A mistrial was declared in Boca Aviation v. Proskauer Rose after two full days of deliberation. Apparently the jury was unable to reach a verdict. A re-trial is not expected soon.
In closing, plaintiff attorney Steven Katzman said, “This case is about Boca Aviation giving up something of value — the 15th Amendment — for nothing at all — the 19th Amendment…The cure was worse than the disease,” Katzman argued, “because we already had the right to put hangars on those 15 acres…and at [our lawyer's] insistence that we were fully protected, we listened to our lawyer…and we gave up that 15th Amendment.”
“If only our [our attorney] had said, ‘Hey, it’s impossible. You’ve given me an impossible job to do. Stick with the 15th Amendment: it’s valid and enforceable.”
According to Katzman, Boca’s attorney should have recognized that the 15th Amendment was valid, and advised Boca not to give up the “bird in the hand,” which was the 15th Amendment. The overwhelming evidence in the case, said Katzman, was that the 15th Amendment was valid, becase the need for hangars was affirmed by witness after witness, and by the airport authority’s own documents.
Boca requested damages of $64,363,646, but noted that this figure might be a too-conservative estimate of the lost profits.
For the defense, Boies Schiller attorney Mark Heise asserted that Proskauer was not negligent and did not breach any fiduciary duty.
The thing that Boca wanted done — the creation of a 19th Amendment that protected Boca’s position as the sole gas station at the airport — could not be done. In fact, the judge had ruled as a matter of law that no such Amendment could have been drafted.
According to Heise, Boca could only prevail if it showed that Proskauer gave a guarantee on the 19th Amendment, and that Proskauer should have known that the 15th Amendment would have served Boca better. Heise explained that a different lawyer who specialized in Aviation Law was responsible for that determination, not Proskauer.
But in any event, the effectiveness of the 15th Amendment would have depended on the airport authority’s willingness to fight the FAA, which the airport made clear it would not have done, and the FAA’s willingness to reverse a finding of an exclusive rights violation, which the FAA had never previously done. Plus, Boca would not have been able to establish the facts necessary to challenge the FAA ruling, because it was possible for another operator to provide service at the airport without taking land from Boca or creating an undue burden.
The FAA’s finding of that the 15th Amendment caused an exclusive rights violation, said Heise, made the 15th Amendment unenforceable. Therefore, the 15th Amendment was worth nothing, or at least its value was in reasonable doubt. Proskauer stated clearly in writing that the 19th Amendment did not fully protect Boca’s interest, but was proposed as a good strategy in response to the damage the FAA had done to the value of the 15th Amendment.
“How many times have we heard about the ‘bird in the hand?’” asked Heise. “If we look at the evidence…it makes it clear that Boca Aviation absolutely knew they didn’t have a guarantee…They knew it before this lawsuit. They knew it when they were sitting in this courtroom telling you they had a full guarantee.”
In rebuttal, Searcy Denney’s Jack Scarola argued that the legal advice given to Boca was grossly negligent because Boca was told that the 19th Amendment would as a practical matter prevent a new fuel provider from serving the airport because the flexibility that it provided would in reality leave no place to dispense fuel. According to Scarola there turned out to be additional risks associated with trading the 15th for the 19th Amendment, because the 19th Amendment turned out to be worth nothing.
As for the validity of the 15th Amendment, said Scarola, the airport authority was contractually bound under the Master Lease to defend Boca Aviation’s lease rights before the FAA unless they were voluntarily relinquished. Those rights were voluntarily relinquished, according to Scarola, because they got bad advice about the value of the 19th Amendment.
Scarola also asserted that there never was a final decision by the FAA, only a preliminary determination without a hearing. Nor was the unlikelihood that the FAA would reverse its decision established by its prior record of not reversing this kind of decision, because Boca Aviation’s was in fact the first proceeding under the rule.
Boca Aviation was a fixed base operator at Boca Raton Airport. Boca Aviation had a long-term lease on 45 acres, and was the sole provider of aviation services, including fuel, at Boca Airport.
An additional 15-acre lot became available, and Boca Aviation won the right to build additional hangars on the lot. The FAA subsequently suggested that the local airport authority develop the lot, and Boca Aviation agreed to give up its right to build the additional hangers, said the plaintiff, in exchange for the airport authority’s commitment to allow Boca Aviation to continue as the airport’s sole fuel supplier.
However, the lease amendments formalizing this agreement between the airport authority and Boca Aviation did not secure Boca’s claimed rights, but instead allowed the airport authority to assign the development rights to a third party, and, after a change in membership, the airport authority did bring in a competing fixed base operator.
Boca Aviation subsequently asserted breach of fiduciary duty and professional negligence claims against Proskauer, and sought to recover damages in excess of $60M for lost profits.
According to defense attorney Mark Heise, of Boies Schiller, “from 1984 when Mr. Greenberg had Boca Aviation at the airport, until 1996, he had a monopoly on the sale of fuel. And as we talked about in voir dire, sometimes it’s ok, and sometimes it’s not. From 1984 to 1996, when he had the only gas station at the airport, it was completely fine. But things changed in 1996. In 1996, a competitor wanted to open up and…Boca Aviation did everything they could to prevent competition at the airport, to keep out the other gas station. And when you do that, it’s against federal aviation law.”
According to the defense, the Proskauer Rose attorney clearly stated in writing that the FAA would not accept a proposed restriction on the airport authority’s ability to use the land, and that their client’s interest therefore was not fully protected. What in fact happened, said Mr. Heise, was that membership changes made the airport authority less friendly to Boca Aviation, and the new authority felt compelled to authorize a competing provider.
“Federal aviation law prohibits exactly what they planned,” said Mr. Heise. “Mr. Greenberg could not get this written guaranty…Lawyers are not magicians, and as a result…we are going to ask you to deliver a verdict that says Proskauer is not responsible for this.”