Hawaiian Air wins ruling in suit over startup of go! $173 Million!

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Hawaiian Air wins ruling in suit over startup of go!
A decision on Hawaiian's $173M damage request will come after trial
David Segal
[email protected]



A federal bankruptcy judge ruled today that Mesa Air Group concealed and destroyed evidence that could have been useful to Hawaiian Airlines in its lawsuit over the Phoenix-based carrier’s decision to start up the interisland airline go!.

Bankruptcy Judge Robert Faris ruled that Mesa did misuse information it got from Hawaiian while Mesa was a potential investor during the local airline’s bankruptcy, and that Mesa’s misuse was a “substantial factor†in its decision to come into the Hawaii market.

Hawaiian is seeking $173 million in damages plus a one-year injunction against ticket sales by go!, whose arrival in the interisland market touched off a fare war that has driven ticket prices as low as $1 and left Hawaiian and competitor Aloha Airlines posting millions of dollars in losses.

Faris said he will decide on damages after a trial that has been rescheduled to start tomorrow.

Before today's ruling, Mesa attorney Maxwell Blecher had acknowledged that Mesa Chief Financial Officer Peter Murnane concealed and deleted information sought by Hawaiian, but said Hawaiian hasn’t proved yet that Mesa used confidential information in its decision to enter the Hawaii market.

Hawaiian attorney Sidney Levinson said the destruction of evidence has hurt Hawaiian’s case in the trial and a default judgment is warranted to sent a message “to all the Mesas of the world.â€

The $173 million was the amount of damages determined to have been suffered by Hawaiian because of Mesa’s entry into the interisland market, according to an analysis by aviation consultant Samuel Engel of Simat, Helliesen & Eichner Inc.
 
To clarify, HA hasn't won $173 million, but they may win it in the next trial.

As for JO and pals, it couldn't happen to a bigger bunch of slime, its time they got caught.
 
To clarify, HA hasn't won $173 million, but they may win it in the next trial.

As for JO and pals, it couldn't happen to a bigger bunch of slime, its time they got caught.
:up: :up: AMEN It's time for The Mesa's of the world to get what they deserve. Just Like Lorenzo and Ichan- they are SCUM!
 
Mesa came to isles via Hawaiian’s data
The information's confidentiality will be decided during a trial

By Dave Segal
[email protected]

A federal judge ruled yesterday that Mesa Air Group misused information it got from Hawaiian Airlines while Mesa was a potential investor during the local carrier's bankruptcy and that Mesa's misuse was a "substantial factor" in its decision to start up the interisland airline go!.

Bankruptcy Judge Robert Faris also ruled that Mesa Chief Financial Officer Peter Murnane concealed and destroyed evidence that could have been useful to Hawaiian in its lawsuit over the Phoenix-based carrier's decision to come into the Hawaii market.

Hawaiian is seeking $173 million in damages plus a one-year ban on ticket sales by go!, whose arrival in Hawaii touched off a fare war that has driven ticket prices as low as $1 one way and left Hawaiian and competitor Aloha Airlines posting millions of dollars in losses.

The $173 million was the amount of damages, including such factors as lost revenue, that Hawaiian suffered because of Mesa's entry into the Hawaii market in June 2006, according to an analysis by aviation consultant Samuel Engel of Simat, Helliesen & Eichner Inc.


Faris, who issued his ruling at the end of a three-day evidentiary hearing, said he will decide on damages after a trial that is scheduled to start this morning and run through next week. The trial will determine whether information misused by Mesa was confidential and whether former Hawaiian consultant Mo Garfinkle, who later served as a consultant to Mesa, misused confidential Hawaiian information.

In deciding yesterday that Hawaiian is entitled to damages, Faris said there was no evidence that anyone other than Murnane had been guilty of wrongdoing. Still, he said Mesa should be held responsible "to some extent" because Murnane was a high-ranking officer at the company. Faris also gave little credence to Mesa's arguments that Murnane was simply trying to permanently erase pornographic material from his computers.

"Mesa basically trusted Mr. Murnane and others to follow directions and do the right thing," Faris said.

"When you're under pressure from litigation, you can do things that are wrong and stupid."

Mark Dunkerley, president and chief executive of Hawaiian, who is scheduled to testify this morning, said the judge's ruling validates Hawaiian's claims that Mesa "misused our data, then destroyed the evidence of that misuse, and then they covered it up."

"I think the evidence that we've seen over the course of the last couple days shows a remarkably cavalier attitude toward the handling of important evidence in a lawsuit, and I think we were very pleased today that the judge found they had indeed destroyed evidence that was important to us," Dunkerley said. "(Faris) allowed the inference that it was information that was a substantial part of their decision to come to Hawaii. And when all is said and done, it's very difficult to compete fairly once you're confronted by competitors in the way that Mesa has behaved."

Faris deferred his decision on damages because even though he found that Mesa destroyed information and then lied about it to the court, it still needs to be decided whether the information Mesa received from Hawaiian was publicly available.

Mesa attorney Maxwell Blecher, saying that Faris "fashioned his remedy with a scalpel," intends to prove that Hawaiian's accusations about using confidential information are groundless.

"We're gratified that we'll have an opportunity to defend ourselves against this phony claim that they gave us confidential information -- because there was none," Blecher said. "And we're confident that at the end of the day, the judge will reach that conclusion."

Because Faris ruled Mesa misused the information, Blecher said "the whole trial is going to turn now on whether what they gave us was confidential."

"Our principal defense always was the starting point, and that is Hawaiian had to establish that they gave us confidential information, secret information, that wasn't available in the public domain or couldn't have been compiled by industry experts," Blecher said. "And we don't think that they're going to be able to climb that hill."

Jonathan Ornstein, chairman and CEO of Mesa, said Faris will be making "an important decision not only for Mesa, but for the traveling public in Hawaii."

"It goes without saying that if Hawaiian is successful in its request to evict go! from the market, the travelers in Hawaii will suffer from the same high fares that they experienced for so long in the past," Ornstein said. "I don't think there are many people in Hawaii who don't realize that this case is more about eliminating competition than anything else. In spite of Hawaiian's persistent and continuing attempt to tie myself and other people at Mesa to some type of improper activity, we are pleased that the judge determined that there was no evidence found that anyone at Mesa, other than Peter (Murnane), acted improperly."

Mesa signed a two-year confidentiality agreement when it received data from Hawaiian in April 2004, accessing 60 documents and downloading more than 2,000 pages of information. But Mesa was dismissed as a first-round bidder the following month. In September 2005, Mesa announced it was going to enter the Hawaii market. It began service in June 2006.

Dunkerley said the one-year injunction is warranted because Mesa misused "confidential" information in deciding to come into the Hawaii market, "and they jumped the gun by at least a year."

Prior to the start of yesterday's hearing, Blecher attempted to get Faris to withhold making a decision on possible sanctions against Mesa when he announced that Kroll, a security services firm hired by Mesa, had uncovered 58,000 new documents, consisting of 500,000 pages related to Hawaiian, on two additional hard drives that Murnane had handed over to Mesa in mid-September.

But Faris denied Blecher's request, calling it "Mesa's problem" because the deadlines for submitting such evidence had already passed.
 
"Faris also gave little credence to Mesa's arguments that Murnane was simply trying to permanently erase pornographic material from his computers."

Interesting defense....
 
I posted about the "it was just porn" defense here:Link


Funny, JO had no problem coming up with a preposterous defense, especially if it meant stabbing one of his officers in the back.
 
HA isn't going to get $173 million... they may be lucky to get something in the double digits, because the judge has to prove that Mesa used the information as their sole plan of inception.

Its one thing for Mesa to see the data and go "wow, we should come in here" and use it as a blue print.

its another if they saw the data, pulled DOT data (readily available), and used data from all carriers to develop the business plan.

If go! had in fact used all of HA's data, then why all the $1, $9, $19, and $29 fare sales? Wouldn't Mesa had been so successful that they wouldn't have needed to do that much marketing?!?!
 
The $173M is just Hawaiian's claim. Aloha's case against Mesa won't be heard for another few months.

Ornstein threw his CFO under the bus to save his own fat ass, and ruined the guys life in the process. If I were Murnane, I think I'd be working a plea agreement that gave me immunity in exchange for testifying to what probably happened, i.e. "Jonathan told me to do it, and here's what we learned..."

One of Mesa's corporate officers destroyed evidence that was subject to a discovery request, and that's a serious offense in light of the Enron scandal. Perhaps it will come down later, but I'm surprised that there wasn't even a mention of a contempt of court charge over that.
 
The $173M is just Hawaiian's claim. Aloha's case against Mesa won't be heard for another few months.

Ornstein threw his CFO under the bus to save his own fat ass, and ruined the guys life in the process. If I were Murnane, I think I'd be working a plea agreement that gave me immunity in exchange for testifying to what probably happened, i.e. "Jonathan told me to do it, and here's what we learned..."

One of Mesa's corporate officers destroyed evidence that was subject to a discovery request, and that's a serious offense in light of the Enron scandal. Perhaps it will come down later, but I'm surprised that there wasn't even a mention of a contempt of court charge over that.

It's Mesa...what did you all expect?
 
To clarify, HA hasn't won $173 million, but they may win it in the next trial.

As for JO and pals, it couldn't happen to a bigger bunch of slime, its time they got caught.
These corporate slime balls
http://www.thehawaiichannel.com/money/3756461/detail.html
Former Hawaiian Air CEO To Pay $2.5M In Settlement
Former airline chief John Adams was accused of making millions in the $25 million stock buy-back transaction in 2002.
http://www.afanet.org/default.asp?id=431
WASHINGTON - The Association of Flight Attendants-CWA, AFL-CIO, wants a federal bankruptcy court to reject a scheme offered by the trustee of Hawaiian Airlines to give huge bonuses to its executives and managers, even though the carrier has extracted concessions from its employees.
Thank goodness the unions got involved with the courts. The level of greed in corporate America needs to be kept in check union oversight is a must. No telling what JO and pals would do without union oversight