Tuesday, July 27, 2010

Federal Jury Finds City of Atlanta, Clear Channel and Barbara Fouch Conspirators in Multi-Million Dollar Bid-Rigging Case

/PRNewswire/ -- Late yesterday 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% 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% 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."

During trial, several key points were made that, ultimately, 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 the next steps."

Corey's attorney since 2004, Mairen Kelly of Fisher & Phillips LLP said, "Mr. Corey has worked tirelessly for what he believes is right. It took great courage on his part to pursue this case and now he's ready to move forward in a positive way."

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