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FedEx wins reversal of jury's $66M award to ATA

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FedEx Corp. has won an appeal that overturns a $66 million verdict in favor of defunct Indianapolis airline ATA Airlines Inc.

The 7th Circuit Court of Appeals in Chicago heard the appeal in November and issued the reversal Tuesday morning in ATA Airlines Inc. v. Federal Express Corp., No.s 11-1271, 11-1492.

ATA initially won a jury verdict over the breach-of-contract case in October 2010. FedEx unsuccessfully appealed the decision to the U.S. District Court, Southern District of Indiana before taking it to the higher court.

ATA charged in its initial lawsuit that FedEx’s unexpected decision in January 2008 to drop it as a military-charter partner forced it into bankruptcy liquidation that spring. ATA had been flying military charters for more than two decades, and it said FedEx was legally obligated to keep it on board through at least September 2009.

The appeals court said ATA’s legal experts failed to prove the amount of damages suffered because of the breach of contract. The court said ATA may well have suffered some losses due to FedEx’s actions, but because there was “no reasonable confidence in the jury’s damages award,” the case should be reversed.

The case hinged on a September 2006 letter that described how business was to be divvied up through September 2009 between ATA and another airline that was part of the FedEx military-charter team.

FedEx argued that was not a legal contract because it didn’t address financial terms and other key issues. It noted the legal standard for an enforceable contract is “a meeting of the minds of the parties, in mutual assent to all essential terms.”

In a court filing, FedEx attorneys wrote, “Given the uncontroverted evidence and the relevant law … there is simply no reasonable basis in the record on which the jury could find that an agreement on just one term of FedEx Team membership was an enforceable contract for FedEx Team membership.”

FedEx balked at the size of the jury's award, noting that in fiscal 2007, ATA earned just $2.1 million from its military charter business.

The $66 million judgment was supposed to go to ATA's creditors, who are still owed millions in the company's Chapter 7 bankruptcy. The 7th Circuit dismissed the suit with prejudice.

This story originally ran on IBJ.com Dec. 27, 2011.

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  1. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

  2. Justice has finally been served. So glad that Dr. Ley can finally sleep peacefully at night knowing the truth has finally come to the surface.

  3. While this right is guaranteed by our Constitution, it has in recent years been hampered by insurance companies, i.e.; the practice of the plaintiff's own insurance company intervening in an action and filing a lien against any proceeds paid to their insured. In essence, causing an additional financial hurdle for a plaintiff to overcome at trial in terms of overall award. In a very real sense an injured party in exercise of their right to trial by jury may be the only party in a cause that would end up with zero compensation.

  4. Why in the world would someone need a person to correct a transcript when a realtime court reporter could provide them with a transcript (rough draft) immediately?

  5. This article proved very enlightening. Right ahead of sitting the LSAT for the first time, I felt a sense of relief that a score of 141 was admitted to an Indiana Law School and did well under unique circumstances. While my GPA is currently 3.91 I fear standardized testing and hope that I too will get a good enough grade for acceptance here at home. Thanks so much for this informative post.

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