Lufthansa, Iberia defeat U.S. passenger appeals over flight delays

By Jonathan Stempel

Feb 2 (Reuters) - Lufthansa and Iberia persuaded a U.S (Other OTC: UBGXF - news) . appeals court in Chicago to reject efforts by passengers to hold them liable for delays on multi-leg international flights involving multiple airlines.

Tuesday's decision by Judge Richard Posner of the 7th U.S. Circuit Court of Appeals highlights the hurdles that passengers can face in holding carriers liable for travel snags, including when foreign laws or code-sharing arrangements are involved.

In the first case, the appeals court said Deutsche Lufthansa AG owed nothing to a California man who arrived in San Francisco 17 hours late after flying from Stuttgart through Munich because the first flight on another carrier was canceled.

Posner said European Union regulations required Hans-Peter Baumeister to seek compensation from the carrier that operated his canceled flight, the now-defunct Augsburg Airways, though he bought his tickets from Lufthansa.

He also rejected Baumeister's argument that Augsburg was "little more than a Lufthansa puppet," justifying holding the larger carrier liable.

"By way of comparison, we point out that Piedmont Airlines is a wholly owned subsidiary of American Airlines (Xetra: A1G.DE - news) - does that mean that when one flies on Piedmont one really is flying on American, so that if Piedmont loses your baggage you can sue American?" Posner wrote. "No, any more than if you find a defect in your IPhone 6S you can sue not Apple (LSE: 0R2V.L - news) , but Apple's shareholders, or its CEO, Tim Cook."

In the second case, the appeals court said Iberia, part of International Consolidated Airlines Group SA, owed nothing to James and Lauren Mitchell Varsamis, who returned to Dallas from their honeymoon 21 hours late because their Rome-to-Madrid flight on Iberia was late, and they missed a connection.

Posner said the difference here was that the Varsamises had bought their tickets through American Airlines, not Iberia, and therefore could not hold the Spanish carrier liable.

"There is a practical logic to imposing liability for a flight delay on the carrier whose flight it was that was delayed," Posner wrote. "But the practical logic fails to carry the day for the Varsamises because they had no contract with Iberia. Their contract was with American."

Lawyers for the carriers and the passengers did not immediately respond to requests for comment.

The decision upheld rulings in 2014 from two U.S. district court judges in Chicago. The plaintiffs had sought class action status against the respective carriers.

The cases are Varsamis et al v. Iberia et al, 7th U.S. Circuit Court of Appeals, No. 14-2414; and Baumeister v. Deutsche Lufthansa AG in the same court, No. 14-2633. (Reporting by Jonathan Stempel in New York; Editing by Tom Brown)