Lawyers Lose $34 Million Fee Bid in Spirit-JetBlue Merger Case

Lawyers representing consumers who sought to block a $3.8 billion merger between JetBlue Airways Corp. and Spirit Airlines Inc. lost their $34 million fee request in federal court.

“The plaintiff’s motion is denied because in no sense were any of the plaintiffs a ‘prevailing party’ in this action,” said Judge William G. Young of the US District Court for the District of Massachusetts, rejecting the requested fees, costs, and expenses in an electronic docket order entered Thursday.

The ruling is the latest outcome in a consumer lawsuit filed in 2022 to block the merger they said would eliminate JetBlue’s main competitor, Spirit, and lead to higher airfare prices. The Department of Justice also sued to block the merger over similar concerns.

The proposed merger was abandoned by the airlines in March, after Young in a separate case earlier this year sided with DOJ regulators that it would hurt consumers by limiting competition.

Plaintiffs lawyers on July 12 argued that they in fact “prevailed in their action against Defendants” because the merger proposal by then had ended—with their help.

“Plaintiffs lawsuit substantially contributed to the DOJ’s victory, including as it related to the evidence of direct harm that the public would suffer following the merger,” the lawyers argued.

The fee request was “amply supported” by detailed time records, accounting entries, and third-party invoices that showed they incurred $724,000 in litigation costs.

The lodestar amount of fees incurred by counsel “at normal and reasonable standard rates” was $6.8 million, they asserted. But that figure should have been multiplied between three and five times, they said, given the hours expended, the “significant risk” of representing plaintiffs on a contingency fee basis, and the filing of the suit without assurance of government intervention.

Alioto Law Fim, Larson LLP, and several other firms represent the consumers. Cooley LLP represents JetBlue. Paul, Weiss, Rifkind, Wharton & Garrison LLP represents Spirit.

The case is Garavanian v. JetBlue Airways Corp., D. Mass., No. 23-10678, docket entry 9/5/24.