FedEx, UPS want Deutsche Post, DHL execs held in contempt
The trans-Atlantic dispute among the world's package delivery giants over the ownership of DHL Airways has grown even nastier.
FedEx Corp. and United Parcel Service have asked the administrative law judge overseeing the case to hold the chief executives of Deutsche Post World Net and DHL International in contempt for refusing to comply with the judge's order to testify about their relationship with DHL Airways, a U.S.-based cargo airline with approximately 34 aircraft.
Deutsche Post and DHL, in turn, have asked the judge to quash the subpoenas ordering Klaus Zumwinkel, chief executive of Deutsche Post, and Uwe Doerken, chief executive of DHL International, to testify.
The dispute has stalled efforts by Deutsche Post, which owns DHL International, to establish itself in the U.S. express delivery market.
American laws bar foreign companies from controlling U.S. airlines. FedEx and UPS contend that Deutsche Post and DHL International, which operates as DHL Express, control DHL Airways. Deutsche Post and DHL have maintained that the airline, based in Cincinnati, is controlled by William Robinson, a U.S. citizen. They also say that Robinson, an Idaho investor, owns 55 percent of the equity in the airline. Deutsche Post and DHL International hold a minority stake in the carrier.
A joint motion by FedEx and UPS acknowledged that the petition to hold Zumwinkel and Doerken in contempt "may appear to be a drastic request," but said they believed it to be necessary "given the aggressive time constraints of the case and the lack of cooperation they have thus far received."
Judge Ronnie L. Yoder has set a July 18 deadline for completing discovery in the case. A formal hearing is set for Aug. 19. Yoder will make his recommendation in the case to the Department of Transportation by Oct. 31.
Responding to an earlier motion from FedEx and UPS, Yoder issued subpoenas for Zumwinkel, who is based in Bonn, Germany, and Doerken, who is based in Brussels. Attorneys for Deutsche Post and DHL informed attorneys for FedEx and UPS on June 26 that they did not intend to have their clients appear for depositions. They stated that the judge's powers did not extend to foreigners living and working outside the U.S. They also stated that Yoder lacked jurisdiction, and offered to provide testimony from Wolfgang Pordzik, president and chief executive of Deutsche Post World Net U.S.A., or another individual familiar with DHL Airways and its ownership structure.
Rather than let Deutsche Post and DHL run out the clock on the discovery process, FedEx and UPS asked Yoder to "bring the issue to a head" by compelling testimony from Zumwinkel and Doerken.
More important than the depositions, however, is "whether an owner of a U.S. air carrier must obey the orders of an administrative law judge within the Department of Transportation," FedEx and UPS added in their filing. Yoder is the chief administrative law judge at DOT.
The legal battle apparently contributed to the failure of an investor group led by John Dasburg, chairman, president and chief executive of DHL Airways, to acquire full control of the airline by a June 30 deadline. The investor group now says it plans to complete the deal within the next 30 days. Dasburg, who became chief executive on April 1, currently owns 5 percent of the airline's stock. Attorneys for DHL Airways unsuccessfully sought to convince DOT that the proceeding before Yoder would be moot once the sale, announced just before the case began, was completed. Dasburg and his partners are all Americans.
