By DAVID BERTOLA
Business First

A class-action lawsuit filed by Buffalo's Rupp Baase Pfalzgraf Cunningham & Coppola LLC against DHL, the world's largest international shipper, will be resolved by a $25 million arbitrated settlement.

"It's not every day that a $25 million class-action suit originates out of Buffalo," said R. Anthony Rupp III, a partner at the firm, which was co-lead counsel along with a Philadelphia-based firm.

Rupp Baase arbitrated a case for Buffalo-based contractor CanAm Group, which was resolved in December, 2005. During that process, Rupp said, it became clear that other contractors had been impacted as CanAm had.

A class-action lawsuit was filed on behalf of a class of contractors who handled shipments. Rupp estimates that the total number of contractors involved in the suit is 1,400 businesses nationwide. These include present and previous DHL contractors dating back to 1994.

Letters to those in the class of contractors qualified to participate in the suit and settlement, based on the agreement with Germany-based DHL, were mailed Thursday.

CanAm was not among the plaintiffs in the class-action lawsuit, since its case had been resolved.

Rupp said DHL's computer system, which had been inherited from Airborne, a freight carrier it acquired in 2003, prevented certain types of shipments from being processed. As a result, some contractors, including CanAm, were never paid.

"The contractor handled the shipments, either picking them up or delivering them, but never got paid for doing so," he said. "We realized that the computer system that had shortchanged our contractor had shortchanged every other contractor over a five-year period."

As long as the plaintiffs consent, this would resolve several existing claims over that issue.

"DHL has been pounded by a number of individual lawsuits, five or six of them, and they're all six-figure cases," said Rupp. "We expect almost all of (the contractors in the class) to accept." It's not likely, he said, that many will opt out.

"The contractors are all multimillion-dollar companies, some with 500 truck Routes," Rupp said. "Unfortunately for some, it's too late, as they've been driven into bankruptcy."

He said the firm put in more than 5,000 hours into the original CanAm arbitration, and more with the class-action suit. Rupp said he is "gratified and proud" about this resolution.

In a prepared statement regarding the class-action suit, DHL said it entered into the settlement talks so that it could continue to maintain a complete focus on providing good service to its customers and avoid prolonged and expensive litigation.

The statement also mentioned that the settlement allows DHL to concentrate on enhancing its pickup and delivery services, and that neither DHL nor Airborne engaged in any wrongdoing.

Rupp said his firm's time investment allowed Rupp Baase to learn the ropes of what DHL was doing and "ramp the case up" to pursue the class action.

"We think it shows some sophistication," he said. "We're pleased with the settlement. It rectifies a wrong that was perpetrated against (the plaintiff contractors)."