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DB Schenker sues for $billions, sued for $millions

COLOGNE: Deutsche Bahn says its logistics subsidiary DB Schenker AG is claiming damages and accumulated interest that could top US$3.0 billion from airlines it says operated a "global price-fixing cartel" between 1999 and 2006.

According to Christopher Rother, head of Regulatory, Competition and Anti-Trust for the state-owned railway and logistics group, the company wants US$350 from a U.S. ruling – which he said could rise to US$1.1 billion with triple damages – and a further US$2.25 billion from a German court.

DB Schenker lawsuit USANoting that the defendants are "jointly and severally" liable, Rother hopes the pressure of a single airline being hit for the whole amount might encourage an out-of-court settlement.

DB Schenker says it is suing Air France, KLM, Martinair, Cargolux, Qantas, SAS and All Nippon Airways in New York; and Lufthansa, British Airways, Singapore Airlines, Swiss International Airlines, Cargolux, SAS, Air Canada, Cathay Pacific, Japan Airlines and LAN Airlines in Cologne.

Citing the European Commission decision in November 2010 to fine most of the same airlines €799.445 million for operating a cartel that affected air cargo within the European Economic Area, Rother said German courts are obliged to abide by the same ruling: "We're not talking about whether the airlines are guilty; that has already established throughout the world," he declared.

DB Schenker has included Lufthansa and Swiss in its German lawsuit despite Lufthansa's "whistleblower" immunity from the original European Commission prosecution.

Lufthansa Cargo says an expert opDB Schenker Germany lawsuitinion subsequently hired by the two airlines concluded the cartel did not inflict any actual damage on customers: "Even if there were damages (i.e. allegedly higher cartel prices), the court will have to examine whether the plaintiffs did not pass them on to their own customers (in the case of the freight forwarders) or whether they were indeed passed on to them (in the case of the final customers)."

Rother said the new court filing is because Deutsche Bahn "is left with little choice" after years of trying to settle with the airlines. "It is particularly important to the German taxpayer," he added. "All our suppliers should know that when they try to defraud us, we make sure they don't get away with it."

DB Schenker sued

Deutsche Bahn says it filed its U.S. complaint in the Eastern District of New York – the same place where DB Schenker is a defendant in a class action cargo cartel case brought by shippers against a large group of freight forwarders.

According to court papers, the company "is a defendant as to six (6) alleged conspiracies: Security Surcharge, New Export System Fee (NES), Currency Adjustment Factor (CAF), Peak Season Surcharge (PSS), Air AMS and Ocean AMS. 90 [ninety] percent of the net settlement proceeds from Schenker will be distributed pro-rata to qualified class members who paid any of such surcharges to any defendant named in such conspiracies, whether it is a settling defendant or not".

DB Schenker has now agreed to pay US$8.75 million of a US$178 million forwarder settlement with shippers. Rother declined to say how much the company wanted from the airlines in any similar pre-trial deal.

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