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OST-2002-13089

DHL/ASTAR Citizenship Docket by Party/Order

DHL Worldwide Express - Petition of Federal Express and UPS

DHL Complaints - Petition and Complaints of Federal Express and UPS


Petition of United Parcel Service Co. to Institute a Public Inquiry Into The Citizenship and Foreign Control of DHL Airways, Inc

OST-02-13089 August 9, 2002 Petition of United Parcel Service (UPS) to Institute a Public Inquiry into the Citizenship and Foreign Control of DHL Airways Public Inquiry into the Citizenship and Foreign Control of DHL Airways
    Exhibit 1:  Financials  
    Exhibit 2:  DHL Conference Slideshow  
    Exhibit 3:  FCC Application for Transfer  
    Service List  

UPS submits that new and significant information and statements as to the complex corporate structure of DHL Airways and its affiliates raise serious grounds to question the U.S. citizenship of the company and add to a growing confusion as to the true ownership and control of this purported U.S. airline. Further, and in any event, UPS respectfully urges the Department to conduct the requested review in public, in a manner that allows UPS and other U.S. citizens to participate meaningfully in it.

Counsel:  Kelley Drye, David Vaughan, 202.955.9864, dvaughan@kelleydrye.com


Compliance with U.S.- Citizenship Requirements of DHL Airways, Inc.  and Petition of United Parcel Service Co. to Institute a Public Inquiry Into The Citizenship and Foreign Control of DHL Airways, Inc

OST-01-8736
OST-02-13089
August 13, 2002 Re:  Request to Set Due Date for Filing Response Answers Compliance with U.S.- Citizenship Requirements of DHL Airways, Inc.  and Petition of United Parcel Service Co. to Institute a Public Inquiry Into The Citizenship and Foreign Control of DHL Airways, Inc
    Service List  

As Federal Express well knows, however, Airways cannot allow to stand unchallenged the litany of misstatements, unsubstantiated allegations and outright distortions that Federal Express is using in its campaign to undermine the Department's decision to review Airways' restructuring in an informal proceeding. Airways, therefore, intends to file a substantive response to the Federal Express pleading. Fundamental fairness and due process of law require that Airways be afforded adequate time to prepare its response to Federal Express's trumped-up charges. Airways therefore requests that the Department establish September 6, 2002, or four days after the end-of summer Labor Day holiday, as the due date for filing such response. Airways considers this to be a reasonable request, given the unauthorized and voluminous nature of the Federal Express pleading and the fact that such response will have to be prepared during the peak of the summer vacation season.

Counsel:  Lachter Clements, Stephen Lachter, 202.862.4321, lachter@starpower.net


Compliance with U.S.- Citizenship Requirements of DHL Airways, Inc.  and Petition of United Parcel Service Co. to Institute a Public Inquiry Into The Citizenship and Foreign Control of DHL Airways, Inc

OST-01-8736
OST-02-13089
Served August 16, 2002 Notice Consolidating Proceedings and Granting Extension of Time Compliance with US Citizenship Requirements of DHL Airways / Petition of UPS

We find that consolidation of these filings in Docket OST-2002-13089 will enable the Department and the parties to address these similar issues and information more efficiently. Thus, we find that the principle of administrative efficiency supports the consolidation of the two proceedings into one coordinated docket. The consolidation will not in any way prejudice any decision, substantive or procedural, made concerning these filings.  We grant the August 13, 2002 request of DHL Airways for an extension of time and give interested parties until September 6, 2002 to answer the petitions of FedEx and UPS in Docket OST-2002-13089.

By:  Read C. Van de Water


Compliance with U.S.- Citizenship Requirements of DHL Airways, Inc.  and Petition of United Parcel Service Co. to Institute a Public Inquiry Into The Citizenship and Foreign Control of DHL Airways, Inc

OST-02-13089 September 6, 2002 Consolidated Answer of DHL Airways Compliance with US Citizenship Requirements of DHL Airways / Petition of UPS
    Exhibit 1DOT Letter dated may 1, 2002 to DHL and Counsel - DHL Satisfies Citizenship Requirements  

Counsel:  DHL and Stephen Lachter


DHL Airways, Inc. - Petitions of United Parcel Service and Federal Express to Institute a Public Inquiry into the Citizenship and Foreign Control

OST-02-13089 September 17, 2002 Contingent Motion for Leave to File an Otherwise Unauthorized Document and Reply of United Parcel Service Petitions to Institute a Public Inquiry into the Citizenship and Foreign Control of DHL
    Service List  
    Exhibits  

The facts developed in this docket create serious doubt that DHL Airways is a U.S. citizen under DOT precedent. If there were no other facts to be known, UPS would request that the Department institute proceedings to revoke DHL Airways' certificate. Yet, UPS acknowledges that all interested parties do not have all of the facts before them. In this circumstance, it is necessary to take a full review of all relevant facts, and this should be undertaken by means of an oral evidentiary hearing before an Administrative Law Judge.

Counsel: UPS and Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kellydrye.com


Petition Of United Parcel Service Co. To Institute A Public Inquiry Into The Citizenship And Foreign Control of DHL Airways, Inc.

OST-02-13089 September 24, 2002 Motion for Leave to File and Otherwise Unauthorized Document and Reply of Federal Express Public Inquiry into the Citizenship and Foreign Control of DHL Airways

Although DHL Airways says repeatedly that the Department itself has declared its new corporate structure consistent with U.S. law, it appears that the only actual review has been made at the staff level, and that review neither binds the Department nor constitutes its decision. It is also clear that the Department has not yet had the opportunity to consider fully the broader implications of the important issues raised by DHL's structure - in short, to consider fully the DHL network's strategy for DHL Airways.

FedEx Express thus renews its August 7 request that the Department review the staff's application of law to the facts of DHL Airways' corporate structure. If the Department has already reviewed the staff decision, FedEx Express requests that the Department reconsider its decision. The issues presented raise serious credibility questions that can be resolved only through an oral evidentiary hearing into the facts of DHL Airways' corporate structure.

Counsel: Federal Express, Rush O'Keefe,  901 434-8586


DHL Citizenship Requirements / Petition of United Parcel Service

OST-02-13089 September 26, 2002 Motion of DHL Airways for Leave to File an Otherwise Unauthorized Document and Surreply DHL Citizenship Requirements / Petition of United Parcel Service

Not surprisingly given the nature of the company being reorganized, DHL Holdings will be Airways's major customer at the outset of its independent existence. But DHL Holdings' ability to influence Airways is limited, since the business relationship is embodied in a long-term contract that Holdings cannot simply terminate at will. Moreover, by the same logic, one could just as readily say that Airways has effective control over Holdings, since the latter is dependent on Airways for air lift services in the U.S. In any event, this non-exclusive contract does not preclude Airways from seeking to expand its business with other customers, and that is precisely what Airways has been doing. In these and other respects, the present case differs significantly from Executive Air Fleet, Inc., Consent Order, Order 92-9-46 (1992)-where the two companies involved shared the same offices and had overlapping corporate officers, and where the new owner of the air carrier had virtually no contact with the business-and from Air-Evac Ambulance, Inc., Order 95-3-3 (1995)-where the controlling shares of a small on-demand air taxi were held in trust for the benefit of a non-citizen's minor daughter (a U.S. citizen), with the lawyer for the non-citizen father acting as trustee. Further indicia that the airline lacked independence in that case were the fact that its only customer was a corporation controlled by the non-citizen father, which had an exclusive contract with the airline, and the fact that the lawyer acting as trustee for the trust also served as counsel to both corporations. These cases have little to do with the situation resulting from the reorganization of the original DHL Airways into separate air and ground companies with different owners, officers, directors, offices, and counsel. Indeed, in the Executive Air Fleet case, after some restructuring of the company to increase its independence from its former parent, the Department found the company to be in compliance with the statute's citizenship requirement, the same conclusion the Department reached here. Thus, if the case has an relevance here at all, it stands for the proposition that a single company can be separated into two distinct business -- one a citizen and one not under the statute -- and continue to do business with each other, the very outcome UPS now complains against.

The "host of significant questions" that UPS purports to raise about William Robinson's ownership of Airways" can only be described as speculative. The Department's investigation included a thorough review of the confidential, operative corporate documents, the nature of the financial transactions, and the sources of funds for purchase of the reorganized company-so the Department is well aware that Mr. Robinson made a large personal investment to become the majority shareholder of Airways and has a strong financial interest in its success. While the Department had a legitimate interest in reviewing this sensitive and proprietary information relating to a non-publicly held corporation, there is no reason why it should be spread across the public record in an evidentiary hearing to satisfy the almost prurient interest of a competitor or to provide that competitor an advantage in the marketplace.

Counsel:  DHL and Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net


DHL Citizenship Requirements / Petition of United Parcel Service

OST-02-13089 September 25, 2002 Re:  Ex-Parte Letter to Senator Ernest Hollings DHL Citizenship Requirements / Petition of United Parcel Service

You asked about the procedures for challenging an "informal decision whether within the Department or by judicial review." In cases like the review of DHL Airways' citizenship, there are procedures to request formal public review, and UPS and FedEx have recently utilized those procedures. Any party is free to file a formal enforcement complaint or a motion requesting a continuing fitness investigation. As I mentioned, both UPS and FedEx recently requested reconsideration or a new public proceeding to review the DHL situation. The statute governing the Department's aviation economic responsibilities gives the parties the right to seek judicial review of the final Department decision on the UPS and FedEx requests.

I believe that the case of DHL Airways shows that the current process is working by allowing the Department to obtain information informally to attempt to solve problems with carriers and competitors, in a way similar to that used by the Justice Department under the Hart-Scott-Rodino Act, but also to provide for public action where necessary, such as when there is an impasse. For example, where a carrier undergoing review has been uncooperative, or where there is a need to condition its certificate, the Department issues a public order or opens a public investigation. Likewise, as discussed above, an order will be issued at the conclusion of the proceeding initiated by the most recent UPS and FedEx requests. Finally, it is my understanding that the Inspector General is reviewing the process by which the Department makes such citizenship determinations pursuant to a request by Representative Don Young, Chairman of the House Transportation and Infrastructure Committee. I will advise the Inspector General of your interest in this matter so that he can be in touch with your office.

By:  Norman Mineta


DHL Airways, Inc. - Petition of United Parcel Service Concerning Citizenship Requirements

OST-02-13089 October 15, 2002 Re:  Ex-Parte Letter to James Hoffa / AFL-CIO DHL Airways, Inc. - Petition of United Parcel Service Concerning Citizenship Requirements

By:  Kirk K. Van Tine


DHL Airways

OST-02-13089 October 18, 2002 Opposition of DHL and Contigent Surreply DHL Airways, Inc. - Petition of United Parcel Service Concerning Citizenship Requirements
    Service List  

The Federal Express Reply is a strange document. It contains no new relevant information or evidence to support the request for an oral evidentiary hearing and little, if anything, that responds to the points made in Airways' Consolidated Answer of September 6, 2002. Only by the loosest use of language can this document be termed a "Reply" at all. What it really amounts to is a spurious polemic against Airways-which Federal Express (reminiscent of Chicken Little) claims is about to transform the U.S. air cargo industry into a "flag-of-convenience" regime that will destroy the U.S. economy and pose a grave threat to our national security. Clearly, this filing -- which is short on information and long on obfuscation, misinformation, and misguided rhetoric -- is a continuation of Federal Express' determined (and increasingly desperate) efforts to eliminate a small domestic competitor by continuing to raise unfounded challenges to Airways' citizenship.

Counsel: Lachter Clements, Stephen Lachter,  202 862-4321


DHL Airways

OST-02-13089 November 8, 2002 Motions of Lynden Air Cargo for Leave to File an Otherwise Unauthorized Document and to Join Complaint DHL Airways, Inc. - Petition of United Parcel Service Concerning Citizenship Requirements
    Service List  

We have reason to believe that DHL Airways intends to use an aircraft currently operating within Europe under the control and authority of DHL International on the above contract under some arrangement that may appear to meet the conditions of the AMC contract (which requires this work be done by a U.S. air carrier). For example, DHL airways may use an array of wet-leased foreign aircraft through convoluted arrangements with DHL International (a 100% foreign owned company). We also point to DHL Airways's current wet leasing arrangements with DHL Holdings (USA), (100% owned by DHL International), whereby all aircraft operations are leased to DHL Holdings (USA). This means that DHL Airwyas is giving its control to a foreign company while effectively evading U.S. taxes. DHL Airways assumes the risk while DHL Holdings takes the profits.

Counsel: Pierre Murphy, 202 822-8050


Petition of United Parcel Service Co. to Institute a Public Inquiry Into The Citizenship and Foreign Control of DHL Airways, Inc

OST-02-13089 November 26, 2002
Docketed December 3, 2002
Motion for Leave to File an Otherwise Unauthorized Document and Amendment No. 1 to Petition of United Parcel Service Co. Public Inquiry into the Citizenship and Foreign Control of DHL Airways
    Attachment:  Letter from Senator Rockefeller to Secretary Mineta  

Subsequent to the filing of the Petition and Reply of United Parcel Service Co. in the above-captioned proceeding, additional information has become public which UPS requests be placed in the record. Specifically, the Chairman of the Senate Aviation Subcommittee, Senator John D. Rockefeller, IV, advised Department of Transportation Assistant Secretary Read Van de Water in a November 18, 2002 letter, of three key circumstances indicating control by non-U.S. citizens of DHL Airways that were heretofore unknown to UPS. Unlike typical Congressional correspondence expressing policy interest, the Chairman's expansive letter reflects deep concern arising from information contained in a briefing to his office by the staff of the Department's own Office of the Inspector General. In this extraordinary circumstance, the Chairman's letter should not only be incorporated in the docket, but the factual statements therein should be given full consideration in a public forum before an Administrative Law Judge.  A copy of the letter is attached.

Based on information available to him, Senator Rockefeller states in his letter that DHL Airways' Board of Directors comprises one American citizen, who has had extensive previous relationships with foreign-owned DHL entities, two American business consultants to him, and a fourth and final board member who is an executive of a foreign-owned DHL entity. Second, the Senator's letter shows that 30% of DHL Airways' aircraft are owned by foreign interests. Third, the letter states that DHL Airways is prohibited in its contract with the foreign­owned DHL entities from carrying third-party traffic if such carriage interferes with traffic from the foreign-owned entities.

Counsel: Kelley Drye, David Vaughan, 202 955-9864


Compliance with U.S. Citizenship Requirements of DHL Airways, Inc.

OST-02-13590
OST-02-13089
December 4, 2002 Answer of DHL Airways to Motions of Lynden Air Cargo Compliance with U.S. Citizenship Requirements of DHL Airways, Inc.
    Service List  

Airways does not oppose the joinder of complaints sought by Lynden, preferring instead to respond to the substance of the Lynden pleadings. In both cases, the Lynden documents fail to add any facts or arguments to support the complaints already on file or to support the grant of any relief to Lynden. Lynden offers no independent evidence, or even assertions, concerning the citizenship and/or continuing fitness of Airways. Indeed, as already amply documented in Airways' responsive pleadings in both dockets, which are incorporated by reference here to avoid repetition, the complaints are wholly without substance and should be dismissed.

Counsel: Lachter Clements, Stephen Lachter, 202 862-4321


DHL Airways

OST-02-13089 December 5, 2002
Docketed December 6, 2002
Motion for Leave to File an Otherwise Unauthorized Document and Amendment No. 2 to Petition of United Parcel Service DHL Airways, Inc. - Petition of United Parcel Service Concerning Citizenship Requirements
    Service List  
    Media Article  
    Commission Decision  

In light of DPAG's now clear emergence as the sole entity having complete control over DHL Airways based on all the evidence that has been brought forward to date, UPS reiterates in the strongest terms its request for a public investigation into DHL Airways' citizenship. However, for the reasons set forth in the EC Decision, it is now equally clear that any such investigation must be conducted by an independent ALJ who is equipped with the investigatory powers to obtain the documentation and other information that must be produced by DHL Airways and its affiliated companies, including DPAG, its ultimate controlling entity. Simply relying on the responses provided by DHL Airways and the information that may be produced by the other interested persons in an informal and ad hoc public proceeding will not suffice.

Counsel: Kelly Drye, David Vaughan, 202 955-9864


Compliance with U.S. Citizenship Requirements of DHL Airways, Inc. / Citizenship and Foreign Control of DHL Airways, Inc.
SNAS Trading and Contracting

OST-02-13787
OST-02-13089
December 11, 2002 Consolidated Answer of DHL to Amendment No. 1 to Complaints Compliance with U.S. Citizenship Requirements of DHL Airways, Inc.
    Service List  

In substance, the UPS Motion and Amendments seek the inclusion in both dockets of a letter addressed to Assistant Secretary Read Van de Water (dated November 18, 2002) from Senator John D. Rockefeller IV supporting the position of UPS that an investigation into the citizenship of DHL Airways, Inc. be commenced before an Administrative Law Judge. Airways has no objection to inclusion of the letter in both dockets since, as ex-parte communications, Department rules and practice require that letters of this sort be placed in the correspondence section of the public docket. Airways strongly objects, however, to the suggestion by UPS that various assertions in the letter be accorded "meaningful weight" in the Department's decision-making process, or that these assertions are relevant to either proceeding.

The statements in the letter, drafted to support UPS's position, are not "facts," but simply the Senator's conclusions. To the extent that the letter refers to "facts" supposedly contained in documents Airways provided the Department as part of its informal review, the best and only evidence of the facts are the documents themselves, not paraphrases of, or oral "reports," made during off-the­record, informal discussions with the staff of the Department's Office of Inspector General. In any event, the OIG apparently intends to submit a written report of its review of the procedures the Department uses in continuing fitness matters, which will include the Department's review of the change in Airways' ownership. To the extent the letter seeks to marshal alleged "facts" in support of the UPS position, the letter should be considered, at best, as an ex parte statement of position to which no weight may be given under the Department's Rules of Practice.

Counsel: Lachter Clements, Stephen Lachter, 202 862-4321

OST-02-13590
OST-02-13089
OST-02-13256
OST-01-10052
December 11, 2002 Reply and Motion of Federal Express to Defer Action Pending Third-Party Complaint Compliance with U.S. Citizenship Requirements of DHL Airways, Inc.
    Service List  

DHL's filings to date raise critical and unresolved factual issues that support overwhelmingly the need for an ALJ to engage in a formal and public fact-finding analysis that will enable him or her to resolve factual issues that are relevant to a determination of who owns and controls DHL Airways, and the nature of its relationship with the DHL network. FedEx Express finds it extremely difficult to understand what interest the Department is trying to protect in refusing to expose DHL's citizenship claims to public scrutiny. 

For all of these reasons, FedEx Express respectfully requests that the Department defer ruling on all pending motions in Docket OST-2002-13089, Docket OST-2002­13256, and Docket OST-2001-10052 until there is a final resolution of the Third-Party Complaint proceeding.

Counsel:  Federal Express, Thomas Donaldson, 901-434-8579


Compliance with U.S. Citizenship Requirements of DHL Airways, Inc. / Citizenship and Foreign Control of DHL Airways, Inc.

OST-02-13089
OST-02-13590
December 12, 2002 Reply of Lynden Air Cargo to DHL Airways and Statement in Support of the Motion Filed by UPS and Federal Express Compliance with U.S. Citizenship Requirements of DHL Airways, Inc. / Citizenship and Foreign Control of DHL Airways, Inc.
    Service List  

Lynden sought to join the above-captioned dockets, not to challenge the contract awarded by the Air Mobility Command, but to ferret out the impropriety of DHL Airways' undertaking to enter this market. DHL Airways has admitted that it acquired an aircraft specifically for the purpose of challenging the renewal of Lynden's contract to provide cargo lift for the U.S. military operating from Europe over routings within Europe and to the middle East. We are concerned that DHL Airways entered this market solely in an effort to create the appearance of independence from the DHL Network in order to address concerns about its citizenship.

Counsel:  Pierre Murphy, 202 822-8050


DHL Citizenship Requirements

OST-02-13089 December 16, 2002 Answer of DHL Airways to Motion and Amendment No. 2 of Petition of UPS Petition of United Parcel Service
    Service List  

Airways does not object to the inclusion in the record of the materials proffered by UPS in conjunction with this latest amendment to its petition, even though those materials and the text of the Amendment contain no facts or evidence of any relevance to this proceeding. In fact, UPS's filing, by exemplifying the lack of evidence to support its petition, underscores the need for the Department to reject UPS's baseless allegations against Airways and the Department and deny UPS's petition.

Counsel:  Lachter Clements, Stephen Lachter


Petition of United Parcel Service Co. to Institute a Public Inquiry Into The Citizenship and Foreign Control of DHL Airways, Inc

OST-02-13089 January 10, 2003
Available to Public January 21, 2003
Re:  Letter from DHL Airways Master Executive Council - Air Line Pilots Association, International Public Inquiry into the Citizenship and Foreign Control of DHL Airways

The purpose of this letter is to address the complaints filed by United Parcel Service and FedEx in which they continue to question the citizenship and control of DHL Airways. Although as the Master Executive Council Chairman I am writing specifically on behalf of DHL's 500 pilots and our families, I am certain that the other 500 plus DHL employees share our concern and our viewpoint.

Disturbingly, though, it seems that both UPS and FedEx want the DOT to go far beyond the application of the law. Actually, from this layman's point of view, it appears that UPS and FedEx are questioning either the competence or the ethics (or both) of the DOT. I say this because neither company seems to want to accept the DOT's internal review, nor its prior ruling on this very same issue. Instead, under the guise of "new evidence" they both continue to ask that an Administrative Law Judge conduct a public review.

By:  Capt. Daniel Brannan


DHL Airways, Inc.

OST-02-13089 March 5, 2003 Notice Requesting Comments Citizenship of DHL Airways
    Attachment:  Public Version of Letter from DOT Inspector General, March 4, 2003  

We seek comments here from all interested parties on the letter from the Inspector General only as it relates to issues pending in this docket, i.e., the citizenship of DHL Airways. Comments must be received on or before March 19, 2003.

We intend to address in another forum the portions of the letter which do not relate specifically to the issues in this docket, but rather address, more generically, the Department's procedural rules and process for handling review of the continuing fitness and citizenship of air carriers, and the factors frequently considered by the Department in determining "actual control".

This procedure is also consistent with earlier determinations. See Notice dated March 21, 2002, Docket OST-2002-11842 (Delta-KAL-Air France-Alitalia-CSA request for approval of and antitrust immunity for Alliance Agreements); Notice dated September 11, 2001, Docket OST-2001-10387 (American Airlines-British Airways request for approval of and antitrust immunity for an Alliance Agreement).

By:  Read C. Van de Water


DHL Airways, Inc.

OST-02-13089 March 5, 2003 Affidavit of Counsel for DHL - Stephen Lachter Citizenship of DHL Airways
OST-02-13089 March 5, 2003 Affidavit of Counsel for DHL - Jacquelyn Gluck  

Counsel:  Lachter & Clements, Stephen Lachter

OST-02-13089 March 6, 2003 Affidavit of Counsel for UPS - Michael Francesconi Citizenship of DHL Airways

Counsel:  Kelley Drye, Michael Francesconi


DHL Airways, Inc.

OST-02-13089 March 6, 2003 Affidavit of Counsel for UPS - David Vaughan Citizenship of DHL Airways
    Affidavit of Counsel for UPS - Steven Okun  

Counsel:  Kelley Drye, David Vaughan

OST-02-13089 March 7, 2003 Affidavit of Counsel for Lynden Air Cargo, LLC - Pierre Murphy Citizenship of DHL Airways

Counsel: Pierre Murphy

OST-02-13089 March 7, 2003 Affidavit of Counsel for Federal Express Corporation - Warren Dean, Thomas Donaldson, Allison Sinoski, Patricia Snyder Citizenship of DHL Airways

Counsel: Thomas Donaldson


DHL Airways, Inc.

OST-02-13089 March 6, 2003 Affidavit of Counsel for UPS - Gerchick-Murphy Associates Citizenship of DHL Airways

P. Charles Altimari / Edwin O. Bailey / Karen L. Butler / Mark L. Gerchick/ Patrick V. Murphy / Daniel N. Tenfelde

Counsel:  Mark Gerchick

OST-02-13089 March 6, 2003 Affidavit of Counsel for FedEx Citizenship of DHL Airways

Counsel:  Federal Express, Nancy S. Sparks/ Gina F. Adams

OST-02-13089 March 10, 2003 Letter from DHL in the Matter of Citizenship Citizenship of DHL Airways

Airways will not object to release of the un-redacted Inspector General's letter to facilitate the Department's ability to bring this matter to a prompt and final conclusion and to limit the burden on Airways and the Department. Notwithstanding, Airways is strongly concerned that to achieve such a resolution, it is forced to provide competitors unrestricted access to confidential business information that other U.S. airlines undergoing continuing fitness reviews have been routinely permitted to keep confidential.

Because Airways' is the only party seeking confidential treatment and thus the only party that conceivably could be harmed by release of the complete version of the correspondence, Airways respectfully requests that the Department release immediately the full text of the Inspector General's correspondence to the public.

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321


Citizenship of DHL Airways, Inc.

OST-02-13089 March 11, 2003 Motion of United Parcel Service Co. In the Matter of the Citizenship of DHL Airways
    Service List  

On March 5, 2003, the Department issued a Notice Requesting Comments on the Inspector General's letter, placing a redacted version on the public record and informing the public that, for an interim period, an unredacted version was available for review with certain access restrictions. In this Notice, the Department stated that the unredacted version contained information "that is the subject of a request from DHL Airways for confidential treatment." As such, the Department made the unredacted version available only to certain "counsel and outside experts for interested parties" who may view the unredacted letter if they filed confidentiality affidavits with the Department.

Prior to March 5, 2003, UPS had no knowledge of such confidential material or DHL Airways' motion for confidential treatment of information submitted to the Department in the context of a citizenship review. Indeed, a search of the DOT docket reveals no such motion. Because UPS desires a full airing of all relevant facts and circumstances pertaining to the citizenship of DHL Airways, UPS intends to file, under separate cover, an Answer to DHL Airways' confidentiality motion.

UPS respectfully requests that the Department not afford the unredacted Inspector General's letter any confidentiality protection. Rather, UPS requests that the DOT immediately make public to all parties (without confidentiality affidavit), and place on the docket in this proceeding, the unredacted version of the Inspector General's letter so that all parties and their decision-makers may review it.

It is obvious from the summary of the confidential information contained in the unredacted letter-which UPS' attorneys and outside experts have viewed in accordance with the required confidentiality affidavits-that the material should not be afforded confidential treatment. The types of material that are ordinarily afforded confidential treatment are trade secrets and business confidential information-which, if released, would cause competitive harm to a carrier. The information in the IG letter contains no such information. Further, the recommendations contained in the Inspector General's letter can only be fully understood by having the complete, unredacted letter made public.

Counsel: Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


Citizenship of DHL Airways, Inc.

OST-02-13089 Issued March 11, 2003
Served March 11, 2003
Posted 9:00 am March 12, 2003
Notice Citizenship of DHL Airways

Notice, the Department makes available unredacted correspondence from the Inspector General of the U.S. Department of Transportation as it relates to issues pending this docket on the matter of the citizenship of DHL Airways, Inc. The unredacted letter is now available to the public without the filing of affidavits in this docket. The procedural dates set by our Notice of March 5, 2003 remains unchanged.

By: Read C. Van de Water

OST-02-13089 March 4, 2003 Unredacted Letter from DOT Inspector General  Citizenship of DHL Airways

By:  Kenneth Mead, 202-366-1959


Citizenship of DHL Airways, Inc.

OST-02-13089 March 14, 2003 Motion of United Parcel Service Co. for Leave to File an Otherwise Unauthorized Document and Answer of United Parcel Service Co.  Citizenship of DHL Airways
    Service List  

By this pleading, United Parcel Service Co. requests that the Department of Transportation release for public viewing all documents and other materials presented to the Department by DHL Airways, Inc. or any of its affiliated or parent companies in the course of any informal process that the Department may have used in reviewing the citizenship of DHL Airways or control of this carrier by foreign entities.

Counsel: Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


Citizenship of DHL Airways, Inc.

OST-02-13089 March 18, 2003 Re:  Letter Addressed to Asst Secretary for Aviation and International Affairs and a Press Release Dated 3/18/03 Citizenship of DHL Airways

Attached for filing in the referenced docket is a letter dated today addressed to the Assistant Secretary for Aviation and International Affairs and a press release issued by DHL Airways, Inc., relating to the appointment of a new Chairman and Chief Executive Officer. Copies of the letter and release are being served today on all parties listed on the attached service list by telecopier.

This appointment comes at an important time in the history of Airways. For two years, the company, its owners and senior management team have been subjected to what I believe has been an unfair attack by its two largest rivals who allege that foreign interests illegally control Airways. I have been advised by counsel for Airways that the Department has conducted a thorough review of these issues. I understand that all relevant corporate materials have been lodged with and reviewed by the Department as part of the informal fitness review undertaken during the corporate reorganization of Airways in 2001. I am aware that challenges to Airways' citizenship are still pending before the Department in a number of dockets and I look forward to the expedited resolution of these issues and dismissal of these challenges.

I understand fully that the fitness requirement, and the citizenship component of that requirement, is a "continuing" requirement. I take this requirement very seriously. You have my personal pledge that I will be vigilant in maintaining U.S. citizen ownership and control of Airways and will keep you and your staff informed of any material changes or circumstances that might affect Airways' citizenship.  John Dasburg, Chairman and Chief Executive Officer

Counsel:  Lachter & Clements, Stephen Lachter, 202-862-4321


DHL Airways Citizenship

OST-02-13089 March 19, 2003 Comments of DHL Airways Citizenship of DHL Airways
    Service List  

Airways strongly disagrees with the IG's view that the Department's informal continuing fitness review procedures are not well suited to evaluate Airways' citizenship. These procedures, which the Department has used as a matter of longstanding policy and practice, are well tailored to evaluate citizenship questions such as those presented by the Airways reorganization. The Department's reasoning has best been articulated by Secretary Mineta in a letter on the same subject to then Chairman Ernest F. Hollings of the Senate Commerce, Science and Transportation Committee, dated September 25, 2002.

The Department's investigation was thorough -­involving meetings with the staff by Airways' officers and directors, and with counsel; a careful review of documents concerning the proposed corporate changes; and an evaluation by the Department of the full range of corporate relationships between Airways and its minority, foreign shareholder. On the basis of that investigation, which was fully consistent with Department precedent, the Department correctly determined that Airways continues to be a citizen, meeting the three applicable statutory requirements as well as the Department's "actual control" test. Moreover, all of the matters the IG raises in his letter have already been addressed by Airways for the Department's benefit in numerous pleadings previously filed in this and related dockets, which are incorporated herein by reference.

The most important policy consideration underpinning the citizenship requirement for US certificated carriers is to give the US Department of Defense access to emergency lift through the CRAF program. Airways has been, and remains a faithful participant in CRAF, and it has played a significant role in advancing US national security and military objectives as our nation approaches military conflict with Iraq. We have conducted our commercial activities in full accord with our responsibilities as US citizens. If our opponents were to have their way, this lift no longer would be available to the military.  As the Department is aware, Lynden Air Cargo has moved to join the UPS/Federal Express complaints against Airways. Lynden's intervention constitutes telling evidence of Airways' success in developing third-party business, because Lynden's complaint -- that it lost out to Airways in bidding for a military contract -- specifically contradicts the assertions that Airways has not developed third-party business. Ironically, Lynden is seeking to exploit this proceeding to undermine Airways' credentials and qualification to bid for such contracts, i.e., to develop third party business and to assist the military and nation in times of military necessity.

Counsel:  Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net  

OST-02-13089 March 19, 2003 Comments of Federal Express Citizenship of DHL Airways

The burden is on DHL Airways to establish that it meets the requirements of U.S. law to hold an air carrier certificate.12 It currently is operating without an authoritative ruling by the Department that it does.13 Under these circumstances, the Department must establish, at a minimum, the following procedures: 

First, DHL Airways must file an application to the Department for a determination that it meets the citizenship requirements of U.S. law, both before and after its reorganization. That application must be accompanied by all relevant documents pertaining to the ownership and control of DHL Airways, authenticated and accompanied by verified statements that the documents are complete and that there are no other arrangements, express or implied, relevant to DHL Airways' ownership and control.

Second, the application must be assigned to an Administrative Law Judge to conduct an on-the-record, oral evidentiary hearing. Thereafter, the Administrative Law Judge should issue an initial or recommended decision on the application.

Third, to the extent that there is any further review of. the decision of the Administrative Law Judge, the Department must take all necessary steps to ensure that no informal, or off-the-record, communications or evidence influence the decision-makers and their advisors. Of course, this includes any communications that took place relevant to these issues during the Department's informal review.

Fourth, the Department must defer action on all pending requests for operating authority, including requests for exemptions or statements of authorization, that involve the certificate authority of DHL Airways, pending a final determination by the Department in its formal review of DHL Airways' citizenship.

Counsel:  Federal Express, Thomas Donaldson, 901-434-6664, gbleopard@fedex.com

OST-02-13089
OST-02-13590
March 19, 2003 Comments of Lynden Air Cargo Citizenship of DHL Airways

The Department's recommendation to DHL Airways that it hire a marketing executive to increase its third party revenue raises profound questions of propriety. The Department effectively encouraged DHL Airways to compete unfairly and unlawfully with law-abiding U.S. taxpayers, like Lynden, that do not have the benefit of comparable foreign subsidies. Lynden has lost a contract for military carriage to DHL Airways under circumstances that defy any rational explanation other than as a response to the Department's recommendation. In the case of Lynden, therefore, the Department's recommendation to DHL Airways has had an effect in the market place. It is not, under any circumstances, a legitimate function of the Department to make recommendations to a carrier, particularly one receiving foreign financial benefits, on how it can compete more effectively with established air carriers like Lynden. The Department's conduct in this respect - which was not publicly disclosed until the IG's Findings were released - should be very carefully considered and independently reviewed.

Counsel:  Pierre Murphy, 202-822-8050, pmurphy@lopmurphy.com 

OST-02-13089 March 19, 2003 Comments of United Parcel Service Citizenship of DHL Airways
    Service List  

The EC Decision details how Deutsche Post deliberately sought to hide its acquisition of a controlling interest in a German express carrier "Trans-o-Flex" by using third­party intermediaries under its own funding and control to acquire a majority of the shares of Trans-o-Flex. Only after the EC launched an independent investigation of Deutsche Post's misleading conduct was Deutsche Post compelled to reveal the documentation on the transactions, thus revealing its effective control of Trans-o-Flex.

The findings of the Inspector General leave several matters open, such as Mr. Robinson's relationship with the foreign DHL entities, as well as the credit guarantee. As, seen in the best light for DHL Airways, there are material issues of disputed fact to be resolved, and UPS urges that a full oral evidentiary hearing before an ALJ is required.

Counsel:  UPS, Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


Citizenship of DHL Airways, Inc.

OST-02-13089 March 25, 2003 Motion for Leave and Reply of DHL Airways to Contingent Motion and Answer of United Parcel Service Citizenship of DHL Airways

UPS's answer may or may not be frivolous but it surely is disingenuous. UPS knows that its request for publication of Airways' confidential materials is without merit, but if UPS were to succeed in pressuring the Department to grant the request, it would afford UPS, a dominant competitor, unprecedented access to a smaller competitor's sensitive corporate information and provide potentially unlimited additional pretexts for yet more unauthorized pleadings. UPS's filing is correct in at least one respect: as implicitly acknowledged, UPS has no right to obtain Airways' confidential materials. In fact, UPS offers absolutely no basis for the Department to grant such access and violate the confidentiality of Airways' information.

UPS's request for access to Airways' confidential materials is unprecedented and unfounded. UPS has offered absolutely no justification for the Department to grant such access to any third party, let alone UPS, Airways' dominant competitor. Airways made the appropriate request (in terms of timing, form and content) for the Department to withhold Airways' confidential materials from public disclosure, and applicable federal law specifically exempts those materials from disclosure. Airways therefore requests that the Department continue to respect and safeguard the confidentiality of Airways' materials consistent with controlling federal law.

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321


Citizenship of DHL Airways, Inc.

OST-02-13089 March 26, 2003 Emergency Motion of Federal Express for Rescission Citizenship of DHL Airways, Inc.

On March 25, 2003, DHL Worldwide Expressl announced that it has reached a merger agreement with Airborne, Inc., parent company to U.S. air carrier and certificate holder, ABX Air, Inc. This agreement appears to rely upon a May 2002 opinion by the Department's staff that a similar structure meets U.S. citizenship requirements. Since that opinion is the subject of a separate review and has been heavily criticized, FedEx Express respectfully requests the Department to rescind the opinion and clarify that no one may rely upon it as precedent pending that review.

Counsel:  Federal Express, Thomas Donaldson, 901-434-6664, gbleopeard@fedex.com 

OST-02-13089 March 26, 2003 Motion of United Parcel Service Citizenship of DHL Airways, Inc.
    Service List  

As is well-known and well-documented, Deutsche Post has a history of misusing its profits from its monopoly on first-class mail to cross-subsidize other segments of its organization in competing against private companies. The DOT should require a full disclosure of the source of the funds being used to finance the Airborne acquisition, paying particular attention to whether government sanctioned monopoly revenues are financing the transaction. It would be contrary to the public interest to allow such unfair competition.

What is becoming apparent here is that Deutsche Post has a strategy of rapidly increasing its investment in the domestic transportation infrastructure of the United States. Documents filed with the Department indicate that Deutsche Post has access to monopoly profits and state aid, unavailable to U.S. companies. Further, this docket contains evidence of how Deutsche Post has, in the past, employed clever corporate organizational structures to avoid governmental ownership and control requirements, or, at a minimum to confuse the situation so that review of their actions would be difficult. Given this history of Deutsche Post's past practices, the United States Government should desire a broader understanding of what is transpiring in the case of DHL Airways and ABX, collectively, rather than viewing these situations on an individual case by case basis.

Counsel:  UPS and Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


Citizenship of DHL Airways, Inc.

OST-02-13089 March 27, 2003 Supplement to Motion by United Parcel Service Citizenship of DHL Airways, Inc.

Yesterday, United Parcel Service Co. filed a Motion requesting that the Department investigate the merger between DHL Worldwide Express, Inc. and Airborne, Inc. Enclosed herein please find a Joint Press Release of Airborne and DHL, dated March 25, 2003, which should have been attached to UPS' Motion. Please post accordingly in docket OST-2002-13089.

Counsel: Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


Citizenship of DHL Airways, Inc.

OST-02-13089 March 28, 2003 Motion for Leave to File and Surreply of United Parcel Service to Reply of DHL Airways Citizenship of DHL Airways, Inc.

United Parcel Service Co. respectfully requests the Department of Transportation to release the documents filed by DHL Airways described above and institute a public docketed proceeding before an Administrative Law Judge. In addition, UPS requests such other and further relief as may be deemed just and necessary.

Counsel:  UPS and Kelley Drye, David Vaughan, 202-955-9792, dvaughan@kelleydrye.com


Citizenship of DHL Airways, Inc.

OST-02-13089 April 2, 2003 Correspondence of Airborne Express Citizenship of DHL Airways, Inc.

Since Airborne is not a party in Docket OST-2002-13089, we do not intend to file any pleadings in opposition to the motions by UPS and FedEx unless specifically requested by the Department. Moreover, the subject of that Docket, Airways, is neither a party to nor involved in any way in the proposed transaction. There is, accordingly, no reason why the Airways proceeding should be complicated with this entirely unrelated transaction.

Airborne will make a timely filing with the Department concerning the proposed transaction. At that time, the Department can determine the procedures that are appropriate for its review of Airborne's filing. Any suggestion that the Department should initiate a prior review is inappropriate.

While the UPS and FedEx filing contain gross mischaracterizations of the proposed transaction, we will defer any response until the appropriate time.

By: David Anderson, 206-830-4600


Citizenship of DHL Airways, Inc.

OST-02-13089 April 4, 2003 Motion of DHL Airways for Leave and Consolidated Answer Citizenship of DHL Airways
    Service List  

These latest unauthorized filings by UPS and Federal Express are wholly without merit. The Department should deny the unauthorized motions of UPS and Federal Express and promptly conclude this proceeding by issuing a written decision explaining the Department's rationale for its determination that Airways continues to be a U.S. citizen. Although filed in this docket pertaining to Airways' citizenship, the motions of UPS and Federal Express concern the recently-announced transaction between DHLWE and Airborne. The motions discuss at length the details of that transaction, the future relationship between those two companies, and certain statements made by Airborne's Chief Executive Officer. UPS and Federal Express fail to demonstrate how a transaction to which Airways is not a party has any bearing on the question of whether Airways is a U.S. citizen -- the sole issue before the Department in this docket. Indeed, the Airborne transaction obviously is irrelevant to the issue of Airways' citizenship, an issue that has been thoroughly reviewed by the Department in this and related dockets and has been the subject of numerous (generally unauthorized) pleadings by UPS and Federal Express.

UPS and Federal Express are using this proceeding as a forum for launching a preemptive regulatory assault on the DHLWE/Airborne transaction -­a transaction that does not involve Airways. The UPS and Federal Express motions are exclusively devoted to issues regarding the DHLWE/Airborne transaction and DHLWE's parent company Deutsche Post. These issues, which have nothing to do with Airways, do not require a substantive response from Airways, are entirely irrelevant to any issue in this proceeding, and should not be considered here.

Counsel: Lachter Clements, Stephen Lachter, 202-835-3219, lachter@starpower.net 

OST-02-13089 April 4, 2003 Contingent Answer of DHL Worldwide Express to Motion of United Parcel Service Citizenship of DHL Airways

UPS's motion is unauthorized, untimely, and seeks relief that is entirely unjustified. It is an opportunistic attempt to place an unprecedented administrative hurdle in the path of the newly-announced Express/Airborne agreement by seeking to drag the transaction into a wholly­unrelated proceeding involving whether a different air carrier is a U.S. citizen. The motion is largely based on misstatements of law and fact and raises issues that either are moot or not ripe for action by the Department - and certainly should not be considered in this docket. Even if the Department were to consider the motion, UPS has provided no basis for granting the relief it seeks. Its predictable effort to drag the new Express/Airborne transaction into the pending Airways citizenship proceeding is nothing more than a pretext for trying to prevent the Express/Airborne transaction from establishing a strong competitive alternative to the UPS/Fed Ex duopoly in the U.S. express delivery market. Such a result would serve well the private commercial interests of UPS (and Fed Ex), but would be highly adverse to the public interest, because U.S. shippers would be denied more competition and choice, and because the jobs of thousands of Americans employed by Express and Airborne across all 50 states could be put in jeopardy.

Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmer.com


Citizenship of DHL Airways, Inc

OST-02-13089 April 3, 2003 Ex Parte Letter of Read C. Van de Water Citizenship of DHL Airways

Thank you for your letter of February 10 enclosing correspondence from your constituent, Mr. James Langley, who expresses concern about the complaints filed by United Parcel Service Co. and Federal Express Corporation challenging the citizenship of DHL Airways.

By: Read C. Van de Water


Citizenship of DHL Airways, Inc.

Order 03-04-14
OST-02-13089
April 17, 2003 Order Instituting Formal De Novo Review | Word

DOT Press Release to Hold Hearing

Citizenship of DHL Airways

The U.S. Department of Transportation (DOT) today said it would conduct a public hearing, as required by statute, to determine whether DHL Airways is a U.S. citizen under law applying to U.S. air carriers.  A DOT administrative law judge will conduct the hearing and issue a recommended decision on whether DHL is a U.S. citizen under the law, a qualification necessary to operate as a U.S. airline.  DOT directed the judge to submit the recommended decision to the department by Sept. 2.  The department will review the recommended decision before issuing a final decision. 

In late 2000, DHL Airways reported to the department its plans to undergo a reorganization and substantial change in ownership under which it would split into two separate companies:  an air carrier, DHL Airways, and a foreign air freight forwarder, DHL Holdings.  Subsequently, Federal Express Corporation, United Parcel Service and Lynden Air Cargo asked the department to review DHL’s citizenship.  

At the time DOT was examining these petitions and DHL’s responses, DOT Inspector General Kenneth M. Mead sent a March 4 letter to Rep. Don Young, chairman of the House Transportation and Infrastructure Committee, regarding procedures to determine the citizenship of DHL.  The department asked for and received public comment on the letter.  Subsequently, Congress enacted supplemental appropriations legislation, which was signed by President Bush on April 16, directing the department to hold a formal proceeding on DHL’s citizenship with the assistance of an administrative law judge.

By:  Read C. Van de Water


Citizenship of DHL Airways, Inc.

OST-02-13089 April 21, 2003 Notice of Assignment of Proceeding Citizenship of DHL Airways

By: Ronnie Yoder

OST-02-13089 April 21, 2003 Order of Chief Administrative Law Judge Citizenship of DHL Airways
    Service List  

Notice is hereby given that a prehearing conference in the above-entitled matter is scheduled to be held on April 29, 2003, at 10:00 A.M. (local time) in Room 5332, Nassif Building, 400 Seventh Street, S.W., Washington, D.C. 20590, before the undersigned. The Order Instituting Formal De Novo Review, Order 2003-4-14, dated April 17, 2003, provides that "this proceeding is being instituted to consider de novo the current citizenship of DHL Airways only."  That issue has been pending before the Department since late 2000 and in several dockets (Order 2003-4-14, pp. 1, 2), including Dockets OST-2002-13089, OST-2002-13590, OST-2002-13787, OST-2001­10052, OST-2001-8824, and OST-2001-8736.

In order to facilitate the conduct of the pre-hearing conference, parties shall serve, file, and deliver two copies to the judge by 5:00 P.M., April 24, 2003:

Parties should review the Judge's Order in Discovery Airways, Inc. and Mr. Phillip Hoe, Docket 46760, concerning the management of confidential documents.  See also Japan Charter Authorization Proceeding (1988/1989), Docket Order 45582, Orders dated May 17 and May 25, 1988; U.S.-Australia Service Proceeding, Docket 46034, Order dated May 3, 1989; U.S.-Japan Service Case, Docket 46438, Orders served September 27 and 29, 1989, review denied, Order 89-10-8; Robert O. Nay, Enforcement Proceeding, Docket 45663, Order served May 18, 1989).

By: Ronnie Yoder

Citizenship of DHL Airways, Inc.

April 22, 2003

OST-02-13089

Comments of Criss Wilson

By: Criss Wilson

Citizenship of DHL Airways, Inc.

April 23, 2003

OST-02-13089

Correspondence of Robert Goldner (e-mail from Steve Okun of UPS)

Steve: As you are aware, we have an open docket on DHL Airways in which issues, such as that what you are addressing below, have already been raised.

> This is to advise you that we were informed yesterday by Nike that we will lose all their European package volume on Standard, Express and Returns. This is a loss of $8,000,000 p.a. to UPS in Belgium. They have selected Deutsche Post as their new package carrier and will begin implementing the change within the next 3-4 weeks. We expect that over the following 3-4 months they will migrate all the volume away from us. Nike confirm that this decision was taken purely on price and they have been offered rates well below our 2002 rates (10%) We will meet with them again in a few weeks to agree an operational plan which will attempt to ensure that the loss of this volume has a controlled impact upon our operations and network. We intend to ensure that we part on good terms so that we leave the door wide open for them to come back. They recognize that Deutsche Post may be buying this business but intend to enjoy the good rates whilst they can. They also realize that they can expect the service levels to be below those that they have become used to with UPS but anticipate that those issues can be managed. We will of course ensure that our operations continue to give the best service that we can until the last package is shipped.>

By: DOT, Robert Goldner


Response of DHL Airways

Exhibit A: Chronology of Events
Exhibit B: Proposed Procedural Schedule


Motion of DHL Airways for Confidential Treatment

Index of Confidential Documents


Submission of DHL Airways

Letter to Dorothy Beard with Attachments
Resumes
Press Articles

Counsel: Lachter & Clements, Stephen Lachter, 202-862-4321


Statement of Lynden Air Cargo

Tab 1: Motion to File an Otherwise Unauthorized Document
Tab 2: Reply to DHL and Statement in Support of Motions Filed by UPS and Federal Express
Tab 3: Comments
Tab 4: Motion to Join Complaint

Counsel: Pierre Murphy, 202-776-3980, pmurphy@lopmurphy.com


Submission of United Parcel Service

Tab 1: Statement of the Issues and Subissues
Tab 2: Disputed Issues of Material Fact
Tab 3: Statement Concerning Citizenship Test
Tab 4: Statement Concerning Burden of Proof
Tab 5: Proposed Stipulations
Tab 6: Proposed Grouping of Parties
Tab 7: Preliminary Requests for Information and Admissions
Tab 8: Chronology of Events
Tab 9: Proposed Procedural Scheduling
Tab 10: Instituting Order Dates 
Tab 11: List of Witnesses
Tab 12: Settlement Efforts
Tab 13: Inspector General Submission

Counsel: Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com

April 25, 2003

OST-02-13089

Statement of Federal Express

Tab 1: Third Party Complaint & Request to Commence Enforcement Proceedings
Tab 2: Motion for Leave to File an Unauthorized Document & Reply
Tab 3: Motion for Leave to File an Unauthorized Document & Comments
Tab 4: Motion for Leave to File an Unauthorized Document & Comments
Tab 5: Petition for Recondsideration Or Petition for Review of Staff Action
Tab 6: Motion for Leave to File an Unauthorized Document & Reply
Tab 7: Reply & Motion to Defer Action Pending Third-Party Complaint Proceeding
Tab 8: Affidavits
Tab 9: Affidavits
Tab 10: Comments
Tab 11: Emergency Motion for Rescission
Tab 12: Third Party Complaint & Request to Commence Proceeding Before an Administrative Law Judge
Part B: Index
Part C: Designation of Previously Submitted Documents
Cover Letter

Counsel: Federal Express, R. Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com

April 29, 2003

OST-02-13089 - Inquiry into the Citizenship of DHL Airways

Affidavits of Federal Express and Thompson Coburn LLP Representing Federal Express Corporation

By: Eileen Brown, John Cassady, Warren Dean, Thomas Donaldson, Matthew Kaiser, R. Kelsey, Marjorie Krumholz, Connie Lensing, G. Leopard, Patricia Snyder, Nancy Sparks

April 29, 2003

OST-02-13089 - Inquiry into the Citizenship of DHL Airways

Transcript of the April 29, 2003 Prehearing Conference into the Citizenship of DHL Airways

By: Ronnie Yoder


April 30, 2003

Correspondence of Quinn Emanuel - Counsel for DHL Airways

We represent DHL Airways, Inc. in the above proceeding. As Your Honor directed, we have conferred with counsel for Federal Express and UPS this morning in an effort to agree upon an extended procedural schedule.

Mindful of the fact that the current schedule contemplates a recommended decision by September 2 and that UPS had proposed December 23, we suggested that the parties propose that Your Honor consider asking the Department to extend the September 2 deadline to October 2. That was unacceptable to Federal Express and UPS, both of which insisted on the December 23 proposal. We then pointed out Airway's serious business concerns about such a long extension and suggested that they propose some date which more reasonably accommodated those concerns. They declined to do so. When we suggested October 15, that was also flatly rejected and they stated that the most they were prepared to move from their December 23 proposal was a period of "days, not weeks."

Counsel: Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


Correspondence of Lachter & Clements - Counsel for DHL Airways

As agreed during the Prehearing Conference on April 29, 2003, we have reviewed our files to locate the attachments which were referenced in the transmittal letters (DHL Airways Tabs Nos. 2 and 3), but not attached. We have located three documents which were attached to the December 4, 2000 transmittal letter (Tab No. 3). Enclosed are the "DHL Airways Mission Statement," "Airways Financial Projections - 2001 to 2004," and the "Aircraft Fleet List." These documents have production numbers DHLAOI 164DHLA01195 and should be placed behind and with the December 4, 2000 letter appearing at Tab 3. The other two attachments referenced in the transmittal letter ("Organizational Chart of DHL Airways" and "Pro-forma financial statements") cannot be found.

Counsel: Stephen Lachter, 202-862-4321


April 29, 2003

Correspondence of Pierre Murphy - Counsel for Lynden Air Cargo

This letter is provided to correct a document filed by Lynden Air Cargo, LLC in Dockets 13089 and 13590, and submitted in response to Your Honor's direction at today's pre-hearing conference. Lynden filed a reply to DHL Airways and Statement in Support of the Motions filed by United Parcel Service Co. and Federal Express Corporation, which is available at Docket 13089-17. In footnote 3, a reference was made to the "Letter of Assistant Secretary for Aviation and International Affairs to Honorable Jon (sic) D. Rockefeller IV dated May 7, 2002." This letter was cited to note that the DHL reorganization plan was changed in response to DHL Airways' corporate needs and to the Depaitinent's recommendations. A copy of this letter is attached hereto under Tab 1. For the convenience of Your Honor, the letter by John D. Rockefeller in response to the Assistant Secretary, dated November 18, 2002, is also attached hereto under Tab 2.

The footnote incorrectly noted that the Assistant Secretary's letter was available at Docket 13089-8. The document actually contained at 13089-8 is nearly identical letter in pertinent part from Norman Y. Mineta to the Honorable Ernest F. Hollings, Chairman of the Committee on Commerce, Science and Transportation, dated September 25, 2002. A copy of this letter is attached hereto under Tab 3. The Mineta letter also notes that the DHL reorganization plan was changed in response to DHL Airways' corporate needs and to the Department's recommendations. Both letters support the proposition stated in text.

Tab 1 - Letter from Read C. Van de Water
Tab 2 - Letter from John Rockefeller
Tab 3 - Letter from Norman Mineta

Counsel: Pierre Murphy, 202-776-3980, pmurphy@lopmurphy.com


April 30, 2003

Correspondence of Kelley Drye & Warren - Counsel for United Parcel Service

In its submission for the Pre-hearing Conference of April 29, 2003, United Parcel Service Co. submitted a draft procedural schedule which included a proposal to have the recommended decision issued on December 23, 2003. In the Instituting Order, the Department requested that the recommended decision be issued by September 2, but it also recognized that the judge be permitted to request an extension of that deadline. In formulating its proposal to have the deadline extended to December 23, UPS took into consideration the Department's desire to have an expeditious process, while still permitting the time necessary to have a complete record.

This morning, counsel for UPS, Federal Express, Lynden Air Cargo and DHL Airways had several conversations to discuss submission of a schedule to which all parties could agree. Counsel for UPS, Federal Express and Lynden Air Cargo explained that the UPS proposal to extend the deadline to December 23 was not a negotiating position, but was the time necessary to have a full and fair hearing while still having an expedited process. Instead, counsel for DHL Airways insisted on treating the December 23 proposal as an opening bid as opposed to a realistic timeframe. Still, counsel for UPS, Federal Express and Lynden Air Cargo attempted to find a compromise which would have shortened the UPS proposal to November 24. Counsel for DHL Airways did not accept that offer, and counsel for UPS, Federal Express and Lynden Air Cargo could not agree to a shorter time period, as such a time period would not have permitted the time necessary for this case.

Counsel: David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


April 30, 2003

OST-02-13089 - Inquiry into the Citizenship of DHL Airways

Affidavits of Counsel for DHL Airways

Counsel: Roxanne Clements, Stpehen Lachter, Sanford Litvack, Steven Rossum, Elliot Seiden, Jonna Swomley


May 2, 2003

OST-02-13089 - Inquiry into the Citizenship of DHL Airways, Inc.

Letter from Norman Mineta

Ex Parte letter to the Honorable Thomas M. Davis from Norman Y. Mineta, Secretary, advising that a copy of his response and Chairman Burton's letter have been placed in Docket 0ST-2002-13089.

By: Norman Mineta


Letter from Norman Mineta

Ex Parte letter to Honorable Dan Young from Norman Y. Mineta, Secretary, advising that a copy of the letter of November 15, 2002 and his response have been placed in Docket OST-02-13089.

By: Norman Mineta


Correspondence of Ronnie Yoder

Correspondence of Ronnie A. Yoder, Chief Administrative Law Judge to Wes Cooksey, Pilot, DHL Airways, Inc., c/o Sandford M. Litvak, advising that three e-mails dated April 30, 2003, have been transmitted to the Docket Section for inclusion in the docket OST-2002-13089, together with a copy of this letter.

By: Ronnie Yoder


Correspondence of Ronnie Yoder

Ex Parte Letter to Mr. Eric Harrison, Pilot from Chief ALJ Ronnie A. Yoder re DHL Airways, Inc.

By: Ronnie Yoder


Correspondence of Ronnie Yoder

Ex Parte Letter to Randy Norman, Pilot from Chief ALJ Ronnie A. Yoder re DHL Airways, Inc

By: Ronnie Yoder


Correspondence of Ronnie Yoder

Ex Parte Letter to Tom Perkins, Pilot from Chief ALJ Ronnie A. Yoder re DHL Airways, Inc.

By: Ronnie Yoder


Correspondence of Ronnie Yoder

Ex Parte Letter to Mr. Gregory Moore from Chief ALJ Ronnie A. Yoder re DHL Airways, Inc.

By: Ronnie Yoder


Citizenship of DHL Airways, Inc.

May 1, 2003

OST-02-13089 - Inquiry into the Citizenship of DHL Airways, Inc

Correspondence of Ronnie Yoder

Correspondence of Ronnie A. Yoder, Chief Administrative Law Judge to Brady G. Murray, Pilot, DHL Airways, Inc. c/o Sanford M. Litvak, advising that all communications concerning the case must be served to all parties. In accordance with the Department's rules concerning ex parte communication a copy of the e-mail dated April 30, 2003 has been transmitted to the Docket Section for inclusion in docket OST-2002-13089.

By: Ronnie Yoder


May 5, 2003

Objections of DHL Airways to Desingations of Federal Express, United Parcel Service, and Lynden Air

Airways has the following general objections. With respect to the pleadings previously filed in this and other dockets by Federal Express, UPS and Lynden, Airways objects to all references within those pleadings to reports, studies, press releases and newspaper articles to the extent they are proffered for the truth of the matters discussed or described.' Further, Airways objects to the introduction of any and all materials which predate Airways' reorganization in May, 2001.

Counsel: DHL, Quinn Emanual, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


May 5, 2003

Chief Administrative Law Judge Prehearing Conference Report, Order, and Request to the Decisionmaker for Extension of Time

The prehearing conference in this proceeding was held on April 29, 2003, and the transcript of that conference is incorporated in this report. The issue in the proceeding is
stated in Order 2003-4-14 and subissues were further elaborated at the conference. Preliminary rulings were made at the conference, and proposed designations were offered

Ground Rules

Exhibit Exchange List

Transcript of Pre-Hearing

By: Ronnie Yoder


May 1, 2003

Correspondence of Ronnie Yoder

Errata from Chief Administrative Law Judge Ronnie A. Yoder, submitting a re-transmittal of the e-mail from Randy Norman, Pilot for DHL Airways, Inc., dated April 30, 2003, including the second page.

By: Ronnie Yoder


May 6, 2003

Correspondence of DHL Airways

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com



May 6, 2003

Copy of DHL Airways Memorandum to Employees

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com



May 6, 2003

Response of DHL Airways to Request for Information, Documents, Admissions and Deponents

DHL Airways, Inc. by and through its undersigned attorneys, hereby requests that Federal Express Corporation and United Parcel Services Co. produce the documents and information itemized below, on or before the deadline set by the chief administrative law judge of May 30, 2003.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com



May 6, 2003

Re: Letter from Federal Express to Judge Yoder (Non-Confidential Version)

I have enclosed for filing the consolidated Requests for Information on behalf of Federal Express Corporation, United Parcel Service and Lynden Air Cargo and a combined chronology on behalf of all parties, including DHL Airways.

Counsel: Federal Express, John Kelsey


May 7, 2003

OST-02-13089 - Inquiry into the Citizenship of DHL Airways, Inc.

Order of Chief Administrative Law Judge

By "Motion of DHL Airways, Inc. For Confidential Treatment Under 14 C.F.R. § 302.12," dated April 24, 2003, DHL Airways, Inc., moves for confidential treatment of certain documents. No answer to that motion has been filed. We conclude that Airways' motion should be granted until information in such documents is included in an exhibit or testimony at the hearing, or in an order or decision, in this case.

By: Ronnie Yoder


May 9, 2003

OST-02-13089 - Inquiry into the Citizenship of DHL Airways, Inc.

Affidavit of Troy Reynolds, Counsel for United Parcel Service

By: Troy Reynolds


May 9, 2003

OST-02-13089 - Inquiry into the Citizenship of DHL Airways, Inc.

Affidavit of Danielle Fisher, Counsel for United Parcel Service

By: Danielle Fisher


May 12, 2003

OST-02-13089 - Inquiry into the Citizenship of DHL Airways, Inc.

Correspondence of Quinn Emanuel - Counsel for DHL Airways

Although, as stated above, Airways does not have a list of members of the DHL Network, in order to comply with Your Honor's request, I asked counsel for DHL Worldwide Express, Inc. if he could provide me with such a list. The list he has furnished is submitted herewith. We note that, on its face, the document indicates that there are other companies which are part of the "DIM Network" but that are not listed. We do not know who those companies are and, despite our request, have been unable to ascertain that information.

Counsel: Quinn Emanuel, Sandy Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


Served May 12, 2003

OST-02-13089 - Inquiry into the Citizenship of DHL Airways, Inc.

Notie on Reqest for Extension of Time for Submission of Recommended Decision

By: Read C. Van de Water


May 13, 2003

OST-02-13089

Federal Express and United Parcel Service's Objections to DHLA's First Set of Requests for Information, Documents, Admissions and Reports

As a threshold matter, FedEx and UPS submit that DHL is only entitled to the identity of witnesses and documents that they will use at the hearing. FedEx and UPS are participating in this matter as a friend of the court and to assist the court in the development of the record. FedEx and UPS object to DHLA's Requests on the basis of fundamental fairness and due process and question DHLA's motives in seeking the requested information and documents. If no objection is provided, FedEx Express and UPS do not object to the request.

Joint Submission of Federal Express, Lynden Air Cargo and UPS on Six Matters

Counsel: Federal Express, R. Jeffrey Kelsey, 901-434-8575, jkelsey@fedex.com / UPS and Kelley Drye, David Vaughan


May 13, 2003

OST-02-13089

Proposal of DHL Airways for Procedural Schedule

Pursuant to Your Honor's direction in the Pre-Hearing Conference Order of May 2, 2003 and in light of the Department's Order of May 12, 2003, DHL Airways, Inc. proposes the following procedural schedule:

Objections to Requests, Proposed Issues, Sub-Issues and Control Elements; Preliminary Pretrial Briefs Concerning Actual/Effective Control, Burden of Proof May 13, 2003 Prehearing Conference May 16, 2003 Response to Requests June 10, 2003 Discovery Cut-Off July 1, 2003 May 13, 2003 Page 2 Exhibits, Written Testimony, Witness Lists, Pretrial Briefs, Including Disputed Facts July 15, 2003 Rebuttals July 29, 2003 Hearing August 12-20, 2003 Briefs, Proposed Findings of Fact and Conclusions of Law September 11, 2003 Reply Briefs, Objections to Proposed Findings of Fact and Conclusions of Law September 25, 2003 Recommended Decision October 31, 2003

Counsel: Quinn Emanuel, Sandy Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


May 13, 2003

OST-02-13089

DHL Airways Memorandum of Law Concerning Actual/Effective Control

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanual.com


May 13, 2003

DHL Airways Memorandum of Law Concerning Burden of Proof

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanual.com


May 13, 2003

DHL Airways Letter to Chief Judge Yoder

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanual.com


May 13, 2003

Objections of DHL Airways to Request for Information, Documents, and Admission Submitted by Federal Express, United Parcel Service and Lynden Air Cargo

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanual.com


May 13, 2003

Objections of DHL Airways to Proposed Issues, Sub-Issues and Control Factors

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanual.com


May 13, 2003

Affidavit of Allen Hill - Counsel for United Parcel Service

By: Allen Hill


May 13, 2003

Affidavit of Joel Rublin - Counsel for United Parcel Service

By: Joel Rublin


May 13, 2003

Affidavit of Joseph Hoffman - Counsel for United Parcel Service

By: Joseph Hoffman


May 13, 2003

Affidavit of Matthew Capozzoli - Counsel for United Parcel Service

By: Matthew Capozzoli


May 14, 2003

Affidavits of Counsel for Federal Express

By: Brian Campbell, Rex Edwards, Andrew Klinghammer, Rush O'Keefe, Ruth Raskas, Richard Roberts


May 13, 2003

Proposal of Federal Express for Procedural Schedule

Counsel: Federal Expess, R. Jeffrey Kelsey, 901-434-8575, jkelsey@fedex.com


Served May 14, 2003

OST-02-13089

Notice of Prehearing Conference and Order

The above-captioned proceeding is scheduled for a Prehearing Conference on May 27, 2003 at 10:00 a.m., Eastern Time, in Room 5332, Nassif Building, 400 Seventh Street, S.W., Washington, D.C. 20590, before the undersigned. In addition, the following procedural dates are established absent further order:

Response to Requests June 10, 2003 Discovery Completion July 18, 2003 Exhibits, Written Testimony, Witness Lists, Pretrial Briefs Including Disputed Facts July 25, 2003 Rebuttals August 8, 2003 Hearing August 19, 2003 Briefs, Proposed Findings of Fact and Conclusions of Law September 12, 2003 Reply Briefs, Objections to Proposed Findings of Fact and Conclusions of Law September 19, 2003 Recommended Decision October 31, 2003

By: Ronnie Yoder


Served May 16, 2003

OST-02-13089

Order of Chief Administrative Law Judge

Subject to change for good cause shown at the prehearing conference on May 27, 2003, the following rulings are made with respect to the objections to requests for information, documents, things, and admissions filed by all parties on May 13, 2003. All parties should be prepared to complete compliance with those requests by the date indicated in our order of May 14, 2003.

By: Ronnie Yoder


Served May 19, 2003

OST-02-13089

Errata to the Order Served May 16, 2003

Errata to the Order served May 16, 2003 by Chief Administrative Law Judge, Ronnie A. Yoder. Objections to the Order are due: May 21, 2003

By: Ronnie Yoder


May 22, 2003

OST-02-13089 - Inquiry into the Citizenship of DHL Airways, Inc.

Notice of Appearance

Counsel: Kelley Drye, Michael Francesconi, 202-955-9792 for UPS


May 21, 2003

OST-02-13089

Correspondence of Quinn Emanual - Counsel for DHL Airways

Airways is announcing today that a group of U.S. citizens, led by John H. Dasburg, the Chairman and CEO of Airways, has reached agreements to acquire 100% of the stock of Airways from William A. Robinson and DHL Holdings (USA), Inc. As a result, all of Airways' stock will be owned by U.S. citizens. (Relevant documents, including the Agreement and Plan of Merger, implementing the transaction will be supplied to the Department under separate cover pursuant to Section 204.5.).

This acquisition means, we submit, that there is not and cannot possibly be any issue about whether Airways meets the statutory requirements of 49 U.S.C. Section 40102(a)(15) (the "Statute"). Specifically, all the stock and with it all the voting interests will be owned by U.S. citizens. The President of Airways is a U.S. citizen. All of the directors and managing officers are U.S. citizens. Accordingly, under prior Department practice, the only remaining issue is whether, despite 100 percent of the voting interests (stock) being owned by U.S. citizens and the management being comprised entirely of U.S. citizens, so-called "actual control" might lie elsewhere.

Counsel: Quinn Emanual, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


May 21, 2003

Objections of DHL Airways to the Order of the Chief Administrative Law Judge

Pursuant to the May 16 Order, Airways sets forth below its specific objections to the particular rulings in said Order. However, at the outset Airways objects overall to the entire May 16 Order on the grounds that it (a) totally and flagrantly ignores the direction of the Decisionmaker that only "limited" discovery should be had in this docket; (b) purports to require Airways to respond to more than 150 requests (including sub-parts) for more than a three and a half year period, despite the fact that the Decisionmaker has twice directed that this matter is limited to the "current ownership only;" (c) unreasonably would require the searching of virtually all of Airways' files, comprised of literally millions of pages of documents, and requires it to be done in less than four weeks; (d) imposes an enormous and unrealistic cost burden on Airways to attempt to comply; (e) by contrast, requires Federal Express Corporation, United Parcel Service and Lynden Air Cargo (collectively "Fed Ex") to respond to only 9 requests for information propounded by Airways; and (f) violates basic constitutional and APA rights, as well as fundamental notions of fair play.

Tab 1 - Affidavit of Steven Rossum
Tab 2 - UPS Annual Report
Tab 3 - UPS Canada: The UPS Story
Tab 4 - Fed Ex Worldwide
Tab 5 - SEC Form S-3 - Fed Ex
Tab 6 - SEC Form 10-K - Fed Ex
Tab 7 - Fed Ex Europe, Middle East, and Africa

Counsel: Quinn Emanual, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


May 21, 2003

OST-02-13089

Response of Federal Express and United Parcel Service

This case was instituted by the Department in response to a Congressional directive "to use an Administrative Law Judge in a formal proceeding to resolve docket number OST-2002-13089." Only one issue was before the Department in that docket - the citizenship of DHL Airways. The citizenship of no other carrier was at issue in the proceeding, nor obviously were the commercial or political practices of any other air carrier before the Department. Against this background, DHL Airways' broad discovery request is an attempt to expand the scope of this proceeding impermissibly. It is highly inappropriate - and beyond the lawful scope of this proceeding itself - for DHL Airways to attempt to use the proceeding as a vehicle to investigate other air carriers participating in the proceeding. In this Response, Federal Express Corporation and United Parcel Service object to DHL Airways Request No. 14. In addition, they seek an extension through June 24, 2003 to respond to DHL Airways' Request No. 8.

Counsel: Fed Ex, Patricia Snyder, 901-434-8563, jkelsey@fedex.com / David Vaughan for UPS


May 22, 2003

OST-02-13089

Affidavit of Joseph Moderow

By: Joseph Moderow


May 23, 2003

OST-02-13089

Re: DHL Citizenship

On May 21, 2003, counsel for DHL Airways, Inc. submitted a letter that purports to be a notification under 14 C.F.R. § 204.5 of an "impending change" in the ownership of DHL Airways, Inc. The letter is an apparent attempt to show that DHLA intends to comply with the citizenship requirements applicable to all U.S. air carriers. The filing itself does not comply with the terms of the rule and therefore is not a proper filing under it. Instead, it is effectively a motion to restructure or terminate the proceedings in Docket 13089. Such a motion must be directed to Chief Judge Yoder, to whom authority to rule on such motions has been delegated.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 / Pierre Murphy for Lynden Air Cargo / Kelley Drye, David Vaughan for UPS


May 22, 2003

OST-02-13089

Re: Introduction of Air Cargo Management Group

ACMG is aware that the filings in this matter have become quite voluminous and that there PUBLISHER OF may be a need for support in understanding issues brought forth in this proceeding. Issues related to the operations of express parcel companies and supporting airline operations can be cargo very complex. ACMG is uniquely qualified, as one of the few, if not the only, consulting firms solely focused on the air freight and express delivery industry. Over the last 25 years, ACMG has maintained business relationships with all of the parties involved in this proceeding.

By: Edwin Laird, 206-587-6537, www.cargofacts.com

Attachments: Brochure and Other Promotional Material


May 27, 2003

OST-02-13089

Transcript of Pre-Hearing Conference

By: Ronnie Yoder


May 29, 2003

Motion of DHL Airways for Confidential Treatment

Respectfully requests that the Chief Judge withhold from public disclosure the documents and information that Airways is filing herewith under seal in the above-captioned proceeding.' These documents and information contain confidential, proprietary and commercially sensitive information relating to an on-going change in ownership of Airways. This transaction has not yet been completed and, in fact, will not close for several more weeks. Thus, premature public disclosure of this information would cause Airways great competitive harm.

Index of Confidential Documents
Affidavit of Steven Rossum

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100


May 29, 2003

OST-02-13089

Order Initiating Corrections to theTranscript of the Prehearing Conference

The following corrections are hereby made in the transcript of the prehearing conference on April 29, 2003.

By: Ronnie Yoder


May 30, 2003

Prehearing Conference Report of Chief Administrative Law Judge

At the prehearing conference DHL Airways, Inc. stated that although certain documents regarding an 'acquisition" by Mr. Dasburg and others had been signed , they had yet to be filed. DHLA further represented that all available documents would be provided on Thursday, May 29, 2003. Accordingly, the Judge directed that any further Information Requests regarding those documents shall be served, filed, and delivered by June 2, 2003, and that objections to those requests shall be served, filed, and delivered by June 6, 2003. The parties were also directed to propose response dates with any such requests and objections. All other previously set dates remain in effect.

By: Ronnie Yoder


June 2, 2003

OST-03-13089

Motion for Confidential Treatment

DHL Airways, Inc., pursuant to Rule 12 of the Department's Rules of Practice (14 C.F.R. § 302.12), respectfully requests that the Chief Judge withhold from public disclosure the documents and information that Airways is filing herewith under seal in the above-captioned proceeding.' These documents and information contain confidential, proprietary and commercially sensitive information relating to the financing of the planned acquisition of Airways by BDAP Acquisition Corporation and to a proposed transaction involving a separate business entity, which is not a party to this proceeding. The materials concern potential transactions that may or may not be completed as currently contemplated. Thus, premature public disclosure of this information would cause Airways and non-parties great competitive harm.

Affidavit of Steven Rossum

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100


June 3, 2003

OST-02-13089

Affidavit of Pierrey Murphy - Counsel for Lynden Air Cargo

By: Pierre Murphy, 202-776-3980, pmurphy@lopmurphy.com


June 3, 2003

Correspondence of DHL Airways

As indicated in our letter dated May 29, 2003, we are submitting herewith additional documents not previously produced, but which either were sent to or received from the Department or are responsive to Joint Requests For Documents and Things Nos. 76 and 77. We request that the documents submitted be incorporated into Airways' Motion For Confidential Treatment filed on April 24, 2003, encompassed within Your Honor's May 7, 2003 rulings regarding confidentiality and afforded the same protections. To the extent that any documents have been withheld, a log describing the document and the grounds for the assertion of privilege has been provided.

All of Airways' executed 2001 transaction documents were produced on April 24, 2003 along with drafts of some of those documents and, together with the materials attached to this letter constitute all of the submissions we have been able to locate.

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net


June 3, 2003

Correspondence of DHL Airways

Attached are charts providing information on the current ownership and management of DHL Airways, Inc., and it's subsidiary ASTAR Air Cargo. Also enclosed is a chart that includes the ownership chain of DHL Holdings (USA) Inc., up to and including Deutsche Post AG (with reference to the shareholders of Deutsche Post AG).

Also attached is a list of the parties to the Agreemnet Plan of Merger ("Dasburg acquisition"), a chart of the ownership and management of ASTAR Air Cargo,Inc., (now DHL Airways, Inc.) after closing of the transaction, and a list of the transaction to be taken on closing of the "Dasburg" acquisition.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


May 30, 2003

Letter from Federal Express to Sanford Litvack

I have briefly reviewed the documents you submitted yesterday pursuant to Judge Yoder's order, and it appears there are several documents and categories of documents that are missing. First, the ACMI Agreement references several schedules and exhibits, but those documents are not attached. Also, there were no financing agreements included despite the fact that Chief Judge Yoder specifically ordered DHLA to produce them. ("Anything related to the new agreement, including new banking agreements, new financing agreements, will be given Thursday." May 27, 2003 Prehearing Conference Transcript, p. 65). As such, we expect to receive these missing documents, along with any other documents related to the Dasburg transaction, immediately. As you are aware, we are determining whether to prepare additional document requests, and we need these documents to do so. If we not receive the documents, we will be forced to raise this issue with the Chief Judge.

Counsel: Fed Ex, Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com


June 2, 2003

Federal Express and United Parcel Service's Second Set of Requests for Information and for Documents and Things

Federal Express Corporation and United Parcel Service have undertaken a preliminary review of the documents provided by DHL Airways, Inc. on May 29, 2003. DHLA's production does not meet the instructions provided by Chief Judge Ronnie A. Yoder at the second prehearing conference held on May 29, 2003. Unless DHLA makes a complete filing soon, the Chief Judge will be unable to meet the October 31, 2003 deadline set by the Department.

FedEx Express and UPS therefore urge the Chief Judge to direct DHLA to respond to the following Second Set of Requests for Documents and Things. As directed in the May 30 prehearing conference report, we propose that the Chief Judge set: June 5 as the date for the responses to Request No. 1; and June 13, 2003 as a firm date for all other documents that have been prepared by then. In addition, DHLA should be directed to provide the rest of the documents within 24 hours of their completion.

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan for UPS


June 3, 2003

Petition for Reconsideration and Clarification and Motion for Leave to File an Otherwise Unauthorized Document

Pursuant to Rules 11 and 14 of the Rules of Practice of Department of Transportation, 14 C.F.R. §§ 302.11, 302.14, DHL Airways, Inc. files this Petition For Reconsideration and Clarification and Motion for Leave to File an Otherwise Unauthorized Document, in the nature of a late filed Petition for Reconsideration. In its Motion and Petition, Airways requests that the Department reconsider and clarify and/or modify its Order Instituting Formal De Novo Review, served April 17, 2003, which directed a hearing in the above-referenced docket, in light of (1) a material change in the factual situation that formed the basis for the referral of this matter to the Chief Administrative Law Judge regarding the ownership of Airways, and (2) the fact that the Chief Administrative Law Judge has, we submit, misinterpreted both the DOT's orders and the Department's intent in connection therewith and hence is acting inconsistently with both the April 17 Order and the DOT's subsequent May 12, 2003 Notice on Request for Extension of Time for Submission of Recommended Decision. These circumstances, we respectfully submit, are extraordinary in nature and support the Department's granting of Airways's Motion, and Petition for Reconsideration and Clarification. In accordance with the provisions of 14 C.F.R. § 302.14(b), we respectfully aver that the new circumstances discussed herein, namely the definitive agreement by the Dasburg group to own and control Airways, and certain rulings by the CALJ, could not have been known or discovered prior to May 21, 2003 (the date the acquisition transaction was submitted to the Department for review under 14 C.F.R. § 204.5) and May 27, 2003 (the date of the conference at which the rulings were made) because the parties did not complete their negotiations and reach definitive agreements until May 20, 2003 and the conference had not yet occurred.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


June 2, 2003

OST-02-13089

Correspondence of Ronnie Yoder

As the presiding judge in the referenced proceeding, I cannot receive communications concerning the case unless all parties are served a copy and have anopportunity to respond (14 C.F.R. § 300.2). Consequently, in accordance with the Department's rules concerning pg communications, your e-mail to me dated June 1, 2003, has been transmitted to the Docket Section for inclusion in the docket in this proceeding, together with a copy of this letter (14 C.F.R. § 300.3).

By: Ronnie Yoder


June 4, 2003

Motion to Correct the Transcripty of the May 27th, 2003 Prehearing Conference

DHL Airways hereby moves to correct the following inaccuracy in the revised version of the transcript of the May 27th, 2003 Prehearing Conference. Page (2R PHC Tr.) Correction 35, line 8 "Mr. Lachter," should read "Mr. Dean" 35, line 18 "Mr. Lachter," should read "Mr. Dean" 35, line 24 "Mr. Lachter," should read "Mr. Dean" 36, line 2 "Mr. Lachter," should read "Mr. Dean" 36, line 5 'Mr. Lachter," should read "Mr. Dean" 36, line 9 "Mr. Lachter," should read "Mr. Dean" 36, line 13 "Mr. Lachter," should read "Mr. Dean" 36, line 18 "Mr. Lachter," should read "Mr. Dean"

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net


June 4, 2003

Motion to Stay Proceedings and Motion for Leave to File

Pursuant to Rules 6 and 11 of the Rules of Practice of the Department of Transportation, 14 C.F.R. §§ 302.6(c), 302.11, DHL Airways, Inc. files this Motion For Leave to File an Otherwise Unauthorized Document requesting the Department to: (a) stay further proceedings before the Chief Administrative Law Judge in this docket, pending a ruling by the Department on Airways' Petition and Motion filed yesterday, June 3, 2003; and (b) vacate the most recent order of the Chief Administrative Law Judge dated June 3, 2003. That Order, among other things, requires Airways to file, on a continuing basis, every document, or draft, prepared by anyone with respect to on-going financing negotiations2 and the finalization of closing documents and schedules for the acquisition of Airways.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


June 3, 2003

Order of the Chief Administrative Law Judge

Order of Chief Administrative Law Judge, requests DHLA to provide, within 48 hours of service of this Order, all existing documents, including drafts of documents, prepared for exchange or submission in connection with the merger agreement or the new ACMI Services Agreement. All other information and documents in the Second Request shall be provided by June 13, 2003, in the absence of a sustained objection. Any new document shall be provided within 24 hours of their creation. At the prehearing conference on May 27, 2003, the date for objections to new requests was fixed at June 6, 2003

By: Ronnie Yoder


June 4, 2003

Order of the Chief Administrative Law Judge

To the extent that DHLA's motion seeks permission for such interlocutory review, that motion is denied.- Nothing in DHLA s motion clearly requests such permission or warrants granting such permission. Consequently, we cannot find that extraordinary circumstances warrant an interlocutory appeal or that such an appeal is necessary to prevent substantial detriment to the public interest or undue prejudice to any party. Since the proposed merger and change of ownership of DHLA is not scheduled to occur before June 30, 2003, and DHLA's filing acknowledges that it may not occur, any request for interlocutory review based upon that prospective change is at best premature. Given the mandates of Congress and the Decisionmaker, the attention of the parties and the Judge is best focused on completing this proceeding in accordance with those directions.

By: Ronnie Yoder


June 4, 2003

Revised and Corrected Transcript of Pre-Hearing Conference

By: County Court Reporters


OST-02-13089

June 5, 2003

Affidavits for Counsel to Federal Express and UPS

Affidavits of Kenneth R. Masterson, Executive Vice President, General Counsel and Secretary, Suzanne L. Montgomery, Attorney for Thompson Coburn LLP, James Lundy, Economic Analyst for the Campbell-Hill Aviation Group; and, Sean McGown, Attorney for Thompson Coburn LLP, representing Federal Express Corporation.

Counsel: Thompson Coburn, Patricia Snyder


June 5, 2003

Answer of UPS and Fed Ex

UPS and Federal Express are currently in the process of reviewing all of the documents attached to DHL's May 29, 2003 Motion for Confidential Treatment, as well as the larger volume of documents submitted by DHL on April 24, 2003 in this docket. An initial review of all of these filings leads UPS and Federal Express to the conclusion that none of them should be kept confidential. After UPS and Federal Express have had the chance to carefully review all of the documents, UPS and Federal Express will present their view on the subject of their continued confidentiality to the Chief Administrative Law Judge and specifically reserve the right to object to their confidential treatment. However, even a cursory review of the documents filed on May 29, 2003 demonstrates that certain of the documents should not remain confidential, and UPS and Federal Express request the Chief Administrative Law Judge to order the public release of these documents and to direct that they be placed in the public docket. Specifically, the following documents filed with DHL's May 29, 2003 confidentiality Motion should not be granted confidential treatment.

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan for UPS


June 4, 2003

Corrections of Federal Express and UPS to Prehearing Conference Transcript | Word

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan for UPS


June 5, 2003

Correspondence of DHL Airways

In accordance with your instructions at the prehearing conference held on May 27, 2003 and in response to your Order of June 3, 2003, we are providing you and all parties on the attached service list with a copy of an additional document pertaining to the new transaction: Exhibit A to the ACMI Agreement, a Guarantee to be entered into as part of the ACMI.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


June 5, 2003

Correspondence of United Parcel Service

At the Prehearing Conference on May 27, 2003, Your Honor requested that parties submit "any documents that were submitted or filed by anyone with respect to this proceeding or its antecedents." Attached please find a collection of correspondence between the Department of Transportation and various member of Congress responsive to Your Honor's request. All parties to this proceeding will be served with a copy of this letter and its attachments.

Tab A - Letter from Norman Mineta to Congress Bill Young and Senator Ted Stevens
Tab B - Letter from Mitchell Daniels to Congress Bill Young
Tab C - Letter from Congressman Peter DeFazio to Norman Mineta
Tab D - Letter from Read C. Van de Water to Senator Judd Gregg
Tab E - Letter from Senator Judd Gree to Sean O'Halloran
Tab F - Letter from David Anderson to Read C. Van de Water
Tab G - Letter from Kenneth Mead to Congressman Don Young
Tab H - Letter from Daniel Brannan to Norman Mineta
Tab I - Letter from Senator John Rockefeller to Read C. Van de Water
Tab J - Letter from Kirk Van Tine to James Hoffa
Tab K - Letter from James Hoffa to Norman Mineta
Tab L - Letter from Norman Mineta to Senator Ernest Hollings
Tab M - Letter from Senator Ernest Hollings to Norman Mineta
Tab N - Letter from Congressman Don Young to Kenneth Mead
Tab O - Letter from Read C. Van de Water to Senator John Rockefeller
Tab P - Letter from Norman Mineta to Congressman Don Young
Tab Q - Letter from Convressman Don Young to Norman Mineta
Tab R - Letter from Patrick McRory to Norman Mineta
Tab S - Letter from Senator John Rockefeller to Norman Mineta
Tab T - Letter from Larry Davis to Congressman David Hobson
Tab U - Letter from Senator Louis DeLuca to Norman Mineta
Tab V - Letter from Senator Harry Reid to Norman Mineta
Tab W - Letter from Congressman Duncan Hunter to Norman Mineta

Counsel: Kelley Drye, David Vaughan, 202-955-9792,


June 5, 2003

Motion for Leave to File an Otherwise Unauthorized Document and Request of UPS and Fed Ex for Protection of Witness Identity

United Parcel Service Co., on behalf of itself and Federal Express Corporation , hereby requests that the Chief Judge maintain confidential the affidavits of prospective expert witnesses that UPS and Federal Express will soon submit in this proceeding. Counsel for Federal Express has given its permission for UPS to conduct the filing on its behalf.

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan for UPS


June 5, 2003

Order of Chief Administrative Law Judge

To the extent that DHLA's motion seeks permission for interlocutory review, that motion is denied. Nothing in DHLA' s motion clearly requests such permission or warrants granting such permission. Consequently, we cannot find that extraordinary circumstances warrant an interlocutory appeal or that such an appeal is necessary to prevent substantial detriment to the public interest or undue prejudice to any party. DHLA's motion states that, "While ordinarily Airways would first ask the CALJ to vacate the Order, under the time constraints of the Order and the CALJ's view of discovery generally, that route is not practical. This Order is intended to address DHLA's concerns, despite its failure to comply with the Department's rules for seeking relief. If DHLA desires further relief from this or any other order in this proceeding, it should file a motion setting forth the specific language of the modification sought and the reasons for the requested relief, preferably in numbered paragraphs for each modification sought. Any future request for relief from the Judge's Orders shall be directed to the Judge in accordance with the Department's Rules of Practice. 14 C.F.R. § 302.11.

By: Ronnie Yoder


OST-02-13089

June 6, 2003

Motion to Vacate the June 4 and June 5, 2003 Orders of Chief Administrative Law Judge

Pursuant to Rule 11 of the Department of Transportation's Rules of Practice, 14 C.F.R. § 302.11, DHL Airways, Inc. files this Motion requesting that the Chief Administrative Law Judge vacate the Orders (1) dated June 4, 2003, and (2) dated June 5, 2003 which "denied" Airways permission to seek interlocutory review. As noted in the CALJ's Orders and as discussed below, Airways did not request either permission to seek interlocutory review or interlocutory review itself, thus, Airways never attempted to satisfy the standards for such review. Accordingly, through the June 4 and June 5 Orders, the CALJ, sua sponte, denied Airways due process by rendering decisions on issues that (1) were not before the CALJ; and (2) are only properly before the Department of Transportation and as to which the CALJ admittedly has no jurisdiction or authority (see June 4 Order n.2). As a result of that ruling, Airways has been effectively deprived of an opportunity to be heard, and thus the ability to attempt to satisfy the requisites for receiving permission for seeking interlocutory review. Under the circumstances, the only way to restore Airways' rights is for the CALJ to vacate the June 4 and June 5 Orders.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


June 6, 2003

Objections of DHL Airways to the Second Set of Requests for Documents and Things

Despite the CALJ's admonition to FedEx and UPS not to add unnecessary information requests to those already outstanding, those parties have done precisely that. Airways objects to those requests, not only because they are in disregard of the CALJ's direction, but also because they represent a new and unprecedented effort by these competitors to inject themselves into the highly confidential and sensitive dealings between the Dasburg group and others to finalize their acquisition of Airways. This latest attempt to interfere with this transaction and eliminate Airways as a competitor goes too far. Accordingly, Airways objects to these requests, as set forth more further below.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


June 6, 2003

Objections to Motion for Leave to File of Federal Express, United Parcel Service, and Lynden Air Cargo

On June 3 and 4, 2003, DHL Airways, Inc. filed unauthorized documents that amount to impermissible interlocutory appeals from rulings by the Chief Administrative Law Judge. Those documents should have been filed with the Chief Administrative Law Judge who is currently conducting this proceeding, not with the Department, and United Parcel Service Co., FedEx Express and Lynden' will not address the substantive issues raised in those filings but will note here their objection to the receipt and consideration of those documents. The Chief Administrative Law Judge has ruled on the issues raised in DHL's filings, the proceeding is underway (albeit under an unduly compressed schedule) and discovery is in progress. If the Department is to have an adequate record before it in reaching a final decision in this matter, all phases of this case, including discovery, must proceed promptly.

In addition. DHL Airways' petition for reconsideration under 14 C.F.R. § 302.14 is untimely and the motion for leave to file it should be rejected. The rules require petitions for reconsideration to be filed in the case of a final order within twenty days after service, and in the case of an interlocutory order, within ten days after service. 14 C.F.R. § 302.14(a)(2). The Department's instituting order was issued on April 17. 2003. DHL Airways announced publicly its contemplation that Dasburg, or a group headed by Dasburg, would buy 100% of DHL Airways on April 24, 2003. Accordingly, this buyout is not a "new circumstance," as DHL Airways "avers" on page 2 of the June 3 filing. DHL Airways could easily have sought reconsideration within the period allowed by Department rules.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS / Pierre Murphy, 202-776-3980 for Lynden


OST-02-13089

June 10, 2003

Answer of DHL in Opposition to the Motion of FedEx

FedEx, joined by UPS, has asked the Chief Judge to be permitted to keep secret, and presumably not disclose to Airways or the Judge, the names of the people to whom it will show Airway's confidential information. FedEx claims it should be allowed to do so because allegedly "most prospective witnesses are unwilling to .. [sign] a confidentiality affidavit without an assurance they will be retained). FedEx also claims that companies tell them "each member of the company must sign an affidavit before they can be consulted," and they presumably find that to be a burden. Both reasons are without merit and, in any event they certainly do not outweigh the need to keep pertinent information confidential.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


June 10, 2003

Motion for Leave to File an Unauthorized Document and Reply of DHL to Answer of UPS and FedEx

While UPS may be technically correct that some or parts of the documents lodged with the Department and identified in the Answer may, at this time, be available publicly, the unique posture of the case, requiring a filing with competitors of documents relating to a transaction that has not been completed and normally would be filed with the Department on a Confidential basis mandates, we contend, that the CALJ accord Airways and the purchasers substantial leeway to protect commercially sensitive information relating to a change of ownership of Airways, particularly when UPS does not - indeed can not under the circumstances - allege any harm to its position in the on-going litigation or to the public interest.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


June 10, 2003

Motion for Confidential Treatment

Affidavit of Steven Rossum

Response of DHL Airways, to Requests for Information, Documents and Admissions by Federal Express Corporation, United Parcel Services, and Lynden Air Cargo, and to Requests for Information by the Chief Administrative Law Judge.

Documents Provided in Response to FedEx's Requests for Documents and Things which consists of multiple boxes of materials available (as of today) for inspection and copying by FedEx at the offices of Quinn Emanuel Urquhart Oliver & Hedges, LLP, 805 Third Avenue, 11th Floor, New York, NY 10022.

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net


Served June 10, 2003

Order Correction Second Prehearing Transcript

By motions dated June 4, 2003, DHL Airways, Inc. and Federal Express Corporation/United Parcel Service move to correct the transcript of the second prehearing conference in this proceeding. No objections to these motions have been filed. Accordingly, they are granted with the following exceptions:

By: Ronnie Yoder


June 10, 2003

Responses of Fed Ex and UPS to First Set of Requests for Information

Federal Express Corporation and United Parcel Service Co. respond to DHL Airways, Inc.'s First Set of Requests for Information, Documents, Admissions and Deponents pursuant to their objections filed on or about May 13 incorporated herein and this Court's Order dated May 16 as follows:

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex/Kelley Drye, David Vaughan, 202-995-9864, dvaughan@kelleydrye.com


OST-02-13089

June 3, 2003

Re: Ex-Parte Letter from Secretary Mineta to Congressman Pete DeFazio

By: Norman Mineta


June 11, 2003

Joint Application for an Order to Depose John Dasburg

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-995-9864, dvaughan@kelleydrye.com for UPS


June 11, 2003

Joint Application for an Order to Depose Dr. Klaus Zumwinkel

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-995-9864, dvaughan@kelleydrye.com for UPS


June 11, 2003

Joint Application for an Order to Depose Michael Klein

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-995-9864, dvaughan@kelleydrye.com for UPS


June 11, 2003

Joint Application for an Order to Depose Richard Blum

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-995-9864, dvaughan@kelleydrye.com for UPS


June 11, 2003

Joint Application for an Order to Depose Uwe Doerken

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-995-9864, dvaughan@kelleydrye.com for UPS


June 11, 2003

Joint Application for an Order to Depose William Robinson

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-995-9864, dvaughan@kelleydrye.com for UPS


OST-02-13089

June 5, 2003

Application of Federal Express and UPS for the Issuance of a Subpoena for Documents and Things

Counsel:Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-995-9864, dvaughan@kelleydrye.com for UPS


June 10, 2003

Application of Federal Express and UPS for the Issuance of a Subpoena for Documents and Things

Counsel:Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-995-9864, dvaughan@kelleydrye.com for UPS


June 10, 2003

Application of Federal Express and UPS for the Issuance of a Subpoena for Documents and Things

Counsel:Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-995-9864, dvaughan@kelleydrye.com for UPS


June 12, 2003

Motion of DHL Airways for Reconsideration, Hearing, Leave to Appeal and Stay

We believe the CALJ has reflected a hostile attitude toward Airways and predisposition on the merits, from the outset. Thus at the April 24th hearing the CALJ spoke of the "need" for this hearing and his "concerns" about DOT's informal processes. Indeed, the CALTs views regarding the Department's failure to utilize administrative law judges as the CALJ believes they should be used is well known and documented.5 The CALJ has exhibited a bias against the Department's findings of Airways citizenship from the outset apparently believing that only an administrative law judge can handle such matters properly. See, e.g. Yoder, remarks at the National Association of Administrative Law Judge's Annual Meeting (October 13, 1998), available at http://wwww.faljc.org/faljc2.html.

Counsel: Quinn Emanual, Sandy Litvack, 212-702-8100


Served June 10, 2003

Order of Chief Administrative Law Judge

On June 6, 2003, DHL Airways, Inc. filed a "Motion to Vacate the June 4 and June 5, 2003 Orders of Chief Administrative Law Judge," and its objections to "Federal Express Corporation and United Parcel Service's Second Set of Requests for Information and for Documents and Things to DHLA" filed on June 2, 2003. We hereby deny DHLA's motion, and we overrule DHLA's objections to the Second Requests, including General Objections A-M and Specific Objections to Requests Nos. 1-16, except as indicated below.

By: Ronnie Yoder


OST-02-13089

June 13, 2003

Motion of DHL Airways for Confidential Treatment

Affidavit of Steven Rossum

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net


June 13, 2003

Objections of John Dasburg, Michael Klein and Richard Blum to Deposition Applications

John H. Dasburg, Michael R. Klein and Richard Blum, are the members of BD Air Partners. L.L.C. an entity that has a contract to acquire DHL Airways, Inc. whose citizenship is the subject of this proceeding. On their behalves, undersigned counsel' respectfully object to the joint applications for orders authorizing the taking of the depositions of Messrs. Dasburg, Blum and Klein. These individuals should not be, and do not have to be. deposed, for the following reasons.

Counsel: Zuckert Scoutt, Frank Costello, 202-298-8660, fjcostello@zsrlaw.com


June 13, 2003

Response of DHL Airways to Federal Express and UPS's Second Set of Requests

Hereby submits its responses to Federal Express and United Parcel Service's Second Set of Requests for Documents and Things, authorized by the CALJ at the May 27, 2003 Pre-hearing Conference. Airways continues to object to the Second Requests for the reasons set forth in its Objections dated June 6, 2003 and its Motion for Reconsideration, Hearing, Leave to Appeal and Stay, dated June 12, 2003, which are incorporated herein by reference.

Counsel: Quinne Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


OST-02-13089

June 16, 2003

Affidavits of Elizabeth Eccher, Peggy Francis, Brendan Rogers, Susan Hoag, Martha Samuelson, David Mishol, Jeffrey Gordon, John Finnerty and Paul Walker

By: Elizabeth Eccher, Peggy Francis, Brendan Rogers, Susan Hoag, Martha Samuelson, David Mishol, Jeffrey Gordon, John Finnerty and Paul Walker


June 16, 2003

Affidavits of John Wyss and Vance Fort

By: John Wyss and Vance Fort



OST-02-13089

June 17, 2003

Motion of Federal Express to Compel

Federal Express Corporation hereby moves to compel the Bank of America, N.A., to comply with a subpoena issued by FedEx Express and UPS for the production of documents. The grounds for this Motion are set forth below. A proposed order is attached.

On Monday, June 16, 2003, Counsel for UPS attempted to contact the recipient of the Subpoena, Jacqueline Jones of the Bank of America Legal Support Group, to inquire about the Subpoena. Ms. Jones' voicemail indicates that she is out on vacation this week. Counsel for UPS spoke to another member of the Legal Support Group, who mentioned that they would check on who was handling the Subpoena, but noted that we should be aware that they are currently handling a large volume of subpoenas and that we could encounter further delays. As of June 17, a member of the Legal Support Group indicated that they still have not heard who is handling the matter for the bank, but that it is likely to be someone from one of their offices in California.

The Subpoena seeks documents highly relevant to this proceeding and is reasonable in scope. The material is relevant because it pertains to certain credit arrangements between the B of A, DHLA, and certain affiliates of DHLA. One contention of UPS and FedEx Express in this proceeding is that these credit arrangements give foreign entities control over DHLA. The documents requested in the attached subpoena will illuminate these arrangements, will provide information with respect to what entity or entities requested the arrangements, what representations were made in obtaining the arrangements and provide information with respect to why the arrangements were made. All of the foregoing is relevant to the issue of whether the credit arrangements are an indicator of foreign control of DHLA, as set forth in Department precedent.

Counsel: Kelley Drye, Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com


June 17, 2003

Motion of Federal Express and UPS for Postponement of Procedural Date

Hereby move that the date for submission of materials regarding expert witnesses (discussed at page 195 of the May 27, 2003 Revised and Corrected Prehearing Conference Transcript) be postponed from June 24 until July 3. An adequate review and analysis of the voluminous materials received thus far from DHL Airways, Inc. necessitates an extension of time in order to adequately identify and qualify experts. Counsel for DHLA has indicated that DHLA agrees with this request.

Counsel: Kelley Drye, Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com

Index


Essential Air Service at Plattsburgh and Saranac Lake/Lake Placid, New York

OST-03-14783 - EAS at Plattsburgh, NY
OST-00-8025 - EAS at Saranac Lake/Lake Placid, NY

June 17, 2003

Response of CommutAir to Request for Proposals

By: CommutAir, Joel Raymond, 518-562-2700


June 17, 2003

Response of Mesa Air Group to Request for Proposals

By: Mesa, Scott Lyon, 602-685-4368, scott.lyon@mesa-air.com


Served June 18, 2003

Order of Chief Administrative Law Judge

By: Ronnie Yoder


Served June 18, 2003

Order of Chief Administrative Law Judge

By: Ronnie Yoder


Served June 18, 2003

Order of Chief Administrative Law Judge

By: Ronnie Yoder


June 18, 2003

Revised Joint Application of Federal Express and UPS for an Order to Depose John Dasburg

Counsel: Fed Ex, Jeffrey Kelsey, 901-434-8575, jkelsey@fedex.com for Fed EX / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


June 18, 2003

Revised Joint Application of Federal Express and UPS for an Order to Depose Michael Klein

Counsel: Fed Ex, Jeffrey Kelsey, 901-434-8575, jkelsey@fedex.com for Fed EX / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


June 18, 2003

Revised Joint Application of Federal Express and UPS for an Order to Depose Richard Blum

Counsel: Fed Ex, Jeffrey Kelsey, 901-434-8575, jkelsey@fedex.com for Fed EX / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


June 18, 2003

Revised Joint Application of Federal Express and UPS for an Order to Depose William Robinson

Counsel: Fed Ex, Jeffrey Kelsey, 901-434-8575, jkelsey@fedex.com for Fed EX / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


June 18, 2003

Revised Joint Application of Federal Express and UPS for an Order to Depose Wolfgang Pordzik

Counsel: Fed Ex, Jeffrey Kelsey, 901-434-8575, jkelsey@fedex.com for Fed EX / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


June 17, 2003

OST-02-13089

Application of Federal Express to the Chief Adminstrative Law Judge for the Issuance of a Subpoena for Documents and Things

Hereby files this Application requesting the Chief Administrative Law Judge to issue a subpoena in the form attached, or in a substantially similar form, to Deutsche Bank AG.

Counsel: Federal Express, R. Jeffrey Kelsey, 901-434-8563


OST-02-13089

June 20, 2003

Affidavit of William Roure

By: William Roure


June 20, 2003

Correspondence of UPS

Application for the Issuance of a Subpoena for Documents and Things - Deutsche Post World Net USA
Application for the Issuance of a Subpoena for Documents and Things - DHL International Ltd
Application for the Issuance of a Subpoena for Documents and Things - DHL Worldwide Express NV
Application for the Issuance of a Subpoena for Documents and Things - DHL Worldwide Express BV

Counsel: Kelley Drye, Michael Francesconi, 202-955-9600


June 20, 2003

Joint Memorandum of Law by DHL Wordwide Express and DHL Holdings (USA) in Support of Motion to Quash

The stated purpose of this proceeding is to determine the current corporate citizenship of DHL Airways, Inc. As a result, it is axiomatic that any discovery requests in this proceeding -- especially those to non-parties like WWE and Holdings -- must relate in a significant manner to the issue of Airways' citizenship. While that conclusion seems obvious, it is evidently not so apparent to UPS and FedEx. They have served subpoenas on two non-parties to this proceeding requesting the production of hundreds of thousands -- if not millions -- of documents that have no relation to Airways' citizenship.

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


June 20, 2003

Motion of DHL Wordwide Express and DHL Holdings (USA) to Quash Subpeonas for Documents and Things

The Motion contends that the subpoenas seek irrelevant matter, are overbroad on their face, and impose an undue burden on WWE and Holdings. As a result, they should be quashed in their entirety.

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


Served June 20, 2003

Order of the Chief Administrative Law Judge

Order of Chief Administrative Law Judge, finds good cause to grant FedEx/UPS/Lynden's joint applications to depose Zumwinkel and Doerken, and issues Zumwinkel and Doerken's subpoenas; and, (1) the witnesses shall produce documentary evidence in connection with their respective testimonies; (2) the scope of the testimony to be taken shall be limited by the issues and subissues identified in Order 2003-4-14, the Judges Orders and rulings at the April 27, 2003 and May 27, 2003, prehearing conferences; (3) FedEx/UPS/Lynden shall supply 2 copies of each deposition to the Judge and a copy to each respective witness and to DHL Airways, Inc.; and, (4) FedEx/UPS/Lynden shall file each subpoena showing service promptly after serving the subpoena on the witness.

By: Ronnie Yoder


Served June 20, 2003

Order of the Chief Administrative Law Judge

On June 11, 2003, Federal Express Corporation, on behalf of United Parcel Service Co., Lynden Air Cargo, LLC, and itself, filed a joint application to depose William A. Robinson, stating that the deposition of the witness "is necessary to perpetuate the testimony of the witness and to prevent undue and excessive expense to a party" (emphasis original), and requesting that the Judge issue an order authorizing the testimony of the witness. No objection to that application has been filed. For the reasons stated below, we grant the application to depose the witness.

By: Ronnie Yoder


Served June 20, 2003

Order of the Chief Administrative Law Judge

On June 11, 2003, Federal Express Corporation, on behalf of United Parcel Service Co., Lynden Air Cargo, LLC, and itself, filed joint applications to depose Michael R. Klein, Richard Blum, and John H. Dasburg, stating that the deposition of each witness "is necessary to perpetuate the testimony of the witness and to prevent undue and excessive expense to a party" (emphasis original), and requesting that the Judge issue an order authorizing the testimony of each witness.

Based upon the submissions, the entire record, and the time limitations in this proceeding, we find good cause to grant each of the joint applications to depose Dasburg, Klein and Blum. Such depositions will likely ensure a more orderly, efficient, and shorter hearing by narrowing and focusing the scope of testimony, thereby serving the public interest and saving time and expense. Depositions of the witnesses will perpetuate their testimony, will prevent undue and excessive expense to the parties, and will not result in undue delay or an undue burden on any party. Discovery in this case is scheduled to be completed by July 18, 2003, and the proceeding is scheduled to be completed by October 31, 2003. Consequently, there is a premium on the expedition of discovery and all other aspects of this proceeding.

By: Ronnie Yoder


OST-02-13089

June 20, 2003

Affidavit of Elias Levenson

By: Elias Levenson


June 23, 2003

Affidavit of Hilary Pope

By: Hilary Pope


June 23, 2003

Affidavits of Maureen Chakraborty and Jerold Zimmerman

By: Maureen Chakraborty and Jerold Zimmerman


June 20, 2003

Affidavits of William Carey Doolan, Tracey Ferrara, and Teresa Kelly

By: William Carey Doolan, Tracey Ferrara, and Teresa Kelly


June 23, 2003

Joint Application of Federal Express and UPS to Depose Giles Instone

Federal Express Corporation and United Parcel Service Co. hereby file this Joint Application. DHL Airways has listed Mr. Instone as a witness it intends to call at the hearing of this matter. See Response of DHL Airways to Requests for Information, Documents and Admissions, dated June 10, 2003, at 4. Therefore, the Joint Applicants believe that Mr. Instone, Managing Director of Instone Air Services, Inc., can provide relevant and material information regarding the matters at issue in this proceeding. Further, by obtaining Mr. Instone's oral testimony well in advance of the hearing, the Joint Applicants expect to narrow and focus the issues, saving valuable hearing time. The Joint Applicants therefore respectfully suggest to the Chief Administrative Law Judge that he should issue an order authorizing the deposition testimony of Mr. Instone to be taken at the time and place specified below. The Joint Applicants further suggest that the Chief Administrative Law Judge should direct the witness to produce documentary evidence in connection with his testimony at the time of deposition.

Counsel: Fed Ex, Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9792, dvaughan@kelleydrye.com for UPS


June 23, 2003

Joint Application of Federal Express and UPS to Depose Vicki Bretthauer

Federal Express Corporation and United Parcel Service Co. hereby file this Joint Application. The Joint Applicants believe that Ms. Bretthauer, President and Chief Operating Officer (COO) of DHL Airways, Inc., can provide relevant and material information regarding the matters at issue in this proceeding.' Further, by obtaining Ms. Bretthauer's oral testimony well in advance of the hearing, the Joint Applicants expect to narrow and focus the issues, saving valuable hearing time. The Joint Applicants therefore respectfully suggest to the Chief Administrative Law Judge that he should issue an order authorizing the deposition testimony of Ms. Bretthauer to be taken at the time and place specified below. The Joint Applicants further suggest that the Chief Administrative Law Judge should direct the witness to produce documentary evidence in connection with her testimony at the time of deposition.

Counsel: Fed Ex, Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9792, dvaughan@kelleydrye.com for UPS


OST-02-13089

June 23, 2003

Affidavit of Bob Lee

By: Bob Lee


June 23, 2003

Affidavit of Melissa Weber

By: Melissa Weber


Served June 24, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


Served June 24, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


Served June 24, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


June 23, 2003

Response of Bank of America to Motion to Compel and Motion to Quash or, in the Alternative, for a Protective Order

Third-party Bank of America, National Association, by its attorneys, hereby files its Response to the Motion to Compel filed in this matter by Federal Express Corporation. In light of the fact that Bank of America is involved in active negotiations with both counsel for FedEx and counsel for United Parcel Service Co. to achieve an agreed-upon resolution to the production of documents in response to the subpoena issued to Bank of America, Bank of America respectfully requests that the Chief Administrative Law Judge enter and continue this matter unless and until advised by counsel for FedEx that a ruling is necessary. If such a ruling from the Chief Judge becomes necessary, Bank of America respectfully requests the Chief Judge to quash the Subpoena or, in the alternative, to enter a Protective Order greatly narrowing the Subpoena.

Counsel: Jenkins Gilchrist, Arthur Muir, 312-425-3900


OST-02-13089

June 24, 2003

Affidavits of James Reitzes, Dorothy Robyn, and Janusz Ordover

By: James Reitzes, Dorothy Robyn, and Janusz Ordover


June 24, 2003

Correspondence to and from Various Government Officials

By: Various


OST-02-13089

June 26, 2003

Correspondence of Quinn Emanuel

This letter is to inform you that, as of Monday, June 30, 2003, our new office location and mailing address will be as follows: Sanford M. Litvack, Esq. Joanna R. Swomley, Esq. Quinn Emanuel T.Jrquhart Oliver & Hedges, LLP 335 Madison Avenue 17th Floor New York, New York 10017 T: (212) 702-8100 (unchanged) F: (212) 702-8200 (unchanged)

Counsel: Quinn Emanuel, Joanna Swomley, 212-702-8100, joannaswomley@quinnemanuel.com


June 26, 2003

Motion of DHL Airways to Vacate or Modify the June 23, 2003 Orders of Chief Administrative Law Judge

Pursuant to Rule 11 of the Department of Transportation's Rules of Practice, 14 C.F.R. § 302.11, DHL Airways, Inc. files this Motion requesting that the Chief Administrative Law Judge vacate or modify Order No. 13089-20 and Order No. 13089-21, both served June 24, 2003. With respect to Order No. 13089-21, Airways requests that: (1) Airways not be compelled to file, either with the DOT Docket or the CALJ, the 12 boxes of documents (and numerous copies thereof) produced in response to document requests by Federal Express and United Parcel Service; (2) Airways not be required to provide an index of the documents for which confidentiality is sought under Section 302.12, or that it have a lengthy extension to do so; and/or (3) the CALJ grant the June 10, 2003 Motion of DHL Airways, Inc. for Confidential Treatment Under 14 C.F.R. § 302.12. Further, Airways objects to Order No. 13089-21 and requests review and modification of such Order to the extent that it suggests that Airways will lose any claim to confidential treatment for any otherwise confidential documents submitted as exhibits in an oral evidentiary hearing.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


June 25, 2003

Motion of Federal Express to Continue Its Motion to Compel (Bank of America) and to Extend Answer Period

Federal Express Corporation submits this motion to continue until July 1, 2003, any decision on its motion to compel dated June 17, 2003. FedEx Express also moves to extend the answer period to the Motion to Quash Or, Alternatively, For A Protective Order filed June 23, 2003 by Bank of America.

FedEx Express supports B of A's request to enter the Motion to Compel and to continue any decision thereon for a brief period. Counsel for FedEx Express and counsel for B of A have worked diligently and cooperatively to seek an expeditious resolution by agreement in regard to the documents sought in the subpoena to B of A issued on Friday, June 6, 2003.

FedEx Express respectfully requests that B of A and FedEx Express be granted through July 1 to determine whether they can agree upon documents to produce and schedule in which to produce them. If these parties are unable to reach an agreement on or before July 1, FedEx will respond promptly to B of A's Response, its Motion to Quash, and its alternative Motion for a Protective Order.

Counsel: Thompson Coburn, Patricia Snyder, 202-585-6900


OST-02-13089

June 27, 2003

Affidavit of Amelia Greenberg

By: Amelia Greenberg


June 25, 2003

Affidavits of Sarah Lowe, Aayush Kabra and Craig Clawson

By: Sarah Lowe, Aayush Kabra and Craig Clawson


OST-02-13089

June 27, 2003

Affidavits of Katherine Beirne, Jay Ezrielev, and Jonathan Orszag

By: Katherine Beirne, Jay Ezrielev, and Jonathan Orszag


June 27, 2003

Affidavit of Geoffrey Cruikshanks

By: Geoffrey Cruikshanks


June 20, 2003

Affidavit of William Roure

By: William Roure


June 27, 2003

Affidavit of Wolfgang Pordzik

By: Wolfgang Pordzik


June 27, 2003

Answer of Federal Express and UPS

Please accept for filing in Docket OST-2002-1 3089 the enclosed answer of FedEx Express and UPS to the June 26 Motion of DHL Airways to Vacate. This answer contains or refers to materials that are the subject of motions of DHL Airways, Inc. for confidential treatment under 14 C.F.R. § 302.12 dated April 24, 2003 and June 10, 2003. Consistent with DOT rules applicable to such information, this document has been segregated and filed separately in the enclosed sealed envelope, which bears the caption of the enclosed submission and the notation "Confidential Treatment Requested Under § 302.12."

Counsel: Thompson Coburn, Patricia Snyder, 202-585-6919, psnyder@thompsoncoburn.com


June 11, 2003

Joint Application of Fed Ex and UPS to Depose Klaus Zumwinkel

Exhibit 1

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


June 11, 2003

Joint Application of Fed Ex and UPS to Depose Uwe Doerken

Exhibit 1

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


June 27, 2003

Joint Memorandum of Law filed by DHL International and DHL Worldwide Express B.V.'s in Support of Motion to Quash

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


June 27, 2003

Joint Motion of DHL International and DHL Worldwide Express B.V.'s to Quash Subpenas for Documents and Things

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


June 27, 2003

Memorandum of Law of Deutsche Post in Support of Motion to Quash

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


June 27, 2003

Memorandum of Ronnie Yoder

By: Ronnie Yoder


June 27, 2003

Motion of Deutsche Post to quash subpoena for documents and things

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


June 27, 2003

Opposition of Deutsche Post to Joint Application to Depose Wolfgang Pordzik

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


Served June 27, 2003

Order of the Chief Administrative Law Judge

Accordingly, we find good cause to grant FedEx/UPS/Lynden's joint applications to depose Zumwinkel and Doerken, and we issue Zumwinkel and Doerken's attached subpoenas.

By: Ronnie Yoder


Served June 27, 2003

Order of the Chief Administrative Law Judge

Accordingly, we find good cause to grant FedExJUPSfLynden' s joint applications to depose Zumwinkel and Doerken, and we issue Zumwjnkej and Doerken's attached subpoenas.

By: Ronnie Yoder


Served June 27, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


OST-02-13089

June 30, 2003

Affidavits of David Short and Christine Richards

By: David Short and Christine Richards


July 1, 2003

Affidavit of John Coffee

By: John Coffee


June 30, 2003

Correspondence of Quinn Emanuel

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


June 30, 2003

Joint Motion of Fed Ex and UPS for an Order to Show Cause

Federal Express Corporation and United Parcel Service Co. move for an order from the Chief Administrative Law Judge to show cause why Dr. Klaus Zumwinkel and Mr. Uwe Doerken should not be held in contempt for refusal to comply with the June 20, 2003, Order of Chief Administrative Law Judge, Order 13089-16. Although this Joint Motion may appear to be a drastic request, and although the Joint Movants would prefer other methods to gain the compliance of DHL entities in this proceeding, the Joint Movants believe it necessary given the aggressive time constraints of the case and the lack of cooperation they have thus far received.

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


June 30, 2003

Memorandum of Law of Klaus Zumwinkel and Uwe Doerken in Support of Motion to Quash

This Memorandum is submitted in support of a motion to quash subpoenas issued to Klaus Zumwinkel and Uwe Doerken seeking their depositions in Washington, D.C. Dr. Zumwinkel is the Chief Executive of Deutsche Post World Net, which is located in Germany with its headquarters in Bonn. Mr. Doeken is the Chairman and Chief Executive Officer of DHL Worldwide Express, B.V., a Netherlands corporation with its headquarters in Brussels, Belgium.

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000

June 30, 2003

Motion of Klaus Zumwinkel and Uwe Doerken to Quash Subpoenas.

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


July 1, 2003

Motion of Fed Ex to Compel

Hereby moves to compel Deutsche Bank AG to comply with a subpoena issued by the Chief Administrative Law Judge and served by FedEx Express for the production of documents.

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com


July 1, 2003

Notice of Deposition - Giles Instone

Enclosure 1: Order of the Cheif Administrative Law Judge
Enclosure 2: Application to Depose

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


July 1, 2003

Notice of Deposition - Vicki Bretthauer

Enclosure 1: Order of the Cheif Administrative Law Judge
Enclosure 2: Application to Depose

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


July 1, 2003

Notice of Deposition - Wolfgang Pordzick

Exhibit 1

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


Served June 30, 2003

Order of the Chief Administrative Law Judge

Accordingly, we find good cause to grant the FedEx/UPS joint application to depose Instone, and we authorize the Deposition and the issuance of a Notice of Deposition for Instone.

By: Ronnie Yoder


Served June 30, 2003

Order of the Chief Administrative Law Judge

Accordingly, we find good cause to grant the FedEx/UPS joint application to depose Bretthauer, and we authorize the Deposition and the issuance of a Notice of Deposition for Bretthauer.

By: Ronnie Yoder


Served June 30, 2003

Order of the Chief Administrative Law Judge

Accordingly, we find good cause to grant FedEx/UPS/Lynden's joint application to depose Pordzik, and we authorize the Deposition and the issuance of the Notice of Deposition for Pordzik.

By: Ronnie Yoder


OST-02-13089

July 1, 2003

Affidavit of Joan Griffin

By: Joan Griffin


July 2, 2003

Motion of DHL Airways to File an Unauthorized Docuemnt in the Nature of DHL Airways Objections to Order No. 13089-24

Airways seeks leave to file an unauthorized document to object to the Order to the extent that it can be read to suggest that an adverse inference may be drawn against Airways because entities such as DHLWE and DHLH, over whom Airways has no control, are deemed not to have complied with subpoenas or other discovery orders in this proceeding. Such an inference is contrary to Department of Transportation precedent, federal case law, and would violate Airways' due process rights and principals of fundamental fairness. It is axiomatic that an adverse inference is permissible only where a party fails to produce documents or witnesses within its possession, custody or control.

Counsel:Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


OST-02-13089

July 2, 2003

Affidavits of Philip Douglas and Julianne Plumb

By: Philip Douglas and Julianne Plumb


July 3, 2003

Application of DHL Airways for an Order to Depose Frederick Smith

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


July 3, 2003

Application of DHL Airways for an Order to Depose Kenneth Masterson

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


July 3, 2003

Application of DHL Airways for an Order to Depose Michael Eskew

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


July 3, 2003

Answer of Klaus Zumwinkel and Uwe Doerken

By: Wilmer Cutler, John Rounsaville, 202-663-6000


July 3, 2003

Correspondence of Quinn Emanuel

By: Joanna Swomley, 212-702-8145, joannaswomley@quinnemanuel.com


July 3, 2003

Joint Opposition of Federal Express and United Parcel Service to Motion to Quash Subpoenas Directed to Klaus Zumwinkel and Uwe Doerken

Counsel: Jeffery Kelsey, 901-434-8563, jkelsey@fedex.com for Fed EX / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


July 3, 2003

Supplemental Response of Federal Express and United Parcel Service

Counsel: Kelley Drye, Michael Francesconi, 202-955-9600


OST-02-13089

July 3, 2003

Affidavits of Frank Costello and Aleksander Lamvol

By: Frank Costello and Aleksander Lamvol


July 7, 2003

Correspondence of Michael Francesconi

Letter for confidential treatment from Michael J. Francesconi, Counsel for United Parcel Service Co., of a Supplemental Response of FedEx Express and UPS., which contains or refers to materials that are the subject of motions of DHL Airways, Inc., for confidential Treatment under 14 C.F.R. Section 302.12.

Counsel: Kelley Drye, Michael Francesconi, 202-955-9600


July 7, 2003

Correspondence of Thompson Coburn

Counsel: Thompson Coburn, Patricia Snyder, 202-585-6918, psnyder@thompsoncoburn.com


OST-02-13089

July 8, 2003

Affidavits of Andrew Leonard, Alexander Rinaudo, and We Chen Foo

By: Andrew Leonard, Alexander Rinaudo, and We Chen Foo


July 7, 2003

Memorandum of Wolfgang Pordzik in Support of Motion to Quash Notice of Deposition

As we show here, both the UPS/FedEx request for Mr. Pordzik's deposition and the CALJ's Order granting that request are defective as a matter of law and procedure. Neither Department Rules nor governing statutes permit the discovery of third-party non-witnesses like Mr. Pordzik. It is also black letter law that a non-party cannot be compelled to testify through the use of a "Notice of Deposition," but rather must be served with a subpoena. The Notice of Deposition issued by UPS/FedEx is unenforceable on its face, and should be quashed.

Counsel: Wilmer Cutler, John, Rounsaville, 202-636-6000


July 7, 2003

Motion of Federal Express and UPS to Compel

Counsel: Thompson Coburn, Patricia Snyder, 202-585-6918, psnyder@thompsoncoburn.com


July 7, 2003

Response of Deutsche Bank AG to Motion to Compel and Motion to Quash or, in the Alternative, for a Protective Order

The Court should deny the motion to compel filed by Federal Express Corporation against Deutsche Bank AG because the third-party subpoena is unduly burdensome, gave Deutsche Bank insufficient time to respond - less than one week - and was followed one week later by this motion to compel, despite Deutsche Bank's good faith efforts to comply with the Subpoena. Deutsche Bank should not be penalized for Federal Express' inactivity in failing to serve its third party discovery sooner. than one month before the close of discovery in this proceeding.

Counsel: Winston Strawn, Jack Crowe, 312-558-5600, jcrowe@winston.com


OST-02-13089

July 9, 2003

DHL Airways's Application for Issuance of a Subpoena for Documents and Things

Counsel: Quinn Emanuel, Sanford Litvack, 221-702-8100, sandylitvack@quinnemanuel.com


July 9, 2003

Joint Application of Fed Ex and UPS for an Order to Depose William Roure

Counsel: Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS / Fed Ex, Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex


July 9, 2003

Joint Objections of Fed Ex and UPS to DHL Airways Applications for Orders to Depose Frederick Smith, Kenneth Masterson, and Michael Eskew and Motion for Sanctions

Counsel: Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS / Fed Ex, Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex


OST-02-13089

July 10, 2003

Affidavit of Matthew Schwartz

By: Matthew Schwarts


July 10, 2003

Correspondence of Quinn Emanuel

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


July 10, 2003

Motion of Federal Express to Continue Motion to Compel and to Extend Answer Period

Counsel: Fed Ex, Jeffrey Kelsey, 901-434-8575, jkelsey@fedex.com


OST-02-13089

July 11, 2003

Answer of Federal Express in Opposition to Bank of America's Motion to Quash or, in the Alternative, for a Protective Order

Counsel: Fed Ex, Jeffrey Kelsey, 901-434-8575, jkelsey@fedex.com


July 11, 2003

Joint Motion of Michael Klein and BD Air Partners for Confidential Treatment

Appendix A: Index of Rule 12 Documents
Appendix B: Affidavit of Michael Klein

Counsel: Zuckert Scoutt, Frank Costello, 202-298-8660, fjcostello@zsrlaw.com


Served July 9, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


Served July 9, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


Served July 9, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


OST-02-13089

July 14, 2003

Correspondence of Thompson Coburn

Counsel: Thompson Coburn, Sean McGowan, 202-585-6976, smcgowan@thompsoncoburn.com


July 14, 2003

Joint Motion of Federal Express and United Parcel Service to Strike Witness Giles Instone

Exhibit A: Correspondence from Quinn Emanuel

Counsel: Fed Ex Jeffrey Kelsey, 901-434-8575, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


July 14, 2003

Motion of Giles Instone and DHL Airways to Quash Notice of Deposition Issued to Giles Instone

Counsel: Steel Hector, Gregory Ward, 305-577-7039, for Giles Instone / Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com for DHL


July 14, 2003

Motion of World Airways to Quash Subpeona for Documents and Things | Word

Motion of World Airways, Inc. moving to quash a subpoena to produce documents and things issued July 10, 2003 on the application of DHL Airways, Inc. and returnable on July 14, 2003. Movant argues that the subpoena is overbroad on its face; is unrelated to the single appropriate issue in this proceeding or wholly unreasonable in scope; is not calculated to lead to the discovery of admissible evidence; imposes an undue burden on a non-party; and commands the disclosure by a non-party of privileged and confidential business information unrelated to the single issue in this proceeding.

Counsel: Robert Olsen, 703-448-8321, olsenr@cox.net


July 14, 2003

Opposition of DHL Airways to the Joint Motion for Sanctions

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


Served July 14, 2003

Order of Chief Administrative Law Judge

By: Ronnie Yoder


Served July 14, 2003

Order of Chief Administrative Law Judge

By: Ronnie Yoder


Served July 14, 2003

Order of Chief Administrative Law Judge

By: Ronnie Yoder


July 11, 2003

Petition of Klaus Zumwinkel and Uwe Doerken for Review of Order of Chief Administrative Law Judge Denying Motion to Quash Subpoenas

Exhibit A: Joint Applications to Depose Klaus Zumwinkely and Uwe Doerken
Exhibit B: Orders of the Chief Administrative Law Judge
Exhibit C: Motions to Quash Subpeonas and Memorandum of Law in Support
Exhibit D: Joint Opposition to Motions to Quash and Order of the Chief Administrative Law Judge

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


OST-02-13089

July 15, 2003

Answer of Federal Express in Opposition to Deutsche Bank's Motion to Quash or, in the Alternative, for a Protective Order

As an initial matter, DB asserts that FedEx Express and UPS have set an unrealistic deadline for production of documents. As the CALJ is well aware, an extremely short time period has been imposed for all discovery in this proceeding. DHLA's first substantive production of documents took place on or about June 10, 2003. It was not until after that production that the need for subpoenas to third parties became evident. As soon as was feasible, FedEx filed its application for a subpoena to DB on June 17, 2003. FedEx and UPS have attempted to work to schedule production dates but to no avail. As of this writing, DB has had over 27 days to produce documents or at the very least tell FedEx Express and UPS what documents it plans on producing and those which it does not plan on producing. To date, no documents have been produced.

Counsel: Fed Ex, Jeffery Kelsey, 901-434-8575, jkelsey@fedex.com


July 15, 2003

Emergency Motion of Fed Ex and UPS to Extended Discovery Cut-Off

Move that the Chief Administrative Law Judge act on an emergency basis to extend the discovery cut-off deadline of July 18, 2003 to August 1, 2003. They also request that the dates for exhibits, rebuttals, hearing, and post-hearing briefs be similarly extended. Finally, they ask that answers, if any, to this motion be filed by 5:00 p.m. on Wednesday, July 16, 2003, and that the Chief Judge act on this motion on or before Thursday, July 17, 2003. Counsel for UPS contacted counsel for DHL Airways earlier today for its consent to this motion, however, so far there has been no response. Mindful of the challenging schedule set by the Department in this case, FedEx Express and UPS have worked hard to develop a complete evidentiary record in the short period allotted for discovery (roughly from May 27 to July 18). Much progress has been made, but we regret that many questions remain unanswered, principally due to the lack of cooperation by necessary third parties and DHLA itself.

Attachment A: Dasburg-Led US Investment Group Completes Acquisition of DHL Airways

Counsel: Thompson Coburn, Patricia Snyder, 202-585-6900, psnyder@thompsoncoburn.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


July 15, 2003

Joint Motion of Michael Klein and BD Air Partners for Confidential Treatment

Appendix A: Index of Rule 12 Information
Appendix B: Affidavit of Michael Klein

Counsel: Zuckert Scoutt, Frank Costello, 202-298-8660, fjcostello@zsrlaw.com


Served July 15, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


Served July 15, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


July 15, 2003

Renewed Application of Fed Ex and UPS to the Chief Administrative Law Judge for the Issuance of a Subpoena for Documents and Things

Exhibit A: Correspondence of Richard Roberts
Exhibit B: Correspondence of John Rounsaville
Exhibit C: Correspondence of David Vaughan
Exhibit D: E-Mail from John Rounsaville
Exhibit E: E-Mail from Troy Reynolds
Exhibit F: E-Mail from Troy Reynolds
Exhibit G: E-Mail from John Rounsaville
Exhibit H: E-Mail from John Rounsaville
Service List

Counsel: Jeffery Kelsey, 901-434-8575, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


July 16, 2003

OST-02-13089 - Inquiry into the Citizenship of DHL Airways
OST-03-15678 - Registration of Name Change and Reissuance of Certificates of Public Convenience and Necessity

Correspondence of Patricia Thomas

On July 14, DHL Airways, Inc. filed an application in the above docket notifying the Department that it was changing its name to ASTAR Air Cargo, Inc., in connection with the purchase by BD Air Partners of all of the currently outstanding stock of DHL. In its application, the carrier requests that the certificates and other operating authority currently issued to DHL be reissued to reflect the new ASTAR name. Pending reissuance of the certificates, DHL requests authority to begin using its new name immediately.

Part 215 of the Department's regulations provides that any carrier wishing to change the name in which its operating authority is issued, or to use a trade name, must first register the new name with the Department. The rule further states that the Department may register such name after the carrier gives notification of the proposed name to similarly named carriers. In this case, we have identified no certificated, commuter, or foreign air carriers having a name similar to the ASTAR name proposed here. In addition, the stock sale was consummated on July 14, and DHL has amended its Articles of Incorporation to reflect the new ASTAR name. Under these circumstances, we will register the name, ASTAR Air Cargo, Inc., for use in DHL's air transportation operations, effective immediately. Reissuance of the carrier's certificate and other operating authority reflecting its new name will follow as soon as possible.

By: Patricia Thomas


July 16, 2003

Correspondence of Quinn Emanuel

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


July 16, 2003

Joint Application of Fed Ex and UPS to Depose Jed Orme

Counsel: Fed Ex, Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


July 16, 2003

Joint Application of Fed Ex and UPS to Depose John Fellows

Counsel: Fed Ex, Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


July 16, 2003

Joint Application of Fed Ex and UPS to Depose Victor Guinasso

Counsel: Fed Ex, Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


July 16, 2003

Joint Application of Fed Ex and UPS to Depose William Smartt

Counsel: Fed Ex, Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


July 16, 2003

Joint Motion of Fed Ex and UPS to Compel and for Sanctions

Attachment 1: Correspondence of Philip Doughlas
Attachment 2: Correspondence of David Vaughan
Attachment 3: Stipulation
Service List

Counsel: Thompson Coburn, Patricia Snyder, 202-585-6900, psnyder@thompsoncoburn.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


July 16, 2003

Motion of Astar Air Cargo for Confidential Treatment

Affidavit of Steven Rossum
Index of Documents

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net


July 15, 2003

Motion of Bank of America for Leave to File Supplement to its Response to Motion to Compel and Motion to Quash

Counsel: Jenkins Gilchrist, Charles Leuin, 312-425- 3900


July 16, 2003

Opposition of Astar Air Cargo to the "Emergency" Motion to Extend Discover Cut-Off

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


OST-02-13089

July 17, 2003

Affidavit of Robin Winchell

By: Robin Winchell


July 17, 2003

Affidavit of William Kutzke

By: William Kutzke


July 17, 2003

Correspondence of Thompson Coburn

Counsel: Thompson Coburn, Sean McGowan, 202-585-6976, smcgowan@thompsoncoburn.com


July 16, 2003

Joint Opposition of Astar and Giles Instone to Motion to Strike

Counsel: Steel Hector, Shanker Singham, 305-577-7039, sas@steelhector.com for Giles Instone / Quinn Emanuel, Sandford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com for Astar


July 17, 2003

Opposition of Astar to World Airways's Motion to Quash

Counsel: Quinn Emanuel, Sandford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


Served July 16, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


OST-02-13089

July 17, 2003

Answer of Fed Ex and UPS in Opposition of Motion to Quash Notice of Deposition

Counsel: Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS / Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex


July 18, 2003

Answer of Fed Ex and UPS to Motion of Astar for Confidential Treatment

Counsel: Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS / Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex


July 18, 2003

Answer of Fed Ex in Opposition to Motion for Leave to Supplement of Bank of America

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com


July 17, 2003

Joint Motion of Fed Ex and UPS for a Status Conference

Attachment A: E-Mail from John Rounsaville

Counsel: Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS / Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex


July 18, 2003

Motion of Astar for Confidential Treatment

Index of Documents

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net


July 17, 2003

Petition of Wolfgang Pordzik for Reconsideration of Order 13089-31 Concerning Discovery Deposition

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


July 18, 2003

Opposition of Astar to Joint Motion for Status Conference

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


July 18, 2003

Subpeona of Uew Doerken

By: Ronnie Yoder


OST-03-15678 - Registration for Name Change and Reissuance of Certificates of Public Convenience and Necessity
OST-02-13089 - In the Matter of Citizenship

July 21, 2003

Affidavit of Scott Claffee

By: Scott Claffee


July 18, 2003

Application of Federal Express for Issuance of Subpeona for Documents and Things

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com


July 18, 2003

Correspondence of Quinn Emanuel

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


July 18, 2003

Joint Opposition of Federal Express and United Parcel Service to Application for Reissuance of Certificates of Public Convenience and Necessity

Counsel: Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS / Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex


July 21, 2003

Response of William Robinson in Opposition to Motion to Compel and for Sanctions

Counsel: Pillsbury Winthrop, Philip Douglas, 212-585-1000


Served July 18, 2003

Order of the Chief Adminstrative Law Judge

By: Ronnie Yoder


Served July 18, 2003

Order of the Chief Adminstrative Law Judge

By: Ronnie Yoder


Served July 18, 2003

Order of the Chief Adminstrative Law Judge

By: Ronnie Yoder


Served July 21, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


Served July 21, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


Served July 21, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


July 16, 2003

Proof of Service of Subpeonas to DHL Worldwide Express and DHL Holdings (US)

Exhibit A: Letter from Richard Roberts
Exhibit B: Letter from John Rounsaville
Exhibit C: Letter from David Vaughan
Exhibit D: E-Mail from John Rounsaville
Exhibit E: E-Mail from Trey Reynolds
Exhibit F: E-Mail from Trey Reynods
Exhibit G: E-Mail from John Rounsaville
Exhibit H: E-mail from John Rounsaville

By: Sam Bellicini


OST-02-13089

July 22, 2003

Joint Motion of Fed Ex and UPS to Extend Period Answer Motion to Dismiss

United Parcel Service Co. and Federal Express Corporation hereby file this Joint Motion requesting that the Chief Administrative Law Judge extend the period for answering the Motion of ASTAR Air Cargo, Inc. to Dismiss or Otherwise Terminate Docket OST-2002-130889 from 24 hours to seven days. Both sides are in the midst of preparing direct exhibits and expert testimonies, making an immediate response burdensome. In addition, the preparation and review of those testimonies should assist the parties in responding to that motion.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


July 22, 2003

Motion of Astar to Dismiss or Otherwise Terminate Docket OST-02-13089; Motion of Astar to the Department to Process its Section 204.5 Application and to Deny the CALJ's Attempt to Replace the Administrative Process

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


Served July 21, 2003

Order of the Chief Administrative Law Judge

Based upon the submissions, the entire record, and the time limitations in this proceeding, we deny FedEx/UPS's joint applications to depose the witnesses. FedEx/UPS filed the joint applications on July 16, 2003-two days prior to the discovery cut-off date established on May 14, 2003. FedEx/UPS apparently knew of the witnesses' existence and positions within the DHL network, and FedEx/UPS have not alleged or established any reason for failing to file the joint applications earlier. Although FedEx/UPS claim that they seek "oral testimony well in advance of the hearing," the hearing is scheduled to begin on August 19, 2003, and discovery, other than discovery related to the July 14, 2003, acquisition/merger, ended July 18, 2003. Accordingly, we deny FedEx/UPS's joint applications to depose the witnesses.

By: Ronnie Yoder


Served July 21, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


Served July 21, 2003

Order of the Chief Administrative Law Judge

Although our order noted that Rule 12(d)(i) requires DHLA to file an index, that it had not provided a sufficient index, that under Rule 12(d)(3) a Rule 12 confidentiality motion will be denied "when complete justification provided by this paragraph is not provided," and that under Rule 11(1) the "filing or pendency of a motion shall not automatically alter or extend the time to take action fixed by this part or by any order of an administrative law judge," DHLA did not file an index and instead asserted in a July 3, 2003, letter to the Docket: "By Motion dated June 26, 2003, Airways also requested that it be exempted from the requirement that it submit an index of the individual documents that are covered by its June 10 and 13 motions, given that the total volume of documents exceeds 21,000 pages. A determination on that request has not been made. See Order NO. 13089-23." Order 13089-23 reiterated that our "Order 13089-20 gave DHLA seven days to file documents and otherwise comply with the Rules" (emphasis added).

By: Ronnie Yoder


Served July 21, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


Served July 22, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


Served July 22, 2003

Order of the Chief Administrative Law Judge

By: Ronnie Yoder


July 22, 2003

Petition of Astar for Review and Objection

Submits this Petition for Review of, and Objection to, Order Nos. 13089-44, 13089-45 and 13089-46.' In those Orders, the CALJ has held that ASTAR's most confidential and proprietary business information may be broadcast, or publicly disseminated, simply because ASTAR's competitors Federal Express Corp. and United Parcel Service Co. (who make little secret of the fact they want to put ASTAR out of business) may decide they want to use the material at the hearing or the CALJ determines to use the information in an order or decision. This remarkable position is contrary to DOT precedent and rules, see 14 C.F.R, Section 302.12 and the discussion below; the Freedom of Information Act, including 5 U.S.C. § 552(b)(3) and (b)(4); and to federal law, which contains protections for confidential information even in connection with the trial of a matter. See, Woven Electronics Corp. v The Advance Group Inc. 930 F.2d 913 (4th Cir. 1991) (unpublished opinion, a copy of which is attached hereto) (noting procedure for and propriety of closing the courtroom when trade secrets are involved and sealing that portion of the record "necessary to prevent the disclosure of trade secrets"); Encyclopedia Brown Prods Ltd V Home Box Office Inc. 26 F.2d 606, 614-15 (S.D.N.Y. 1998) (noting propriety of closing portions of the upcoming trial, redacting the record and other alternatives available to protect confidential material).

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


July 22, 2003

Subpeona of Cindy Swinson

By: Ronnie Yoder


OST-02-13089

July 23, 2003

Affidavit of Roman Wiel

By: Roman Weil


July 23, 2003

Joint Answer of Fed Ex and UPS to Motion to Quash Subpeonas for Documents and Things

Hereby file this Joint Answer to DHL Worldwide Express, Inc.'s and DHL Holdings, Inc.'s Motion to Quash Subpoenas for Documents and Things filed on July 22, 2003. UPS and FedEx Express oppose this Joint Motion because it is based (i) on an incorrect assumption that because of the recent merger of BD Air Partners and the emergence of ASTAR that the WWE and Holdings data is no longer relevant and (ii) on an inaccurate representation that the current document request is overly broad. UPS and FedEx Express undertook negotiations with counsel to WWE and Holdings in order to narrow the scope of the request, and have submitted the current request in good faith. To the extent that WWE and Holdings continue to object, counsel for UPS and FedEx Express have amply described, with particularity, the documents requested. Further, The Chief Administrative Law Judge has already ruled on both issues and, as such, the Motion should be denied forthwith.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


July 22, 2003

Joint Memorandum of Law of DHL Worldwide Express and DHL Holdings (USA) in Support of Motion to Quash

UPS and FedEx served these subpoenas on Holdings and WWE allegedly seeking documents to substantiate their theory that these companies somehow controlled the ownership of what was once called DHL Airways, Inc. and is now called ASTAR Air Cargo, Inc. However, on July 14, 2003, BD Air Partners, L.L.C. completed the acquisition of all of the outstanding shares of ASTAR, replaced three of the company's four directors, and otherwise assumed control of the company. See ASTAR Air Cargo Press Release, dated July 14, 2003 (attached as Exhibit A). Accordingly, neither Holdings nor WWE -- a registered freight forwarder and an ASTAR customer -- has any ownership interest of any kind in ASTAR. Consequently, documents in the possession of either company relating to Holdings' dealings as a shareholder of Old Airways, including how or why Holdings' board representative voted, have no relevance to this proceeding.

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


July 22, 2003

Joint Motion of DHL Worldwide Express and DHL Holding (USA) to Quash Subpoenas for Documents and Things

The Motion contends that the change in ownership of Airways renders this proceeding, and thus the subpoenas at issue, moot. Moreover, the subpoenas seek irrelevant matter, are overbroad, and impose an undue burden on WWE and Holdings. As a result, they should be quashed in their entirety.

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


July 23, 2003

Joint Motion of Fed Ex and UPS to Extend Discovery Deadline

Hereby file this Joint Motion to the Extend the Discovery Deadline. Accordingly, the Joint Movants request that the CALJ extend the deadline for the conduct of discovery in this case until August 18, 2003, without changing any other deadlines in the current procedural schedule.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


July 23, 2003

Joint Motion of Richard Blum and BD Air Partners for Confidential Treatment

Counsel: Zuckert Scoutt, Frank Costello, 202-298-8660, fjcostello@zsrlaw.com


July 22, 2003

Joint Opposition of Fed Ex and UPS to Petition for Review of Order of Chief Administrative Law Judge Denying Motion to Quash Subpoena as Directed to Klaus Zumwinkel and Uwe Dorken

In the final analysis, the Department must be able to investigate whether air carriers are in fact U.S. citizens. To achieve that end, Congress has authorized the Department to issue subpoenas as a part of its investigative authority. The Court of Appeals for the D.C. Circuit has interpreted that statutory authority to include the ability to issue subpoenas that reach beyond the borders of the United States. Chief Judge Yoder analyzed this case law, properly distinguished the witnesses' cited authority, and appropriately denied the witnesses' Motion to Quash. Their Petition for Review, and the new objections they make therein, should likewise be denied.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


July 23, 2003

Joint Opposition of Fed Ex and UPS to Petition for Review and Objection to the Use of Confidential Materials at the Hearing

Hereby file this Joint Opposition to the July 22, 2003 Petition for Review and Objection of ASTAR Air Cargo, Inc. that seeks to limit the authorized use of discovered evidence in the upcoming hearing and ultimate decision regarding its citizenship. ASTAR requests that the Chief Administrative Law Judge reverse previous orders pertaining to the use of the currently confidential materials and permanently maintain the protections that such materials have been temporarily afforded. ASTAR is confusing this investigatory proceeding into the citizenship requirements placed on its air carrier license by U.S. law with the civil litigation of some commercial matter-which it is not. ASTAR's Petition once again seeks to avoid scrutiny of an issue fundamental to a certificate of public convenience granted by the U.S. Government.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


July 22, 2003

Petition of Bank of America for Reconsideration

Like counsel for FedEx had the week before, counsel for UPS stated that he would confer with other interested parties and advise counsel for Bank of America of FedEx's and UPS's position in response to Bank of America's proposal. FedEx and UPS then proceeded to do absolutely nothing with respect to this issue for two weeks. No one from FedEx or UPS contacted counsel for Bank of America. Nothing was filed with respect to this matter. Instead, FedEx and UPS were completely silent on this issue until, near the close of business on Friday, July 11, 2003, FedEx filed an answer asking that the Subpoena be enforced in its entirety. Far from having diligently pursued this matter, FedEx and UPS did nothing as far as Bank of America and its counsel could tell with respect to the Subpoena for more than three weeks after Bank of America's first attempts to reach an agreed-upon resolution of this matter. FedEx and UPS should not now be rewarded for that delay and inactivity.

Counsel: Jenkins Gilchrist, Charles Leuin, 312-425-3900


Served July 23, 2003

Order of the Chief Administrative Law Judge

By "DHL Worldwide Express, Inc.'s and DHL Holdings (USA), Inc.'s Joint Memorandum of Law in Support of Motion to Quash Subpoenas for Documents and Things" ("Memorandum") accompanying the Motion, DHLWE and DHLH argue that "the change in [DHL Airways, Inc.'s ("DHLA's")] ownership, the reconstituting of its board of directors, and the restructuring of its finances and business agreements render the current investigation moot," and "the ALJ lacks the authority (in the form of a mandate from the Department) to review [DHLA's] citizenship in general .,, DHLWE and DHLH further contend that the subpoenas are "overbroad, seek irrelevant information, and impose an unreasonable burden on [DHLH] and [DHLWE]"

Based upon the submissions and the entire record in this proceeding, we deny DHLWE's and DHLH's Joint Motion.

By: Ronnie Yoder


OST-02-13089


July 24, 2003

Opposition of Astar to Joint Motion to Extend Discovery Deadline

With a seeming desire to engage in never-ending discovery, FedEx's latest scheme is to have every deadline in this case stay in place -- the time for filing and exchange of witness statements, exhibits and pre-trial briefs, as well as rebuttal -- but to allow FedEx to continue to conduct discovery until August 18, the day before the hearing is scheduled to start. That is nonsensical. Presumably on August 19, the day the hearing is to begin, FedEx will tell the CALJ and ASTAR, for the first time, what part, if any, of the discovery they have taken they have decided to introduce during the hearing. At that point ASTAR would, under FedEx's proposal, be left to scramble to figure out how to respond to this eleventh hour tactic. That of course, is not how these things are properly done.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


July 24, 2003

Motion of DHL International to Quash Subpeonas for Documents and Things

This Motion contends that (1) the requests in the subpoena are overly broad and beyond the scope of what has become a moot proceeding; (2) the persistence of UPS and FedEx with burdensome discovery demands reflects UPS's and FedEx's underlying strategy designed to harass and attempt to impugn the reputation and customer relationships of a competitor and to obstruct the competitor's ability to compete with the UPS/FedEx duopoly in the United States; and (3) the issuance and service of the subpoena is an unauthorized extension of agency subpoena power.

DHL International's Memorandum of Law in Support of Motion to Quash Subpoena for Documents and Things

As in all of their other document requests in this proceeding, UPS and FedEx here seek an astonishing array of documents. Indeed, the requests in this subpoena are virtually identical to requests the CALJ has already quashed in their entirety because they are "well beyond the scope of this proceeding" and "overly broad." (CALJ Order No.13089-32 at 4, quashing subpoena to Deutsche Post World Net USA, Inc.) Without making any offer to narrow the scope of the requests or altering them in any way following the CALJ's rejection of the requests as facially deficient, UPS and FedEx have simply re-served the same requests on International. As a result, the CAU should simply re-issue his Order as to this subpoena, and quash it in its entirety.

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


July 24, 2003

Correspondence of Federal Express and UPS

As we prepare for the commencement of the hearing on August 19, 2003, we respectfully request that His Honor give every consideration to conducting the hearing at a location other than the Department of Transportation.

Our experience at the first and second prehearing conferences showed that standard visitor access to the DOT building was quite restricted and made arrival, lunchtime and breaks very time consuming, or impossible. We believe that holding the hearing at an off-site location might reduce or even eliminate the difficulties related to access.

There is DOT precedent for holding a hearing at a location other than the DOT. During the Computer Reservations System rulemaking, the Department held a portion of the public proceeding at a hotel in Washington D.C. because the DOT building security requirements made impractical the attendance of the large number of participants and observers. We also understand that, for similar reasons, the Department held certain portions of Americans with Disabilities Act rulemaking proceeding off-site. We believe that the same conditions supporting the venue changes exist in the instant case and we request that His Honor consider this as an option to holding the August 19 hearing in the DOT building.

United Parcel Service Co. and Federal Express Corporation commit to covering the reasonable expenses associated with the requested venue change.

Counsel: Thomspon Coburn, Warren Dean for Fed Ex / Kelley Drye, David Vaughan, 202-955-9600, dvaughan@kelleydrye.com for UPS


July 24, 2003

Joint Answer of Federal Express and UPS to Motion to Quash

In the Motion, counsel for Mr. Roure (also serving as counsel to DHL Worldwide Express, Inc., DHL Holdings (USA) Inc., and Deutsche Post World Net, and their respective officers in this proceeding) primarily argues that Mr. Roure's testimony is sought regarding subjects pertaining to ownership arrangements and business transactions that are no longer relevant. This is an argument that counsel repeatedly has put forward and that repeatedly has been denied by the Chief Administrative Law Judge in this proceeding. Despite the contention that DHL Airways' restructuring moots the need to look at issues that precede July 14, 2003, the Chief Administrative Law Judge has clearly stated that the restructuring does not render this proceeding moot or obviate the need for parties to comply with discovery requests.

Counsel: Thomspon Coburn, Patricia Snyder for Fed Ex / Kelley Drye, David Vaughan, 202-955-9600, dvaughan@kelleydrye.com for UPS


July 23, 2003

Federal Express' Answer in Opposition to Bank of America's Petition for Reconsideration

B of A's Petition states that due to the changed circumstances in this matter, the documents sought by the subpoena are irrelevant and compliance is unnecessary. This unilateral decision on what documents are relevant to this proceeding runs afoul of the Instituting Order and the Chief Judge's statements to date in this proceeding. B of A's Petition essentially echoes the arguments set forth by DHL Holdings (USA), Inc. that the equity ownership of DHL Airways, Inc. has changed and thus, B of A asserts, discovery from B of A is now moot.

Counsel: Federal Express, R. Jeffrey Kelsey, 901-434-8575


July 23, 2003

Memorandum of Law of William Roure in Support of Motion to Quash

If UPS and FedEx desired Mr. Roure's testimony, they could have sought it long ago. Yet they never served a notice of deposition or subpoena on Mr. Roure and never contacted his counsel seeking to arrange a deposition. Mr. Roure has never, until now, refused to cooperate or moved to quash a deposition. Having delayed until past the final hour, UPS and FedEx may not now take advantage of the limited one-week extension to compel Mr. Roure's testimony.

Motion of William Roure to Quash Notice of Deposition

This Motion contends that the notice of deposition is untimely and inadequate to compel Mr. Roure's testimony; that the proceeding is moot; and that in any event UPS and FedEx have failed to show good cause for deposing Mr. Roure.

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


July 25, 2003

OST-01-10052 - DHL Airways - US-Mexico All Cargo Service
OST-02-13089 - Inquiry into the Citizenship of DHL Airways
OST-02-13256 - SNAS Trading & Contracting - Exemption and Statement of Authorization to Wet-Lease to DHL International (Bahrain-Kuwait/Dubai)
OST-02-13590 - Complaince with US Citizenship Requirements of DHL Airways - Complaint of Fed Ex
OST-02-13787 - Complaince with US Citizenship Requirements of DHL Airways - Complaint of UPS

Correspondence of United Parcel Service

Please accept for filing in the correspondence section of each of the above-referenced dockets, the enclosed materials from a recent National Mediation Board case. These materials are relevant to DHL Airways, Inc. (now ASTAR Air Cargo, Inc.) and its citizenship - an item at issue in each list DOT proceeding. Thank you for your assitance.

Counsel: Kelley Drye, Michael Francesconi, 202-955-9600


OST-02-13089

July 24, 2003

Affidavits of Elizabeth Yi Su and Simone Boyce

By: Elizabeth Yi Su and Simone Boyce


July 25, 2003

Motion of Astar Air Cargo to Vacate or Modify the July 22, 2003 Order of Chief Administrative Law Judge

Dissatisfied with the results netted from the nearly boundless discovery they have been permitted, and faced with the close of the discovery, FedEx and UPS sought another opportunity to expand the scope of their fishing expedition. Accordingly, FedEx and UPS cobbled together a meritless motion to compel, "supported" by a fictitious claim of "missing" documents, with the hope that the CALJ would give them another bite at the apple and order ASTAR to produce additional documents that they never requested.

As fully set forth below, the CALJ should reconsider and vacate Order 13089-48, and thereby deny FedEx's and UPS' motion to compel.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


July 25, 2003

Motion of Boeing Capital Corporation and Boeing Capital Loan Corporation to Quash Subpeonas for Documents and Things and Memorandum of Law in Support of Motion to Quash

Pursuant to 14 C.F.R. § 302.25(f), non-parties Boeing Capital Corporation ("BCC") and Boeing Capital Loan Corporation ("BCLC"), through counsel, submits this Motion to Quash Subpoena for Documents and Things. The Subpoena was issued on July 21, 2003, by the Chief Administrative Law Judge of the United States Department of Transportation, and was served on BCC on July 22, 2003. The grounds for this Motion are that the Subpoena seeks irrelevant matter and is vague, overbroad on its face, provides inadequate time for response, and imposes an undue burden. The Subpoena therefore should be quashed in its entirety. A supporting Memorandum of Law is attached.

Counsel: Sidley Austin, Paul Hemmersbaugh, 202-736-8538, phemmersbaugh@sidley.com


Served July 24, 2003

Order of the Chief Administrative Law Judge

Bank of America argues that the Petition should be granted because "changed circumstances in this matter make the documents sought by the subpoena irrelevant and compliance unnecessary," its "Response to Motion to Compel and Motion to Quash or, in the Alternative, for a Protective Order," dated June 23, 2003 ("Motion to Quash"), should have been granted, and the two days provided by Order 13089-38 to comply with the subpoena are insufficient.

Contrary to Bank of America's contentions, the Rules of Practice regarding subpoenas do not relieve it from the obligation of compliance." According to 14 C.F.R. § 302.25(f), "If the person to whom a motion to modify or quash a subpoena has been addressed or directed, has not acted upon such a motion by the return date, such date shall be stayed pending his or her decision thereon." Since Bank of America's response to the subpoena was due June 13, 2003,12 and its Motion to Quash was not served until June 23, 2003,-10 days later-its Motion to Quash was late-filed and did not stay its obligation to comply. 13 Even if the return date were stayed pending the Judge's ruling on the Motion to Quash, Bank of America had ten days to prepare a response before its motion was filed, and its response should have been made immediately after the Judge denied the Motion to Quash. 14 The Judge's Order gave Bank of America two additional business days to respond to the subpoena and four days have not passed.15 Accordingly, the Petition is denied.

By: Ronnie Yoder


Served July 24, 2003

Order of the Chief Administrative Law Judge

On July 23, 2003, Federal Express Corporation ("FedEx") and United Parcel Service Co. ("UPS") (collectively, "FedEx/UPS") filed a "Joint Motion to Extend Discovery Deadline" ("Joint Motion"), requesting that the Judge extend the discovery cut-off date in this proceeding from July 25, 2003, to August 18, 2003, without changing any other deadlines in the current procedural schedule.

Based upon the time limits, submissions, and entire record in this proceeding, we deny FedEx/UPS's Joint Motion. But for the time limits in this proceeding, it would have been desirable to have an additional prehearing conference and to bring the discovery process to an orderly conclusion. In the face of those time limits, however, desirable procedures must give way to the time limitation mandate despite the consequent risk to the rights of the parties and the public interest. The Joint Motion provides no indication of how the hearing could begin on August 19, 2003, if discovery were extended to August 18, 2003. Consequently, unless there is an extension by the Decisionmaker as requested in the Order of the Chief Administrative Law Judge 1308937, served July 18, 2003, the procedural dates remain as set forth in that Order.

By: Ronnie Yoder


Served July 25, 2003

Order of the Chief Administrative Law Judge

By "Motion of ASTAR Air Cargo, Inc. for Confidential Treatment Under 14 C.F.R. § 302.12" dated July 16, 2003, ASTAR Air Cargo, Inc. ("DHLA" )' "requests that the Department withhold from public disclosure the documents and information that ASTAR is filing herewith under seal" (motion at 1).2 By "Answer of Federal Express Corporation and United Parcel Service Co. to Motion of ASTAR Air Cargo, Inc. for Confidential Treatment," dated July 18, 2003, Federal Express Corporation and United Parcel Service Co. ("FedEx/UPS") oppose DHLA's motion, arguing, inter cilia, that DHLA sets forth insufficient grounds to grant it confidentiality. For the reasons set forth below, we conclude that the motion should be granted only until information in such materials to the parties and their experts upon filing an appropriate affidavit," "the parties cannot allege any harm to their position or the public interest from treating all of the produced materials as confidential." Accordingly, DHLA requests prior notice to any third-party involved before such use.

By: Ronnie Yoder


Served July 25, 2003

Order of the Chief Administrative Law Judge

It is the Judge's Order, not the Notice of Deposition, that requires Roure' s presence at the deposition. The Judge's Order was served on the parties on July 15, 2003-three days before the initial discovery deadline and 10 days before the new discovery deadline-providing Roure with notice of an impending deposition.

By: Ronnie Yoder


Served July 25, 2003

Order of the Chief Administrative Law Judge

Procedures for disqualification of an administrative law judge are set forth in 14 C.F.R. § 302.17(b), which requires submission of an affidavit setting forth "personal bias or disqualification with substantiating facts." Such a motion and affidavit is addressed to the administrative law judge, and the Judge's decision on such a motion is subject to review as part of the entire record after the Judge's decision. The Rules provide that "The DOT decisionmaker shall not otherwise consider any claim of bias or disqualification." DHLA's repeated attacks on the Judge and failures to follow the applicable Department's Rules of Practice raise serious questions under the Department's Rules and the Rules of Professional Responsibility.

By: Ronnie Yoder

Served July 25, 2003


Errata to Order 13089-50

The following correction is hereby made to Order of Chief Administrative Law Judge 13089-50, served July 24, 2003:

PAGE LINE READS SHOULD READ

3 12 not now

By: Ronnie Yoder


July 25, 1002

Motion of DHL Holding (USA) and DHL Worldwide Express for Declaratory Order

DHL Holdings (USA), Inc. ("Holdings"), and DHL Worldwide Express, Inc., hereby move for a Declaratory Order finding that the proceeding instituted by Order 2003-4-14, In the Matter of DHL Airways, Inc. (citizenship proceeding), currently pending in the Office of Hearings, has been rendered moot for the reasons; set forth here. The Motion is made pursuant to Section 554(e) of the Administrative Procedure Act ("APA") (5 U.S.C. § 554(e)) and Rule 11 of the Department's Rules of Practice in Proceedings.

The Department issued Order 2003-4-14 on April 17, 2003. The stated sole purpose of the proceeding was to review the citizenship of DHL Airways, Inc. ("Airways") that resulted from its May 2001 reorganization. As the Instituting Order states: "this proceeding is being instituted to consider de novo the current citizenship Of DHL Airways only" -- emphasis in original -- and other issues will not be made a part of this proceeding." Order Instituting Formal De Novo Review, Order 2003-4-14, Docket OST-2002-13089, dated April 17, 2003, at 2 (attached as Exhibit A).

There is no longer any reason for this proceeding to continue, and the Department should confirm that the proceeding has become moot. On July 14, 2003, BD Air Partners, L.L.C. ("BDAP") completed the acquisition of all of the outstanding shares of Airways. BDAP's new air carrier is called ASTAR Air Cargo, Inc. ("ASTAR"). BDAP replaced three of the old company's four directors, altered management structure, changed corporate governance requirements and the company's financial backing and entered into new contracts with customers. See ASTAR Air Cargo Press Release, dated July 14, 2003 (attached as Exhibit B). It is undisputed that the new owners of ASTAR hold United States citizenship, and that none of the entities that previously had ownership participation in Airways -- including Holdings -- now has any ownership interest of any kind in ASTAR. It is not disputable that the central operating agreements between ASTAR and its customers have been re-negotiated.

Counsel: Wilmer Cutler, John Rousnaville, 202-663-6000


OST-02-13089 - Inquiry into the Citizenship of DHL Airways

July 25, 2003

Correspondence of Astar

Enclosed herewith is a copy of ASTAR Air Cargo’s Pre-trial brief, witness list, and three tabbed copies of direct testimony and direct exhibits in the above-captioned proceeding.

Counsel: Lachter Clements, Stephen Lachter


July 25, 2003

Motion of Boeing Capital Corporation and Boeing Capital Loan Corporation to Quash Subpoena for Documents and Things / Memorandum in Support of Non-Parties

For these and other reasons described below, the subpoena should be quashed in its entirety, or, in the alternative, modified to encompass only documents directly relevant to the citizenship of DHL Airways, Inc., and to provide a reasonable period for production of any such documents and appropriate protection for confidential information.

Counsel: Sidley Austin, Michael Nemeroff, 202-736-8000


Served July 28, 2003

Order of the Chief Administrative Law Judge

By "Joint Motion to Quash Subpoena for Documents and Things," dated June 27, 2003 ("Joint Motion"), DHL International, Ltd. ("DHLI") sought to quash the subpoena issued by the Judge at the request of Federal Express Corporation ("FedEx") and United Parcel Service Co. ("UPS"), to DHLI, returnable June 27, 2003. On July 9, 2003, the Judge denied the Joint Motion and ruled that the Department had proper jurisdiction to issue and enforce a subpoena against DHLI, and that FedEx and UPS had improperly served the subpoena on DHLI. t Nevertheless, the Judge granted leave for FedEx and UPS to properly serve the subpoena,2 and on July 17, 2003, FedEx and UPS, by personal service, served the subpoena on DHLI again.3 By "DHL International, Ltd.'s Motion to Quash Subpoena for Documents and Things," dated July 24, 2003 ("Motion"), DHLI seeks to quash the subpoena. No response has been filed to the Motion.

Even though the Motion was served one day late, we hereby grant the Motion because FedEx and UPS took an unnecessarily lengthy time to re-serve the subpoena, and the subpoena's requests are unreasonable in scope and overly broad.17 FedEx and UPS have not opposed the Motion. Accordingly, in light of the discovery period ending July 25, 2003, and the time limitations in this proceeding, we quash the subpoena.

By: Ronnie Yoder


Served July 28, 2003

Order of the Chief Administrative Law Judge

By "Joint Motion of Richard Blum and BD Air Partners, LLC, For Confidential Treatment Under 14 C.F.R. § 320.12," dated July 23, 2003, movant (i.e., Richard Blum and BD Air Partners, LLC) requests to "withhold from public disclosure certain documents and other information that were produced at the deposition of Richard Blum in [this] proceeding." No party has objected to the motion. For the reasons set forth below, we conclude that the motion, to the extent that it seeks to protect from public disclosure documents which were submitted, should be granted until information in such documents is included in an exhibit or testimony at the hearing, or in an order or decision, in this proceeding.

By: Ronnie Yoder


Served July 28, 2003

Order of the Chief Administrative Law Judge

By Motion for Declaratory Order ("Motion"), dated July 25, 2003, DHL Holdings (USA), Inc. ("DHLH") and DHL Worldwide Express, Inc. ("DHLWE") move for a declaratory order finding that this proceeding has been rendered moot.

DHLH and DHLWE are neither parties to this proceeding, nor have they sought permission to participate under Rules 19 or 20.1 DHLH and DHLWE cite no regulation or authority permitting it to file any pleading in this proceeding, and we find that DHLH and DHLWE lack standing to file such a motion. Moreover, we have previously noted the proceeding is mandated by Congress and the Decisionmaker and is not moot.' Accordingly, we deny the Motion.

By: Ronnie Yoder


July 28, 2003

Proof of Subpoena to Boeing Capital Loan

Counsel: Thompson Coburn, Sean McGowan, 202-585-6976, smcgowan@thompsoncoburn.com


July 25, 2003

Request of United Parcel Service Co. and Federal Express Corporation for Confidential Treament

Counsel: Thompson Coburn, Patricia Snyder, 202-585-6918, psnyder@thompsoncoburn.com


OST-02-13256 - SNAS Trding & Contracting - Wet-Lease to DHL - Bahrain-Kuwait/Dubai
OST-02-13590 - DHL - Third Party Complaint of Fed Ex
OST-02-13787 - DHL - Third Party Compaint of UPS
OST-01-10052 - DHL Airways - US-Mexico All Cargo Certificate Renewal and Amendment

July 29, 2003

Correspondence of Lachter & Clements

Enclosed for filing in the above-referenced proceedings is a conformed copy of a letter from John Dasburg to the National Mediation Board dated July 29, 2003.

Counsel: Lachter Clements, Roxanne Clements, 202-862-4321


July 28, 2003

Affidavit of Adam Decter

By: Adam Decter


July 29, 2003

Correspondence of Lachter & Clements

Enclosed herewith is a conformed copy of a letter from John Dasburg to the National Mediation Board dated July 29, 2003. ASTAR Air Cargo, Inc. is hereby submitting this letter in response to the documents filed by United Parcel Service in this docket and in Dockets OST-2001-10052; OST-2002- 3256; OST-2002-13590; OST-2002-13787.

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net


July 29, 2003

Document in Further Support of Motion of Astar to the Department to Dismiss or Otherwise Terminate Docket OST-02-13089; and in Further Support of Motion to the Department to Process its Section 204.5 Application and to Deny the CALJ's Attempt to Replace the Administrative Process

As we advised the Department, because the Docket relates to the citizenship of DHL Airways, Inc. ("Old Airways") as a result of its May 2001 reorganization, the Docket is now moot due, inter alia, to the complete change of ownership of Old Airways. In light of that substantial change, ASTAR has made the requisite 204.5 filing and that should be processed by the Department in accordance with its normal procedures.

It is imperative, we submit, that the DOT act and act now to prevent a proceeding which is totally out of hand and fundamentally unfair to ASTAR and its new owners. ASTAR is being forced to expend large sums defending itself with respect to a matter that is moot, and where its most sensitive business material will become fair game for public dissemination. The citizenship of ASTAR and its new owners deserves to be decided on its own merits. The proceeding which is slated to occur, absent DOT action, will not do that but rather will deprive ASTAR of its basic rights under the DOT's rules and the law. The failure by the DOT to act in a timely manner amounts, unfortunately, to action. We respectfully urge the Department not to allow inaction to become action. Otherwise ASTAR will be faced with the unenviable prospect of continuing with the costly proceeding, the result of which has seemingly been predetermined. The company cannot be expected to sit idly by while it is being deprived of its most fundamental rights: the right to be treated fairly in accordance with the DOT rules; the right to have any hearing which may be ordered conducted in a fair and impartial way, focused on the pertinent issue of its current citizenship, and the right to know that its most confidential, sensitive business information will not become fodder for its competitors' strategy sessions.

Counel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


July 29, 2003

Motion of Astar for Confidential Treatment

ASTAR Air Cargo, Inc. ("ASTAR"), formerly known as DHL Airways, Inc., pursuant to Rule 12 of the Department's Rules of Practice (14 C.F.R. § 302.12), respectfully requests that the Department withhold from public disclosure the documents and information that ASTAR is filing herewith under seal. The documents and information consist of drafts of materials previously filed under seal on July 16 and July 18 and contain confidential, proprietary and commercially sensitive information relating to the substantial change in the ownership and corporate structure of ASTAR. The transaction effecting these changes closed July 14, 2003. Public disclosure of the documents and information would cause ASTAR great competitive harm because the documents and information reveal confidential details about corporate decisionmaking and ASTAR's relationships with its customers and lenders.

Index of Documents

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net


Served July 29, 2003

Order of the Chief Administrative Law Judge

By "Motion of Boeing Capital Corporation and Boeing Capital Loan Corporation to Quash Subpoena for Documents and Things," dated July 25, 2003. Boeing Capital Corporation and Boeing Capital Loan Corporation, move to quash the subpoena issued by the Judge on June 21, 2003, at the request of Federal Express Corporation and United Parcel Service Co. to BCLC, returnable July 25, 2003. No response has been filed to the Motion.

By "Memorandum in Support of Non-Parties Boeing Capital Loan Corporation's and Boeing Capital Corporation's Motion to Quash Subpoena" accompanying the Motion, BCC and BCLC contend that the Motion should be granted due to the "unreasonably short time" the subpoena allows for compliance, because the documents sought are related to a transaction not relevant to the instant proceeding, and the documents requests are overbroad, impose an undue burden on BCLC, and seek confidential and irrelevant documents. BCC and BCLC also argue that if the subpoena is not quashed in its entirety, the document requests should be limited to "documents directly related to the citizenship of DHL Airways or the 2001 Reorganization."

Based upon the submissions and the entire record in this proceeding, we deny the Motion, except as noted hereafter.

By: Ronnie Yoder


July 29, 2003

Petition of Astar for Reconsideration and for Leave to Appeal to the Decisionmaker

ASTAR Air Cargo, Inc. ("ASTAR") files this petition pursuant to 14 C.F.R. § 302.11. For the reasons discussed below, ASTAR hereby requests the Chief Administrative Law Judge (the "CALF') to review and reconsider his Order No. 1308952, dated July 25, 2003 (the "Order"), or, in the alternative, to grant leave to appeal to the Decisionmaker.

As a preliminary matter, ASTAR is not seeking and has never sought to have "this proceeding conducted in secret," as the Order suggests at page 4. Instead, ASTAR seeks nothing more than that to which it is entitled under Department rules of practice and precedent: the right to confidential treatment of sensitive commercial material during the course of the hearing scheduled to begin on August 19. While Department rules specifically provide a process for obtaining confidential treatment of sensitive information, see, e.g., 14 C.F.R. § 302.12, the Order provides a blanket rule that allows Federal Express and United Parcel Service (collectively, "FedEx") to decide which of ASTAR's confidential information to make public, simply by offering such information into evidence at the hearing. ASTAR is not asking for a secret hearing -- it is asking for a public hearing conducted in accordance with Department rules, where confidential information, which can injure the company, is kept confidential.

Counel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


Order 03-7-36
OST-02-13089

Issued and Served July 30, 2003

Order | Word

By this Order, we extend the deadline for the Recommended Decision in this case for 30 days. We also affirm the decisions of Chief Administrative Law Judge Ronnie A. Yoder denying the Motion of ASTAR Air Cargo, Inc., formerly known as DHL Airways, Inc. to terminate the proceeding in this docket, and denying the motion of DHL Holdings (USA), Inc., and DHL Worldwide Express, Inc. for a declaratory order finding this proceeding to be moot. Further, we defer consideration of the non-citizenship aspects of the continuing fitness of ASTAR under its new ownership until the conclusion of this proceeding. We also make clear that the scope of this proceeding, including discovery, and the relevance of facts involved therein, is to be limited to the current citizenship of ASTAR as it now exists.

By: Michael Reynolds


OST-02-13089

July 30, 2003

Affidavit of Andrew Lynn

By: Andrew Lynn


July 30, 2003

Correspondence of Thompson Coburn

Please accept for filing in Docket OST-2002-13089 the enclosed deposition transcript of John H. Dasburg, dated July 15, 2003 and the accompanying Motion for Confidential Treatment.

At the deposition on July 15, 2003, Mr. Costello, counsel for Mr. Dasburg and BD Air Partners, requested confidential treatment of the deposition under 14 C.F.R. § 302.12. Consistent with DOT rules applicable to such information, this deposition has been segregated and filed separately in the enclosed sealed envelope, which bears the caption of this proceeding and the notation "Confidential Treatment Requested Under § 302.12. - Testimony Given by John H. Dasburg."

Counsel: Thompson Coburn, Seth McGowan, 202-585-6976, smcgowan@thompsoncoburn.com


July 30, 2003

Correspondence of Thompson Coburn

Please accept for filing in Docket OST-2002-13089 the enclosed deposition transcript of Vicki Bretthauer, dated July 16, 2003 and the accompanying Motion for Confidential Treatment.

At the deposition on July 16, 2003, Ms. Swomley, counsel for DHL Airways, Inc., requested confidential treatment of the deposition under 14 C.F.R. § 302.12. Consistent with DOT rules applicable to such information, this deposition has been segregated and filed separately in the enclosed sealed envelope, which bears the caption of this proceeding and the notation "Confidential Treatment Requested Under § 302.12. - Testimony Given by Vicki Bretthauer."

Counsel: Thompson Coburn, Seth McGowan, 202-585-6976, smcgowan@thompsoncoburn.com


July 30, 2003

Correspondence of Thompson Coburn

Enclosed for your reference please find two CD-ROMs containing electronic copies of (1) the supplemental document production produced by ASTAR Air Cargo, Inc. on July 16, 2003 (DHLA 90334-90829) and (2) documents produced by Michael R. Klein at Mr. Klein's deposition on July 10, 2003 (Klein Depo. 00001-01818). ASTAR and BD Air Partners have sought protection under Rule 12 for the information contained on these two CDs. Also enclosed for your reference are instructions on how to open and search the CD-ROMs.

Counsel: Thompson Coburn, Seth McGowan, 202-585-6976, smcgowan@thompsoncoburn.com


July 29, 2003

Joint Application of Fed Ex and UPS to Take Limited Discovery Out-Of-Time

Request leave to take the deposition of, and obtain documents from, William A. Robinson and William J. Rowe after the discovery cut-off.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


July 29, 2003

Motion of Deutsche Bank AG for confidential treatment

Deutsche Bank AG ("Deutsche Bank"), pursuant to Rule 12 of the Department's Rules of Practice (14 C.F.R. § 302.12), respectfully requests that the Chief Judge withhold from public disclosure the documents and information that Deutsche Bank is filing herewith under seal in the above captioned proceeding. An index of Deutsche Bank's confidential documents is attached. These documents contain confidential, proprietary and commercially sensitive information. In support of its motion, Deutsche Bank states as follows.

Affidavit of Jack Crowe
Index of Confidential Documents

Counsel: Winston Strawn, Jack Crowe, 302-558-5600, jcrowe@winston.com


July 30, 2003

Motion of Fed Ex and UPS for Confidential Treatment

United Parcel Service Co. and Federal Express Corporation hereby submit this Motion for Confidential Treatment to withhold from public disclosure the information in the attached sealed envelope marked "Confidential Treatment Requested Under § 302.12," as required by the Department's rules and the procedures set down for this case. We are filing this motion only to comply with the Department's rules and procedures, but our submission of this motion should not be construed to indicate that we advocate the confidential treatment of all information for which such treatment has been sought in this case. In fact, we advocate strongly that, given the proclivity of DHL Airways to evade public review by decisionmakers, a strong presumption of full disclosure should govern all information in this case, with narrow exceptions designed to protect the legitimate concerns of a commercial enterprise.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


July 30, 2003

Motion of Fed Ex and UPS for Confidential Treatment

United Parcel Service Co. and Federal Express Corporation hereby submit this Motion for Confidential Treatment to withhold from public disclosure the information in the attached sealed envelope marked "Confidential Treatment Requested Under § 302.12," as required by the Department's rules and the procedures set down for this case. We are filing this motion only to comply with the Department's rules and procedures, but our submission of this motion should not be construed to indicate that we advocate the confidential treatment of all information for which such treatment has been sought in this case. In fact, we advocate strongly that, given the proclivity of DHL Airways to evade public review by decisionmakers, a strong presumption of full disclosure should govern all information in this case, with narrow exceptions designed to protect the legitimate concerns of a commercial enterprise.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


OST-02-13089

July 31, 2003

Answer of Astar to Joint Application to Take Discovery Out-Of-Time

In short, the ownership and operations of DHL Airways, Inc. ("Old Airways") are not relevant to this proceeding. The Order states that "the Department has already found that historical ownership is not relevant to the current citizenship status of ASTAR. j at 3, Indeed, the Department confirmed, as it had stated in its Instituting Order, that "[h]istorical ownership" may be relevant to a compliance disposition, "but [that] those issues are not before the Chief Judge in this proceeding." Id Thus, for the purposes of this proceeding, Old Airways is history.

Having failed to identify any basis for questioning Mr. Robinson or Mr. Roure on the only relevant issue - the "current ownership of ASTAR Air Cargo, Inc., by BD Air Partners, LLC[J' Order at 4 - FedEx should not be permitted to depose either individual, out-of-time, or at any time.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


July 30, 2003

Answer of UPS and Fed Ex Express to Petition of Astar for Reconsideration

UPS and FedEx Express oppose DHLA/ASTAR's petition for reconsideration of the CALJ's order granting confidential treatment to virtually all discovery items until they are included in an exhibit or testimony at the hearing or in an order or decision.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, dvaughan@kelleydrye.com for UPS


July 31, 2003

Answer of William Robinson in Opposition to Joint Application to Take Limited Discovery Out-Of-Time and Motion to Vacate the July 21, 2003 Order as Void Ab Initio

To the extent that the parties to this proceeding have attempted to probe into historical developments in the DHL Airways ownership structure, all participants are reminded that the Department has already found that historical ownership is not relevant to the current citizenship status of ASTAR. Our instituting Order specifically stated that the past citizenship of this airline would be considered in the context of the pending formal enforcement complaints. Historical ownership may be relevant to compliance disposition and perhaps other aspects of the continuing fitness of the carrier, but those issues are not before the Chief Judge in this proceeding.

Exhibit A: Order 03-7-36

Counsel: Pillsbury Winthrop, Philip Douglas, 212-858-1000


July 31, 2003

Motion of Astar to Compel Fed Ex to Limit Its Witness List and To Proclude Witnesses from Whom Witness Statements Have Not Been Provided

ASTAR Air Cargo, Inc., hereby moves for an Order: (a) requiring Federal Express Corporation and United Parcel Service Co. to submit a list of witnesses they intend to call at the hearing currently scheduled to begin August 19, 2003 in light of the DOT's Order of July 30, 2003; and (b) precluding as witnesses any person for whom Fed Ex did not provide a witness statement as required by the Order of May 14, 2003.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


OST-02-13089

July 31, 2003

Affidavits of Marina Fayerberg, Christine Nelson, James M. Rittinger, Partha P. Chattoraj, Neil Cave, Jonathan B. Oblak, and Michele Stoute

By: Marina Fayerberg, Christine Nelson, James M. Rittinger, Partha P. Chattoraj, Neil Cave, Jonathan B. Oblak, and Michele Stoute


Served August 1, 2003

Certification to the Decisionmaker

This certification to the Decisionmaker is submitted by the Chief Administrative Law Judge assigned to this proceeding pursuant to Rule 11(g) of the Department's Rules, because a prompt decision on the questions certified is essential to a proper conduct of the proceeding.

Because of the fundamental nature of the issues discussed above and their potential impact on this proceeding and the continuing time limits, a prompt decision of those issues by the Decisionmaker is essential to a proper conduct of this proceeding, and we hereby certify those issues to the Decisionmaker for decision and request expedited consideration of this certification.

By: Ronnie Yoder


August 1, 2003

Joint Motion of Fed Ex and UPS for Confidential Treatment

United Parcel Service Co. and Federal Express Corporation hereby submit this Motion for Confidential Treatment to withhold from public disclosure the information in the attached sealed envelope marked "Confidential Treatment Requested Under § 302.12," as required by the Department's rules and the procedures set down for this case. We are filing this motion only to comply with the Department's rules and procedures, but our submission of this motion should not be construed to indicate that we advocate the confidential treatment of all information for which such treatment has been sought in this case. In fact, we advocate strongly that, given the proclivity of DHL Airways to evade public review by decisionmakers, a strong presumption of full disclosure should govern all information in this case, with narrow exceptions designed to protect the legitimate concerns of a commercial enterprise.

This motion covers information contained in the documents produced and depositions taken to date in this proceeding. The information in the documents and depositions have been the subject of Rule 12 Motions for Confidentiality. Accordingly, in compliance with the Department's rules and the rules of this proceeding, FedEx Express and UPS seek confidential treatment of the information contained in the attached sealed envelope until such time as the Department or the Chief Administrative Law Judge finds that such protection is no longer warranted or in the public interest. We are providing a copy of this motion to those on the enclosed service list.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


July 31, 2003

Joint Motion of Fed Ex and UPS for Leave to File Otherwise Unauthorized Document and Notice to the Chief Administrative Law Judge

Pursuant to 14 C.F.R. § 302.6(c), Federal Express Corporation ("FedEx Express") and United Parcel Service Co. ("UPS") seek leave to file this Notice to the Chief Administrative Law Judge. Good cause exists to grant this motion as the Department's Order 2003-7-36 raises questions regarding the Chief Administrative Law Judge's authority to determine what evidence is relevant in this proceeding. This Notice serves to inform the Chief Judge of FedEx Express and UPS's intention to Petition the Department for Reconsideration and/or Clarification of that Order.

Petitioners Federal Express Corporation and United Parcel Service Co. will file a Petition for Reconsideration and/or Clarification of Order 2003-7-36 with the Decisionmaker on Monday, August 4, 2003. The Petition will request, inter alia, clarification that the Order does not diminish or impair the Chief Administrative Law Judge's authority, confirmed in the Instituting Order, to "determine what documentation is relevant and necessary to determine the sole issue in this proceeding ...." See Order Instituting Formal De Novo Review, Order 2003-4-15, served April 17, 2003 at 4; see also 14 C.F.R. § 302.17.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


August 1, 2003

Joint Opposition of Fed Ex and UPS to Astar's Motion to Compel

United Parcel Service Co. ("UPS") and Federal Express Corporation ("FedEx Express") (together "Joint Opponents") hereby file this Joint Opposition to ASTAR's Motion to Compel which was filed on July 31, 2003. In its Motion to Compel, ASTAR asked the Chief Administrative Law Judge ("CALJ") to submit a new list of witnesses in lieu of the list provided on July 25, 2003. Further, ASTAR asks that the CALJ preclude any witness for whom Joint Opponents did not provide a witness statement. UPS and FedEx Express oppose this Motion to Compel and respectfully request that such Motion be denied.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


August 1, 2003

Opposition of Astar to Motion for Leave to File Unauthorized Document

ASTAR Air Cargo, Inc. ("ASTAR") files this opposition to the motion by Federal Express Corporation and United Parcel Service Co. (collectively, "FedEx") to file a "Notice" with the Chief Administrative Law Judge (the "CALF) that it intends to seek reconsideration and/or clarification of the Department of Transportation's (the "Department" or "DOT") Order 2003-7-36 (the "Order"). However, there is no requirement that FedEx file any "notice" prior to filing a petition for reconsideration or clarification. Indeed, there is no provision in the rules for such a "notice;" in short, there simply is no such animal. Rather, when reconsideration or clarification is sought, the proper procedure is simply to file the petition. See 14 C.F.R. § 302.14. The "notice" FedEx filed therefore serves no cognizable, legitimate function.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


Served August 1, 2003

Notice of Prehearing Conference and Order

The above-captioned proceeding is scheduled for a Prehearing Conference on August 7, 2003, at 10:00 a.m., Eastern Time, in Room 5332, Nassif Building, 400 Seventh Street, S.W., Washington, D.C. 20590, before the undersigned.

In view of Order 2003-7-36, served July 30, 2003, the change in ownership of DHL Airways, Inc. ("DHLA"), and the direction in that Order that the Judge conduct the proceeding "in a manner consistent with the directions outlined above, limiting the scope of issues and discovery to the current ownership of ASTAR Air Cargo, Inc., by BD Air Partners, LLC."' the parties shall serve, file, and deliver by August 5, 2003, proposed procedural schedule changes and additional procedural requirements, if any;2 a list of all pending motions, including motions for additional discovery or extensions of time for discovery and their current relevance; all outstanding discovery requests, their status, and their current relevance; any changes in the parties' evidentiary proffers, together with final witness lists with the anticipated time for testimony of each witness, an explanation for any witness proffered without presubmitted testimony, and the alleged relevance of each proffer and witness to the current ownership and citizenship of ASTAR; and any other procedural and substantive implications of Order 2003-7-36, particularly with respect to the statement that "historical ownership is not relevant to the current citizenship status of ASTAR," and its substantive and procedural implications for evidentiary submissions.

By Certification to Decisionmaker 13089-59, we have requested clarification of the intent of Order 2003-7-36, and we note that Federal Express Corporation and United Parcel Service Co. have indicated their intent to seek reconsideration of that Order. Nevertheless, we conclude that the Prehearing Conference should proceed in view of the continuing time limits on this proceeding.

By: Ronnie Yoder


OST-02-13089

August 1, 2003

Affidavit of Anu Bharadwaj

By: Anu Bharadwaj


August 1, 2003

Joint Answer of Fed Ex and UPS in Opposition to Motion of William Robinson to Vacate CALJ's Order

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


August 4, 2003

Joint Petition of Fed Ex and UPS for Reconsideration and/or Clarification, Motion for Immediate Stay of Order 03-7-36, and Motion to Shorten Answer Period

On July 30, 2003, the Department issued Order 2003-7-36 (the Order), reviewing on its own initiative two Orders of the Chief Administrative Law Judge (CALJ) issued on July 25 and July 28 (Orders 13089-54 and 56), and responding to the CALJ's request in his July 18 Order (13089-37) for an extension. Order 2003-7-36 affirmed Orders 1308954 and 56, and granted a 30-day extension of the proceeding in response to the CALJ's request for a 90-day extension in Order 13089-37. This petition seeks reconsideration or clarification of the Order, and moves for an immediate stay of its effectiveness. Further, Petitioners move that the period for filing answers to this Petition be shortened from the normal ten days to four days, given the expedited nature of this proceeding.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


Served August 4, 2003

Order of the Chief Administrative Law Judge

By "ASTAR Air Cargo, Inc.'s Petition For Review and Objection" ("1st Petition") dated July 22, 2003, ASTAR Air Cargo, Inc. ("ASTAR") requests the Judge to "reverse Order Nos. 13089-44, 13089-45 and 13089-46 and permanently maintain the confidentiality" I of documents listed in indices accompanying the confidentiality motions, or modify those orders to require anyone who "would make such documents publicly available ... give ASTAR 10 days advance notice of same ... so that ASTAR may have an opportunity to take appropriate steps in federal court to enjoin such disclosure" (1s' Petition at'), footnote omitted). By "ASTAR Air Cargo, Inc.'s Petition For Reconsideration and For Leave to Appeal to the Decisionmaker" ("2nd Petition") dated July 29, 2003, ASTAR requests the Judge "to review and reconsider his Order No. 13089-52, dated July 25, 2003 . . ., or, in the alternative, to grant leave to appeal to the Decisionmaker." Federal Express Corp. and United Parcel Service Co. ("FedEx/UPS") oppose the 2"d Petition, arguing that ASTAR "wants this proceeding to be conducted in secret," that DHLA/ASTAR has not identified any potential competitive harm from disclosure of these documents, and that "it is abundantly clear that any such limited competitive harm would not overcome the public interest in public disclosure." 2 For the reasons set forth below, we refer ASTAR's petitions to the Decisionmaker to the extent that they seek to appeal Order Nos. 13089-44. 13089-46 and 13089-52, and recommend that they be denied.

By: Ronnie Yoder


OST-02-13089

August 5, 2003

Motion of Astar to Strike Portions of Fed Ex's and UPS's July 25 and August 1, 2003 Pre-Hearing Submissions and to Compel the Return of Destruction of Material No Longer in Issue

ASTAR Air Cargo, Inc. ("ASTAR") files this motion, in light of the Department of Transportation's (the "DOT" or the "Department") Order 2003-7-36 (the "DOT Order") which expressly limited this proceeding to "the citizenship of ASTAR ... as it now exists." DOT Order at 3. By this motion, ASTAR asks the Chief Administrative Law Judge to (1) strike those portions of the July 25 and August 1, 2003 pre-hearing submissions by Federal Express Corporation and United Parcel Service Co. (collectively, "FedEx") which relate to events prior to the July 14, 2002 acquisition of ASTAR, and (2) to require FedEx to return to ASTAR or to destroy those materials which relate to issues no longer in existence - events and relationships that pre-date July 14, 2003. As the DOT has made crystal clear, the scope of this proceeding, including discovery, is to be limited to the current citizenship of ASTAR Air Cargo, Inc. "as it now exists[,]" and the "historical ownership [of DFIL Airways, Inc.] is not relevant to the current citizenship status of ASTAR."t Id. at 3.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


Served August 5, 2003

Order of the Chief Administrative Law Judge

In view of the issues pending before the Decisionmaker,t the scope and evidentiary questions that they present, and the need to resolve those questions before proceeding with evidentiary rulings and the hearing, the prehearing conference is adjourned sine die. In view of the continuing time limitations on this proceeding, all other procedural dates, including the dates for filing pursuant to the Notice of Prehearing Conference, served August 1, 2003, remain unchanged until further order. Following receipt of the parties' submissions, a new procedural schedule will be announced.

By: Ronnie Yoder


August 5, 2003

Joint Motion of Fed Ex and UPS for Confidential Treatment

Federal Express Corporation and United Parcel Service Co. hereby submit this Motion for Confidential Treatment to withhold from public disclosure their Joint Motion in Limine to Exclude and to Strike Testimony of Dr. Dorothy Robyn and Dr. Janusz A. Ordover ("Motion in Limine"). The Motion in Limine references statements and opinions made in Dr. Robyn's and Dr. Ordover's testimony. Such testimony has been filed under seal and is the subject of a formal Rule 12 Motion for Confidential Treatment filed by DHL Airways, Inc. n/k/a ASTAR Air Cargo, Inc. Consistent with DOT rules applicable to confidential information, Federal Express Corporation and United Parcel Service Co. hereby request that Rule 12 protection be applied by the Department to the Motion in Limine until such time as the Chief Administrative Law Judge finds that such protection is no longer warranted or in the public interest

Counsel: Jeffery Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, dvaughan@kelleydrye.com for UPS


August 5, 2003

Joint Motion of Fed Ex and UPS for Confidential Treatment

United Parcel Service Co. and Federal Express Corporation hereby submit this Motion for Confidential Treatment to withhold from public disclosure the information in the attached sealed envelope marked "Confidential Treatment Requested Under § 302.12." as required by the Department's rules and the procedures set down for this case. We are filing this motion only to comply with the Department's rules and procedures, but our submission of this motion should not be construed to indicate that we advocate the confidential treatment of all information for which such treatment has been sought in this case. In fact, we advocate strongly that, given the proclivity of DHL Airways to evade public review by decisionmakers, a strong presumption of full disclosure should govern all information in this case, with the normal narrow exceptions designed to protect the legitimate competitive concerns of a commercial enterprise.

Counsel: Thompson Coburn, Warren Dean, wdean@thompsoncoburn.com 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, dvaughan@kelleydrye.com for UPS


August 5, 2003

Response of Astar to the CALJ's Notice of Prehearing Conference and Order

It is ASTAR's understanding that the only discovery outstanding prior to the DOT's July 30 Order related to individuals and entities who are not affiliates of ASTAR and not related to any inquiry into the current citizenship of ASTAR. Thus, in light of the Order, there are no outstanding discovery requests.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


August 5, 2003

Response of Astar to the CALJ's Referral to the Department Regarding Confidential Treatment

In connection with this most unusual proceeding, the CALJ has given ASTAR's competitors, Federal Express Corporation and United Parcel Service, Inc. almost carte blanche in connection with their requests for documents from ASTAR. Not surprisingly, among the documents requested were some of ASTAR's most confidential and proprietary information, including but not limited to tax returns, financial statements, budgets, financial analyses and the like. The documents produced, to date, number close to 30 thousand pages.

Due to the time constraints involved in this proceeding, ASTAR was unable to index and make a confidentiality proffer with respect to each document it produced and timely comply with production requirements and hearing preparations. Thus, it requested that confidentiality protection be afforded, and ASTAR be exempted from the requirements of indexing and making a proffer of confidentiality for each document, in favor of what, we respectfully submit, is a more rational approach under the circumstances. First, ASTAR requested that confidentiality protection continue for all of the material it produced, since the vast majority of it will never be used and there is no reason (except anti-competitive ones) to make ASTAR's files public.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


August 4, 2003

Response of Astar to CALJ's Request for Clarification

ASTAR Air Cargo Inc. ("ASTAR") submits this document with respect to the "Certification to the Decisionmaker" submitted by the Chief Administrative Law Judge ("CALF') on August 1, 2003 in light of the Department of Transportation's (the "Department's" or "DOT's") Order 2003-7-36 (the "Order"). Labels aside, the "certification" is in reality simply a request for reconsideration of an Order which the CALJ does not like and with which he does not agree. But whether the CALJ likes it or not the law is clear that, when referring a matter to an administrative law judge, the Department may properly frame the issue(s) presented. See City of San Antonio v. Civil Aeronautics Board, 374 F.2d 326, 329 (DC Cir. 1967); National Airlines, Inc. v. Civil Aeronautics Board, 392 F.2d 504, 509, (DC Cir. 1968). See also Air Canada v. Dep't of Transportation, 148 F.3d 1142, 1147 (D.C. Cir. 1998) (recognizing the propriety of limiting the scope of a proceeding by framing the issue(s) for the administrative law judge). That is precisely what the Department has done here, no more and no less.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


OST-02-13089


Served August 6, 2003

Notice Shortening Answer Period | Word

On August 1, 2003, the Chief Judge issued a Certification to the Decisionmaker (“Certification”), certifying questions arising from Order 2003-7-36. On August 4, 2003, Federal Express Corporation (FedEx) and United Parcel Service Co. (UPS) filed a Petition for Reconsideration and/or Clarification, Motion for Immediate Stay of Order 2003-7-36, and Motion to Shorten Answer Period (“Petition”). On August 4, ASTAR filed a response to the Chief Judge’s Certification.

Under the Department’s regulations, 14 CFR § 302.14, answers to the Petition would be due on August 14, 2003. FedEx and UPS asked us to shorten the answer period to August 8, 2003. We agree that the public interest supports a shorter answer period but wish to afford parties sufficient time to respond. Accordingly, we establish Monday, August 11, 2003, as the due date for answers to the Petition and the Certification. We do not anticipate entertaining replies to answers.

By: Michael Reynolds


Served August 6, 2003

Errata to Order 13089-63

By: Ronnie Yoder


August 5, 2003

Errata Notice of Astar

Counsel: Lachter Clements, Stephen Lachter


August 6, 2003

Opposition of Astar to Fed Ex's and UPS's Joint Motion to In Limine to Exclude and to Strike Testimony of Dr. Dorothy Robyn and Dr. Janusz Ordover

In accordance with 14 C.F.R. § 302.11 and the Order of the Chief Administrative Law Judge, served June 18, 2003, ASTAR Air Cargo, Inc. ("ASTAR") hereby submits its opposition to the "Joint Motion in Limine to Exclude and to Strike Testimony of Dr. Dorothy Robyn and [a portion of the testimony ofJ Dr. Janusz A. Ordover," filed by Federal Express Corporation ("FedEx") and United Parcel Service Co. ("UPS") on August 5, 2003.

ASTAR submitted the testimony of these two experts (Dr. Robyn and Dr. Ordover) because it is relevant to the exercise of the Decisionmaker's discretion as to ASTAR's citizenship determination. The testimony of Dr. Robyn carefully analyzes the impact on domestic and international competition of the citizenship determination at stake in this matter; the contested portion of the expert testimony of Dr. Ordover demonstrates that the contractual relationship between ASTAR and certain foreignowned entities does not have any intrinsic anticompetitive impact in the domestic express delivery market. FedEx and UPS (jointly "Movants") seek to strike this expert testimony and exclude it from consideration on the ground that the evidence is somehow "irrelevant" to a determination of ASTAR's citizenship. They are wrong and the Joint Motion should be denied in its entirety.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


August 6, 2003

Opposition of Astar to Fed Ex's and UPS's Petition for Reconsideration and/or Clarification

Federal Express Corporation ("Fed Ex") and United Parcel Service Co. ("UPS") (collectively, "Petitioners") have petitioned for "Reconsideration and/or Clarification" of the Department of Transportation's (the "DOT's" or "Department's") very clear Order No. 2003-7-36, served July 30, 2003 (the "July 30 Order"). That Petition is not only offensive and shrill, but it is wholly off-base on the merits. Accordingly, ASTAR submits this response.

The Petition seems to be predicated on three hypotheses: (1) a claim that the Department is powerless to direct the Chief Administrative Law Judge ("CALJ") regarding the issues to be considered in this docket. Specifically, according to petitioners, the CALJ is a free agent and he, and he alone, determines the issues (Petition at 1-6); (2) the Department has wrongly focused the hearing on ownership, rather than current citizenship (Petition at 1, 4, 13-14), despite the fact that the Department has explicitly stated that the issue is ASTAR's citizenship; and (3) Petitioners can show that ASTAR's predecessor DHL Airways, Inc. ("Old Airways") was under the control of foreign interests and, thus (although they cannot really articulate a cogent explanation as to why it is the case) ASTAR must also be under foreign control (Petition at 7-17). This three-legged stool is a fiction, as set forth below.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


Served August 5, 2003

Order of the Chief Administrative Law Judge

By "Motion of Deutsche Bank AG for Confidential Treatment Under 14 C.F.R § 302.12" ("Motion"), served July 29, 2003, Deutsche Bank AG ("DB") requests that the Judge withhold from public disclosure the documents it produced in response to a subpoena served upon it June 18, 2003, by Federal Express Corporation ("FedEx"). I No answer to the Motion has been filed. For the reasons set forth below, we conclude that the Motion should be granted only until information in such documents is included in an exhibit, testimony, order, or decision in this proceeding

By: Ronnie Yoder


Served August 5, 2003

Order of the Chief Administrative Law Judge

On July 31, 2003, William Robinson Filed a "Motion to Vacate the July 21, 2003 Order as Void Ab Initio" ("Motion"), arguing that due to the Decisionmaker's Order 2003-7-36, dated July 30, 2003, the Judge "is precluded from requiring discovery from Mr. Robinson and that [Order of Chief Administrative Law Judge 13089-40, served July 21, 2003,] was itself in violation of the Department's April 17, 2003 Instituting Order."' By "Joint Answer in Opposition to Motion of William A. Robinson to Vacate CALJ's Order of July 21, 2003" ("Answer"), dated August 1, 2003, Federal Express Corporation ("FedEx") and United Parcel Service (`-UPS") (collectively, "FedEx/UPS") argue that the Decisionmaker does not have the authority to limit the facts that the Judge may consider in this proceeding, and that in any event, Order 2003-7-36 does not relieve Robinson of his obligations to comply with the Judge's Orders in this proceeding.'

FedEx/UPS assert that determination of ASTAR Air Cargo, Inc.'s ("ASTAR's") current citizenship "necessarily includes the facts surrounding BDAP's acquisition of Robinson's nominal majority interest in the company and the formation of ASTAR";; that "the sale of Robinson's ownership interest was not an arms-length transaction ... and [was E controlled by DHL Worldwide Express and/or its parent Deutsche Post"; and that "Robinson is one of the most knowledgeable people concerning the facts and circumstances surrounding (1) BDAP's acquisition of his ownership interest in [DHL Airways, Inc. ("DHLA")], (2) the extent to which such acquisition was controlled or influenced by Deutsche Post, . . . (3) the manner in which the terms and conditions of the .ale play affect DHLA/[ASTAR's] future operations ... [and (4)] the purpose of the sale.' We conclude that Robinson's testimony was, and continues to he, relevant to the current citizenship of ASTAR Air Cargo, Inc., and consequently, we deny the Motion to vacate Order 13089-40.' Nevertheless, in view of Order 2003-7-36; the pending Certification to Decisionmaker 13089-59, served August 1, 2003; the "Petition for Reconsideration and/or Clarification Motion for Immediate Stay of Order 2003-7-36, and Motion the propriety of further discovery in this proceeding prior to the hearing, we conclude that a prompt decision by the Decisionmaker on this matter is essential to the proper conduct of the proceeding,6 and we refer the issue of requiring Robinson's testimony concerning the current citizenship of ASTAR to the Decisionmaker under 14 C.F.R. ss 302.11(g).

By: Ronnie Yoder


Served August 5, 2003

Order of the Chief Administrative Law Judge

By two motions, each captioned "Motion For Confidential Treatment" ("July )0`n Motions"), dated July 30, 2003, Federal Express Corporation and United Parcel Service Co. ("FedEx/UPS") seek to withhold from public disclosure information contained at the deposition of Vicki Bretthauer, President and Chief Operating Officer of ASTAR Air Cargo, Inc., and John H. Dasburg, Chairman and Chief Executive Officer of ASTAR Air Cargo, Inc., because respective counsel for the deponents 'requested confidential treatment of the deposition under 14 C.F.R. § 302.12."t By "Motion for Confidential Creatment" ("August I'` Motion"), dated August 1, 2003, FedEx/UPS seek confidential trcatment for "information contained in the documents produced and depositions taken to date in this proceeding." No answer to the'-motions has been filed.` For the reasons set torth below, we conclude that the motions should be granted only until information in such documents is included in an exhibit or testimony at the hearing, in an order or decision. in this proceeding.

By: Ronnie Yoder


OST-02-13089


August 6, 2003

Answer of Fed Ex and UPS in Opposition of Astar's Motion to Strike; Motion to Defer Further Proceedings; and Motion to Refer the Record to the Inspector General | Word

Federal Express Corporation and United Parcel Service Co. hereby Answer in Opposition to ASTAR’s Motion to Strike. Joint Respondents also seek a deferral of further proceedings and a referral of all documents and submissions made so far in this proceeding to the Inspector General for his independent review.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


August 8, 2003

Motion of Astar for Confidential Treatment

ASTAR Air Cargo, Inc. , formerly known as DHL Airways, Inc., pursuant to Rule 12 of the Department's Rules of Practice (14 C.F.R. § 302.12), respectfully requests that the Department withhold from public disclosure the documents and information that ASTAR is filing herewith under seal. The documents and information consist of aircraft lease agreements and related materials and contain confidential, proprietary and commercially sensitive business information that would not normally be released to the public. Public disclosure of the documents and information would cause ASTAR great competitive harm because the documents and information reveal confidential details concerning the leasing of some of its aircraft and ASTAR's relationships with its customers and lenders.

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net


August 8, 2003

Motion of Fed Ex and UPS for Leave to File an Otherwise Unauthorized Document and Response to Order No. 13089-63

Pursuant to 14 C.F.R. §§ 302.6(c)(1) and (c)(2), Federal Express Corporation and United Parcel Service Co. hereby seek leave to file an otherwise unauthorized document in the form of a Response to Order No. 13089-63 . Good cause exists to grant this motion since the Order makes a previously unannounced referral of a relevance question to the Decisionmaker and no clear procedure exists for FedEx Express and UPS to respond to that referral. Moreover, the proceeding remains on an expedited schedule and is due to commence on August 19, 2003.

In the Order, the Chief Administrative Law Judge ("CALJ") denied the Motion of Mr. William A. Robinson to Vacate the July 21, 2003 Order as Void Ab Initio, filed on July 31, 2003, in this docket. The CALJ also referred the issue of requiring Mr. Robinson's testimony concerning the current citizenship of DHL Airways, Inc. n/k/a ASTAR Air Cargo, Inc. to the Decisionmaker under Rule 11(g) in view of Order 2003-7-36 and the pending CALJ Certification and the Petition for Reconsideration and/or Clarification as to the meaning of that agency action.

Attachment 1: Joint Answer in Opposition to Motion of William Robinson to Vacate CALJ's Order of July 21, 2003

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


August 8, 2003

Motion of Fed Ex and UPS for Leave to File an Otherwise Unauthorized Document and Response to Order No. 13089-61

Pursuant to 14 C.F.R. §§ 302.6(c)(1) and (c)(2), Federal Express Corporation and United Parcel Service Co. hereby seek leave to file an otherwise unauthorized document in the form of a Response to Order No. 13089-61. Good cause exists to grant this motion since the Order makes a referral to the Decisionmaker and no clear procedure exists for FedEx Express and UPS to respond to that referral. Moreover, this proceeding remains on an expedited schedule and is due to commence on August 19, 2003.

In the Order, the Chief Administrative Law Judge referred the "l" Petition" and "2°d Petition" (as those terms are defined in the Order) of DHL Airways, Inc. n/k/a ASTAR Air Cargo Inc. to the Decisionmaker "to the extent that they seek to appeal Order Nos. 13089-44, 13089-46 and 13089-52" with the recommendation that the Decisionmaker deny review. Order at 2. For the reasons enumerated by the CALJ and set forth below, FedEx Express and UPS agree with the CALJ's recommendation that the Decisionmaker deny review. Alternatively, FedEx Express and UPS respectfully request that the Decisionmaker affirm Order Nos. 1308944, 13089-46 and 13089-52.

Attachment 1: Answer of Fed Ex and UPS to Motion of Astar for Confidential Treatment
Attachment 2: Answer of UPS and Fed Ex to Petition of Astar for Reconsideration

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


Served August 8, 2003

Notice of Prehearing Conference and Order

The above-captioned proceeding is scheduled for a Prehearing Conference on Wednesday, August 13, 2003, at 10:00 a.m., Eastern Time, in Room 5332, Nassif Building, 400 Seventh Street, S.W., Washington, D.C. 20590, before the undersigned. The following rulings are made concerning outstanding issues related to the further conduct of the proceeding. Other matters raised in the parties' submissions will be addressed at the Prehearing Conference.

By: Ronnie Yoder


August 8, 2003

Response of William Robinson to the CALJ's Referral of the Denial of Robinson's Motion to Vacate and Request for an Interim Stay Pending the Department's Ruling

William A. Robinson, through his attorneys Pillsbury Winthrop LLP, hereby responds to Chief Administrative Law Judge Yoder `s reference to the Decisionmaker of his August 5, 2003 denial of Robinson's motion to vacate the CALJ's July 21, 2003 deposition order.

The Robinson Order presents the question of whether the evidence sought from Mr. Robinson, a non-party with no connection to ASTAR Air Cargo, falls within the narrow scope of the pending citizenship proceeding. Because the Department's two prior orders on this subject clearly limit the proceeding to the "current ownership" of ASTAR, the CALJ's denial of Robinson's motion must be reversed.

Counsel: Pillsbury Winthrop, Philip Douglas, 212-858-1000


OST-02-13089


August 11, 2003

Answer of Lynden Air Cargo to Petition for Reconsideration and/or Clarification and to Certification of Chief Administrative Law Judge

On July 30, 2003, the Department, without prior notice to the parties or to the Chief Administrative Law Judge (CALJ) presiding over this proceeding, issued Order 2003-7-36 to narrow the scope of issues and discovery in this proceeding. The Order was issued after the parties had filed their initial testimony and pre-trial briefs, and were in the processes of completing discovery and depositions.

Order 2003-7-36 is seriously flawed. As both FedEx and UPS note in their Petition, the Order intrudes into evidentiary matters that are the exclusive province of the administrative law judge. As noted in both the Petition for Reconsideration and/or Clarification and the CALJ's certification, the Order is incorrect as a matter of law in that impermissibly equates ownership and citizenship. Finally, the Order has effectively interrupted all discovery in, and prejudiced the conduct of, the proceeding.

Counsel: Pierre Murphy, 202-776-3980, pmurphy@lopmurphy.com


August 11, 2003

Motion of Astar for Leave to File an Unauthorized Supplementary Filing in Furhter Oppostion to Motion for Reconsideration of Order 13089-66

Although ASTAR Air Cargo, Inc. has responded in opposition to the Petition for Reconsideration filed by Federal Express Corp. and United Parcel Service, Inc., and did not anticipate filing an additional response, AST AR is constrained to call to the Department of Transportation's attention the most recent and truly outrageous order of the Chief Administrative Law Judge, Order No. 13089-66, served late Friday afternoon, August 8, 2003 which, among other things, purports to rule upon matters which are the subject of motions of ASTAR previously submitted.' Thus ASTAR requests leave to file, within the time limit set by DOT, this unauthorized supplementary filing in further opposition to FedEx's Petition for reconsideration and to the CALJ's prior Certification regarding the same issue.

In light of Order No. 66, ASTAR respectfully submits that it is imperative that the Department step in and expressly direct the CALJ (1) once again, that only ASTAR's current citizenship is in issue in the docket; the citizenship of DHL Airways, Inc. is not; (2) that he may not consider facts that do not pertain to ASTAR's July 14, 2003 reorganization or its operations since that time; (3) that he may not violate the law by drawing an inference adverse to ASTAR based on the failure of any witnesses whom ASTAR does not control to appear at the hearing or to provide document discovery; and (4) that he may not conduct a hearing in secret.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


Served August 11, 2003

Order of the Chief Administrative Law Judge

By "Motion of ASTAR Air Cargo, Inc. For Confidential Treatment Under 14 C.F.R. § 302.12", dated July 29, 2003, ASTAR Air Cargo, Inc. seeks confidential treatment for "the documents and information that ASTAR is filing herewith under seal."' No answer to the Motion has been filed.' For the reasons set forth below, we grant the Motion only to the extent that information in such documents will continue to be confidential until it is included in an exhibit, testimony, order, or decision, and we refer the Motion to the Decisionmaker with.a recommendation that review be denied.

The Motion seeks confidential treatment for the "drafts of materials previously filed under seal on July 16 and July 18 ... relating to the substantial change in ownership and corporate structure of ASTAR."3 Many of the documents that ASTAR seeks to withhold from public disclosure have, apparently, already been submitted along with motions seeking confidential treatment. We ruled in Order Nos. 13089-52 and 13089-46 that ASTAR "has not shown that specific documents are entitled to confidential treatment or that disclosure is not required in the public interest," 4 but those Orders granted interim confidential treatment for the documents referenced in those Orders "only until information in such documents is included in an exhibit or testimony at the hearing, or in an order or decision, in this proceeding."5 The Motion also apparently includes drafts which were not submitted with the July 16`h Motions and July 18`h Motions.

By: Ronnie Yoder


Served August 11, 2003

Order of the Chief Administrative Law Judge

By "Motion For Confidential Treatment", dated August 5, 2003, Federal Express Corporation and United Parcel Service Co. seek confidential treatment for their "Joint Motion in Limine to Exclude and to Strike Testimony of Dr. Dorothy Robyn and Dr. Janusz A. Ordover", dated August 5, 2003. No answer to the Motion has been filed.' For the reasons set forth below, we deny the Motion.

The Motion "request[s] that Rule 12 protection be applied by the Department to the Motion in Limine,"2 because "[s]uch testimony has been filed under seal and is the subject of a formal Rule 12 Motion for Confidential Treatment filed by DHL Airways, Inc. n/k/a ASTAR Air Cargo, Inc."3 However, ASTAR did not file the Robyn and Ordover testimony along with a Rule 12 motion seeking confidentiality, and consequently the FedEx/UPS motion to withhold from public disclosure its motion discussing that public testimony is moot and is hereby denied.

This Order is effective forty-eight (48) hours after service unless a petition for review is filed within that time, in which event the effectiveness of this order is stayed until a determination of any such petition. Answers to any such petition shall be filed within four days after service of this Order.

By: Ronnie Yoder


August 7, 2003

Correction of Astar to Opposition to Petition for Reconsideration and/or Clarification Filed August 6, 2003

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321


August 7, 2003

Objection and Opposition of Astar to Joint Response to Notice of Prehearing Conference and Order

FedEx asserts that ASTAR has failed to provide certain documents in response to the CALJ's Order No. 13089-48, granting, in part, FedEx's motion to compel. This assertion is specious, as several of the documents identified by FedEx are the subject of a motion to vacate or modify Order No. 13089-48, filed by ASTAR on July 25, 2003, while other documents have already been offered to FedEx or are not in ASTAR's possession custody or control.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


August 7, 2003

Opposition of Astar to Motion to Refer the Record to the Inspector General

ASTAR Air Cargo, Inc. submits this opposition to the latest motion filed by Federal Express Corporation and United Parcel Service Co. This time FedEx is asking the Chief Administrative Law Judge (1) to delay all proceedings and toll all deadlines in this docket, and (2) take all the documents (some 30,000 produced by ASTAR alone) and all the submissions (probably 60 or 70 briefs) in this docket and transmit them to the Inspector General to conduct a review" to accomplish heaven knows what. While there seems to be no end to FedEx's efforts to stall a hearing on ASTAR's current citizenship, which the Department of Transportation has ordered, ASTAR responds, once again, urging the CALJ to reject this latest ploy for the following reasons.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


August 11, 2003

Affidavit of Maria Fernanda Miralles Gasparini

By: Maira Fernanda Miralles Gasparini


August 11, 2003

Affidavit of Steven A. Rossum

By: Steven Rossum


August 12, 2003

Motion of ASTAR to Disqualify the Chief Administrative Law Judge

The CALJ's pursuit of an exalted administrative judiciary free from what he perceives as agency interference is, quite simply, a crusade. The accompanying affidavit, which is incorporated herein by reference, demonstrates how deeply the CALJ's bias against ASTAR has pervaded this proceeding. While the CALJ has decided virtually every motion in favor of FedEx (even finding grounds when FedEx has failed to do so, see Litvack Aff, 113), the more telling fact is that each decision has a unifying theme: expand the scope of this proceeding as broadly as possible in the hope of finding something that the CALJ can use to pass judgment on, and criticize, the Department's informal review of Airways' citizenship following the 2001 reorganization. By this conduct, the CALJ has crossed the line between adjudicator and advocate. He has pushed as hard, or harder, than FedEx to draw into this proceeding events and facts that are not at issue; and when the Department confirmed on July 30 (for the third time!) the narrow scope of this docket, the CALJ joined with FedEx to challenge that decision while refusing to implement it.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


August 11, 2003

Errata Notice of ASTAR Submitting Corrections to its Motion for Leave to File an Unauthorized Supplementary Filing in Further Opposition to Motion for Reconsideration of Order 13089-66

ASTAR Air Cargo, Inc., respectfully submits the following correction to its Motion for Leave to File an Unauthorized Supplementary Filing in Further Opposition to Motion for Reconsideration of Order 13089-66 filed today in this docket.

The citations to 14 CYR. 301,11 in footnote number 1 on page 1 and to 14 C-F.R- 11 in paragraph two on page two should read 14 C.F.R. 302.11- Corrected copies of pages 1-2 are attached for your convenience.

Counsel: Lachter Clements, Roxanne Clements, 202-862-4321


August 11, 2003

DHL Worldwide Express and DHL Holdings Joint Motion for Leave to File and Answer to Petition for Reconsideration and/or Clarification | Word

The Petition challenges the Department’s authority to issue Order 2003-7-36, which clarified the limited scope of this proceeding. Contrary to UPS/FedEx’s assertions, the Order does not improperly infringe on any unique or exclusive prerogative of the Chief Administrative Law Judge to make evidentiary rulings free from Departmental scrutiny. Rather, Department Rules explicitly permit precisely this sort of interlocutory Order dealing with evidentiary issues. Department Rule 17, which lists the powers delegated to an ALJ -- including the authority "to rule upon offers of proof and to receive relevant evidence" -- does not carve out an exclusive realm of authority for an ALJ. Rather, those powers do not apply "to the review of rulings by the administrative law judge on interlocutory matters that have been appealed to the DOT decisionmaker." / (14 C.F.R. §§ 302.17(a)(1)(v); 302.17(a)(3); see also Order at 3 (identifying the Order as interlocutory in nature).) Moreover, the DOT Rules explicitly grant the decisionmaker, among other things, the same powers as an ALJ under Rule 17, including the power to "rule upon offers of proof and to receive relevant evidence." (14 C.F.R. § 302.18(a).) As a result, there can be no doubt that the Department possesses the power to issue its interlocutory Order, and that it is fully binding on the parties and the CALJ

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


August 12, 2003

Joint Answer of Fed Ex and UPS to the Certification by the CALJ | Word

The CALJ’s certification pertains to questions raised by Order 2003-7-36, specifically whether they “intend to indicate that ASTAR’s prior ‘citizenship’ is not an issue in this proceeding.” The CALJ notes that Order 2003-7-36 includes a statement that “what constitutes the current citizenship of DHL Airways substantially changed on July 14, 2003.”

The Department has no factual record before it upon which it might lawfully reach a conclusion that the citizenship of DHL Airways “substantially changed” on July 14, 2003. That issue is before the CALJ, and is addressed specifically in the pre-trial brief of FedEx Express and UPS. It is not yet before the Department. The Department should take all steps necessary to ensure that its decisions in this docket are based exclusively on the evidentiary record developed by the CALJ, and not on information developed outside the docket.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


August 11, 2003

Motion for Leave to File an Unauthorized Document, Response of Fed Ex and UPS to Robinson | Word

Pursuant to 14 C.F.R. §§ 302.6(c)(1) and (c)(2), Federal Express Corporation and United Parcel Service Co. seek leave to respond to William Robinson’s unauthorized filing to the Department entitled, “Response to the CALJ’s Referral of the Denial of Robinson’s Motion to Vacate, and Request for an Interim Stay Pending the Department’s Ruling.” Good cause exists to grant this motion since Robinson’s unauthorized filing provides misleading information, and no clear procedure exists for FedEx Express and UPS to respond. Moreover, the proceeding remains on an expedited schedule and is due to commence on August 19, 2003.

Mr. Robinson’s so-called Response is an unauthorized document within the meaning of 14 C.F.R. § 302.6(c), which should be summarily rejected by the Decisionmaker. It does not provide good cause for the Decisionmaker to grant leave to file such a document. To the extent Mr. Robinson seeks a stay from the CALJ's June 20 and July 21 Orders authorizing his deposition, this request has been improperly brought before the Decisionmaker. Under the Department’s rules, all motions must be addressed to the ALJ. 14 C.F.R. § 302.11(a). The Decisionmaker should deny Mr. Robinson’s filing for these procedural deficiencies alone.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


Served August 12, 2003

Order of the Chief Administrative Law Judge

By "Motion of ASTAR Air Cargo, Inc. to Vacate or Modify the July 22, 2003 Order of Chief Administrative Law Judge" dated July 24, 2003, ASTAR Air Cargo, Inc. seeks to vacate or modify the Order of Chief Administrative Law Judge 13089-48 dated July 22, 2003, granting in part, and denying in part, a July 7, 2003, "Motion to Compel" seeking to compel ASTAR to produce certain documents.' While no party has answered the motion, Federal Express Corporation and United Parcel Service Co. filed a "Joint Response to Notice of Prehearing Conference and Order" dated August 5, 2003, requesting that the Judge affirm Order 13089-48.' By "ASTAR Air Cargo, Inc.'s Objection and Opposition to Joint Notice of Prehearing Conference and Order" dated August 7, 2003, ASTAR responds to the requests in the Joint Opposition. Upon consideration of the arguments presented by the motion, the Joint Response, and the ASTAR Opposition, we modify Order 13089-48 to delete certain production requirements, and otherwise affirm that Order.

By: Ronnie Yoder


OST-02-13089


August 13, 2003

Affidavits of Paul Hemmersbaugh and Richard Menard

By: Paul Hemmersbaugh and Richard Menard


August 14, 2003

Motion of Astar for Confidential Treatment

Respectfully requests that the Department withhold from public disclosure the documents and information that ASTAR is filing herewith under seal. These documents were filed previously under seal with a Motion for Confidential Treatment on June 13, 2003. The information attached hereto quotes portions of those documents. ASTAR reaffirms its request (and incorporates by reference its June 13 Motion) that these documents and this information not be released to the public because such disclosure would cause ASTAR competitive harm.

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net


August 14, 2003

Objection of Astar and Petition for Review

Hereby submits, pursuant to 14 C.F.R. §302.11, this Objection and Petition for Review of Order No. 13089-69, issued by the Chief Administrative Law Judge on August 12, 2003. Order No. 69 denied, in part, ASTAR's Motion to Vacate Or Modify the July 22, 2003 Order of the Chief Administrative Law Judge, an order granting a motion to compel filed by Federal Express and United Parcel Service. ASTAR seeks reconsideration or leave to appeal because the Order directs the production of a privileged communication, as well as the production of a host of third-party contracts that have absolutely no bearing on the issues in this proceeding.' Although ASTAR recognizes that this proceeding has been re-assigned, pending the issuance of an order so indicating, ASTAR is serving this Petition and Objection on the CALJ.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


August 13, 2003

Objection of Astar and Petition for Review

For the reasons stated in ASTAR Air Cargo, Inc.’s Petition for Review and Objection, dated July 22, 2003, Petition for Reconsideration and For Leave to Appeal to the Decisionmaker, dated July 29, 2003, and Response to the CALJ’s Referral to The Department Regarding Confidential Material, dated August 5, 2003,1 which we adopt and incorporate by reference, we hereby object to, and request that the Decisionmaker review and reverse, the CALJ’s Order No. 13089-67, served August 11, 2003, with respect to the documents which were the subject of ASTAR’s Motion for Confidential Treatment dated July 29, 2003.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


August 14, 2003

Motion of the Chief Administrative Law Judge for Confidential Treatment

Enclosed for filing is Order of Chief Administrative Law Judge 13089-69 which should be segregated and filed separately in the enclosed sealed envelope bearing the caption "Confidential Treatment Requested Under § 302.12."

By: Ronnie Yoder


August 14, 2003

Hearing Transcript of the pre-hearing conference before the Honorable Ronnie A. Yoder, Chief Administrative Law Judge, on Wednesday, August 13, 2003.

By: Ronnie Yoder


August 13, 2003

Answer of FedEx Express and UPS to Joint Motion of DHL Worldwide Express and DHL Holdings (USA), Inc. for Leave to File Answer to Petition for Reconsideration

On August 12, 2003, non-parties DHL Worldwide Express, Inc. and DHL Holdings (USA), Inc. filed a joint motion, seeking leave to file an unauthorized Answer to the Petition for Reconsideration and/or Clarification currently pending before the Department.' As the Department is aware, the question of the extent of control by these DHL non parties over the certificate holder in this case is pending before the Administrative Law Judge. Notwithstanding the importance of these DHL non-parties to this proceeding, they have refused to comply with any order issued in this proceeding to date.

Counsel: Thompson Coburn, Warren Dean, wdean@thompsoncoburn.com 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, dvaughan@kelleydrye.com for UPS


OST-02-13089


August 14, 2003

Letter from DHL Holdings (USA) and DHL Worldwide Express

Letter stating that they do not intend to respond substantively to FedEx's answer, but submit this letter to correct FedEx's erroneous assertion that the WWE/Holdings' filling was untimely.

Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6000


August 15, 2003

Application of Fed Ex and UPS for the Issuance of a Subpeona Requiring the Attendance of a Custodian of Records for Bank of America at the Hearing

Federal Express Corporation and United Parcel Service Co. hereby file this Application for the Issuance of a Subpoena Requiring the Attendance of a Custodian of Records for Bank of America at the Hearing in OST-2002-13089, which is scheduled to commence on Tuesday, August 26, 2003.

During the course of this proceeding, Bank of America has produced documents to the Joint Applicants which, at the hearing, may require testimony regarding their authenticity. By this Application, Joint Applicants are requesting that, in accordance with 14 C.F.R. §§ 302.25 and 302.7(b), a subpoena be issued to, and then served by Joint Applicants on, the counsel of record for Bank of America so that he may identify and bring to the hearing an appropriate Custodian of Records for the documents produced by him and his client.

Counsel: Fed Ex, Jeffery Kelsey, 901-434-8563, jkelsey@fed.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


August 15, 2003

Application of Fed Ex and UPS for the Issuance of a Subpeona Requiring the Attendance of a Custodian of Records for Boeing Capital Company at the Hearing

Federal Express Corporation and United Parcel Service Co. hereby file this Application for the Issuance of a Subpoena Requiring the Attendance of a Custodian of Records for Boeing Capital Company at the Hearing in OST-2002-13089, which is scheduled to commence on Tuesday, August 26, 2003.

During the course of this proceeding, The Boeing Company d/b/a Boeing Capital Company has produced documents to the Joint Applicants which, at the hearing, may require testimony regarding their authenticity. By this Application, Joint Applicants are requesting that, in accordance with 14 C.F.R. §§ 302.25 and 302.7(b), a subpoena be issued to, and then served by Joint Applicants on, the counsel of record for Boeing Capital Company (Office of the General Counsel for The Boeing Company) so that she may identify and bring to the hearing an appropriate Custodian of Records for the documents produced by her and her client.

Counsel: Fed Ex, Jeffery Kelsey, 901-434-8563, jkelsey@fed.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


August 15, 2003

Application of Fed Ex and UPS for the Issuance of a Subpeona Requiring the Attendance of a Custodian of Records for Deutsche Bank AG at the Hearing

Federal Express Corporation and United Parcel Service Co. hereby file this Application for the Issuance of a Subpoena Requiring the Attendance of a Custodian of Records for Deutsche Bank AG at the Hearing in OST-2002-13089, which is scheduled to commence on Tuesday, August 26, 2003.

During the course of this proceeding, Deutsche Bank AG has produced documents to the Joint Applicants which, at the hearing, may require testimony regarding their authenticity. By this Application, Joint Applicants are requesting that, in accordance with 14 C.F.R. §§ 302.25 and 302.7(b), a subpoena be issued to, and then served by Joint Applicants on, the counsel of record forDeutsche Bank AG so that he may identify and bring to the hearing an appropriate Custodian of Records for the documents produced by him and his client.

Counsel: Fed Ex, Jeffery Kelsey, 901-434-8563, jkelsey@fed.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


August 14, 2003

Answer of Fed Ex and UPS to Astar's Motion to Disqualify the Chief Administrative Law Judge

Hereby answer and oppose ASTAR's motion and request that it be denied. Further, the Department and the new Administrative Law Judge should insist that AS TAR respect the Department as a legitimate arm of the United States Government, its procedures, and regulations. Even ASTAR's motion to disqualify does not allege that the CALJ has spoken publicly about this proceeding or given any indication to any person that he has prejudged the issues in dispute. That undisputed fact alone was sufficient for Judge Yoder to have denied the disqualification motion.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


August 15, 2003

Application of Fed Ex and UPS for the Issuance of a Subpeona Requiring the Attendance of Doug Turner at the Hearing

Counsel: Fed Ex, Jeffery Kelsey, 901-434-8563, jkelsey@fed.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


August 15, 2003

Application of Fed Ex and UPS for the Issuance of a Subpeona Requiring the Attendance of John Fellows at the Hearing

Counsel: Fed Ex, Jeffery Kelsey, 901-434-8563, jkelsey@fed.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


August 15, 2003

Application of Fed Ex and UPS for the Issuance of a Subpeona Requiring the Attendance of Dr. Klaus Zumwinkel at the Hearing

Counsel: Fed Ex, Jeffery Kelsey, 901-434-8563, jkelsey@fed.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


August 15, 2003

Application of Fed Ex and UPS for the Issuance of a Subpeona Requiring the Attendance of Uwe Doerken at the Hearing

Counsel: Fed Ex, Jeffery Kelsey, 901-434-8563, jkelsey@fed.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


August 15, 2003

Application of Fed Ex and UPS for the Issuance of a Subpeona Requiring the Attendance of William Robinson at the Hearing

Counsel: Fed Ex, Jeffery Kelsey, 901-434-8563, jkelsey@fed.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


August 15, 2003

Application of Fed Ex and UPS for the Issuance of a Subpeona Requiring the Attendance of William Roure at the Hearing

Counsel: Fed Ex, Jeffery Kelsey, 901-434-8563, jkelsey@fed.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


August 15, 2003

Correspondence of Thompson Coburn, Counsel for Fed Ex

Original and seven copies of the Application for Subpoena directed to William Robinson; Motion for Confidential Treatment for Applications for Subpoenas of Klaus Zumwinkel, Uwe Doerken, William Roure, John Fellows, and Doug Turner; Original and seven copies of the Confidential Treatment Requested Versions of the Applications for Subpoenas directed to Klaus Zumwinkel, Uwe Doerken, William Roure, John Fellows, and Doug Turner (segregated in the envelope marked "Confidential Treatment Requested"); and Original and seven copies of the Public Versions of the Applications for Subpoenas directed to Klaus Zumwi.nkel, Uwe Doerken, William Roure, John Fellows, and Doug Turner.

Counsel: Thompson Coburn, Sean McGowan, 212-585-6976, smcgowan@thompsoncoburn.com


August 15, 2003

Motion of Fed Ex and UPS for Confidential Treatment

Enclosed in a sealed envelope are five Applications for the Issuance of Subpoenas Requiring the Attendance of the following individuals at the Hearing in OST-2002-13089: Klaus Zumwinkel, Uwe Doerken, William Roure, John Fellows, and Doug Turner.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


Served August 15, 2003

Chief Administrative Law Judge Prehearing Conference Report and Notice of Reassignment

A prehearing conference in this proceeding was held on August 13, 2003, and the transcript of that conference is hereby incorporated in this Report. At the Prehearing Conference the date for the hearing in this proceeding was changed to August 26, 2003. For the reasons set forth at the Prehearing Conference on August 13, 2003 (3 PHC Tr. 103-106), this proceeding is reassigned to Administrative Law Judge Burton S. Kolko. All future communications should be sent to him at the address indicated in the attached service list.

By: Ronnie Yoder


Served August 15, 2003

Order Correcting Third Prehearing Conference Transcript

By: Ronnie Yoder


Served August 15, 2003

Order of the Chief Administrative Law Judge

By "Motion of ASTAR Air Cargo, Inc. to Vacate or Modify the July 22, 2003 Order of Chief Administrative Law Judge" dated July 24, 2003, ASTAR Air Cargo, Inc. seeks to vacate or modify the Order of Chief Administrative Law Judge 13089-48 dated July 22, 2003, granting in part, and denying in part, a July 7, 2003, "Motion to Compel" seeking to compel ASTAR to produce certain documents.' While no party has answered the motion, Federal Express Corporation and United Parcel Service Co. filed a "Joint Response to Notice of Prehearing Conference and Order" dated August 5, 2003, requesting that the Judge affirm Order 13089-48.2 By "ASTAR Air Cargo, Inc.'s Objection and Opposition to Joint Notice of Prehearing Conference and Order" dated August 7, 2003, ASTAR responds to the requests in the Joint Opposition. Upon consideration of the arguments presented by the motion, the Joint Response, and the ASTAR Opposition, we modify Order 13089-48 to delete certain production requirements, and otherwise affirm that Order.

By: Ronnie Yoder


Served August 15, 2003

Order of the Chief Administrative Law Judge

By motion dated August 11, 2003, ASTAR Air Cargo, Inc. , formerly known as DHL Airways, Inc., requests that the Judge withdraw from this proceeding, because he "has shown a clear prejudgment of the issues arising from his extrajudicial beliefs regarding the role of an administrative law judge ... and demonstrated ... an extreme bias."' No such prejudgment or bias exists and nothing in ASTAR's motion supports disqualification.2 Accordingly, for the reasons set forth below, the Motion is denied. Additionally, in view of the reassignment of this roceeding announced at the prehearing conference on August 13, 2003, the motion is dismissed as moot.

By: Ronnie Yoder


August 15, 2003

Correspondence from Robert Gabel

Correspondence from Robert D. Gabel, Assistant General Counsel and Alternate Designated Agency Ethics Official to Wiley Rein & Fielding LLP, representatives of United Parcel Service Co., and Federal Express Corporation, informing them that Ms. Knapp has recused herself from all administrative matters concerning proceedings before the Department's Administrative Law Judges.

By: Robert Gabel


OST-02-13089


August 15, 2003

Motion of Non-Parties Boeing Capital Corporation and Boeing Capital Loan Corporation For Confidential Treatment

BCC is not an air carrier, and it does not own a controlling interest in an air carrier. BCC was not a party to transactions changing the ownership or control of ASTAR Air Cargo, Inc and it takes no position as to the proper outcome of this proceeding. BCC simply provided financing to a party to transactions involving ASTAR, and BCC neither supports nor opposes any participant's position regarding the citizenship of ASTAR.2 The information BCC produced in response to a subpoena issued on behalf of FedEx has little if any legal relevance to the current citizenship of ASTAR (or to an official determination of the citizenship of DHL Airways, Inc.), and the public interest in disclosure of that information in the context of this proceeding is essentially nil.

Index of Documents
Declaration of Jordan Weltman

Counsel: Sidley Austin, Paul Hemmersbaugh, 202-736-8000


August 18, 2003

Application of Fed Ex and UPS for the Issuance of a Subpeona Requiring the Attendance of John Dasburg at the Hearing

Counsel: Fed Ex, Jeffery Kelsey, 901-434-8563, jkelsey@fed.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


August 18, 2003

Application of Fed Ex and UPS for the Issuance of a Subpeona Requiring the Attendance of Michael Klein at the Hearing

Counsel: Fed Ex, Jeffery Kelsey, 901-434-8563, jkelsey@fed.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


August 18, 2003

Application of Fed Ex and UPS for the Issuance of a Subpeona Requiring the Attendance of Richard Blum at the Hearing

Counsel: Fed Ex, Jeffery Kelsey, 901-434-8563, jkelsey@fed.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


August 18, 2003

Motion of Fed Ex and UPS for Confidential Treatment

Counsel: Thompson Coburn, Warren Dean, 202-585-6900, for Fed Ex / Kelley Drye, David Vaughan, dvaughan@kelleydrye.com for UPS


August 18, 2003

Motion of Fed Ex and UPS for Confidential Treatment

Counsel: Thompson Coburn, Warren Dean, 202-585-6900, for Fed Ex / Kelley Drye, David Vaughan, dvaughan@kelleydrye.com for UPS


August 15, 2003

Correspondence of Thompson Coburn, Counsel for Fed Ex

Counsel: Thompson Coburn, Sean McGowan, 202-585-6976, smcgowan@thompsoncoburn.com


August 15, 2003

Correspondence of Thompson Coburn, Counsel for Fed Ex

Counsel: Thompson Coburn, Sean McGowan, 202-585-6976, smcgowan@thompsoncoburn.com


August 18, 2003

Opposition of William Robinson to Joint Application for the Issuance of a Subpeona Requiring His Attendance at the Hearing

Counsel: Pillsbury Winthrop, Philip Douglas, 212-858-1000


Served August 18, 2003

Notice of Hearing and Order

NOTICE IS GIVEN that the hearing of this matter will occur on August 26, 2003, starting that day at High Noon in Room 5332, United States Department of Transportation, Nassif Building, 400 7th Street SW, Washington, DC. The schedule for the following days of hearing will be worked out on an ad hoc basis at the hearing on the first day and thereafter as needed. For guidance, the expected "normal" hearing day thereafter would be expected to be from 10 a.m.-6 p.m., for five days per week, concluding not later than September 19th. The hearing will be in recess during the week of September 1st.

By: Burton Kolko


August 18, 2003

Bank of America's Objection to Application for the Issuance of a Subpoena Requiring the Attendance of a Custodian of Records for Bank of America at the Hearing

Third-party Bank of America, National Association by its attorneys, objects to the application by Federal Express Corporation and United Parcel Service for the issuance of a subpoena requiring the attendance of a custodian of records for Bank of America at the hearing in this matter.

Counsel: Jenkins Gilchrist, Charles Leuin, 312-425-3900


Issued and Served August 19, 2003
Order 03-8-19

Order

In the Petition, FedEx and UPS asserted that the Department erred when it required the Chief Judge to submit a Recommended Decision rather than an Initial Decision in this proceeding. If a carrier is found not to be a U.S. citizen, the ramifications of that determination are not limited to the carrier's domestic certificates, but apply to the carrier's international certificates as well. Thus, because the determination of ASTAR's citizenship in this proceeding involves foreign air transportation and certain potential outcomes could be subject to review by the President of the United States under 49 USC § 41307, requiring the ALJ to submit a Recommended Decision is not only appropriate in this case but is required under the Department's regulations.

By: Michael Reynolds


Issued and Served August 19, 2003
Order 03-8-20

Order on Review

By filing a "myriad" of documents without segregating purportedly confidential information from public, or other, information, ASTAR has not complied with the requirements of the Rule. Instead, ASTAR has sought to withhold nearly all of its filings from public disclosure. ASTAR has not segregated documents or provided a justification of why those segregated documents merit confidentiality, it has not shown why the public interest does not require their disclosure, and has not otherwise complied with Rule 12. Accordingly, we find no basis for the Judge or the Decisionmaker to review the propriety of ASTAR's confidentiality claims regarding individual documents.

This matter involves two separate issues: whether confidentiality should be denied because ASTAR failed to comply with the requirements of Rule 12, and, if not, whether the material in question is entitled to confidential treatment under the Freedom of Information Act, 5 U.S.C. § 552 standards normally applied in making such determinations. Because we answer the first question in the negative, the Chief Judge, or his successor, will need to rule on the second issue.

By: Michael Reynolds


August 20, 2003

Answer of Fed Ex and UPS to Motion of Non-Parties Boeing Capital Corporation and Boeing Capital Loan for Confidential Treatment

Counsel for FedEx Express and UPS are working with counsel for BCC to achieve a fair and expeditious resolution to the concerns raised by BCC. Accordingly, FedEx Express and UPS request that the Administrative Law Judge refrain from further action on that motion pending the outcome of those discussions.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


August 20, 2003

Joint Motion of Fed Ex and UPS to Compel

Counsel: Fed Ex, Jeffery Kelsey, 901-434-8563, jkelsey@fedex.com / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


August 20, 2003

Motion of Fed Ex and UPS for Confidential Treatment

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


August 20, 2003

Proof of Service and Subpeonas Served Upon Bank of America, Deutsche Bank and Boeing Capital Company

Subpeona of Bank of America
Subpeona of Deutsche Bank
Subpeona of Boeing Capital Company

Counsel: UPS, Kelley Drye, 202-955-9600


August 20, 2003

Motion of William Robinson to Vacate the CALJ's Orders Authorizing Robinson's Deposition

William A. Robinson, through his counsel Pillsbury Winthrop LLP, hereby moves to vacate the CALJ's June 20, 2003 and July 21, 2003 orders requiring him to submit to discovery. Although Mr. Robinson is mindful of the ALJ's admonition not to engage in additional motion practice, this sui generis issue merits review by the ALJ. This motion responds to Order 2003-8-19 (the "August 19 Order"), in which the Decisionmaker remanded to the ALJ the issue of whether Mr. Robinson's testimony is relevant to the scope of this proceeding as clarified by the Department. In light of the Department's August 19 Order, this pre-hearing issue remains unresolved and the ALJ should conduct a de novo review of whether Mr. Robinson's testimony is relevant to the Department's stated scope of this proceeding.

Counsel: Pillsbury Winthrop, Philip Douglas, 212-858-1000


August 20, 2003

Correspondence of Quinn Emanuel, Counsel for Astar

On the merits of the authenticity issue, now that FedEx and UPS have indicated they wish to offer all the documents produced by the banks and listed by them as exhibits, ASTAR can advise them that it does not object, on authenticity grounds, to any of the documents which were prepared by the banks and which a bank witness could authenticate. Of course, we could not agree to the authenticity of documents which were not prepared by the banks or ASTAR and which the bank itself could not authenticate. Accordingly, there is no need for such witnesses.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


August 21, 2003

Correspondence of Quinn Emanuel, Counsel for Astar

As counsel to ASTAR Air Cargo, Inc., I write to respond to the August 11, 2003 letter from Fred Fielding which was addressed to your colleague, Rosalind A. Knapp, and which was placed in Docket No. OST-2002-13089 pursuant to your response of August 15. Mr. Fielding's letter on behalf of Federal Express and United Parcel Service (the "Fielding Letter") warrants a response for three reasons: (1) the letter contains several misstatements of fact; (2) the letter is an improper, ex parte communication intended to influence the outcome of this proceeding; and (3) Mr. Fielding's contention that certain Department staff must recuse themselves is without merit.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


August 21, 2003

Answer of Fed Ex and UPS to William Robinson's Motion to Vacate

This is William Robinson's second motion to vacate the orders directing him to give testimony and his fifth attempt to avoid compliance with such orders. In four of these attempts (both in this proceeding and before the federal court) Mr. Robinson has argued that the orders at issue have been mooted by the July 14, 2003 restructuring. This argument has been consistently rejected. Inasmuch as Mr. Robinson raises no new grounds for his current motion, this latest attempt to avoid compliance with this agency's orders should be rejected.

By Order 13089-63, the CALJ expressly ruled that William Robinson's testimony "vas, and continues to be, relevant to the current citizenship of ASTAR Air Cargo, Inc." The facts and arguments set forth in Order 13089-63, as well as in the Joint Answer in Opposition to Motion of William A. Robinson to Vacate CALJ's Order of July 21, 2003, are incorporated as if fully set forth herein.

Counsel: Thompson Coburn, Warren Dean for Fed Ex / Kelley Drye, David Vaughan for UPS


August 20, 2003

Motion of Fed Ex and UPS to Set Deposition Date

Counsel: Thompson Coburn, Matthew D. Schwartz for Fed Ex / Kelley Drye, David Vaughan for UPS


August 21, 2003

Answer of William Robinson to Motion to Set Deposition Date

Exhibit A: William Robinson's Motion to Vated the CALJ's Orders Authorizing Deposition

Counsel: Pillsbury Winthrop, Philip Douglas, 212-858-1000


Served August 21, 2003

Order of the Chief Administrative Law Judge

Cross motions have been filed to set the deposition date for Mr. Robinson and to vacate the prior orders that required his deposition. I grant the former in part while cognizant of the request of Mr. Robinson to view afresh the need for any of his testimony at all. Accepting the representations in paragraph 3, for example, of his motion, I find that in order to give meat to the bones of those representations we need discovery, which translates into the deposition testimony of the man himself. Certainly, as his motion points out, he was a key player at least as to ownership. We cannot cross him off that list until we learn what he knows, as FedEx/UPS ask in their cross answer, about ASTAR and DHLA and the transition from the latter to the former. That, in turn, means that at least for discovery purposes, the request for scope limitation in Mr. Robinson's answer to the motion has to be denied. His discovery testimony, consistent with discovery's role, is relevant to determining the relevance and scope of any hearing testimony from him or others and of any evidence it leads to.

I also grant Mr. Robinson's request, in his answer to the motion, that assuming his hearing testimony will occur he not be required to travel twice to Washington, DC. Therefore, the parties will work out when he will be deposed for one day in Los Angeles, CA; if they cannot agree upon a date by the time the hearing begins, I will set one in court.

Accordingly, I grant the motion to take Mr. Robinson's deposition as limned above; and I dismiss all other motions on this issue. The deposition will comply with Order 13089-17; its scope will conform to all prior orders and rulings. Prior to the deposition, FedEx/UPS shall identify the categories of documents, which shall be limited to the scope of the testimony, to be produced by Mr. Robinson at or before the deposition; and upon completion of the deposition they shall supply two copies to the presiding judge, a copy to the witness, and a copy to ASTAR.

By: Burton Kolko


August 22, 2003

Motion of Astar for Clarification of Order

ASTAR Air Cargo, Inc. files this motion seeking clarification of that portion of the ALJ's Order No. 13089-3(K) which could be read to indicate that Federal Express Corporation and United Parcel Service, Inc. may introduce evidence relating to ASTAR's historical ownership and citizenship, which would, we submit, run afoul of the Department of Transportation's Orders 2003-7-36 and 2003-8-19.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


August 22, 2003

Motion of Astar for Confidential Treatment

AST AR Air Cargo, Inc., formerly known as DHL Airways, Inc., pursuant to Rule 12 of the Department's Rules of Practice (14 C.F.R. § 302.12), respectfully requests that the Department withhold from public disclosure the documents and information that ASTAR is filing herewith under seal contained in ASTAR's Opposition to the Joint Motion to Compel. These documents were filed previously under seal with a Motion for Confidential Treatment on June 13, 2003, supplemented by ASTAR's Rule 12 Motion of August 14, 2003. The pleading and schedule attached quote portions of those documents. ASTAR reaffirms its request (and incorporates by reference its June 13 and August 14 Motions) that these documents and this information not be released to the public because such disclosure would cause ASTAR competitive harm.

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net


August 22, 2003

Opposition of Astar to the Joint Motion to Compel

ASTAR Air Cargo, Inc.'s hereby submits, pursuant to 14 C.F.R. §302.11, this Opposition to the Joint Motion to Compel, which was filed on August 20, 2003, six days before the start of trial. Now that Federal Express Corp. and United Parcel Service, Inc. are finally getting the hearing they purportedly craved, they are desperate to put on the same old case they wanted to put on prior to the July 2003 reorganization of ASTAR Air Cargo, Inc. - despite the clear rulings of the Department of Transportation that only the current citizenship of ASTAR is in issue in this Docket and that evidence must be limited to that issue. Order No. 2003-8-19 at 4.

By its latest filing, FedEx moves to compel the production of documents which, by any standard, are not relevant to the proceeding. For example, it seeks the employment contract of a deceased former CEO of DHL Airways, Inc. ("Old Airways"), contracts with U.S. citizens for the maintenance of airplane tires, wheels and brakes, consulting agreements with third-parties, and material relating to an inoperative ACMI agreement and September 11, 2001 events.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


August 21, 2003

Proposed Amendments of Astar to Evidentiary Proffers Resulting From the Department's Orders 2003-7-36 and 2003-8-19

In light of the clear directive from the Decisionmaker dated August 19, 2003, limiting the issue to the current citizenship of ASTAR as a result of the July 14, 2003 acquisition, ASTAR would amend its initial submissions (filed on July 25, prior to DOT Order No. 2003-7-36) by deleting from the testimony of John H. Dasburg (Exhibit AST-3) any reference to the prior stock ownership or board members of Old Airways (page 3, second full paragraph)

ASTAR would also delete from the Rebuttal Testimony of John H. Dasburg (Exhibit AS-RT-2) that portion related to the National Mediation Board (page 8, point 6) if it is held, as it should be, that evidence relating to this is irrelevant.

ASTAR Air Cargo, Inc. does not concede the relevance of any of the documents it has submitted as rebuttal exhibits. Indeed, ASTAR believes that many of the its rebuttal exhibits are not relevant to this proceeding, as confirmed by the Department's Orders of July 30, 2003 (Order No. 2003-7-36) and August 19, 2003 (Order No. 2003-8-19). ASTAR submits its "100 Series" rebuttal exhibits, however, in the event that the ALJ admits evidence over its objection that we believe is outside the scope of the Department’s orders.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


August 22, 2003

Motion of Fed Ex and UPS for Confidential Treatment

United Parcel Service Co. and Federal Express Corporation hereby submit this Motion for Confidential Treatment to withhold from public disclosure the information in the attached sealed envelope marked "Confidential Treatment Requested Under § 302.12," as required by the Department's rules and the procedures set down for this case. We are filing this motion only to comply with the Department's rules and procedures, but our submission of this motion should not be construed to indicate that we advocate the confidential treatment of all information for which such treatment has been sought in this case. In fact, we advocate strongly that, given the proclivity of DHL Airways/AS TAR to evade public review by decisionmakers, a strong presumption of full disclosure should govern all information in this case, with narrow exceptions designed to protect the legitimate concerns of a commercial enterprise.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, dvaughan@kelleydrye.com for UPS


August 22, 2003

Correspondence of Thompson Coburn, Counsel for Fed Ex

Please accept for filing in Docket OST-2002-13089 the enclosed: (1) videotaped deposition of Michael Klein, dated July 10, 2003; (2) videotaped deposition of John Dasburg, dated July 15, 2003; (3) videotaped deposition of Vicki Bretthauer, dated July 16, 2003; and (4) the accompanying Motion for Confidential Treatment.

Consistent with DOT rules, the video taped depositions have been segregated and filed separately in the sealed envelopes, which bear the caption of this proceeding and the notation "Confidential Treatment Requested Under § 302.12. - Video Taped Testimony Given by" Michael Klein, John H. Dasburg, or Vicki Bretthauer.

Counsel: Thompson Coburn, Sean McGowan, 202-585-6976, smcgowan@thompsoncoburn.com


August 22, 2003

Correspondence of Thompson Coburn, Counsel for Fed Ex

Counsel: Thompson Coburn, Sean McGowan, 202-585-6976, smcgowan@thompsoncoburn.com


August 22, 2003

Subpeona of John Dasburg, Richard Blum and Michael Klein

Counsel: Thompson Coburn, Sean McGowan, 202-585-6976, smcgowan@thompsoncoburn.com


August 22, 2003

Subpeona of Klaus Zumwinkel, Uew Doerken, William Roure, Doug Turner and John Fellows

Counsel: Thompson Coburn, Sean McGowan, 202-585-6976, smcgowan@thompsoncoburn.com


August 22, 2003

Subpeona of William Robinson

Counsel: Thompson Coburn, Sean McGowan, 202-585-6976, smcgowan@thompsoncoburn.com


Served August 22, 2003

Order of the Chief Administrative Law Judge

Cross motions in limine have been filed to strike submitted testimony/exhibits. The motions are denied. ASTAR will be allowed to present evidence that supports its theoryy of the case that "evidence of the competitive impact of a citizenship determination is ... relevant and must be considered" as a matter of law [ASTAR Opposition ... dated August 6, 2003]. Thus, we do not strike the testimony of Drs. Robyn and Ordover as part of our obligation to develop the full record that is required under the Department's case law.

For that same reason we do not strike the FedEx/UPS exhibits as requested by ASTAR in its motion dated August 5, 2003. Those parties, too, are entitled to pursue their theory of the case, i.e., that the "July 14 acquisition did not change DHLA/ASTAR's citizenship (in contrast to ownership)". There may prove to be individual exhibits that cannot be tied in or are unneeded, irrelevant, or immaterial, but for now there is no reason to strike the exhibits en masse.

In these pleadings the parties appear to recognize that the question of ownership does not dispose of a determination of citizenship, and that the latter is to be considered in all of its factual, legal, and policy ramifications as the Department has identified those over its history and that of the CAB. Our job, as said above, is to see that the Department has as full a record as time allows to decide these issues.

By: Burton Kolko


August 25, 2003

Motion of Astar to Quash Subpoenas

ASTAR Air Cargo, Inc. hereby submits, pursuant to 14 C.F.R. § 302.25(f), its Motion to Quash Subpoenas sent to counsel for John H. Dasburg, . Richard Blum and Michael R. Klein on August 21, 2003,1 merely five days before the start of trial. Once again, just as in the case of the "custodial" subpoenas they sent to various financial institutions earlier this week, Federal Express Corp. and United Parcel Service, Inc. have wasted the time of the Administrative Law Judge ("ALT'), the parties, and counsel with entirely unnecessary compulsory process, for reasons that are at best mystifying and at worst appalling.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


August 25, 2003

Joint Answer of Fed Ex and UPS to Motion for Clarification

On August 22, 2003, Air Cargo, Inc. filed a Motion for Clarification of Order No. 13089-3(K), repeating relevance arguments that have been rejected repeatedly by the Administrative Law Judge and the Decisionmaker in this proceeding. Federal Express Corporation and United Parcel Service Co. hereby file a Joint Answer in Opposition to ASTAR's latest attempt to assert this argument.

On August 25, 2003, the Administrative Law Judge issued Order No. 13089-4(K) denying all motions. We presume that ASTAR's Motion for Clarification was before the Judge at that time, and has therefore been denied. Assuming it was not, however, it should be denied as frivolous. The Department has made it clear that relevance issues are for the Administrative Law Judge and that ASTAR's prior ownership and actual control can be considered "to the degree... [they] relate to ASTAR's present citizenship." Order 2003-8-19.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900, wdean@thompsoncoburn.com for Fed Ex / Kelley Drye, David Vaughan, dvaughan@kelleydrye.com for UPS


Served August 25, 2003

Order of the Chief Administrative Law Judge

All outstanding motions are denied, excepting those dealing with the confidential treatment of documents or testimony. The latter will be dealt with seriatim as we come to a document or testimony, and the appropriate party will be the one to "flag" the item for the presiding judge. Where nonparties have sought confidential treatment, the party first using or questioning on such matter will flag it for the presiding judge. Once confidential treatment is afforded on any given hearing day, for that day the transcript will be sealed, etc., and at that point in the day the hearing will be closed for the remainder of the day.

By: Burton Kolko


August 22, 2003

Motion of Bank of America for Confidential Treatment

Third-party Bank of America, National Association, by its attorneys, hereby requests that, pursuant to 14 C.F.R. § 302.12, the Administrative Law Judge treat as confidential and withhold from public disclosure documents disclosed by Bank of America as referred to herein. On July 28, 2003, Bank of America produced to counsel for UPS eleven boxes of documents containing almost 24,000 pages.' Those documents consisted of various commercial lending and lease financing documents, including loan and lease financing documents, drafts of those documents, application documents, correspondence between Bank of America and other parties relating to commercial lending and lease financing relationships and application processes. The documents produced by Bank of America contain commercial or financial information obtained from a person outside the government and are privileged or confidential.

Counsel: Jenkins Gilchrist, Charles Leuin, 312-425-3900


August 20, 2003

Motion of Boeing Capital Corporation and Boeing Capital Loan Corporation for Confidential Treatment

We represent non-parties Boeing Capital Corporation and Boeing Capital Loan Corporation in the above-referenced proceeding. We learned today that this proceeding has been reassigned from CALJ Yoder to you. Because the date of the hearing in this matter is fast-approaching, we are providing for your convenience copies of BCC's pending Rule 12 Motion for Confidential Treatment. The Motion seeks confidential treatment for, and protection from public disclosure of, documents BCC produced under subpoena in this proceeding. Also attached is a copy of a letter we sent to Judge Yoder earlier this week explaining certain circumstances surrounding BCC's production and filing of documents in this matter, and its request that the subject documents be kept confidential. See Letter from P. Hemmersbaugh and R. Menard to The Honorable Ronnie A. Yoder (August 18, 2003) (copy attached) (the "August 18 Letter").

Counsel: Sidley Austin, Paul Hemmersbaugh, 202-736-8538, phemmersbaugh@sidley.com


August 26, 2003

Memorandum of Law in Support of Motion to Quash Subpoenas Directed to Douglas Turner

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


August 26, 2003

Motion to Quash Subpoenas Directed to Douglas Turner

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


August 26, 2003

Memorandum of Law in Support of Motion to Quash Subpoenas Directed to John Fellows and William Roure

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


August 26, 2003

Motion to Quash Subpoenas Directed to John Fellows and William Roure

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


August 26, 2003

Memorandum of Law in Support of Motion to Quash Subpoenas Directed to Klaus Zumwinkel and Uew Doerken

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


August 26, 2003

Motion to Quash Subpoenas Directed to Klaus Zumwinkel and Uew Doerken

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


August 26, 2003

Affidavit of Douglas Turner

By: Douglas Turner


August 27, 2003

Transcript of Hearing on Tuesday, August 26, 2003

By: Burton Kolko


August 28, 2003

Motion of William Robinson for Confidential Treatment

Counsel: Pillsbury Winthrop, Philip Douglas, 212-585-1000


August 27, 2003

Memorandum of Randall Bennett

Memorandum to Judge Burton S. Kolko, requesting the listed staff members be permitted to attend the portions of the hearing that must be closed to the public in order to discuss confidential information.

By: Randdall Bennett


August 27, 2003

Hearing/Meeting Transcript

By: Burton Kolko


August 28, 2003

Transcript of Hearing - Thursday August 28, 2003

By: Burton S. Kolko


August 29, 2003

Joint Opposition of Federal Express and UPS to Motion to Quash Subpoenas Directed to Klaus Zumwinkel and Uwe Dowrken

Counsel: Kelley Drye, David Vaughan, dvaughan@kelleydrye.com / Federal Express, R. Jeffrey Kelsey, 901-434-8575


August 29, 2003

Joint Opposition of Federal Express and UPS to Motion to Quash Subpoena Directed to Douglas Turner

Counsel: Kelley Drye, David Vaughan, dvaughan@kelleydrye.com / Federal Express, R. Jeffrey Kelsey, 901-434-8575


August 29, 2003

Joint Opposition of Federal Express and UPS to Motion to Quash Subpoena Directed to John Fellows and William Roure

Counsel: Kelley Drye, David Vaughan, dvaughan@kelleydrye.com / Federal Express, R. Jeffrey Kelsey, 901-434-8575


August 29, 2003

Joint Motion of Federal Express and UPS for Leave to File Opposition to Motion to Quash Subpoenas Directed to Messrs. Fellows and Roure Out of Time

Counsel: Kelley Drye, David Vaughan, dvaughan@kelleydrye.com / Federal Express, R. Jeffrey Kelsey, 901-434-8575


August 29, 2003

Joint Motion of Federal Express and UPS for Leave to File Opposition to Motion to Quash Subpoenas Directed to Messrs. Zumwinkel and Doerken Out of Time

Counsel: Kelley Drye, David Vaughan, dvaughan@kelleydrye.com / Federal Express, R. Jeffrey Kelsey, 901-434-8575


August 29, 2003

Joint Motion of Federal Express and UPS for Leave to File Opposition to Motion to Quash Subpoenas Directed to Mr. Tuner Out of Time

Counsel: Kelley Drye, David Vaughan, dvaughan@kelleydrye.com / Federal Express, R. Jeffrey Kelsey, 901-434-8575


September 2, 2003

Joint Opposition of Fed Ex and UPS to Motion to Quash Subpeonas

Counsel: Thompson Coburn, Warren Dean, 202-585-6900, wdean@thompsoncoburn.com for Fed Ex / Kelley Drye, David Vaughan, dvaughan@kelleydrye.com for UPS


September 2, 2003

Joint Motion of Fed Ex and UPS for Leave to File Opposition to Motion to Quash Subpeonas Directed to William Robinson Out of Time

Counsel: Thompson Coburn, Warren Dean, 202-585-6900, wdean@thompsoncoburn.com for Fed Ex / Kelley Drye, David Vaughan, dvaughan@kelleydrye.com for UPS


September 2, 2003

Motion of Dr. Klaus Zumwinkel, Uwe Doerken, and Douglas Turner for Reconsideration of Order Denying Motions to Quash Subpeonas

Attachment 1: Commodity Futures Trading Commission v. Naji Robert NAHAS

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


August 29, 2003

Transcript of Hearing Friday, August 29, 2003 (pages 708 - 927)

By: Burton Kolko


September 3, 2003

Motion of Astar for Confidential Treatment

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net


September 2, 2003

Bank of America's Motion to Vacate the CALJ's July 18, 2003 Order and to Compel the Return of Documents that are Not Relevant

Counsel: Jenkens & Gilchrist, Arthur Muir, 312-425-3900


Transcript of Hearing - Monday September 8, 2003

Transcript of Hearing - Tuesday September 9, 2003

By: Burton Kolko


September 10, 2003

Joint Opposition of Federal Express and United Parcel Service to Motion for Reconsideration of Order Denying Motions to Quash Subpoenas Directed to Klaus Zumwinkel, Uwe Doerken and Douglas Turner

Continually perturbed by the Department's audacity in requiring foreign individuals who head foreign companies that (1) own and control a foreign indirect air carrier with substantial operations in the United States and (2) engage in U.S. foreign and domestic air transportation in the United States presumably in accordance with and under the rules established by the Department of Transportation, Dr. Zumwinkel, Mr. Doerken and now Mr. Turner, all move this Court for reconsideration of Your Honor's Order denying their Motions to Quash subpoenas requiring their attendance at the Hearing of this matter. In what can only be seen as yet another of the numerous stall tactics, the motion for reconsideration of the Order does not provide any new information to substantiate such a review. Rather, Movants simply reassert the arguments as posed in their numerous prior motions to quash in the hopes that repetition may somehow give credence to their claims. FedEx Express and UPS therefore find themselves before the Judge once again to respond to these continued efforts to avoid providing information regarding the issues outlined by the Department and the presiding Judges in this proceeding. As these witnesses have stated no valid grounds for reconsideration, the motion for reconsideration must be denied.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900, wdean@thompsoncoburn.com for Federal Express / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


September 10, 2003

ASTAR's Rejected Exhibits File

By: Neal Gross


Transcript of Hearing Wednesday September 10, 2003


OST-02-13089

September 12, 2003

Motion of Fed Ex and UPS for Confidential Treatment

This motion covers information contained in the deposition of William A. Robinson, taken on August 25, 2003, at which time Mr. Phillip Douglas, counsel for Mr. Robinson, requested confidential treatment of the deposition. By this filing we are honoring that request. Further, because no one has told us or the Administrative Law Judge what portions of it, if any, fall within the exemptions from the U.S. Freedom of Information Act, we are unable to explain what information falls within exemptions from that Act. Similarly, we cannot explain why public disclosure of the testimony or the deposition exhibits would adversely affect any party's interests.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, dvaughan@kelleydrye.com for UPS


September 12, 2003

ASTAR's Rejected Exhibits File


Transcript of Hearing Thursday, September 11, 2003

By: Neil Gross



September 12, 2003

By: Patricia Matthews


September 12, 2003

Hearing Transcript for Friday September 12, 2003


September 17, 2003

Motion of DHL Worldwide Express and DHL Holdings (USA) for Confidential Treatment

Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6000


Served September 22, 2003

Order of the Administrative Law Judge

By: Burton Kolko


September 18, 2003

Objection of Astar to Request for Postponement of Hearing

FedEx has presented no reason why this hearing cannot be completed now. If, and in the event, the DHL document issue yields some evidence which FedEx wishes to introduce, it can move to supplement the record at that time and ASTAR can respond accordingly. It is time to put this hearing to rest.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


September 18, 2003

Request of Fed Ex for Postponement of Hearing

DHL has produced a total of three documents. In so doing, DHL has effectively refused to comply with the subpoenas and is in contempt of both this Court's and the federal court's orders directing it to produce documents. Indeed, by its response, DHL is representing that it does not have documents relating to, among other things, the sale of its equity interest in DHL Airways! ASTAR or its communications with Airways/ASTAR, one of its primary carriers in the United States and a company in which it held an equity interest. This position is not credible.

For the above reasons, the resumption of the hearing should be postponed until the week of October 6, 2003 so that we may (1) resolve disputes concerning the adequacy of the production, (2) review any documents that may be produced following the resolution of the dispute, and (3) prepare an effective examination of Messrs. Fellows and Roure, and ASTAR's rebuttal witnesses.

Counsel: Fed Ex, Jeffery Kelsey, 901-434-8563, jkelsey@fedex.com


September 25, 2003

Correspondence of Quinn Emanuel, Counsel for Astar

As you know, Federal Express and United Parcel Service yesterday filed a motion to exclude Mr. Hammes, ASTAR's Chief Operating Officer, as a rebuttal witness. Mr. Gary Hammes' testimony is required in order to rebut opinions and analysis presented by FedEx's rebuttal witness, Dr. Campbell (much of which was disclosed for the first time during his oral testimony). While the parties have been working under an Order by Judge Yoder requiring that all responses be filed within 24 hours, we ask that we be permitted an extra day to prepare our response to the Motion to Exclude, which would then be filed tomorrow, September 26. David Vaughan of Kelley Drye & Warren has consented to this brief extension on behalf of UPS and FedEx.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


September 24, 2003

Joint Motion of Fed Ex and UPS to Exclude Rebuttal Witness

Move to exclude Mr. Gary L. Hammes as a rebuttal witness for Astar Air Cargo, Inc. in this proceeding. Allowing a surprise witness to testify at this late date would be unfair and prejudicial. In support hereof, the Joint Movants state as follows

Counsel: Jeffery Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, dvaughan@kelleydrye.com for UPS


September 25, 2003

Renewed Motion of Fed Ex to Compel

At the hearing on September 12, 2003, Your Honor denied the request of Federal Express Corporation and United Parcel Service to compel ASTAR Air Cargo, Inc. to produce its 2002 audited financial statements. The denial was subject to the offer of ASTAR's lawyer to supply a sworn statement that the so-called Pre-Effective Time Maintenance CapEx existed before July 14, 2003, instead of being a device to fund the restructuring of DHL Airways. The discussion on this issue took place at the end of a long week of hearings, and we believe that both the suggested proffer and the ruling on the motion were contrary to law.

Exhibit 1: Affidavit of Jerold Zimmerman
Exhibit 2: Correspondence from Boeing Capital Loan

Counsel: Thompson Coburn, Patricia Snyder, 202-585-6900


September 26, 2003

Opposition of Astar to Joint Motion to Exclude Rebuttal Witness

In the Joint Motion FedEx seeks to exclude the testimony of Gary Hammes, ASTAR's Chief Operating Officer, on the ground that it did not know of this witness until September 20, two and one half weeks before he is scheduled to testify. Not only is the motion baseless but it conies with particular ill grace in light of FedEx's tactics during this trial. Specifically, the motion should be denied because (1) the witness' testimony is relevant, it responds directly to assertions made during FedEx's case and it could not have been anticipated in advance, since the testimony (of Dr. Campbell) which will be rebutted was articulated for the first time from the witness stand and (2) while not necessary to decide this motion, the Court should note that it takes more than a little hubris for FedEx to assert such a claim given its conduct during the hearing to date.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


September 26, 2003

Opposition of Astar to "Renewed" Motion to Compel

FedEx's motion should be denied summarily because (1) discovery is long over; (2) except for two possible additional DHL witnesses, FedEx has presented its case; and (3) ASTAR has offered, in lieu of producing the 2002 audited financial statement, to provide an affidavit or sworn oral testimony regarding the presence of the capital expenditures in ASTAR's financial statements, as well as the nature and origin of the debt, and the AU has agreed that it may do so. Since ASTAR is going to proffer at least one witness during its rebuttal case to testify regarding the subject, that should end the matter. FedEx will have the opportunity to ask its questions of ASTAR's rebuttal witness(es) during cross examination. But what it is not free to do is to relitigate an issue the ALJ has already decided or continue rummaging through ASTAR's files when discovery has ended.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


September 29, 2003

Letter from John Rounsaville

You are dead wrong to assert in your September 17 letter that it "is inconceivable" that DHLWE and DHLH do not have documents that are responsive to the subpoenas you served. Directly to the contrary, teams of litigation lawyers from Wilmer, Cutler & Pickering and legal assistants went to the three principal offices of DHL in the U.S. and, after a very thorough and careful search, including interviews of all of the key senior management, found the responsive documents that were provided to you.

Your letter contains assumptions that have no factual basis. You assert, for example, that it is "inconceivable" that there are no documents relating to the decision to sell shares in DHL Airways to Mr. Dasburg (see Specification No. 1 of your subpoenas). That is not in the least surprising. The decision to sell some shares to Mr. Dasburg and then to sell all of the equity to him and his partners was not made at either DHLWE or DHLH. It would therefore be readily conceivable to find no documents relating to the decision at either entiiy in dJçyour colleagues that there would likely be no documents relating to the decision to sell in an email last August. Discuss that with Mr. Vaughn.

By: John Rounsaville


September 29, 2003

Correspondence of Quinn Emanuel, Counsel for Astar

This is in response to Mr. Kelsey's letter of September 26, 2003 to Your Honor - the latest in FedEx's series of efforts to have the ALJ apply one set of rules to it and an entirely different set to ASTAR. I am constrained to write to Your Honor for two reasons: first, to correct the record regarding ASTAR's rebuttal witnesses; and second, since it is important to have the issue resolved promptly, to object to FedEx's request that ASTAR supply additional written testimony for all its rebuttal witnesses in advance of the next hearing date because the request is inappropriate in any case, but especially here given FedEx's actions.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


September 30, 2003

Motion of Fed Ex and UPS for Leave to File and Motion to Shorten Answer Period

Federal Express Corporation and United Parcel Service Co. move for leave to file the attached Petition for Reconsideration and Application to Extend Deadline. The petition seeks reconsideration and withdrawal of Orders 2003-7-36 and 2003-8-19, which have effectively prevented the parties from developing a complete record that takes into consideration the totality of the circumstances required by law. Further, FedEx Express and UPS move that the period for filing answers to this Motion be shortened to October 3, 2003, given the expedited nature of this proceeding.

Appendix A: Examples of Regulatory Misrepresentation and Evasion by DHL Entities
Appendix B: Exhibits

Counsel: Thompson Coburn, Warren Dean, 202-585-6900, wdean@thompsoncoburn.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


September 30, 2003

Petition of Fed Ex and UPS for Reconsideration, Application to Extend Deadline and Motion to Shorten Time

The only way to ensure that these efforts do not succeed is for the Department to eliminate its deadline for the AL's decision. Until these matters are resolved and the cooperation of these DHL non-parties can be obtained, the hearing mandated by Congress cannot be completed and these entities will continue to exploit the time limit established by the Department to frustrate the proceeding. Based on the foregoing, FedEx Express and UPS respectfully request the Department to reconsider and withdraw Orders 2003-7-36 and 2003-8-19, and eliminate the deadline for the Judge's decision to allow the development of a complete evidentiary record, including evidence from DHLWE and Holdings. Further, FedEx Express and UPS move that the period for filing answers to this Petition be shortened to October 3, 2003, given the expedited nature of this proceeding.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900, wdean@thompsoncoburn.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


Served September 30, 2003

Order 13089-6(K)

Order 13089-6(K) denying the motion of September 25, 2003 filed by the joint FedEx/UPS parties.

By: Burton Kolko


October 2, 2003

Opposition of Astar to Motion for Leave to File and Motion to Shorten Answer Period

While the papers filed by FedEx are styled as a Petition for Reconsideration, it is clear that its filing is nothing more than an improper attempt to argue "its case" to the Department in advance of the AL's recommended decision. The Second Petition is replete with false statements and misrepresentations and includes hundreds of pages of exhibits that have no bearing on ASTAR' s citizenship. Having failed to prove any of its assertions in the ongoing hearing, and fearing the inevitable, FedEx sought a continuance from the AU under the guise of pursuing discovery. Instead, FedEx seemingly used that time to assemble this massive propaganda document, apparently in the hopes of coloring the Department's views or derailing this proceeding so that it can rewrite the rules to serve its purpose - putting a competitor out of business. These efforts should not be countenanced.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


October 2, 2003

Correspondence of Quinn Emanuel, Counsel for Astar

As Your Honor knows, ASTAR is prepared to go forward with its rebuttal case when the hearing resumes on October 8, 2003, if FedEx and UPS "rest" their case. To that end I have sought to have Mr. Kelsey advise me whether FedEx and UPS will rest their case or call the additional witnesses they have identified. It is essential to know this so that we can arrange the schedules of our executives and experts accordingly.

Despite my efforts, I have been unable to obtain an answer to my question. Instead, FedEx seems to be arguing, as it has for some time now, that it cannot make that determination because it is still hoping to receive more documents from two DIM companies. Unfortunately that, we submit, is no longer an acceptable answer. This proceeding must come to an end and ASTAR, as well as the AU, has the right to know if FedEx will rest its case so that the rest of the schedule can be finalized.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8146, sandylitvack@quinnemanuel.com


Served October 2, 2003

Order 13089-7(K)

The presiding judge will not be available on Friday or on Monday. Therefore, without awaiting a response ASTAR's request dated today is granted to ascertain from FedEx/UPS their plans for the October 8th resumption of the hearing. By the close of business today, FedEx/UPS will kindly inform us of what remaining witnesses will be called next week, and when (recognizing that if seminal events, meaning material rulings from other bodies, occur in the interim those plans may change).

By: Burton Kolko


October 2, 2003

Joint Motion of Fed Ex and UPS to Continue Hearing

As Your Honor is aware, ASTAR Air Cargo, Inc. does not wish to go forward with its rebuttal case until Federal Express Corporation and United Parcel Service Co. have completed their affirmative case. We understand this position and do not take exception to it. As part of our affirmative case, however, we intend to elicit testimony from Klaus Zumwinkel, Uwe Dörken, John Fellows, and William Roure, all officers of the DHL network and its parent, Deutsche Post. Accordingly, we respectfully move for an order continuing this proceeding until two weeks after the date on which DHL produces all documents, unless relieved of the obligation to do so.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


October 6, 2003

Joint Emergency Motion of Fed Ex and UPS to Decisionmaker to Expedite Conseration of Request to Eliminate Deadline and Motion to Shorten Answer Period

As of this writing, DHL Holdings, Inc. and DHL Worldwide, Express, Inc. are in contempt of Court orders requiring them to cooperate with discovery in this proceeding.' As Federal Express Corporation and United Parcel Service Co. have stated repeatedly in this proceeding, information from these two companies is critical to the hearing:

• DHLH is a former shareholder of the certificate holder, DHL Airways/ASTAR Air Cargo (DHLA/ASTAR) and, therefore, the divesting entity in this control inquiry; and

• DHLA/ASTAR derives 90% of its revenue from DHLWE, which holds Part 297 exemption authority. DHLWE supplies most ground support and administrative services to DHLA/ASTAR.

DHL's strategy in this case is to run the clock out on the arbitrary deadline established by the Department on the hearing before the Administrative Law judge. To prevent that strategy from succeeding, the Department should immediately: (1) grant the September 30, 2003, joint Motion to Eliminate the Deadline in this proceeding; and (2) order DHLWE and its affiliates to cooperate with discovery in the case.

Counsel: Thompson Coburn, Patricia Snyder, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


October 6, 2003

Supplement to Joint Emergency Motion of Fed Ex and UPS to Decisionmaker to Expedite Conseration of Request to Eliminate Deadline

Three strikes and you are in contempt. That is what is going to happen to Deutsche Post entities' DHL Holdings and DHL Worldwide Express if they ignore, for the third time, a subpoena issued by the government of the United States to produce documents concerning their past ownership and current involvement with DHL Airways/ASTAR Air Cargo. Unfortunately, the artificial and arbitrary deadline placed on the Administrative Law Judge to issue his recommended decision has had the unintended consequence of giving the Deutsche Post and its entities the incentive to violate US law. The Department must eliminate its deadline today to meet Congress' intent to have a fill and fair public review of the citizenship of DHL Airways/ASTAR Air Cargo, and that the truth of the ownership and control by Deutsche Post over a U.S. domestic airline can be determined.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


October 6, 2003

Joint Motion of Fed Ex and UPS for Confidential Treatment of District Court Order

This Motion seeks to protect information contained in Magistrate Judge Alan Kay's Memorandum Order dated October 3, 2003. The Memorandum Order was served in response to (1) the Motion of FedEx Express and UPS to Hold Respondents DHL Worldwide Express, Inc. and DHL Holdings, in Contempt of Court and for Sanctions and (2) Supplemental Filing of FedEx Express and UPS Pursuant to Court Request, which were filed with the U.S. District Court for the District of Columbia in Misc. Action No. 03-1658 on September 24, 2003 and October 1, 2003, respectively.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


OST-02-13089

October 7, 2003

Correspondence of Garfinkle, Wang, Seiden & Mosner

Counsel: Garfinkle Wang, Elliot Seiden, 703-522-0900


OST-02-13089

October 7, 2003

Opposition of Astar to Petition for Reconsideration, Application to Extend Deadline and "Emergency" Motion

FedEx offers nothing new in its latest attempt to stall or derail this proceeding, other than an air of desperation. The Second Petition is in reality (1) a rehash of arguments made in its pijQr motion for reconsideration which has already been ruled upon, (2) devoid of any rational explanation as to why historical structures, contracts or circumstances, which no longer exist, would be probative of ASTAR's current citizenship, and (3) built entirely on a flawed premise which is easily debunked in Point I below. Moreover, there is no "emergency" for the reasons set forth in Point VT below.

Counsel: Quinn Emanuel, Sanford Litvack, 202-702-8100, sandylitvack@quinnemanuel.com


October 8, 2003

Transcript of Hearing Wednesday, October 8, 2003


October 9, 2003

Opposition of Astar to Renewed "Emergency" Motion to Eliminate Deadline

Like the boy who cried wolf, FedEx has filed yet another "emergency" motion -- its second of the week on the same subject. Predicated on comments made by the ALJ during the hearing on October 8, FedEx once again asks the Department to lift all deadlines in this docket and permit it to continue its open-ended witch hunt. While ASTAR does not oppose a reasonable extension of the deadline (such as the two week extension suggested in its Opposition to FedEx's Second Petition, filed on October 7) for post hearing submissions and for the AU to issue his recommended decision, it strenuously objects to FedEx's request and the AL's endorsement thereof to lift any and all deadlines for a recommended decision. Indeed, we would note that the AU offered an alternative request to the Department for a 30 day extension, as opposed to an infinite and indefinite one -- an alternative which FedEx fails to mention in its latest filing.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


October 8, 2003

Renewed Emergency Motion of Fed Ex and UPS to Eliminate Deadline

FedEx Express and UPS renew, once again, their emergency request for immediate action on their Petition for Reconsideration and Application to Extend Deadline, filed September 30, 2003. Action by the Department is requested by the close of business this Thursday, October 9, 2003, to allow for its consideration at the hearing this Friday, October 10, 2003.

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


October 8, 2003

Transcript of Hearing Wednesday, October 9, 2003

By: Burton Kolko


October 14, 2003

Astar Air Cargo's Motion for Leave to File and Supplemental Opposition to Renewed "Emergency" Motion to Eliminate Daadline

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100


October 10, 2003

Motion of DHL Worldwide Express and DHL Holdings for Confidential Treatment

Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6000


October 13, 2003

Motion of DHL Worldwide Express and DHL Holdings for Confidential Treatment

Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6000


October 14, 2003

Renewed Motion of Fed Ex and UPS to Continue Hearing

Counsel: Thompson Coburn, Sean McGowan, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, dvaughan@kelleydrye.com for UPS


Served October 14, 2003

Order 13089-8 (K)

Order 13089-8 (K) of Administrative Law Judge Burton S. Kolko, which endorses the request of Federal Express Corporation and United Parcel Service Co. at the hearing on October 8, 2003, to extend the deadline to either January 2, 2004, or some later time to allow for the conclusion of the ongoing District Court Case to enforce certain orders and subpoenas in this proceeding.

By: Burton Kolko


October 14, 2003

Transcript of the hearing held on Friday October 10, 2003, page 2453 through page 2720

By: Burton Kolko


October 14, 2003

Exhibits Submitted by the Parties

By: Burton Kolko


October 15, 2003

Motion of DHL Worldwide Express and DHL Holdings (USA) for Confidential Treatment

Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6000


October 15, 2003

DHL Worldwide Express and DHL Holdings (USA) Motion to Confirm Scope of Subpoenas and Motion to Shorten Time to Answer

This motion has been necessitated by recent efforts of FedEx/UPS to disavow a specific representation made in their application for the subpoenas regarding the scope of Requests Nos. 6 and 7, a representation on which both WWE/Holdings and the Chief Administrative Law Judge ("CALJ") therefore relied. By confirming the scope of WWE/Holdings' subpoena obligations, the ALJ will accelerate the companies' ongoing production of documents, which we anticipate can be completed this week if the original limitation of the scope of Requests Nos. 6 and 7 agreed to by FedEx and UPS is confirmed. If that agreed limitation is not confirmed, the search for responsive documents-though irrelevant to the matters at issue in this proceeding-will be vastly expanded (at great cost to WWE and Holdings), and discovery could drag on for weeks.

Counsel: Wilmer Cutler, John Rounsaville, 202-663-6000


October 15, 2003

Hearing/Meeting Transcript of DHL Airways.

By: Burton Kolko


October 16, 2003

Exhibits Submitted by Parties

By: Burton Kolko


October 16, 2003

Transcript of the Hearing that took place on Wednesday, October 15, 2003, pages 2998 through 3041

By: Burton Kolko


Served October 17, 2003

Order of the Chief Administrative Law Judge

Order of the Administrative Law Judge stating that since no objections were received, the motions of DHL World Express, Inc. and DHL Holdings (USA), Inc., are granted to accord confidential treatment to the matters listed as an attachment to this order. Pursuant to 14 CFR 301.12, access to the listed items is limited to counsel and outside experts who file or have filed an affidavits containing specific statements.

By: Burton Kolko


October 17, 2003

Motion of ASTAR for Leave to File and Supplemental Opposition to Renewed "Emergency" Motion to Eliminate Deadline

Files this motion for leave to file a supplemental opposition, pursuant to 14 C.F.R. § 302.14, to the "Renewed Emergency Motion to Eliminate Deadline" filed by Federal Express and United Parcel Service, to advise the Department of further developments in this proceeding since ASTAR's October 14 submission.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


October 17, 2003

Motion of DHL Worldwide Express and DHL Holdings (USA) for Confidential Treatment

Hereby request that the Department issue an order withholding from public disclosure documents produced today to Federal Express Corporation and United Parcel Service Co. pursuant to Subpoenas signed by the Chief Administrative Law Judge on July 16, 2003, as revised by United States Magistrate Judge Alan Kay in an Order dated October 3, 2003.

Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6000


Served October 16, 2003

Order 13089-9(K)

The last item of business conducted at the hearing dealt with the Motion to Confirm Scope of Subpoenas filed by counsel for DHL World Express, Inc. and DHL Holdings (USA), Inc. The presiding judge expressed doubts whether jurisdiction lay here or instead in the US District Court, where pending actions resided about the same subpeona. Counsel for the above parties and for FedEx/UPS set up a telephone conference between the presiding judge and the Magistrate Judge. The Magistrate Judge expressed his view that the presiding judge resolve any scope questions about the subpoena. Both counsel were then advised by telephone to resolve their impasse and to file their agreed-upon modification language today. They have done so as follows; it is effective now. We thank counsel for their efforts.

By: Burton Kolko


October 20, 2003

Motion of DHL Worldwide Express and DHL Holdings (USA) for Confidential Treatment

Hereby request that the Department issue an order withholding from public disclosure documents produced today to Federal Express Corporation and United Parcel Service Co. pursuant to Subpoenas signed by the Chief Administrative Law Judge on July 16, 2003, as revised by United States Magistrate Judge Alan Kay in an Order dated October 3, 2003.

Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6000


Order 03-10-25
OST-02-13089

Issued and Served October 22, 2003

Order

By this Order, we grant the Petition for Reconsideration filed by Federal Express Corporation and United Parcel Service Co. on September 30, 2003, which was partially endorsed by Administrative Law Judge Burton J. Kolko in this proceeding, and grant the FedEx/UPS Motion for Leave to File Late. We extend the deadline for the Recommended Decision in this case for one month, as recommended by the ALJ, to January 2, and deny the relief otherwise requested by the petition. This extension will give the parties adequate time to address all of the relevant factual and legal issues without unduly delaying the completion of this proceeding. We will not entertain petitions for reconsideration of this Order.

We emphasize again that the issue in this proceeding is the current citizenship of ASTAR. The Department has the authority to limit the scope of the issues in a proceeding set for hearing before an ALJ. The administrative law judge has the authority to determine the relevance of the evidence in the proceeding.*’ The ALJ’s relevance determinations, however, must reflect the scope of the issues before him, as established by the Department. He has ruled on evidentiary matters on a case-by-case basis and will continue to do so.

By: Michael Reynolds


October 22, 2003

Answer of Fed Ex and UPS to Motion for Leave to File

As a preliminary matter, ASTAR's motion and supplement are procedurally deficient and should be denied summarily on that ground alone.' First, it is entirely unclear what ASTAR's October 17 filing is intended to achieve, or even to whom it has been addressed. The filing itself is addressed to the Office of Hearings2 and is couched as a motion for leave to file pursuant to Rule 302.14, the rule that governs Petitions for Reconsideration.3 But ASTAR does not assert that it is challenging any ruling of the Presiding Judge. Moreover, if appealing a ruling of the Presiding Judge to the Department were its aim, the rules would not permit such a filing, at least without the judge's permission. Indeed, Rule 302.11(a) states specifically that motions in the nature of petitions for review are not authorized.' Accordingly, FedEx Express and UPS are at a loss as to what this filing is and to whom it is directed.

If anything regarding ASTAR's filing is clear, however, it is the fact that it is unauthorized and must be denied for failure to show good cause. It is unauthorized because there is no such pleading as a "supplemental opposition" under the Department's Rules. Under 14 C.F.R. §302.6, unauthorized documents may be accepted only if leave has been obtained, which requires a showing of good cause. ASTAR has made no such showing. Indeed, the motion asserts no cause - good or bad - for granting leave at all.

Counsel: Thompson Coburn, Sean McGowan, 202-585-6969 for Fed Ex / Kelley Drye, David Vaughan, dvaughan@kelleydrye.com for UPS


OST-02-13089

October 23, 2003

Correspondence of Quinn Emanuel, Counsel for Astar

I write to request that the court hold a teleconference with the parties tomorrow, October 24, to address the comment, in Federal Express's and UPS's Joint Motion Requesting An Extension of Time, filed yesterday, that they may yet "move relevant documents [produced by DIM] into evidence or make. other motions based on the information contained therein."

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


October 22, 2003

Motion of DHL Worldwide Express and DHL Holdings (USA) for Confidential Treatment

Hereby request that the Department issue an order withholding from public disclosure documents produced today to Federal Express Corporation and United Parcel Service Co. pursuant to Subpoenas signed by the Chief Administrative Law Judge on July 16, 2003, as revised by United States Magistrate Judge Alan Kay in an Order dated October 3, 2003.

Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6000


October 22, 2003

Joint Motion of Fed EX and UPS Requesting an Extension of Time in the Briefing Schedule

Move this Court for an extension of time with respect to the briefing schedule that is currently in place. Under the current briefing schedule, ASTAR's post-hearing brief is due on October 24, 2003, Fed Ex ExpressUPS's brief is due on November 3, 2003, and ASTAR's reply brief is due on November 10, 2003. FedEx Express and UPS request that the briefing schedule be extended by four weeks. Pursuant to Department Rule 14 C.F.R. §302.9 regarding requests for extension of time, FedEx Express and UPS state the following as good cause for this motion for an extension of time in the briefing schedule to be granted

Counsel: Thompson Coburn, Warren Dean, 202-585-6900 for Fed Ex, Kelley Drye, David Vaughan, dvaughan@kelleydrye.com for UPS


October 28, 2003

Motion of Astar for Confidential Treatment

Respectfully requests that the Department withhold from public disclosure the documents and information that ASTAR is filing herewith under seal. The documents and information consist of the consolidated 2002 and 2001 financial statements of DHL Airways, Inc. and contain confidential, proprietary and commercially sensitive business information that would not normally be released to the public.

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net


October 28, 2003

Re: Withdrawal of Motion of Astar for Confidential Treatment

ASTAR Air Cargo, Inc. respectfully withdraws the Motion for Confidential Treatment which was filed today seeking to withhold from public disclosure the consolidated 2002 and 2001 financial statements of DHL Airways, Inc.

Counsel: Lachter Clements, Roxanne Clements, 202-862-4321


OST-02-13089

October 29, 2003

Motion of Astar to Correct the Transcript of the August 26, 2003 to October 15, 2003 Hearing

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


October 29, 2003

Motion of Fed Ex and UPS for Confidential Treatment

Counsel: Thompson Coburn, Matthew Schwartz, 202-585-6900 for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


OST-02-13089

October 30, 2003

Motion of DHL Worldwide Express and DHL Holdings (USA) for Confidential Treatment

Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6000


October 31, 2003

Astar's Proposed Findings of Fact and Conclusions of Law

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


October 31, 2003

Astar's Post-Hearing Brief

Although this hearing was convened in response to an act of Congress, its true genesis lies in the boardrooms of Federal Express and United Parcel Service. These two parties have, for years, sought to challenge the citizenship of ASTAR Air Cargo, Inc.'s predecessor, DHL Airways, Inc. in any and all fora it could find. Despite the fact that Old Airways was sold to its current owners in July 2003, FedEx has continued its unending crusade. The zeal with which FedEx has pursued Old Airways, and the lengths to which it is willing to go are all easily explained: if it can knock this carrier out of the box, it will largely succeed in eliminating its foremost competitor -- DHL Worldwide Express -- from operating competitively in the United States. If that is accomplished, FedEx and UPS will secure their cozy duopoly control over the United States express delivery market, while also striking a serious blow to DHL's competitive standing in the international express delivery market.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


OST-02-13089

November 7, 2003

Motion of Astar for Confidential Treatment

Counsel: Lachter Clements, Stephen Lachter, 202-852-8100, lachter@starpower.net


November 7, 2003

Public Opposition of Astar to Motion to Admit Evidence and Request for Sanctions

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


November 7, 2003

Joint Answer of DHL Worldwide Express and DHL Holdings (USA) to Motion for Confidential Treatment

Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6000


November 10, 2003

Motion of Fed Ex and UPS for Confidential Treatment

Counsel: Thomspon Coburn, Warren Dean for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


November 10, 2003

Motion of Fed Ex and UPS for Confidential Treatment

Counsel: Thomspon Coburn, Warren Dean for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


OST-02-13089

November 12, 2003

Redacted Post-Hearing Brief of Fed Ex and UPS

Although the members of the new investor group immediately professed their independence, the evidence shows that DP/DHL continues to have the power to exercise a controlling influence over ASTAR. In this regard, the investors' subjective intention to be independent is beside the point, if not wholly irrelevant. The relevant legal issue is whether, under the totality of the circumstances, DP/DHL has the power to influence, directly or indirectly, ASTAR's management or policies. When ASTAR's citizenship is evaluated under this standard, it is indisputable that DP/DHL has this power.

Counsel: Jeffery Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


OST-02-13089

Novembr 12, 2003

Proposed Findings of Fact and Conclusions of Law of Fed Ex and UPS

Counsel: Jeffrey Kelsey, 901-434-8563, jkelsey@fedex.com for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


November 17, 2003

Motion of Astar for Confidential Treatment

Counsel: Garfinkle Wang, Elliott Seiden, 703-522-0967, emseiden@gwsmplc.com


November 17, 2003

Re: Errata to the Post-Hearing Brief of Fed Ex and UPS

Counsel: Thompson Coburn, Patricia Snyder, 202-585-6918, psnyder@thompsoncoburn.com


November 17, 2003

Post-Hearing Reply Brief of Astar

For nearly three years, Federal Express and United Parcel Service sought a public hearing before an Administrative Law Judge to determine whether DilL Airways, and now ASTAR Air Cargo, Inc., complies with the citizenship requirements imposed by law. Now that FedEx has had its hearing, it is clearly disappointed with the record that has resulted. FedEx has obviously decided therefore to ignore that record' and instead cite, again and again, to evidence that is not part of the record documents that (1) were offered into evidence and rejected by the ALJ, or (2) were never offered into evidence at all during the hearing. And, when it cannot find anything to cite either in or outside the record, FedEx simply makes sweeping statements, with no citations, apparently hoping that by filing 200 pages of materials no one will notice.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


November 19, 2003

Motion of Fed Ex and UPS for Confidential Treatment

Counsel: Thompson Coburn, Warren Dean, for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


November 19, 2003

Answer of Fed Ex and UPS to Motion for Sanctions

If you can't argue the law, argue the facts, and if you can't argue the facts, pound the table and attack your opponent. And so it ends as it began, with ASTAR pounding the table and accusing others of misconduct. But instead of focusing on the Chief Judge, ASTAR is left only with FedEx Express, UPS, and their respective counsel. And instead of tilting at windmills of alleged judicial misconduct, ASTAR confronts very real, and very damaging, evidence for which it can provide no credible explanation. ASTAR's oratory, theatrics, and press releases aside, the documents produced by DHL show an intention to deceive the Department and manipulate this investigation that should not be countenanced. They reflect not only ASTAR's position that it is the form ‑ and not the substance ‑ that matters, but also the complete disdain that DHL and ASTAR have for this investigation, which Mr. Klein called "nonsense." Under the circumstances, ASTAR' s citation to the Department's rules admonishing practitioners to "refrain from statements or other actions designed to mislead DOT" is ironic, if not insincere.

Counsel: Thompson Coburn, Warren Dean, for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


November 20, 2003

Motion of Fed Ex and UPS for Confidential Treatment

Counsel: Thompson Coburn, Warren Dean, for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


OST-02-13089

November 26, 2003

Motion of Astar for Confidential Treatment

Counsel: Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net


November 26, 2003

Answer of Fed Ex and UPS to Motion to Strike and to Contingent Motion for Leave to File

In its post‑hearing reply brief, ASTAR Air Cargo, Inc. has asked the presiding Judge to strike the brief filed by Federal Express Corporatio and United Parcel Service Co.  The title of the document does not suggest that any such motion has been filed. This conduct violates the Department's standards, which require practitioners to "refrain from statements or other actions designed to mislead DOT. The failure to title the document accurately also violates a Department rule requiring any document filed to contain "the title of the specific action being requested" on the first page. 3 More importantly, it is a transparent effort to deprive us of the right to answer, since, properly labeled as a motion to strike, rules 6(a) and 11 of the Department's rules expressly afford such a right. Although we believe that we do not need to do so, we seek leave to file this answer out of an abundance of caution to the extent it may be necessary.

Consel: Thompson Coburn, Warren Dean for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com for UPS


December 3, 2003

Opposition of Astar to Motion for Leave to File an Improper Surreply

In a new version of "Ripley's Believe It or Not," Federal Express Corporation and United Parcel Service Co. have outdone themselves. This time they have filed a purported "Answer" to a motion that was never filed! Although this would normally seem very odd, it is not for FedEx and not in this case. For the truth is, that in its zest to have the last word, FedEx is in reality seeking to file a sur-reply final brief (which is not permissible) by pretending as though it is a response to some motion ASTAR Air Cargo, Incfiled. Nevertheless, ASTAR. now responds to this latest filing to address new arguments raised by FedEx to support its reliance on rejected exhibits and documents not offered during the hearing.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100, sandylitvack@quinnemanuel.com


December 5, 2003

Correspondence of Thompson Coburn

The Post‑Hearing Brief of Federal Express and UPS, filed November 10, 2003, cited two (2) Rejected Exhibits: 

1) JE 37 at page 26, footnotes 58‑60; and
2) JE Ill at page 49, footnote 88. 

Their purpose is as described in our November 26, 2003, Answer to ASTAR's Motion to Strike.

Counsel: Thompson Coburn, Patricia Snyder, 202-585-6918, psnyder@thompsoncoburn.com


December 8, 2003

Answer of Fed Ex and UPS to Opposition

According to ASTAR, it "never filed" a motion to strike our brief. It only asked the Presiding Judge to "strike" our "entire brief." Apparently, like the CapEx receivable, ASTAR's third-party business and its citizenship, "things are not always what they seem in this place."

Counsel: Thompson Coburn, Warren Dean for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


December 15, 2003

Motion for Leave to File of Federal Express and UPS and Memorandum of Supplemental Authority to Post-Hearing Brief

As discussed in our Answer to Motion to Strike and Contingent Motion for Leave to File at 2,1 Congress has just recently acted to codify and reaffirm the Department's "actual control" test by amending the statutory definition of a "citizen of the United States. H.R. 2115, the FAA Reauthorization Act, which passed both Houses of Congress on November 21, 2003, has now been signed into law.

This Memorandum analyzes the implications of the new law on the ASTAR citizenship proceeding. Since this supplemental authority (1) was not finalized at the time of filing the Post‑Hearing Brief of FedEx Express and UPS  on November 10, 2003, and (2) codifies the Department's existing practice in analyzing citizenship proceedings and thereby confirms the Department's "actual control" test precedent, good cause exists for this motion to be granted pursuant to 14 C.F.R. § 302.6(c).

Attachment: H.R. 2115

Counsel: Thompson Coburn, Warren Dean for Federal Express / Kelley Drye, David Vaughan for UPS


December 16, 2003

ASTAR Air Cargo's Opposition to FedEx's Second Motion for Leave to File an Improper Surreply

There are at least two things in this docket that cannot be seriously disputed. One is that the ALJ and the Department would apply the "actual control" test in deciding whether ASTAR is a U.S. citizen.' The second is that FedEx does not know when to quit filing papers. In its latest filing FedEx purports to notify the AU that he "must" rely on the Department's precedent applying the "actual control" standard because that standard was codified in the recent Vision 100-Century of Aviation Reauthorization Act, H.R. 2115, 108 Cong. (2003) ("FAA Reauthorization Act"), which was signed into law on December 12, 2003. Second Sur-Reply at 1-3. Had FedEx stopped there - advising the ALJ that the actual control standard is now part of the statutory definition and not simply a creature of Department precedent - its filing would have been unnecessary, but, at least not unnecessary and improper.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100


DHL Airways, Inc. (ASTAR)

OST-02-13089 - Citizenship Proceeding

Served December 19, 2003

Recommended Decision of Administrative Law Judge

And in fact the nature of the ASTAR-DHLWE relationship does not implicate control. DHLWE is not a parent or affiliate or even, at bottom, a business partner of ASTAR. It is a client. All clients have needs particular to them. DHLWE's require ASTAR to mesh the entities' services to insure a smooth and reliable delivery system. That is ASTAR's role. ASTAR simply is selling its services to DHLWE. In Professor Ordover's analogy, the DHL network could have its house painted to its particular specifications without controlling the painting company it hires for the job. Against this background, the notions of actual control and a seamless integrated network for package delivery are not mutually exclusive. In view of the foregoing, I find and conclude that the preponderance of evidence shows that ASTAR Air Cargo, Inc. (formerly DHIL Airways, Inc.) is owned and controlled by U.S. citizens within the meaning of the operative statute, 49 U.S.C. §40102(a)(15). Accordingly, I conclude that ASTAR is a U.S. citizen.

By: Burton Kolko


Served December 19, 2003

Order 13089-11(K)

Change Transcript

By: Burton Kolko


Served December 19, 2003

Order 13089-12(K)

Ruling of Motions

I also grant the Joint Parties' and ASTAR's motions for confidentiality in connection with the supplemental joint motion and ASTAR's confidential opposition to that motion. Thus, the respective exhibit documents and confidential answer shall remain sealed in the Docket and accessible only by those who have provided a signed affidavit in accordance with the rules of this proceeding.

The Joint Parties also filed a motion for confidential treatment of its post‑hearing brief, and ASTAR filed one for its post‑hearing reply brief. No answers were filed. I grant those motions for confidentiality. Thus, the confidential versions of those briefs shall remain sealed in the Docket and accessible only by those who have provided a signed affidavit in accordance with the rules of this proceeding.

By: Burton Kolko


December 23, 2003

Joint Motion of Federal Express and UPS to Modify Schedule

file this Joint Motion to Modify the Schedule. On October 22, 2003, the Department extended the deadline for Administrative Law Judge Burton S. Kolko to file his recommended decision with the Department, making the decision due on January 2, 2004. Based on that Order, the Joint Movants and their respective counsel planned to be available after the January 2 decision deadline. On December 19, 2003, just before three major holidays, Judge Kolko filed and served the RD.' Accordingly, this action set January 12, 2004 as the due date for filing any petition for discretionary review to the Decisionmaker.

Good cause exists for an order extending until January 23, 2004 the time in which parties must file their petition for discretionary review, and eliminating the twenty page limit on such petitions. In the alternative, Joint Movants respectfully suggest that the Decisionmaker should take review and establish a briefing and oral argument schedule. Finally, the Joint Movants respectfully request that the Department disclose the names of all Department personnel who will be involved in reviewing the RD, and provide assurances that these individuals did not participate in the May 2002 determination of DHL Airways' citizenship.

Counsel: Counsel: Thompson Coburn, Warren Dean, for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


OST-02-13089

Served December 31, 2003

Notice on Joint Motion to Modify Schedule

An extension of time to file petitions for discretionary review will be allowed. As requested by FedEx/UPS, all petitions for discretionary review shall be due no later than January 23, 2004. Consequently, the date for all answers to petitions shall be due fifteen (15) days after that date (February 9, 2004). Additionally, as requested by FedEx/UPS, we are removing the page limits for petitions for discretionary review and answers contained in Rule 32, and instead a fifty‑page (50) limit will be imposed on all parties for petitions for discretionary review. Answers to the petitions also will be limited to fifty (50) pages.

By: Michael Reynolds


Janaury 2, 2004

Astar Air Cargo's Response to Joint Motion to Modify Schedule

Putting aside the arrogant tone, the misstatements of fact and the presumptuous approach, no one could or would reasonably object to a mere request for an extension of time to file a petition for review, especially at this time of year. However, in their typical high-handed fashion, the Objectors have not simply limited their request to an extension of time to file such a petition. To the contrary, the Objectors have chosen to chastise the ALJ for delivering his decision before they expected it, painted a picture of an imminent foreign invasion of the U.S. airline industry and "demanded" to know who will decide this matter because, they declare (as though making a novel pronouncement), it is important that the Decisionmaker be impartial.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100


OST-02-13089

January 26, 2004

Joint Motion of Federal Express and UPS for Leave to File Late and Petition for Discretionary Review

Counsel: Counsel: Thompson Coburn, Warren Dean, for Fed Ex / Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com


Served January 28, 2004

Notice on Joint Motion for Leave to File Late

The Joint Parties attempted to file their petition for discretionary review with the Department on January 23, 2004, by means of electronic submission at 4!51 PM on Friday, January 23, 2004. The Department's Docket Management System received two copies of the Joint Parties' Certificate of Service, and not the Petition for Review. On January 26, 2004, after notification by Department staff that the Petition had not been filed, the Joint Parties remedied the error and filed their petition for discretionary review along with a Motion for Leave to File Late. The Motion stated that all other parties were properly served with the petition on January 23, 2004, so there was no prejudice.

In light of the Joint Parties' representation that the other parties were properly served on the due date for petitions, there appears to be no prejudice from the error in filing. For this reason, we will grant the Joint Parties' motion for leave to file late without awaiting answers. Petitions for Reconsideration of this action will be due Friday, January 30, 2004.

By: Michael Reynolds


OST-02-13089 - Citizenship Proceeding

February 6, 2004

Astar Air Cargo's Answer to Petition for Discretionary Review

Although the Department's Rules expressly provide that a Petition for Discretionary Review should be specific and focus on a limited number of key issues to be reviewed,' Petitioners have totally ignored that mandate. Instead, taking advantage of every page of the 50-page limit granted to them, Petitioners have filed a shotgun pleading, which can best be summed up in two words -- sour grapes. Having obtained the unprecedented discovery and the extensive hearing they sought, and having correctly lost, Petitioners would now like to complain about virtually every holding and finding in the Recommended Decision of the Honorable Burton S. Kolko, as well as any preliminary rulings of the AU, or the Department, that Petitioners did not like. That, of course, is not the basis for review.

Recognizing that the issue of whether to grant review of the Decision lies within the sound discretion of the Decisionmaker, see 14 C.F.R. 302.32(a)(1), ASTAR submits that the Petition should be denied because Judge Kolko' s Decision is clear, cogent and supported by the facts. Petitioners have provided basis for review. As discussed in Point I below, to the extent they seek to argue that public policy implications, particularly competitive and international concerns, should be reviewed, these are the same issues Petitioners previously asserted were "irrelevant" and as to which they deliberately chose not to offer or rebut evidence.

Counsel: Quinn Emanuel, Sanford Litvack, 212-702-8100


OST-02-13089 - Petition of United Parcel Service Co. to Institute a Public Inquiry Into The Citizenship and Foreign Control of DHL Airways, Inc.

February 9, 2004

Re: Ex Parte Letter to Senator Ted Stevens

October 3, 2003:

I am disturbed to learn that your Department is thwarting the Administrative Law judge proceeding on the citizenship case mandated in the FY03 supplemental Appropriations bill. I understand DOT has limited discovery and refused to postpone the deadline for resolving the case, despite a federal judge holding one of the parties in contempt for failing to produce documents. I believe this is a breach of the relationship between the Department of Transportation and the Congress. Please do what you can to ensure that DOT complies with the spirit of the Supplemental amendment.

By: Norman Mineta


May 6, 2004

Recusal of Department Officials

As you are aware, UPS and Federal Express requested the disqualification and recusal from the pending ASTAR proceeding of any Department officials who participated in the informal citizenship review of DHL Airways completed on May 1, 2002. My office reviewed the carriers' allegations that these officials received ex parte information, are or may be biased, and cannot be permitted to offer advice on the merits of this review proceeding, as well as the underlying facts. As you were earlier informally advised, I concluded that the involvement of Department officials who participated in the informal review of DHL Airways' continuing citizenship in advising the decisionmaker does not violate the Administrative Procedure Act (APA), our rules, or procedural due process. Such officials did not engage in the functions covered by the APA preclusion; the officials did not possess ex parte information; their participation is consistent with our Rules of Conduct in Proceedings; and there is no violation of procedural due process. This memorandum of law documents the reasoning behind those conclusions.

By: Roberta Gabel


Order 04-05-10

Issued and Served May 13, 2004

Order Declining Review | Word

United Parcel Service Co. and Federal Express Corporation began this proceeding by petitioning for an investigation into whether DHL Airways, Inc., a U.S. certificated air carrier, complied with the statutory requirement that every U.S. air carrier must be controlled by U.S. citizens. As Congress directed, we assigned the matter to an administrative law judge for resolution after an oral evidentiary hearing. After we did so, DHLA’s ownership and senior management changed completely, and the new management renamed the carrier ASTAR Air Cargo, Inc. After the hearing, the ALJ, Burton S. Kolko, issued a recommended decision that found that ASTAR satisfies the statutory citizenship test. All of ASTAR’s directors and senior management are U.S. citizens, and U.S. citizens own all of ASTAR’s stock. He found that ASTAR makes its own financial and operational decisions. ASTAR obtains most of its business from the DHL network of companies, a package delivery group controlled by foreigners. However, Judge Kolko found that contracts between ASTAR and the DHL Network provide ASTAR with financial and business guarantees that deny the DHL Network any potential ability to exercise substantial influence over ASTAR’s decisions. Judge Kolko therefore concluded that ASTAR is controlled by U.S. citizens and so is complying with the statutory citizenship requirements.

UPS and FedEx have asked us to take review of the ALJ’s decision. They argue that the ALJ erred, because ASTAR is allegedly controlled by the DHL Network. After considering their arguments, we have determined that there is no reason for us to take review of the ALJ’s decision. Judge Kolko thoroughly analyzed the evidence presented by the parties and applied the correct legal standards for determining citizenship as defined by 49 U.S.C. 40102(a)(15). By this Order, we therefore deny the petition for discretionary review. As a result, we will allow Judge Kolko’s Recommended Decision, which finds that ASTAR is a U.S. citizen, to become the Department’s final decision in this proceeding.

By: Michael Reynolds


OST-02-13089 - Petition of United Parcel Service Co. to Institute a Public Inquiry Into The Citizenship and Foreign Control of DHL Airways, Inc.

May 27, 2004

Re: New Contact Information

We represent ASTAR Air Cargo in the above‑referenced matter. This letter is to inform you that Joanna R. Swomley and I have joined the law firm of Hogan & Hartson L.L.P. We provide our new contact information below for your records and to effect such change for any future correspondence in this matter.

Sanford M. Litvack, Esq.
Hogan & Hartson L.L.P.
Biltmore Tower 500
South Grand Avenue, Suite 1900
Los Angeles, California 90071
T: (213) 337-6788
F: (213) 337-6701
New York office: (212) 918-8271
E-mail: slitvack@hhlaw.com

Counsel: Hogan & Hartson, Sanford Litvak, 213-337-6788, slitvak@hhlaw.com


June 22, 2005

Re: Letter to Thompson Coburn - Counsel for Federal Express - Confirmation that Confidential Documents Have Been Destroyed

Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com


June 22, 2005

Re: Letter to Jeffrey Kelsey - Legal Department of Federal Express - Confirmation that Confidential Documents Have Been Destroyed


June 22, 2005

Re: Letter to David Vaughan - Counsel for UPS - Confirmation that Confidential Documents Have Been Destroyed

Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com


OST-2002-13089

February 24, 2006

Destruction Affidavit of UPS - David Vaughan

Counsel: Kelley Drye


OST-2002-13089

February 24, 2006

Destruction Affidavit of FedEx - Warren Dean

Counsel: Thompson Coburn


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