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SWCBK appointed lead counsel in class action against Verified Identity Pass Inc. on behalf FLY CLEAR members.

NEW YORK , OCTOBER 28, 2009 - A federal judge has appointed the law firms of Schneider Wallace Cottrell Brayton Konecky, Kaplan Fox, and Squitieri and Fearson lead counsel in a class action lawsuit filed in the U.S. District Court for the Southern District of New York against Verified Identity Pass, Inc. (VIP) on behalf of consumers and businesses that purchased membership in the CLEAR program.   Shortly before VIP ceased operations on June 22, the company continued to sell new and extend memberships in the CLEAR program, which offered streamlined airport security screening.   The suit claims that by ceasing operations and not offering refunds, VIP committed conversion, fraud, breach of contract, negligence and unjust enrichment.

 

VIP until recently provided biometric system solutions for airports, airlines, travel agents and business travelers in the United States.   The company, a Delaware corporation based in New York, offered CLEAR, a registered traveler program that enabled airports to provide enhanced customer services to passengers while addressing security concerns and allowing for resource allocation at airport checkpoints.   CLEAR's "fast-lane" program began at Orlando International Airport in 2005 and was expanded to at least 18 airports nationwide.

 

During the CLEAR program's existence, in exchange for an annual membership fee of at least $199 and after completing extensive prescreening procedures in accordance with the Transportation Security Administration's guidelines (including the provision of social security numbers, fingerprints and, in some cases, iris scans), CLEAR members were provided with a card that allowed them to access designated airport security fast lanes.   It is reported that the CLEAR program had approximately 250,000 members.

 

On June 22, the CLEAR program ceased operations.   On that day, the CLEAR airport kiosks were unstaffed with a paper note stating it had "ceased operations" and passengers should "please utilize regular security checkpoint lanes."   Content on the VIP Web site was removed and replaced with a statement that the company was ceasing operations, effectively immediately.

 

The lead plaintiff, Stephen Perkins of Indianapolis, Ind., also received an electronic mail notice from the CLEAR program, alerting him that the company was ceasing operations because VIP was unable to negotiate an agreement with its senior creditor.   The electronic mail also stated that "at the present time, Verified Identify Pass, Inc. cannot issue refunds due to the company’s financial condition."

 

"In the weeks leading up to VIP's shut down, it continued to both sell and renew extended CLEAR program memberships to consumers and businesses - monies that VIP now refuses to return," said Todd Schneider of Schneider Wallace Cottrell Brayton Konecky LLP, who is representing the plaintiffs.   " VIP entered into contracts with its customers that it would provide expedited airport check-in privileges.   The company then terminated the services without refunding membership fees paid by its customers.    This conduct is simply wrong.    Businesses cannot simply take money from customers and then fail to perform the services for which they were paid without a refund.    This type of corporate behavior needs to stop immediately"

 

In addition to Schneider Wallace Cottrell Brayton Konecky LLP, the plaintiffs are represented by Kaplan Fox & Kilsheimer LLP .   Individuals or businesses who have purchased membership in the CLEAR program are potentially members of the class action lawsuit and can obtain additional information by calling 415.421.7100 or by clicking here .

Click here to view the First Amended Class Action Complaint
Click here to view the Motion to Appoint Lead Counsel
Click here to view the Motion for Preliminary Injunction