Order 2011-6-18

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

On the Seventeenth day of June, 2011

Deutsche Lufthansa AG Docket OST 2011-0003

Violations of Article 19 of the 

 Montreal Convention and 49 U.S.C. § 41712 Served June 17, 2011

 

CONSENT ORDER

This consent order involves violations by Deutsche Lufthansa AG (Lufthansa) of Article 

19 of the Montreal Convention and the statutory prohibition against unfair and deceptive 

trade practices, 49 U.S.C. § 41712, in connection with monetary claims resulting from its 

delay in delivering checked baggage. It directs Lufthansa to cease and desist from future 

similar violations of Article 19 and section 41712, and assesses the carrier a compromise 

civil penalty of $50,000.

Applicable Law

Article 19 of the Montreal Convention (Montreal) provides that a carrier is liable for 

damage occasioned by delay in the carriage by air of baggage, except to the extent that it 

proves that it took all reasonable measures to prevent the damage or that it was 

impossible to take such measures.1

 Article 22 currently sets the liability limit for 

damages associated with delayed passenger baggage at 1,131 Special Drawing Rights

(SDRs) for each passenger.2

 Furthermore, Article 26 states that any provision tending to 

relieve a carrier of liability or to fix a lower limit than that which is laid down in the 

Convention is null and void. Violations of the Montreal Convention constitute unfair or 

deceptive business practices and unfair methods of competition in violation of 49 U.S.C. 

§ 41712.

 1 Convention for the Unification of Certain Rules for International Carriage by Air, adopted on 

May 28, 1999.

2 Inflation Adjustments to Liability Limits Governed by the Montreal Convention Effective 

December 30, 2009, 74 FR 59017, available at http://airconsumer.dot.gov/ruleslNotice_ll_09_09.pdf 

(November 9, 2009).
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Background

Based on a consumer complaint, the Office of Aviation Enforcement and Proceedings 

(Enforcement Office) investigated Lufthansa’s policies and practices in connection with 

its handling of monetary claims for delay in delivering checked baggage. That 

investigation showed that in a number of instances arising out of flights to and from the 

United States Lufthansa was limiting reimbursement to 50 percent of the claimed expense 

against original receipts for damages associated with a delay in returning checked 

baggage. That investigation also determined that on some occasions Lufthansa was using 

language in letters to claimants reflecting this practice and had accordingly advised 

numerous claimants who had requested reimbursement for their expenses associated with 

the delay in returning checked baggage that Lufthansa would reimburse only 50 percent 

of the cost of clothing items and 100 percent of the cost of toiletries and underwear. The 

practical effect of using this language in the letters was to limit in some instances 

Lufthansa’s liability for damage occasioned by delay to less than the minimum 1,131 

SDRs required by the Montreal Convention. 

Mitigation

In mitigation, Lufthansa states that it responds to passenger claims on a case by case basis 

and takes note of the particular circumstances surrounding each claim and tries to assist 

the passengers in the best possible manner. Lufthansa asserts that it never had any 

intention of purposely misstating its policies to passengers or establishing limits of 

liability below allowable legal standards. Lufthansa states that response letters to 

customers over a period of time contained language that may have been somewhat 

ambiguous but certainly there was no intent on denying its valued customers anything 

less than they deserved under the law. Lufthansa states that it has revised the language 

for passenger communications under such circumstances making it clearer to the 

passenger and consistent with applicable law. 

Decision

The Enforcement Office has carefully considered the information provided by Lufthansa

but continues to believe that enforcement action is warranted. The Enforcement Office 

and Lufthansa have reached a settlement of this matter in order to avoid litigation. 

Lufthansa consents to the issuance of an order to cease and desist from future violations 

of Article 19 of the Montreal Convention and 49 U.S.C. § 41712 of the Department’s 

regulations, and to the assessment of $50,000 in compromise of potential civil penalties 

otherwise due and payable pursuant to 49 U.S.C. § 46301. 

This compromise assessment is appropriate considering the nature and extent of the 

violations described herein and the size and sophistication of the carrier, and serves the 

public interest. It represents an adequate deterrence to future noncompliance with the 

Montreal Convention by Lufthansa, as well as by other air carriers and foreign air 

carriers. 
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This order is issued under the authority contained in 49 CFR 1.57a and 14 CFR 385.15.

ACCORDINGLY,

1. Based on the above discussion, we approve this settlement and the provisions of 

this order as being in the public interest;

2. We find that Deutsche Lufthansa AG violated Article 19 of the Montreal 

Convention by limiting its reimbursement to 50 percent of the claimed expense 

against original receipts for damages associated with a delay in returning checked 

baggage;

3. We find that by engaging in the conduct and violations described in ordering 

paragraph 2, above, Deutsche Lufthansa AG, has also violated 49 U.S.C. 

§ 41712; 

4. We order Deutsche Lufthansa AG, and all other entities owned or controlled by or 

under common ownership with Deutsche Lufthansa AG, and their successors and 

assignees, to cease and desist from violations of Article 19 of the Montreal 

Convention and 49 U.S.C. § 41712. Failure to comply with this cease and desist 

provision shall subject Deutsche Lufthansa AG, and their successors and assignees 

to further enforcement action;

5. We assess Deutsche Lufthansa AG, a compromise civil penalty of $50,000 in lieu of 

civil penalties that might otherwise be assessed for the violations described in 

ordering paragraphs 2 and 3, above. Of this total penalty amount, $25,000 shall be 

due and payable within fifteen (15) days of the date of issuance of this order. The 

remaining $25,000 shall be due and payable immediately if Deutsche Lufthansa 

AG violates this order’s cease and desist or payment provisions during the twelve 

(12) months following the service date of this order; and

6. We order Deutsche Lufthansa AG, to remit the payment ordered in paragraph 5 

above, by wire transfer through the Federal Reserve Communications System, 

commonly known as “Fed Wire,” to the account of the U.S. Treasury in accordance 

with the instructions contained in the Attachment to this order. Failure to pay the 

penalty as ordered shall subject Deutsche Lufthansa AG, to the assessment of 

interest, penalty, and collection charges under the Debt Collection Act and to further 

enforcement action for failing to comply with this order.
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This order will become a final order of the Department 10 days after its service date 

unless a timely petition for review is filed or the Department takes review on its own 

motion.

BY:

ROSALIND A. KNAPP

Deputy General Counsel

(SEAL)

An electronic version of this document is available at

www.regulations.gov