A handful of American Airlines passengers who said they were improperly forced to pay bag fees filed a class-action lawsuit – and the airline has agreed to refund them and others who claim they were wrongly charged.

American said it would pay at least $7.5 million as part of a settlement agreement in the federal suit filed in Texas. The airline denies any allegations of wrongdoing in the case, court filings say. A representative for American declined to comment, as did an attorney working on the case.

The sides reached an agreement in mid-August, 12 days before a trial was scheduled to begin. Terms of the settlement were revealed Friday in a motion for approval of the agreement.

“It is the product of hard-fought, arms-length negotiations between the parties,” the motion says.

According to a complaint filed early last year, five travelers who were told they would not have to pay for at least some of their checked bags – because they held co-branded credit cards, had frequent flier status or for other reasons – were made to do so when they arrived at the airport. The suit says American dangles the promise of free checked bags to certain loyalty members, credit card holders and those who buy first- or business-class tickets.

“AA’s passenger contracts specify that certain of its passengers are permitted to check bag(s), for free,” the complaint says. “Yet, AA systematically required these passengers to pay to check bags and thus breached its contract with affected passengers.”

The lawsuit alleges that the airline failed to program the terms on checked bags in its standardized software system used for determining when passengers have to pay for bags upon checking in at the airport.

“As a result, AA passengers were improperly charged, and forced to pay, baggage fees,” the suit says.

The settlement applies to two sets of affected passengers: those who received email confirmation that promised one or more of their checked bags would be free but still had to pay; and those who held branded credit cards that entitled them to no-charge luggage checking but who were still charged on domestic trips. Travel had to take place on or after Feb. 24, 2017, and tickets needed to be bought no later than April 8, 2020.

Passengers who were affected will have the opportunity to file claims; according to the settlement, all members of the class will be eligible to get a full refund of the baggage fees. American will pay no less than $7.5 million and “there is no limit or cap” on the amount the airline might pay above that number, according to court documents. The airline will also pay costs for settlement administration and attorney fees.

“That amount represents a strong result given the potential recovery and the risks and delay of ongoing litigation in this case,” the motion says. “The fairness, reasonableness, and adequacy of the proposed settlement is even clearer in light of the risks, expense, and delay that would accompany ongoing litigation.”

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