The city of Atlanta's six-year legal battle over an airport advertising contract has cost the city about $3.5 million in legal fees so far and some are questioning whether the city should continue to rack up more charges by fighting the federal jury's $17.5 million judgment.
Acting city attorney Peter Andrews said much of the city's $3.5 million in expenses came early on in the case and involved getting individuals removed from the suit. The federal suit was filed in 2004 against Hartsfield-Jackson International Airport and originally also named then-Mayor Shirley Franklin and more than a dozen other city officials as defendants.
Corey Airport Services, which lost out on an advertising contract at the airport in 2002, argued in the case that the bidding process at the airport was corrupt. The verdict is seen as another chapter in a 30-year epic of cronyism, bribery and corruption that has sullied Hartsfield-Jackson's operation.
Andrews said he does not yet have an estimate of the cost of an appeal and is hoping the judge will overturn the jury's decision. The city has 10 days from the judgment to file a motion asking the judge to overturn the verdict. If it is not overturned, the city has vowed to appeal.
John Sherman, president of the Fulton County Taxpayers Foundation, criticized the city's plan to appeal.
"It is throwing good money after bad," he said.
Of the $17.5 million in damages awarded by the federal jury Monday, the city would be responsible for about $2.8 million. The team that won the airport advertising contract, Clear Channel Outdoor Inc. and Barbara Fouch, would be responsible for the remaining amount.
Technically, the city's portion of the damages would be covered by the Aviation Department and Hartsfield-Jackson's revenue fund.
"As with all airport-related litigation, these fees and expenses have been paid using airport funds," Andrews said in a statement released later Friday. "The taxpayers of the city of Atlanta have not funded the defense of the case."
Although Corey's legal fees, estimated between $3 million and $3.5 million, were not included in the award, Corey said he intends to file the necessary appeal to add those fees to the settlement.
Councilman H. Lamar Willis said the city needs to "make an informed decision on proceeding with litigation."
"This has been a long, expensive battle," Willis said. "Unless our attorneys believe that there is a valid -- and I mean very valid -- reason for us to continue, it is only something that is going to become more expensive over the long haul."
He said the city council could technically could weigh in on the matter, but he thinks that is unlikely. Willis said the council would be more inclined to follow the advice of the mayor and counsel, "to the extent that we believe it's the right thing to do."
Andrews said the council has the ability to pass a resolution with opinions on the matter, but the city administration has discretion on whether to appeal.
Willis, who is also an attorney, said he believes an appeal would cost at least several hundred thousand dollars. Sherman estimated an appeal could end up costing more than the $2.8 million in damages the city would be responsible for.
The city does not have insurance coverage to handle damages in lawsuits, said Reese McCranie, a spokesman for Mayor Kasim Reed. Payment of any damages would come after the appeals process.
The verdict comes as the mayor continues a search for a new airport manager to replace Ben DeCosta, who departed after his contract expired in June. Among the names that have surfaced as candidates in recent months are airport officials Miguel Southwell from Miami, John D. Clark III from Indianapolis, Larry Cox from Memphis and Lester Robinson from Detroit.
Sherman said the suit raises issues "that affect the city's reputation nationally and internationally, at a time when the city wants to expand internationally," such as Reed's plans to pursue growth of air cargo at Hartsfield-Jackson.
Daniel Petree, professor and dean of the college of business at Embry-Riddle Aeronautical University in Daytona Beach, said the damages are “not a back-breaking amount of money for an operation the size of Atlanta.”
“Every large city has its own skeletons in its closet, if you will,” he added.
“Whatever happened that year where Corey Airport Services didn’t win that contract, that was a long time ago [for Atlanta],” Pauline Armbrust, publisher of Airport Revenue News, said.
Willis said that if there are any problems with the city's procurement process, "I would expect that we would go and correct those things in the future because it's a very expensive lesson, even if we were to win on appeal."
Andrews said the city amended procurement codes in recent years, but that the moves were unrelated to the Corey case.
"We're still of the position that everything was handled appropriately in the Corey case," Andrews said.
Yet to be determined is if and when the city will rebid the advertising contract in question, which is still held by Clear Channel and Fouch on a month-to-month basis.
"That would be a policy decision for the airport and the city as a whole," Andrews said.
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