Court continues to trim airline lawsuit against Internet service vendor

Deutsche Lufthansa AG v. The Boeing Company (S.D.N.Y. Feb. 2, 2007).  In 2003, Lufthansa and Boeing entered into a contract in which Boeing agreed to provide high-speed Internet service for passengers on long-haul Lufthansa flights.  In 2006, after Lufthansa had spent substantial sums in developing the service, Boeing notified Lufthansa that it had decided to discontinue its Internet service business, in its entirety, at the end of the year.

In response to Boeing’s notice, Lufthansa filed a lawsuit seeking specific performance and damages.  As reported earlier, in October 2006 the court dismissed the portion of Lufthansa’s complaint seeking specific performance because the parties had agreed in their contract to limit their remedies against each other to damages.

Boeing had also moved to dismiss the portion of Lufthansa’s complaint seeking damages in excess of the $1,000,000 damages limit in the parties’ contract, but the court did not rule on that issue in its October decision.  Earlier this month, the court upheld the damages limit.  The court reasoned that “the conduct alleged by Lufthansa falls well below the levels required by the New York courts to invalidate a mutually agreed upon limitation of liability” because Boeing had acted rationally, and without malice toward Lufthansa, in discontinung its Internet service business.

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