Northwest Airlines Inc. has settled a lawsuit against U.S. Bancorp. The airline, now owned by Delta Air Lines Inc., sued the bank in late April to prevent it from converting frequent-flier cardholders from the Northwest WorldPerks reward program to a multiple-airline program (CardLine, 4/28). U.S. Bancorp lost a cobranding contract with Northwest last year after the carrier was acquired by Delta, which has a longtime cobranding partner in American Express Co. The Minneapolis-based banking company reacted by introducing a "FlexPerks" rewards card it has started sending to its cardholders. It also began notifying cardholders of the date on which they would start earning FlexPerks points instead of Northwest WorldPerks points. According to the complaint, which Northwest filed on April 23 in the U.S. District Court for Minnesota, U.S. Bancorp breached its agreement with Northwest by its plan to switch cardholders from one points program to the other. But the case was settled, according to a May 4 filing in the court, which dismissed all claims "with prejudice and on the merits, with each side to bear its own costs and attorneys' fees." "Northwest and U.S. Bank were able to resolve their differences on mutually agreeable terms back in May," Teri Charest, a spokesperson for U.S. Bancorp, stated in an e-mail message. Those terms appear to include an opportunity for cardholders to earn both types of points after receiving their new FlexPerks cards. For approximately 30 days after cardholders begin earning FlexPerks points, they also will earn WorldPerks miles, regardless of whether they use the new FlexPerks card or the current WorldPerks Visa card, according to Charest. After the approximately 30-day period is over, the cardholder's WorldPerks Visa card no longer will allow charges, and the FlexPerks card will not earn WorldPerks miles, she says. "The cardholder's FlexPerks card will continue to earn FlexPerks points when he or she uses the FlexPerks cards," Charest says.

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