Judge Calls Off Preliminary Hearing on Former DHL Airways
Wed Aug 6,12:17 PM ET
By Rick Brooks, Staff Reporter of The Wall Street Journal
ATLANTA -- A federal judge canceled a preliminary hearing scheduled for Thursday on the ownership dispute over the former DHL Airways Inc. The move could delay the start of this month's legal showdown to determine if the cargo airline is under the control of German delivery carrier Deutsche Post AG
Ronnie Yoder, the Department of Transportation's chief administrative law judge, Tuesday called off a "prehearing conference" where Astar Air Cargo Inc. was expected to tussle with rivals FedEx Corp. (NYSE
:FDX - News) and United Parcel Service Inc. (NYSE
- News) over evidence and testimony likely to be introduced at a full-blown hearing set to start Aug. 19.
The judge decided not to proceed with the preliminary conference until the DOT deals with questions raised about its decision last week to sharply limit the scope of the judge's scrutiny. As reported, the agency ordered Mr. Yoder to consider only the current ownership structure of Astar. The Miami airline's previous ownership, including a stake held until last month by Deutsche Post, is no longer relevant to the proceeding, the DOT ruled.
Mr. Yoder told the agency last week that limiting him from examining facts related to Astar's previous ownership "would raise serious questions concerning the applicable substantive and procedural law."
FedEx and UPS, which have been trying to drag closely held Astar's past owners into their fight to ground the carrier for allegedly violating federal laws limiting ownership or control of U.S. airlines by foreign entities, have moved to reverse or at least stay the limits set by the DOT. The two companies claim the agency's instructions to the judge contradict last spring's "explicit Congressional mandate" that the two-and-a-half-year dispute be decided by an administrative law judge.
Narrowing the scope of the proceedings "is an improper effort to control and influence the decisions of the (judge) on discovery and evidentiary matters," FedEx and UPS said in a petition filed with the DOT Monday. FedEx and UPS also claim that the Astar takeover did little more than change the airline's name, leaving it under the control of Deutsche Post.
FedEx and UPS complained in their filing that efforts to prove that control are being hampered by "stall and delay tactics" of Astar and the airline's past owners that were triggered by the DOT's July 30 ruling.
In response, Astar urged the DOT to stick to its decision. In a filing with the agency, Astar criticized Mr. Yoder for what it called "simply a request for reconsideration of an order which the (judge) does not like." Astar claims it " no longer shares any services" with any company in the DHL Worldwide Express delivery network and leases just four of its 40 planes from a Deutsche Post subsidiary.
Mr. Yoder's decision not to go ahead with Thursday's preliminary conference in Washington will make it tougher to keep on track the full-blown hearing set to start in less than two weeks. The judge has until Dec. 31 to make a recommendation in the case.
Astar changed its name from DHL Airways when an investor group led by John Dasburg, the airline's chief executive since April, completed its $57 million takeover in mid-July. The sale ended any ownership by Deutsche Post and William Robinson, a U.S. citizen who took control of DHL Airways in 2000 and was a founder of the DHL network.
-Rick Brooks, The Wall Street Journal; 404-865-4355
But DHL/AStar is good enough for the US DOD to support the USPS
and DOD in Afghanistan and Iraq.... Where UPS & FedEx don't dare go yet!
Many other threads on this, just do a search on DHL.