Interesting: United Settlement Precludes Dao From Suing Police

United announced last week that they had reached a settlement with Dr. Dao following the incident in which he was forcibly dragged from the plane when he refused to give up his seat for deadheading crew. The terms of the settlement were not disclosed, which is not uncommon in these situations. That said, it seems that United paid dearly in order to quickly put this behind them and prevent the case from dragging out in court.

There had been speculation that Dao and his legal team would then move on toward suing the city of Chicago for the abusive treatment he received from three city Aviation Security Officers. After all, they were the ones who ultimately roughed him up, not United. His lawyer had even said that he would need plastic surgery to repair some of those injuries.

The city of Chicago was apparently preparing for the inevitable, with a few aldermen actually stating that they expected to eventually be on the hook for a big pay out.

Well, evidently Dr. Dao won’t be suing the city of Chicago after all. DNAinfo reports:

Dr. David Dao’s lawyers confirmed Friday that the settlement includes a provision that prohibits him from suing the city, even though his nose was broken, two of his front teeth knocked out and he suffered a concussion at the hands of three city Aviation Security Officers. Those officers have been suspended with pay while the investigation is ongoing.

United

My thoughts

I am not a lawyer and don’t normally follow this kind of thing closely, but this provision certainly seems very interesting. At first glance, it’s hard to see why United would much care if Dao goes after the police. That would seemingly be a different matter, and not their problem or concern.

On the other hand, having Dao in court at all — even if he wasn’t suing United — would have miserable optics for the airline. It would again bring the story back to the front page and start the discussion all over again. And United clearly realized that.

So they got creative with their settlement and structured it such that he waived his right to sue the city. Presumably that didn’t come for free, however, as Dao and his lawyers probably insisted that United compensate him at something close to the expected value of any such future settlement. In other words, I would speculate that United basically paid out compensation to cover their own actions as well as those of the city. 

And unless there was some backroom transfer of cash or in-kind contributions between the city of Chicago and United, the airline isn’t going to be reimbursed for paying those damages. Then again, this is Chicago and this is United that we’re talking about. Neither of which have been immune from wheeling and dealing in the past, so who knows what went on.

Now if a special Friday to Monday flight between Chicago and the location of the mayor’s vacation home were to magically show up on the schedule in a few months….

Bottom line

Let me reiterate that I have no knowledge of anything other than what I’ve read about the situation.

I just think it’s interesting that United’s settlement with Dao precludes him from suing the city, and presumably compensates him for that loss of optionality. Maybe this is common, I don’t know, but I’d be curious to hear what the experts out there think. Hopefully some more details of the settlement will leak out over time.

So what do you think — were you surprised that United’s settlement with Dao precluded him from suing the city of Chicago?

Comments

  1. Must have been a pretty hefty payout then. Of course, it’s difficult to win against the police (even in a civil forum) so, as you said, that didn’t come for free.

  2. no details of the settlement can come out, otherwise it’ll be void. If he speaks with any details United will sue him and he’d lose the settlement.

    and frankly, who cares?

  3. You are probably right… But the other option is that Dao doesn’t want some info coming out, and thus tried to get United to pay more…

  4. The City of Chicago and United’s 30 year lease agreement expires next year. The city is in negotiations with United and American presently. Interesting way for United to gain favor with the city?

  5. It’s worth it to UA to pay the $1M or whatever he could have gotten from the City of Chicago to keep it out of the press.

  6. I am an attorney and I can say that our court system is pretty liberal in ensuring everyone gets to have “their day in court.” That being said, since that right has been given up on such a highly publicized event, it is very clear that Mr. Dao got an extremely generous settlement. We will probably never know exactly how much money he got but if I had to guess, it’s in the millions.

    I’m not surprised by this settlement because a lawsuit would generate continued negative PR for United which would greatly outweigh the settlement cost the passenger received.

  7. Not sure what the arrangement is between the airline and airport security, but United may be on the hook for claims stemming from this type of incident…so a suit against the City would be the equivalent of one against United…so they include both in the release.

  8. Right — United might be concerned that a release with Dao might not cover them from an indemnification claim by the police, so it got him to agree not to bring one. Or, they may simply not want their people to have to be hauled into court as witnesses in a suit against the police.

    Lots of reasons to do this.

  9. United needed the seat to position the crew and its policies and handling of the situation led to Dr. Dao’s removal from the aircraft. So it I could be argued that United put the police in the position of having to remove a passenger from the aircraft.
    United would know that if Dr. Dao had filed a claim against the City of Chicago, it could then lead to the City filing a claim against United.
    The settlement puts finality to the circle of lawsuits, allows United to get out of the news cycle and recover from its PR disaster.

  10. ” But the other option is that Dao doesn’t want some info coming out”

    THIS. CNN also reported that the OFFICIAL police report stated that his hand was in a fist and swinging them prior to the dragging portion (and somehow missing in the viral video). Since this is in the official police report, the UA lawyers were probably using it to remind Dao that if he wants to go public in court, all of that dirty laundry will come with it – and recorded in official, perpetual court documents. (it’s not a smear campaign if they’re merely citing an official police report).

  11. @henry: all videos show that his hand wasn’t in a fist and he wasn’t swinging. Witnesses even said that.

  12. IMHO this is smart of UA’s lawyers as if he sued Chicago UA could have to produce discovery evidence and have to retain counsel for that event. If I were to bet the City of Chicago was informed of the fact and UA did it as a courtesy to them, I doubt money changed hands as if it did it would be public record.

    While I doubt it says Chicago specifically, I bet he waived his right to sue any third party related to this event.

  13. It is incredibly common for parties to a settlement to waive their rights to any claim against, or to sue, another party or parties to the settlement relating to the situation that gave rise to the settlement. The City of Chicago may have been a party to the settlement — anyone know?

  14. @John I’d love to get your legal perspective on how you think Dao had grounds to sue United when it wasn’t an aircraft they owned, nor were the crew operating the flight or the deadheading crew employees of United. Do you think the contract between Republic and United basically absolves Republic of all responsibility for these situations since they are just operating on behalf of United, and reservations, dispatch and other operations are all controlled by United? I’ve just been curious throughout this story why zero blame or accountability has fallen on the actual company which operated the flight and whose employees caused the bumping of passengers which led to the incident.

  15. I would estimate that he revived $30-$50 million as a settlement.

    There is no question that United wanted this story to die.

  16. If this settlement precluded him from suing the city as well, this settlement had to be 20 million or more. I’m curious at what others think the amount is.

  17. I would like to say that this was discussed at legal blogs, but I must say that it was almost incomprehensible to me because I don’t touch personal injury law that often. United did it to quickly take it out of sight of everyone and preclude potentially damaging discovery. Estimates are from $1m to $5m (with legal expenses). For a couple of reasons I think it is really good (and just) for all parties.

  18. Obviously United settled to avoid a court case that would reignite all the horrible publicity about their fiasco in Chicago. Whether he sues the airline or the police, the impact is the same to United’s battered reputation. No kind of court case is in United’s interest. They had to get him to waive suing the police also or it would have done them no good to settle. I’d guess $10 million.

  19. I have read these hilarious small predictions like 100k. United pays $1500 per hour for legal fees. I cant even fathom how many however going to court what cost them, yet alone the chance they lose and pay even more, and most importantly daily negative PR.

    Minimum had to be 1000 hours paid, I would gather way more with the clause preventing him from suing the city.

    5+ million

  20. Agree with Larry. Main reason United put this in the settlement is that if after settling with United, Dr. Dao turned around and sued the city police, they would sue United asking to be indemnified because United did ask them to take him off the plane, after all. They didn’t want to spend more money, have more risk, and more public exposure over this.

  21. As a civil litigator, I am confident this provision was included because the discovery process in the case against the police would have given Dao an opportunity to tee off against United, not to mention they could have subpoenaed United and its witnesses anyway and forced them to testify on the incident in the case against the police. Getting a release of claims against the police puts the whole incident to bed and basically ensures that no more negative facts come out (or continue to be repeated) as a result of any litigation. This is wise from a PR perspective. I’m sure United paid dearly for this release!

    I don’t think the indemnification theories above fly because indemnification is contractual and it seems unlikely to me that the Chicago airport police require airlines to sign a contract indemnifying them for any damages sustained as a result of a civil rights suit against the police. This would be crazy of Chicago airports to require and even crazier for any airline that agreed to sign it.

  22. Chinese news outlets reported that the settlement amount is $140M. Is that possible?

  23. I am a lawyer who litigates cases in court, and while this isn’t legal advice (just views on this news event), I had a few thoughts:

    (1). A settlement that requires the plaintiff to release claims against other potential tortfeasors is unusual. Typically, if there are multiple tortfeasors, each one will settle separately. Once United settled, it would have some protection against claims for indemnification, so this wasn’t motivated by a fear that the City of Chicago would come after United if Dr. Dao later sued the City of Chicago. Presumably this was driven by a desire to minimize publicity, and of course, there’s nothing wrong with reaching a settlement to avoid negative publicity. Our legal system encourages settlement.

    (2) I don’t think a lawsuit against the city would have been worth all that much. I would guess that a suit against the city alone, not considering United, would be worth maybe a few hundred grand, not millions. There are a number of rules that limit the circumstances in which you can recover from the government, and the amount of damages that you can be awarded. Courts are mindful of the fact that this is ultimately taxpayer money you’re talking about, so while you can get compensation from genuine injuries, it’s very, very difficult to get a really huge, multi-million dollar payday if you’re suing the government. A court might well conclude that Dr. Dao acted unlawfully by refusing to give up his seat when ordered to do so and that law enforcement was thus entitled to use force to take him off the flight. He’d had to prove that it was unreasonable force, but that could be an uphill battle, since it really turns on the actions of the officers more so than Dr. Dao’s injuries. If the officer’s conduct was reasonable, Dr. Dao would be out of luck even if his injuries were much worse than expected. So it’s not clear that Dr. Dao would really be able to recover anything if he had sued the city.

    (3) From United, my best guess would be low single digit millions is the most likely number (but admittedly that’s just informed speculation, and it really depends on how much Dr. Dao wanted to settle vs. how desperate United was to make this case go away). I don’t see much indication that Dr. Dao was eager to remain a public spectacle — while his lawyer and a family member made public statements, presumably to put pressure on United, most doctors do not want to be involved in major litigation since any hospitals they’re affiliated with will require updates about their litigation activity. Even being a plaintiff in an active lawsuit would just be an administrative pain that he’d want to avoid. And again, it’s not clear the Court would actually side with him because, as bad as the tape looks, the Court could say that United was lawfully entitled to remove a passenger from the plane and didn’t violate the law by calling the police to remove someone who refused to leave the plane when ordered to do so.

    So, I think the negotiation would take place with both sides recognizing that Dr. Dao’s legal case, were it go to trial, is probably a whole lot weaker than it appears on video (and I say that at someone who, as a citizen, sees what happened to him as appalling and outrageous). At the same time, Dr. Dao’s lawyers probably knew that United would be willing to pay a few million to just make it go away quickly. They probably tried to even sweeten the deal by agreeing to put out that press release where they praised United for doing the right thing. A few million isn’t chump change, but in the context of this debacle, I could see that making business sense.

    I would not guess in the tens of millions, as some have speculated, for several reasons: If the settlement demand from Dr. Dao was anything close to that level, United could have proposed mediation (which most lawyers would agree to, if they’re open to settlement). You basically get a retired judge to come in, listen to both sides, and tell the parties what he thinks the settlement terms should be. Most parties will typically take that deal since it helps them to see the strength and weakness of their case more objectively. It’s hard to imagine a mediator coming in with tens of millions of dollars just because someone got beaten up. There are wrongful death cases that settle for much less. It’s way outside what the norm would be. In addition, in my experience, a legal settlement of $10 million or more has to be approved by the board of directors of the corporation (as a matter of company policy). It’s a fairly extensive process to go through to get a board resolution approving a settlement. It’s not impossible, but this happened so quickly that I would assume they settled at a level that was within the CEO’s authority to settle lawsuits. I doubt a company like United would let their CEO settle cases for more than $10 million without any board oversight. Plus, I sort of think that if Dr. Dao were told that a few million is the most they could offer and the whole thing just goes away immediately, he’d take that deal. The alternative would be to file a lawsuit, which would make an ongoing public spectacle of himself. Most people would probably want to move on.

    So that’s my guess, but again, none of this is based on any specific knowledge of what’s going on — just informed speculation.

  24. Am I the only one that wonders this: If UAL had crashed a plane would it get as much media coverage as this non-sense? I don’t get it apparently.

    I agree he was unjustly treated and has cause to sue, etc but enough already. Maybe 1 or 2 posts about this but not 20.

  25. Corporations need to protect the state thugs acting on their behalf, or they’ll find themselves without any state thugs to act on their behalf.

  26. Obviously United wants to put this to bed and litigation against the police would have dragged this out. In addition, it would not surprise me if some in the police union were acting like they won’t get involved in United disputes with customers in the future if no law is being broken and United is refusing to back them up no matter what happens. I’m fairly certain that United wants to keep the police on call and not have a situation where the police tell them to deal with their own civil problems. It seems almost like a distant cousin of bribery. Like United has your back so you will take their side in future disputes or give them preferential treatment. Makes me very uncomfortable that such language was included in a settlement.

  27. All of this….and nobody is talking about Dr. Dao’s refusal to obey authority. Should he be compensated to get back to where he was prior? Yes, of course.
    Does this precedent allow others to disobey civil authority and claim that they too ! !
    were hurt physically, emotionally, etc.?

    Is everybody going to do “what is right in their own eyes”? We have a whole segment of society now that feels entitled to riches at someone else’s expense.

  28. This is a win-win. United avoids the PR from a trial. Dr Dao avoids his past run-ins with the law being rehashed in court. With his payday, he can retire and have a full-time boy toy.

  29. 9.9 mn $ settlement and free flights on UNITED for ever.
    And browny points for UL in their upcoming Chicago talks.

  30. Some of the guesses above are quite high. Wrongful death tops out a few million bucks, other than the most extreme cases. He got a bloody nose and a concussion… I’d guess low 7 figures.

  31. because suing the city of Chicago would’ve still inevitably kept United and its bad name in the headline.

  32. “Now if a special Friday to Monday flight between Chicago and the location of the mayor’s vacation home were to magically show up on the schedule in a few months….” I know you’re just kidding here, but that wouldn’t even make logical sense. United effectively did a favor for the city here, not the other way around, so it wouldn’t be putting on a special flight for the mayor as a quid pro quo, now would it?

  33. 5 mil and lifetime free flights in the best cabin available for any of Dr Dao’s future travel with United’s operated flights.

    No better publicity other than Dr Dao endorsing United’s recovery efforts.

  34. @John’s experience is similar to my own, except it is not unusual for me to sign-off on settlement agreements which prevent 3rd parties being sued.

    The logic is, as other posters have suggested, that I don’t want a “back door” being opened to litigation when the whole point of the settlement is to shut the situation down and make it fade away.

    If I make a settlement, and then the victim sues a 3rd party, what’s to stop the 3rd party dragging me back into the case?

    The people stupidly focussing on Dao’s alleged past indiscretions clearly weren’t paying attention when their mommies told them that “two wrongs don’t make a right”. We’re not all angels – get over it: we are still all equal under the law. For the time being, anyway.

  35. It makes perfect sense… surely the police were acting on “instructions/intelligence/reporting” from United in the first instance. United got the police on board to remove him. So United would very much be answerable if he goes for the police. It’s not even about bringing the subject to the fore!

  36. Well this still does not prevent any crimial filings if any is to be submitted.

    Besides this being a civil issue between corporate and customer … were there any crimial actions done in this scenario?

  37. Pleasee,
    Can we stick to something besides airlines scandals, like nice deals and trip reports, this bashing of all airlines grows tiresome.

  38. I guess $3 million to Dao and for UAL in return, a lifetime ban from him flying United again. Last thing they want is passengers seeing him on a future flight.

  39. What will happen if somebody guess it right ? Dao will have to return the $ ? Even if the info could comes from United, or via telecommunications who manage to know about evertything soner or later ? This condition to reduce Dao to silence seems another unpleasantness impose to Dao and makes me think about the Universal Declaration of Human Rights. Article 19 states that “Everyone has the right to freedom of opinion and expression’. United was responsible and have pay for this agression. Why revealing the amount should not be OK ?

  40. Suppose that a wiki info about the settlement comes out and United, with a lot of contorsions sue Dao to return the $, is a 5 hours a day trial coverage on CNN would be good for United ?

  41. Limiting his ability to take action against another party is a strategy to protect the terms of the settlement.

    While Dao agreed not to disclose the terms, a court could compel the release and United would not want the terms and methodology exposed.

  42. I was making a connecting United flight in the same airport the day this took place when this happened and videotaped 1 of the 3 Chicago aviation cops Trying to taser Dr. David Dao after him and the 2 others knocked him out and dragged him off of united flight # 3411 in the terminal but the same Chicago aviation cop confiscated my Iphone 5C. Then told me I would be arrested for interfering with their ongoing investigation unless I went ahead boarded my flight or else to Washington D.C at once! Since he had just assaulted this united passenger I was in fear for my personal safety and was thinking I was next. I will skip dealing with flying United ever again and will tell my co-workers at LogistiCare Solutions to do the same since this was for a business trip for a convention I had to be at last week in the Chicago, IL area! This same Chicago aviation cop refused to give me
    his name and badge number at all!

  43. I would think the expenses surrounding the PR and any other consulting support + legal + media would have exceeded $10MM. Not to mention on-going additional retraining and operational expenses as a result of the announced procedural changes.

    I would think the actual settlement amount with Dr. Dao will pare compared to these costs.

  44. You asked for it…

    Here is is: $2.65 million, plus attorneys fees.

    No lifetime free flights and/or ban from flying.

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