Vendor permitted to discontinue Internet service to airline

Deutsche Lufthansa AG v. The Boeing Company (S.D.N.Y. Oct. 30, 2006).  In 2003, Lufthansa and Boeing entered into a 70-page contract in which Boeing agreed to provide high-speed Internet service for passengers on long-haul Lufthansa flights.  In August 2006, Boeing notified Lufthansa that it had decided to discontinue its Internet service business, in its entirety, at the end of the year.  In response, Lufthansa filed a lawsuit against Boeing.

According to the court, Lufthansa’s lawsuit sought “to have the Court order Boeing to maintain in operation a service which Boeing has chosen to shut down completely.”  Lufthansa claimed that it had spent over $120 million developing and marketing the Internet service, that 90,000 booked customers would be “adversely affected” by the termination of the service and that the parties’ contract permitted it to use the remedy of specific performance to force Boeing to continue providing the service.

Boeing moved to dismiss the portion of Lufthansa’s complaint seeking specific performance.  In its decision granting the motion, the court held that the parties had agreed in their contract to limit their remedies against each other to money damages, thus rendering specific performance unavailable as a remedy for Lufthansa.  The court also noted the impracticality of what Lufthansa was essentially seeking — “an order compelling Boeing to indefinitely keep in operation a service employing over 300 people for the benefit of one customer under the supervision of the Court.”

Note:  In February 2007, the court issued a related opinion in this case.

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