SBJ Special Report
Late last Monday afternoon, a federal jury awarded $17.5 million to Corey Airport Services after finding that the City of Atlanta, Clear Channel and Barbara Fouch, Clear Channel’s minority partner, conspired to deprive Corey of its equal protection rights while bidding for the advertising contract at Hartsfield-Jackson Atlanta International Airport in 2002.
The City of Atlanta, Clear Channel and Fouch will share the compensatory damages of $8.5 million equally. Clear Channel was ordered to pay another $8.5 million and Fouch $500,000 in punitive damages. As a matter of law, the City of Atlanta cannot be held liable for punitive damages.
“This was a clear case of favoritism, cronyism and bid-rigging,” said co-lead attorney for Corey Airport Services Jeffrey R. Harris of Harris Penn Lowry LLP (HPL), the firm brought in by Corey to try the case before U.S District Judge Charles A. Pannell. “The jury not only found that the bidding process at the airport was tainted, but that the City, Clear Channel and Barbara Fouch conspired to ensure the lucrative advertising contract remained with political insiders and City-favored vendors.”
The case, which was filed in 2004, concerned how the City of Atlanta procures contracts for advertising at the world’s busiest airport. Clear Channel and Fouch were first awarded the contract in 1980. Until 1997, the contract stipulated that the City receive 50 percent of airport advertising revenues. The contract expired, but Clear Channel and Fouch maintained the advertising concession on a month-to-month basis from that point forward. Until 2007, they were paying the 1980 rental rate of 50 percent of revenue.
At the start of trial, Clear Channel and Fouch owed the city $15.6 million in unpaid rental fees due to the month-to-month holdover provision of the advertising contract. “The fact that the City of Atlanta left more than $15 million dollars on the table, never taking steps to recover that revenue, is compelling evidence of favoritism,” said Darren Penn of HPL and co-lead counsel for the plaintiff. “The jury obviously agreed. It is our hope that the City doesn’t continue to waste taxpayers’ money by dragging out this process.”
According to Harris Penn & Lowry, during trial several key points were made that convinced the jury of corrupt conduct on the part of the defendants:
The advertising concession was maintained by Clear Channel and Fouch in a “holdover” agreement, ensuring they retained the City’s lucrative contract, barring other contenders from bidding, while not paying the full rental fees stipulated in the holdover agreement. The reduced payment resulted in a $15.6 million loss of revenue for the City – money the City never attempted to collect.
The percentage of rental revenue promised by Corey, if awarded the 2002 contract, was significantly higher than Clear Channel and would have netted more income for the City, yet the concession was awarded to Clear Channel and Fouch.
Hand-written notes were produced during trial proving Clear Channel and Fouch had access to the numbers submitted by Corey, allowing them the opportunity to adjust their bid accordingly.
In a taped deposition, former airport general manager Angela Gittens testified that Mayor Bill Campbell instructed her not to bid the airport advertising contract because he didn’t want to hurt his “friend,” Barbara Fouch.
Evidence showed that Fouch maintained an airport contract slush fund used to influence City elected officials and decision-makers during the procurement process.
After eight years of litigation, Billy Corey of Corey Airport Services said, “I’m thankful for the jury’s wisdom in this case, but saddened by the fact that the City of Atlanta chose to waste more than $3 million of the taxpayers’ money fighting a case every expert told them they would lose. It is my hope we’ll be able to end this fight and come to an agreement on how to best move forward.”
Mairen Kelly of Fisher & Phillips LLP has represented Corey since the suit was filed in 2004. Fisher & Phillips assisted Harris Penn Lowry during the preparation for and duration of the trial.
Harris Penn & Lowry has offices in Savannah and Atlanta, led by the firm's three partners, Jeffrey Harris, Darren Penn and Stephen Lowry.
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