Station Casinos settles surcharge lawsuit

By Liz Benston (contact)

Tuesday, Aug. 31, 2004 | 10:34 a.m.

Hundreds of thousands of people who stayed at Station Casinos Inc. hotels over the past several years have recently begun receiving coupons worth $3 and $2.50 as part of a $5.2 million settlement of a proposed class action lawsuit.

The suit, filed May 2003 in Los Angeles County Superior Court by customer Dov Plattner against Station Casinos and its Palace Station hotel, proposed a class-action suit based on claims that the company failed to disclose the collection of a $1 charge for telephone usage and an "energy surcharge" of up to $3.50 per night. Station has charged guests the extra fees for stays at company hotels since at least April 1, 2001, according to the complaint.

Station Casinos was one of many Las Vegas hotels that charged guests extra for energy use in 2001 because of soaring energy costs that plagued several western states at the time. By the end of 2001, Station had kept the surcharge while some Strip hotels dropped the charge, saying their energy costs had fallen and they wanted to induce more travelers to Las Vegas after the Sept. 11 attacks.

The Station Casinos settlement is expected to be approved at a hearing Oct. 22 before a state court judge in Los Angeles, according to attorneys for both Plattner and Station. The coupons will be good only if the court approves the settlement and are valid for 18 months after approval.

Station Casinos has denied the allegations and has also denied that customers have suffered any damages.

With the settlement, Station does not admit to any liability and the plaintiffs are barred from any further legal action on the claims. The court hasn't ruled on the merits of the claims. Station also agreed to pay $550,000 in attorneys' fees and expenses.

The coupons have been distributed to about 940,000 guests who paid to stay at any Station Casinos hotels from April 1, 2001, through June 7, 2004, according to a statement mailed with the coupons. Each of the coupons cannot be redeemed for cash and must be used toward the purchase of a one-night stay at a Station property.

The court notification process is standard for class-action settlements and gives consumers a chance to comment on the settlement before a judge gives final approval, Plattner's Los Angeles-based attorney, Mitch Kalcheim, said. Consumers have the right to opt out of the settlement or dispute the terms, he said.

Coupons may not be as favorable to consumers as cash but became the best compromise that could be reached between the parties, attorneys said. Coupons are one way in which class-actions are settled and have been used in similar energy surcharge claims against hotels, they said.

"While it's true that some of the coupons might not be utilized we anticipate that a large majority will be," Kalcheim said.

"That was the best way we found to benefit (consumers)," added Amy Schulder, Station's Los Angeles-based attorney.