Mesa loses bid to move venue of lawsuit
The airline wanted its antitrust claims heard in U.S. District Court
Mesa Air Group Inc. lost its bid yesterday to have a lawsuit against it by Hawaiian Airlines switched from federal Bank-ruptcy Court to U.S. District Court.
District Judge Helen Gillmor ruled that Bankruptcy Court was the proper venue to hear a suit that Hawaiian filed for injunctive relief and damages against Mesa. She dismissed Mesa's arguments that the case should be moved because Hawaiian is no longer in bankruptcy and the case involves antitrust issues.
Gillmor said Bankruptcy Judge Robert Faris "is very capable of looking at this" and that the case is early in the process.
"The antitrust issues seem very straightforward: Antitrust 101," she added.
Mesa, the parent company of interisland startup go!, now faces a potentially long battle in bankruptcy court, starting with a hearing at 10 a.m. Friday on a motion by Hawaiian to dismiss an antitrust countersuit against it by Mesa. The Phoenix-based carrier said Hawaiian is attempting to monopolize the interisland market by suing to keep Mesa out of Hawaii for at least two years. Hawaiian said it has less than half of the market when all competitors, including Island Air, are included.
Hawaiian, which filed the first complaint in the dueling suits, alleges that Mesa violated a nondisclosure agreement as a potential investor during Hawaiian's bankruptcy by using confidential and proprietary information it gathered to start a new interisland airline. A trial is scheduled for April 2007.
Mesa said it destroyed the information after its bid for Hawaiian was rejected in May 2004. It wasn't until September 2005, Mesa said, that it hired consultant Mo Garfinkle of GCW Consulting to look at developments in Hawaii, including Aloha Airlines' prospects for survival and the possibility of Mesa beginning interisland operations.
Garfinkle, who was the consultant for Hawaiian Airlines' parent during the bankruptcy, said he completed work for Hawaiian Holdings Inc. in December 2004, with the exception of one assignment in which Hawaiian hired him to set up meetings with airline officials in China and other parts of Asia. Garfinkle said that assignment was completed in October 2005, and that none of the confidential information that GCW obtained in working with Hawaiian was ever used in its work for Mesa.
Sid Levinson, the Los Angeles-based attorney for Hawaiian, said in court yesterday that the carrier is still studying the possibility of filing a preliminary injunction that could halt Mesa from flying.
Mesa, which in March sparked an interisland fare war with $39 one-way tickets, last week reignited the battle with the announcement of $59 round-trip tickets Monday through Friday. The fares have been matched by Hawaiian and Aloha.
Chris Pappaioanou, Mesa's Phoenix-based attorney, reaffirmed after yesterday's hearing that Mesa intends to begin flying June 9.
Mesa attorney Robert Marks, a Honolulu-based lawyer who argued the case yesterday, said the Bankruptcy Court had limited jurisdiction and was not empowered to rule on some of the issues.
But Marks, who was unsuccessful in getting Friday's hearing postponed, said he was happy to proceed before Faris.
"We have a great deal of confidence in him," Marks said.