U.S. Bankruptcy Judge Robert Faris ordered Mesa to pay Hawaiian Airlines $80 million in damages suffered through October 2007, plus litigation costs after he found the regional airline guilty of using confidential information to gain a competitive advantage for building its go! operation. However, Faris rejected Hawaiian's bid to prohibit go! from selling tickets. Despite the court’s ruling, Hawaiian intends to study the opinions and applicable law to determinate what steps it can take to recover damages it may suffer in subsequent periods since the court did not award damages for any injury Hawaiian may sustain in the future.
The major carrier had sought $170 million and suspension of go! operations for a year but Faris said his financial award adequately compensates Hawaiian. He also found Mesa purposely destroyed evidence in the case as part of a coverup and ordered it to pay 3.97 percent of the $80 million per year and turn over any confidential information pertaining to the case. The findings boost a similar suit by Aloha, scheduled to be heard next spring.
Mesa Air Group, Inc. said it will seek to overturn the ruling which results from the court's finding that the company's executive vice president and chief financial officer, Peter Murnane, now on administrative leave pending the completion of Mesa’s investigation, intentionally, and in bad faith, destroyed evidence pertinent to Hawaiian's case against Mesa. Related Story While Mesa intends to appeal this ruling, it anticipates it will be required to post a bond or letter of credit as security for the judgment amount in connection with the appeal.
“Today’s ruling is a triumph for fair competition and ethics over dishonesty and illegal behavior,” said Hawaiian President and CEO Mark Dunkerly. “Nobody benefits when a company like Mesa misuses confidential information to gain an unfair competitive advantage, then lies about it and destroys evidence. Mesa pretends that they are in Hawaii to help the consumer. As the evidence in this trial showed, the reality is that Mesa’s intent was to drive local competition out of business and raise fares. We are pleased that the court laid out the facts for all to see.”
The court’s decision followed two weeks of court proceedings from September 25 through October 4. Related Story In a pre-trial hearing, the court found that Mesa not only kept confidential information it was supposed to destroy or return to Hawaiian, but misused the information it kept, which was a substantial factor in the company’s decision to enter the Hawaii market.
"We are obviously very disappointed with this judgment,” said Jonathan Ornstein, chair and CEO of Mesa Airlines.” The order is not a result of a jury finding, but from a Bankruptcy Judge who entered sanctions against Mesa concerning evidentiary issues.”