Corey Airport Services, Inc. v. City of Atlanta

632 F.Supp.2d 1246

COREY AIRPORT SERVICES, INC., Plaintiff, v. The CITY OF ATLANTA, et al., Defendants.

Civil Action No. 1:04-CV-3243-CAP.

United States District Court, N.D. Georgia, Atlanta Division.

September 30, 2008.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Griffin B. Bell, Jr., Fisher & Phillips, Joseph Matthew Maguire, Jr., Michael J. Bowers, Balch & Bingham, LLP, Mairen C. Kelly, Fisher & Phillips, Atlanta, GA, for Plaintiff.

John Anderson Sensing, Michael P. Kenny, Cari K. Dawson, Christopher Allen Riley, Ryan Jay Lewis, Wade Walker Pearson, Alston & Bird, LLP, Atlanta, GA, for Defendants.

ORDER

CHARLES A. PANNELL, Jr., District Judge.

This matter is now before the court on the following motions: Barbara Fouch's motion for summary judgment [Doc. No. 447]; the City of Atlanta's motion for summary judgment [Doc. No. 448]; Ben DeCosta's motion for summary judgment [Doc. No. 450]; Adam L. Smith's motion for summary judgment [Doc. No. 451]; Carolyn Chavis's motion for summary judgment [Doc. No. 453]; Kyle Mastin's motion for summary judgment [Doc. No. 457]; Hubert Owens's motion for summary judgment [Doc. No. 459]; James Riley, Michael Riley, and John McNeany's motion for summary judgment [Doc. No. 463]; Clear Channel Airports of Georgia, Inc. and Clear Channel Outdoor, Inc.'s motion for summary judgment [Doc. No. 464]; Clear Channel Airports of Georgia, Inc. and Clear Channel Outdoor, Inc.'s motion in limine to exclude evidence and testimony of plaintiff's proffered expert witness John H. Landon [Doc. No. 496]; the joint motion to exclude testimony of Brett Katzman [Doc. No. 571]; the joint motion to strike the declaration of Steve Moody [Doc. No. 575]; and Barbara Fouch's motion to strike the declaration of Steve Moody [Doc. No. 576]. In Section I, the court will outline the factual background of this case. In Section II, the court will address the motion to exclude the testimony of Brett Katzman [Doc. No. 571] and the motions to strike the declaration of Steve Moody [Doc. Nos. 575 and 576]. In Section III, the court will rule on the respective motions for summary judgment as to each count in Corey's Second Amended Complaint [Doc. No. 444]. In doing so, the court will examine the evidence and set out in specificity the facts that are relevant to the particular defendants and the claims against them. Because Landon testifies as to the relevant market and harm to competition, the court will address the motion to exclude the testimony of Landon when it rules on the motions for summary judgment as to Corey's antitrust claims.¹

I. Factual Background

This case arises from the City of Atlanta's ("City") Request for Proposal No. FC-7430-02 for the advertising concession at Hartsfield-Jackson International Airport ("2002 RFP"). Before addressing the 2002 RFP itself, the court will first discuss the historical background leading up to the 2002 RFP.

A. Historical Background of the Airport Advertising Concession and the 2002 RFP

In 1980, the City's Hartsfield-Jackson International Airport ("Airport") opened. In that same year, James Riley (the owner of Transportation Media, Inc.) and Barbara Fouch partnered to form Transportation Media, Inc. of Georgia ("TMI of Georgia") in order to pursue the contract for the Airport advertising concession. J. Riley owned a 70% interest in TMI of Georgia, and Fouch owned a 30% interest. TMI of Georgia was awarded a 15-year no-bid contract for the Airport advertising concession ("1980 Airport Advertising Contract"). Initially, TMI of Georgia operated the Airport advertising concession as a subcontractor of Dobbs-Paschal Midfield Corp. ("DPMC").

In 1993, the City terminated DPMC's master concessionaire contract. At that time, the City Council authorized a two-year contract directly with TMI of Georgia for the Airport advertising concession based on the 1980 Airport Advertising Contract and at the rate of 50% of revenue received ("1993 Airport Advertising Contract"). In September 1995, the City Council authorized a two-year extension of the contract ("1995 Airport Advertising Contract"). During this extension, TMI of Georgia continued to pay the City rent at the rate of 50% of revenue received. The term of the 1995 Airport Advertising Contract expired in September 1997, but Clear Channel has continued to operate the Airport concession on a month-to-month basis at the 50% rental rate.

On February 17, 1998, J. Riley signed a consulting agreement, in which TMI of Georgia agreed to pay Fouch an additional $144,000 per year in consulting fees and an additional $50,000 per year bonus for "each year extension of the present airport contract, to a maximum of $250,000 for a 5 year renewal extension, said bonus to be paid concurrent with signing of the extension by the parties thereto." Ex. 13 to Plaintiff's Statement of Facts. That same year, Universal Outdoor Holdings acquired TMI of Georgia. Later that year, Clear Channel's parent corporation acquired the stock of Universal Outdoor Holdings, TMI of Georgia became a subsidiary of Clear Channel, and its name was changed to "Clear Channel Airports of Georgia, Inc." Clear Channel Airports of Georgia, Inc. does not have its own employees. Instead, the people who operate the advertising concession at the Airport on a day-to-day basis are employees of Clear Channel Outdoor, Inc. Under the terms of Clear Channel's response to the 2002 RFP, Fouch's status would change from a 30% owner of Clear Channel Airports of Georgia, Inc. to a subcontractor of Clear Channel Outdoor, Inc. with a right to 30% of the profits from Clear Channel's operation of the Airport advertising concession.

Between 1997 and 2002, after the term of the 1995 Airport Advertising Contract had expired, Clear Channel was in communication with the City regarding the status of its contract. For example, J. Riley testifies in his deposition, "There was an effort to get a contract continually." Ex. 2 to Plaintiff's Statement of Facts at 162. J. Riley also states that "some people that were working for the company were in negotiations with the airport to get us a contract, open up an RFP" and that "anything is better than a 30-day contract." Id. at 165. In addition, J. Riley testifies that Fouch "was being paid to be [at the Airport] and try to work out a plan where [Clear Channel] could have a bid." Id. at 196.

In 1997, while Angela Gittens was the General Manager of the Airport, a request for proposal for the Airport advertising concession was issued ("1997 RFP"), but the 1997 RFP was soon cancelled prior to the submission of any proposals. The 1997 RFP reduced the number of advertising display locations from approximately 300 to approximately 100. In 1998, Gittens was replaced by Ben DeCosta, who left his position with the Newark International Airport ("Newark Airport").

DeCosta had the responsibility of determining whether and when a new request for proposal for the Airport advertising concession would be issued by the City's Department of Procurement. From 1998 until 2002, no new RFP for the Airport advertising concession was issued and Clear Channel continued to pay the City rent at the 50% rate. The City and DeCosta state that the release of the new RFP was delayed due to revisions of the 1997 RFP. Kyle Mastin, the Concession Manager of the Airport, states that, when he prepared Section III of the 2002 RFP, he used the materials from the 1997 RFP and did little other than update the number of authorized locations.

B. Release of the 2002 RFP

In 2002, the City released the 2002 RFP, which is a request in accordance with the City's competitive sealed proposal method pursuant to the Procurement and Real Estate Code of the City, § 2-1189. Parts I and II of the 2002 RFP, which are entitled "General Information" and "Instructions", were drafted by the City's Department of Procurement under the supervision of Senior Contract Analyst Carolyn Chavis. Chavis began working for the Department of Procurement in 1994 as a contracting officer assigned to the Department of Aviation. In that capacity, she provided procurement services exclusively to the City's Department of Aviation. She was the contracting officer for hundreds of procurements and was promoted to senior contracting officer in 2002. Chavis left her position in 2007.

As the contracting officer assigned to the 2002 RFP, Chavis served as the contact person for the bid proponents. In this capacity, bid proponents would contact Chavis with any questions they had regarding the 2002 RFP. For any substantive questions, bid proponents were to submit the questions in writing, and Chavis would ensure that those questions were answered and attached to the 2002 RFP as an addendum. Questions relating to Part I or Part II of the 2002 RFP were to be answered by the Department of Procurement, while responses to Part III were the responsibility of the Department of Aviation.

Part III of the 2002 RFP, which contains all of the technical provisions, was drafted by the Department of Aviation, specifically Kyle Mastin and Marlene Coleman. Mastin is the Concession Manager for the Airport and served in that capacity when the 2002 RFP was released. Section 3.4 of the 2002 RFP requires bid proponents to project their gross receipts for the first five years of the term of the contract and to commit to pay the City a monthly rental payment of not less than 60% of their gross receipts. Section 3.4 also includes Clear Channel's annual revenue for the years 1996-2001, which were as follows:

Year      Revenue
    1996     $5,524,980
    1997     $4,925,822
    1998     $5,106,848
    1999     $6,257,820
    2000     $9,448,465
    2001     $7,113,930

Section 3.4 also provides for a Minimum Annual Guaranteed payment ("MAG") to protect the City if the contractor fails to attain its projected...