbitration. Members had argued that a clause compelling arbitration was not valid for a variety of reasons, including alleged fraud by the sharing economy provider.
Altogether JetSmarter has been successful in at least a dozen cases in its efforts to compel arbitration.
In the meantime, with Vista Global now behind JetSmarter, it has taken elements of JetSmarter’s various crowdsourcing and jet charter pricing and integrated it with XOJET’s various jet card programs under the new XO brand.