United States District Court, E.D. Michigan, Southern Division
ORDER (1) DENYING DEFENDANT'S PETITION FOR
SANCTIONS (ECF #32) AND PRIOR REQUEST FOR SANCTIONS (ECF
#13), (2) DENYING PLAINTIFFS' MOTION FOR SANCTIONS (ECF
#35), (3) DECLINING TO AWARD DEFENDANT ITS COSTS (ECF #33),
AND (4) DISMISSING THIS ACTION WITH PREJUDICE
Matthew F. Leitman, Judge
handling of this case will never appear in any litigation
“best practices” manual. These proceedings
involved a substantial amount of unreasonable and/or
unhelpful conduct by Plaintiffs Stuart and Valerie Sandweiss,
Defendant Spirit Airlines, Inc., and their respective
counsel. This conduct, along with case management
shortcomings by the Court, contributed to rounds of wasteful
sides have moved for sanctions against each other. Neither
deserves such an award. Accordingly, for the reasons
explained below, the Court DENIES both parties' current
requests for sanctions (ECF ## 32, 35), DECLINES to grant
Spirit its costs (ECF #33), DENIES Spirit's prior request
for sanctions in its motion to dismiss (ECF #13), and
DISMISSES this action WITH PREJUDICE.
and 2016, the Sandweisses had bad experiences with Spirit. In
2010, the Sandweisses purchased tickets from Spirit so that
two friends could attend their daughter's wedding.
(See Compl. at ¶31, ECF #1-2 at Pg. ID 20.)
According to the Sandweisses, Spirit cancelled their
friends' flight due to a pilot's strike and refused
to refund the cost of the tickets. (See Id. at
¶¶ 33-35, ECF #1-2 at Pg. ID 21.) In 2016, Valerie
Sandweiss attempted to purchase two tickets from Detroit to
New York, and she contends that Spirit unfairly increased the
cost of the fare in the middle of the purchase process.
(See Id. at ¶25, ECF #1-2 at Pg. ID 20.)
Sandweiss (“Sandweiss”), a licensed attorney,
decided to sue. Acting as both co-counsel and co-plaintiff
(with his wife), Sandweiss filed this action against Spirit
in the Wayne County Circuit Court on June 3, 2016.
(See Compl., ECF #1-2.) But Sandweiss did not just
sue on behalf of himself and his wife. Instead, Sandweiss
filed a putative class action in which he sought damages on
behalf of (1) the “hundreds or thousands of [Spirit
customers]” who did not receive a refund as a result of
the 2010 pilot strike and (2) the “many thousands of
individuals who have been defrauded by [Spirit's]
‘bait and switch' price tactics.”
(Id. at ¶¶ 10, 29, ECF #1-2 at Pg. ID 18,
20.) However, Sandweiss was not actually seeking to recover
on behalf of the classes he purported to represent. All he
really wanted - and what he was willing to
“settle” for - was “approximately
$750” for himself and his wife. (Sandweiss Omnibus Br.,
ECF #36 at Pg. ID 862.)
removed the action to this Court on June 9, 2016.
(See ECF #1.) Spirit contended that removal was
proper under the Class Action Fairness Act of 2005, 28 U.S.C.
§ 1332(d) (“CAFA”), because (1) diversity of
citizenship existed and (2) the Complaint sought over $5,
000, 000 in aggregated damages. (See Id. at Pg. ID
5-12.) Spirit also filed a motion to dismiss the Complaint.
(See ECF #3.)
12, 2016, Sandweiss, as counsel, filed a motion to remand the
action to the Wayne County Circuit Court (the “Remand
Motion”). (See ECF #5.) Sandweiss argued,
among other things, that the amount in controversy did not
meet CAFA's $5, 000, 000 threshold for removal because
Sandweiss and his wife were willing to “stipulate to
individual damages of less than $75, 000 and potential class
damages of less than $5, 000, 000.” (Id. at
Pg. ID 167.) Sandweiss insisted that the Court should
sanction Spirit for having removed the action, and he asked
the Court to order Spirit to pay the fees that he and his
wife incurred related to the Remand Motion. (See Id.
anyone should have been sanctioned, it was Sandweiss. Years
before Sandweiss filed the Remand Motion, the United States
Supreme Court had unanimously rejected one of the main
arguments he advanced in that motion - that his and his
wife's post-remand stipulation to seek less than $75, 000
in individual damages and less than $5, 000, 000 in class
damages deprived this Court of subject-matter jurisdiction.
See Standard Fire Insurance Co. v. Knowles, 568 U.S.
558 (2013). Likewise, long before Sandweiss filed the Remand
Motion, the United States Court of Appeals for the Sixth
Circuit had held that “a post-removal stipulation
reducing the amount in controversy to below the
jurisdictional limit does not require remand to state
court.” Rogers v. Wal-Mart Stores, Inc., 230
F.3d 868, 872 (6th Cir. 2000). In light of Knowles
and Rogers, Sandweiss did not have a good-faith
basis to seek a remand based upon the offer to stipulate to
damages below CAFA's amount-in-controversy threshold. The
Court could have sanctioned Sandweiss for his frivolous
arguments in the Remand Motion, but it did not.
before the scheduled hearing on the Remand Motion, the Court
met with counsel (including Sandweiss) in chambers and urged
them to explore a possible settlement. The parties and the
Court then discussed a framework for resolving the dispute
under which Spirit would provide the Sandweisses with two
vouchers for air travel on a Spirit route. After some
discussion, the parties agreed to settle the case using the
parties then placed their agreement on the record.
Spirit's counsel explained that “[t]he settlement
consists of Spirit Airlines providing two vouchers for travel
anywhere Spirit flies, and [that Spirit would] provide Mr.
Sandweiss a [telephone] number he would call to book the
reservations.” (9/26/16 Hearing Tr., ECF #10 at Pg. ID
273.) Spirit's counsel further noted that Spirit would
“provide for each of the two passengers a free checked
bag and a free carry-on bag, so a total of four free
attorney then introduced a new settlement term that had not
been raised or accepted during the in-chambers discussions.
Spirit's counsel shared this new term with Sandweiss only
moments before the parties went on the record. The new
condition was that the Sandweisses needed to book their
flights “within 60 days.” (Id.) Adding
this new condition without any real warning was not helpful
and contributed to the breakdown of trust between the
immediately objected to Spirit's attempt to change the
deal that the parties had reached. He explained that he had a
“problem” with the “60-day”
requirement because he and his wife would be using the Spirit
vouchers, and they would not know within that limited time
period when they would be able to travel:
I guess I would have to - I talked to my wife about this, she
is the one - she is the other plaintiff and she is the
one who would be traveling with me. Usually we
go away on vacation during the wintertime, we have already
booked everything for this winter, so it will be the
following winter, and that's why 15 months in advance I
can't possibly know when you have children, an elderly
father, I can't possibly know what the situation is going
to be say for the winter of - fall/winter of 2017 to 2018.
(Id. at Pg. ID 276; emphasis added.)
Sandweiss raised his objection, the Court took a short recess
so that Spirit's counsel could contact his client in an
attempt to extend the 60-day booking window. Ultimately,
Spirit offered to extend the time period for booking to 120
days, and Sandweiss agreed to that requirement. The parties
then went back on the record and Spirit's counsel
summarized the terms of the settlement:
The totality of the settlement is as follows: Spirit Airlines
will provide two travel vouchers which will permit Mr.
Sandweiss and I assume it's his wife to travel
anywhere that Spirit flies. Secondly - and again, the fees
and taxes, if any, are the responsibility of Mr. Sandweiss.
Second, the airline will throw in a free checked bag and a
free carry-on bag for each of the two passengers. And
finally, Mr. Sandweiss will have 120 days to book the
reservation, he then can travel whenever there is a
flight. In other words, he can book in four months and
travel up to a year later. As long as there is a
scheduled flight he can book any flight he wants within that
four-month period. That's the totality of the settlement.
In exchange, of course, we would get a release of all claims
and a dismissal with prejudice.
(Id. at Pg. ID 277-78; emphasis added.) Sandweiss,
through his attorney Herschfus, agreed that this summary
accurately stated the terms of the parties' deal.
(See Id. at Pg. ID 279.)
Sandweiss later learned, the representation by Spirit's
counsel that he could travel “up to a year later”
was wrong. Sandweiss discovered that Spirit does not schedule
flights “a year” in advance. (See,
e.g., Spirit website print-outs, ECF #22-2; email
from Spirit representative, ECF #25-3 at Pg. ID 559.) The
erroneous statement by Spirit's counsel was not helpful
and contributed to the erosion of trust between the parties.
drafted a settlement agreement that memorialized the terms
that the parties had placed on the record. The draft made
clear that Spirit would provide two vouchers to the
Sandweisses and that the ...