Berkson v. Gogo LLC, 147 F. Supp. 3d 123

Background

Plaintiffs sued Gogo for allegedly failing to disclose that its “Monthly Pass” would automatically renew and charge customers monthly unless cancelled; individual plaintiffs allege repeated unauthorized charges after a one‑month purchase.
The court previously denied Gogo’s motion to compel arbitration, transfer venue, and to dismiss (Berkson I), and that decision (and a contrary decision in Nicosia v. Amazon) is on appeal; those issues are not resolved in this memorandum.
After litigation began, Gogo changed its website to more clearly disclose automatic renewals; parties negotiated a settlement mediated by a retired magistrate judge.
The proposed settlement creates two settlement classes (Initial: Apr.1,2010–Dec.31,2012; Supplemental: Jan.1,2013–Mar.31,2015) divided at the date an arbitration clause was added to Gogo’s terms.
Relief under the settlement is primarily promo codes (one‑day or one‑hour passes, transferrable and aggregable) allocated by tiers; named plaintiffs seek $5,000 each and class counsel up to $750,000.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether preliminary approval and provisional class certification for settlement are appropriate	Settlement fairly compensates affected customers and resulted from arm’s‑length negotiation; promo codes meaningful to many class members	Settlement is appropriate resolution; changed website provides injunctive benefit already	Court granted preliminary approval, provisionally certified classes for settlement purposes, and set fairness hearing (found negotiations non‑collusive and within range of possible approval)
Whether the settlement is an impermissible “coupon” settlement	Plaintiffs contend promo codes are not coupons and will provide meaningful relief to many repeat users	Gogo argues promo codes are appropriate relief and administratively feasible	Court acknowledged coupon concerns but found special class characteristics and social utility (website changes) justify approval; suggested establishing a marketplace to convert codes to cash to reduce coupon concerns
Adequacy of named‑plaintiff service awards and attorneys’ fees	Plaintiffs seek $5,000 per named plaintiff and up to $750,000 fees; counsel cites work performed and results obtained	Defense does not object to amounts up to $750,000; court must scrutinize under coupon‑settlement fee principles	Court conditionally approved submissions for hearing but required justification at fairness hearing, noting class member recovery likely under $100 and emphasizing fee/reward proportionality and statutory considerations for coupon settlements
Notice method and claims process sufficiency	Plaintiffs propose email summary notice with a long‑form notice on a settlement website and an online claims process	Defendants will provide emails and pay notice costs; parties propose Claims Administrator to verify claims	Court found email + website notice the best practicable notice, approved claim form/process and Analytics LLC as administrator, and set opt‑out/objection procedures and deadlines

Key Cases Cited

Berkson v. Gogo LLC, 97 F. Supp. 3d 359 (E.D.N.Y. 2015) (district court denial of motion to compel arbitration and related defenses; underlying opinion incorporated)
Nicosia v. Amazon.com, 84 F. Supp. 3d 142 (E.D.N.Y. 2015) (contrasting district court decision on enforceability of website terms cited by parties and on appeal)
In re Sony Corp. SXRD, [citation="448 F. App'x 85"] (2d Cir. 2011) (standard for judicial approval that settlement be fair, adequate, reasonable, and non‑collusive)
City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974) (Grinnell factors governing substantive fairness review of class settlements)
Cohen v. J.P. Morgan Chase & Co., 262 F.R.D. 153 (E.D.N.Y. 2009) (criteria for preliminary approval: arm’s‑length negotiations, no obvious deficiencies, within range of approval)
In re Nasdaq Market‑Makers Antitrust Litig., 176 F.R.D. 99 (S.D.N.Y. 1997) (procedures for preliminary settlement review)
Goldberger v. Integrated Res., Inc., 209 F.3d 43 (2d Cir. 2000) (fee award considerations and standards)
Hensley v. Eckerhart, 461 U.S. 424 (1983) (relationship between fee award and results obtained)
In re HP Inkjet Printer Litig., 716 F.3d 1173 (9th Cir. 2013) (attorney’s fees in coupon settlements must be tied to value of relief obtained)