Judge denies Mesa retrial
Mesa Air Group Inc. has lost its bid for a new trial in a federal lawsuit filed by rival Hawaiian Airlines and will appeal to U.S. District Court.
Federal Bankruptcy Judge Robert Faris yesterday denied a motion for a retrial by the Phoenix-based parent of interisland carrier go!, which he said was responsible for the actions of its former Chief Financial Officer, Peter Murnane, who was charged with deliberately destroying evidence prior to the trial.
Faris also said he didn't believe Mesa Chief Executive Jonathan Ornstein, who earlier testified that it was his sole decision to enter Hawaii and that he didn't rely on the advice of Murnane or other members of Mesa's management team.
"Most of the arguments are based on the premise that Mesa shouldn't be held responsible for what Murnane did," Faris said, adding that Murnane had been a key player in the company and a longtime friend of Ornstein. "Whatever he did is attributable to Mesa even if Mesa didn't know."
Mesa last month posted a $90 million bond to satisfy a damages award after it was found to have used Hawaiian's confidential information in deciding to enter the Hawaii market, but wanted a retrial because of new evidence it claimed to have discovered and alleged errors in Faris' original ruling.
Mesa said it had discovered a third hard drive of Murnane's, though Hawaiian argued -- and Faris agreed -- that Mesa had the evidence in its possession during the trial. Mesa also claimed all the documents believed to be permanently destroyed are now in its possession, after recovering the files Murnane had tried to delete.
In any case, Faris said that bringing in new evidence wouldn't likely change the outcome of the trial and that Mesa could have done more to protect the information.
"This is an unprecedented outcome," said Mesa's new high-profile Los Angeles attorney Daniel Petrocelli, who won a civil trial against O.J. Simpson. "The discovery of backup (drives) prove there was no evidence destroyed or lost. The assumption is he deleted mythical evidence."
In addition, Petrocelli said that no one else at Mesa had anything to do with the actions of Murnane, who he described as a "lone ranger," who concealed his actions from Mesa and its attorneys for more than a year.
"Murnane defrauded the company," he said. "We had no ability to do anything more."
Meanwhile, Hawaiian attorney Bruce Bennett maintained that there is no way to know what information had been destroyed and, at best, Mesa recovered only 11 to 12 percent of the deleted files on one of two laptops used by Murnane.
Despite Mesa's intention to appeal to a higher court, Hawaiian is confident that it will be vindicated.
Faris earlier ordered Mesa to pay Hawaiian $80 million in damages, plus interest and attorney fees, because it had used confidential information received as a potential investor during Hawaiian's bankruptcy.
Mesa's $90 million bond takes into account the $80 million in damages, $4.7 million in Hawaiian's legal fees, $3.4 million in interest for a year and $1.9 million to cover additional fees or interest if the appeal takes longer than a year.
"We're going to collect the money," Bennett said. "Mesa got its chance to refine all of its arguments and the judge made it explicit that Ornstein wasn't entirely truthful."