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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. Well, maybe it's because they are unelected, and, they have a tendency to strike down laws by elected officials from all over the country. When you have been taught that "Democracy" is something almost sacred, then, you will have a tendency to frown on such imperious conduct. Lawyers get acculturated in law school into thinking that this is the very essence of high minded government, but to people who are more heavily than King George ever did, they may not like it. Thanks for the information.

  2. I pd for a bankruptcy years ago with Mr Stiles and just this week received a garnishment from my pay! He never filed it even though he told me he would! Don't let this guy practice law ever again!!!

  3. Excellent initiative on the part of the AG. Thankfully someone takes action against predators taking advantage of people who have already been through the wringer. Well done!

  4. Conour will never turn these funds over to his defrauded clients. He tearfully told the court, and his daughters dutifully pledged in interviews, that his first priority is to repay every dime of the money he stole from his clients. Judge Young bought it, much to the chagrin of Conour’s victims. Why would Conour need the $2,262 anyway? Taxpayers are now supporting him, paying for his housing, utilities, food, healthcare, and clothing. If Conour puts the money anywhere but in the restitution fund, he’s proved, once again, what a con artist he continues to be and that he has never had any intention of repaying his clients. Judge Young will be proven wrong... again; Conour has no remorse and the Judge is one of the many conned.

  5. Pass Legislation to require guilty defendants to pay for the costs of lab work, etc as part of court costs...

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