Two Erie County whistle-blowers have lost the first round in a four-year legal battle over allegations that an international delivery company overcharged the federal government millions of dollars.
U.S. District Judge John T. Curtin cited the two men's failure to properly notify the company of their claims in dismissing their suit.
The two men who filed the complaint, Kevin Grupp, of Clarence Center, and Robert Moll of, Orchard Park, plan to appeal.
At the crux of the case were allegations that DHL Express, a national transport company, intentionally and illegally overcharged federal agencies such as the departments of Defense and Homeland Security over the course of several years.
"In our judgment, the judge followed precedent and arrived at the logical conclusion," said Terrence M. Connors of Buffalo, a lawyer for DHL.
The federal court case was one of two against DHL involving allegations of overbilling.
The second federal case, filed by the Jim Ball car dealership in Orchard Park, is still pending.
"The judge's decision was not unexpected given some of his prior positions," said Daniel C. Oliverio of Buffalo, a lawyer for Grupp and Moll.
The allegations by the two men, owners of the former MVP Delivery and Logistics company in Depew, stem from their past role as an independent contractors to DHL.
In 2008, they filed a lawsuit accusing the company of charging the federal government a special air express surcharge when in fact many of the government's packages were transported by truck.
Grupp and Moll estimated at the time that thousands of packages were transported this way.
They also claim DHL began expanding its network of regional truck hubs across the U.S. in 2004 as a way of transporting packages solely by ground.
In their court papers, they offered the example of a package presumably sent air express from Buffalo to Cleveland that in reality traveled by truck from Buffalo to a DHL office in Erie, Pa., and from there by truck to Cleveland.
The two men also accused the company of citing rising fuel costs in requesting a special diesel surcharge from the government in 2003 and then illegally adding the surcharge to its billings even though most of the ground deliveries were done by independent contractors.
Curtin, in ruling against Grupp and Moll, cited their failure to notify DHL within the required time period and suggested that failure was "fatal to the plaintiff's claim."
The judge pointed to a section of the United States Code governing rates and billings by delivery companies and the requirement that challenges to those bills be filed within six months of the original billings.
Oliverio said he plans to file a notice of appeal today and is confident his clients will eventually prevail.
Like those by Grupp and Moll, the allegations by the Jim Ball dealership suggest the company overcharged its customers by tens of millions of dollars.
Ball, in its lawsuit, said it used DHL's Next Day and Second Day delivery services to send financing documents to customers.
DHL is a subsidiary of Deutsche Post World Net, a German company not named in the suit.