I may have answered my own question. Is this the authority:
http://eur-lex.europa.eu/LexUriServ/...01:0007:EN:PDF
Article 10, entitiled "Upgrading and downgrading" provides:
* * * *
2. If an operating air carrier places a passenger in a class
lower than that for which the ticket was purchased, it shall
within seven days, by the means provided for in Article 7(3),
reimburse
(a) 30 % of the price of the ticket for all flights of 1 500 kilometres
or less, or
(b) 50 % of the price of the ticket for all intra-Community
flights of more than 1 500 kilometres, except flights
between the European territory of the Member States and
the French overseas departments, and for all other flights
between 1 500 and 3 500 kilometres, or
(c) 75 % of the price of the ticket for all flights not falling
under (a) or (b), including flights between the European
territory of the Member States and the French overseas
departments.
As for whether compensation is due for downgrading on an award ticket, Article 3, entitled "Scope", provides:
* * * *
3. This Regulation shall not apply to passengers travelling
free of charge or at a reduced fare not available directly or
indirectly to the public. However, it shall apply to passengers
having tickets issued under a frequent flyer programme or
other commercial programme by an air carrier or tour
operator.
It does not appear that compensation would be due until one actually takes the flight in an involuntarily downgraded class, as opposed to my situation where my trip is not until the fall. Nevertheless, this should provide leverage in dealing with LH.
Lucky for me that I happened to catch this downgrade, and then be in position to do something about it prior learning the bad news at the airport. I doubt I ever would have received prior notice of it since US may not know and LH may not know how to contact me, assuming it would try.