JetAway Aviation, LLC v. Board of County Commissioners of the County of Montrose, Colorado, The et al

Filing 250

MEMORANDUM OPINION AND ORDER re: 207 and 216 Motions. Defendants' motions for summary judgment are granted. The Clerk shall enter judgment for the defendants, dismissing this civil action and for an award of costs, by Judge Richard P. Matsch on 3/28/2012. (rpmcd )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Senior District Judge Richard P. Matsch
Civil Action No. 07-cv-02563-RPM
JETAWAY AVIATION, LLC, a Colorado Limited Liability Company,
Plaintiff,
v.
THE BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF MONTROSE,
COLORADO;
MONTROSE COUNTY BUILDING AUTHORITY, a Colorado Nonprofit Corporation;
JET CENTER PARTNERS, LLC, a Colorado Limited Liability Company;
BLACK CANYON JET CENTER, LLC., a Colorado Limited Liability Company;
WILLIAM PATTERSON;
KEVIN EGAN; and
JAMES RUMBLE,
Defendants.
_____________________________________________________________________
MEMORANDUM OPINION AND ORDER
_____________________________________________________________________
The plaintiff in this case is JetAway Aviation, LLC (“JetAway”), a Colorado limited
liability company in which Steve Stuhmer is the managing principal, as plaintiff. The
defendants are The Board of County Commissioners of the County of Montrose,
Colorado; Montrose County Building Authority, a Colorado Nonprofit Corporation; Jet
Center Partners LLC, a Colorado Limited Liability Company; William Patterson; Kevin
Egan; and James Rumble. Black Canyon Jet Center LLC, a Colorado limited liability
company, was merged into JCP and is no longer an entity.
JetAway claims that all of the defendants acted collusively to prevent it from
providing services to the public as a fixed base operator (“FBO”) on the Montrose
Regional Airport in Montrose County, Colorado (“Airport”). The geographical location of
the Airport makes it attractive to general aviation for tourists and recreational users for

southwest Colorado destinations, particularly the ski and resort facilities at Telluride,
Crested Butte and other nearby attractions. It serves commercial airlines and local
general aviation users as well.
FBO services were provided by V.I.P. Flyers, a Colorado corporation until 1991
when the District Court for Montrose County entered a permanent injunction against it
for a violation of certain agreements. James Rumble (“Rumble”) owned and managed
that company.
From 1991 to January, 2006, the County provided FBO services, including the
sale of aviation fuel and a terminal for the use of pilots and passengers of private
aircraft. The terminal building was closed in 2002 because of asbestos concerns. The
County installed a double-wide trailer as a temporary measure.
The governing authority for Montrose County is a three member Board of County
Commissioners (“BOCC”). Recognizing the need for better facilities, the BOCC began
consideration of contracting with a private provider for services. The members then
were David Ubell, Betsy Hale and Leo Lange.
Rumble, Kevin Scott and Kevin Egan formed a business in 2002 for the single
purpose of obtaining and operating an FBO at the Airport. Scott had FBOs at other
comparable airports.
The question of privatization of the Airport was discussed publicly in Montrose.
William Patterson had been the Treasurer of the Airport authority when V.I.P. Flyers had
the FBO and he was well acquainted with Rumble. Both of them lived in Montrose.
All three members of the BOCC favored privatization and they directed the
County Attorney, James Fritze to draft a Request for Proposal (“RFP”) and to develop
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minimum standards for FBO operations at the Airport.
In 2004, the BOCC retained a financial consulting firm to compare the anticipated
financial results of privatization with continuing County operation, which would require
an estimated $2 million investment in necessary capital improvements. The reported
conclusion was that projected cash flows for the period 2006 through 2010 made
continued county operation the more appropriate action.
The question of privatization of the Airport was discussed in the election for
county commissioners in November 2004. Patterson and Allan Belt, proponents of
privatization, were elected. They joined the incumbent, Ubell, in January, 2005.
In 2004, JetAway purchased a building adjacent to the Airport that had been
used as a manufacturing facility. Through agreements with the County, JetAway began
providing “through the fence” FBO services to Airport users but it was restricted from
selling aviation fuel.
The County issued a Request for Proposals with a response date of April 1, 2005
(Ex. A-23).
This RFP was different from a request for competitive bids with specifications. It
asked each proposer to submit a business plan with no preconceptions except for
adherence to the Airport’s Minimum Standard requirements. The terms and conditions
of the RFP included the following:
The County reserved the right:
1

To select one, two, or more respondents with whom
the County may pursue negotiations pursuant to this
RFP.

2

To reject any and all proposals received pursuant to
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this RFP for whatever reason deemed necessary or
for no specified reason.
3

To amend or otherwise modify this RFP prior to the
submission date and to cancel this RFP with or
without the substitution of another RFP.

4

To request more detailed qualifications statements
and/or references and to conduct investigations with
respect to the qualifications and/or reputations
claimed by proposer.

5

To not proceed with the evaluation process as
indicated by this RFP for whatever reason.

6

To require additional information to clarify or
supplement proposals.

7

To expressly waive any non-compliance with an
insubstantial requirement of this RFP in any proposal
submitted.

8

To negotiate regarding unacceptable provisions
incorporated in an otherwise acceptable proposal.
Exhibit A-23

While the RFP was for a lease, there was no legal description of the premises.
That, too, would be negotiated.
The County formed a committee (FBO Committee) to review the proposals, to
recommend whether to privatize the Airport and, if so, which applicant should be
accepted. The county manager, Dennis Hunt, and Scott Brownlee, Airport Manager,
selected the members of the FBO Committee. Brownlee, County Attorney Fritze, a
banker and three airport employees were appointed.
Steve Stuhmer, a principal of JetAway, delivered its proposal to the airport
administration office at about 3:00 p.m. on April 15, 2005. The proposal was in multiple

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binders in a footlocker that was sealed and marked. When Stuhmer returned about an
hour later, he saw that the footlocker had been opened. JCP’s proposal was delivered
almost two hours later.
Jeanette Anderies, an airport employee and member of the FBO review
committee, opened the footlocker and was seen looking at a copy of JetAway’s
proposal by Scott Brownlee who admonished her. When Stuhmer returned, he was told
that Anderies had gone for the day.
The JetAway proposal was based on its existing facility. The land was to be
conveyed to the County at no cost and leased back to JetAway which would also lease
the adjacent Airport land to develop a ramp area. JetAway pointed out that this was a
unique proposal which would provide a full range of FBO services immediately. Ex. A27.
The JCP proposal provided for construction of a hangar, terminal and a parking
area on leased space on the Airport.
The FBO review committee recommended that the County continue to operate
the FBO but if the contrary conclusion was reached the negotiations should be with
JCP.
On August 15, 2005, Commissioners Ubell, Patterson and Belt unanimously
voted to negotiate with JCP. On December 5, 2005, the County adopted amended
minimum standards, replacing some of the 2003 standards referred to in the RFP. The
amended standards conformed to the JCP FBO Agreement, executed on the same day.
JetAway did not stop its efforts to provide FBO services after JCP’s agreement.
In addition to its multiple proposals, JetAway has engaged the County in litigation in the
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District Court of Montrose County regarding its lease agreements for the JetAway
facility. That litigation ultimately resulted in an injunction barring JetAway’s access to the
Airport. JetAway also filed two complaints with the FAA, contending that denial of its
access to the Airport violated the conditions of Federal grants. The FAA rejected those
complaints.
This case was filed on December 10, 2007. After prolonged discovery
and motion hearings, the claims now before this court are for violation of Sections 1 and
2 of the Sherman Act, for denial of equal protection of the law in violation of the
Fourteenth Amendment, and for an unconstitutional burden on interstate commerce.
All of the defendants are accused of collusion in the RFP process. The plaintiff
attempts to equate this case with the type of bid rigging that constitutes a per se
violation of the Sherman Act. It does not fit. They involve horizontal competitors who
agree on which bidder will win the contest. Here the allegation is that the County had
selected JCP to be the FBO operator even before issuing the RFP. The disputed
evidence may support that finding. That, however, is not illegal. The County made it
clear that the RFP was only the first step in the selection process. The proposals were
reviewed to determine the entity with which negotiations would be conducted. The
County was free to make that selection without the use of an RFP.
The plaintiff’s retained economist, Dr. Philip Nelson, compared the proposals of
JCP and JetAway, reaching the conclusion that JetAway’s approach would have been
significantly better for the financial benefit to the County both in the short and long term.
That, however, is not determinative of the antitrust claims.
The plaintiff suggests that Patterson, Egan or someone for JCP had knowledge
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of JetAway’s proposal before JCP’s bid was submitted. There is evidence that Anderies
saw the plaintiff’s proposal when it was delivered and that she left the office shortly
thereafter. It is only an unwarranted speculation that she communicated what she saw
to anyone acting on behalf of JCP or that JCP had sufficient time to alter its proposal
before submitting it a few hours later.
The County’s preference for JCP was demonstrated by accepting the
modification of the minimum standards it proposed and by accepting JCP’s proposals in
negotiating the final terms of the FBO contract.
The execution of the FBO contract with JCP on December 5, 2005, did not deter
JetAway from pursuing an opportunity to provide FBO services. It continued to provide
aircraft hangaring, a pilot lounge and related services from its offsite location until it was
enjoined by the state court.
JetAway did not limit its efforts to persuasion. It filed four lawsuits against the
County in January, 2006, shortly after JCP began operations. It complained to the FAA
that the Airport violated the terms of the grant by granting an exclusive to JCP.
These efforts failed and as of this time JetAway’s business has been shut down
in consequence of the state court litigation.
JetAway contends that all of its efforts to conduct business on the Airport have
been blocked by the combined efforts of the defendants to preserve an illegal
monopoly.
The critical legal question in this case is whether JetAway has provided sufficient
admissible evidence to support a finding that there has been an injury to competition.
The plaintiff argues that its proposal was so much better than that of JCP, the
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selection of the latter injured the citizenry of Montrose County financially. It further
contends that the defendants’ protection of JCP from later entry by JetAway has caused
injury to the users of the Airport by subjecting them to higher prices and inferior
services.
The plaintiff’s forensic witness, Dr. Nelson, has constructed an elaborate theory
of liability and damages. He has defined the relevant market as FBO services at the
Airport and that may be accepted. What is most significant is his conclusion that while
there may be a period of competition between two competing FBO’s, for a limited time,
perhaps one year, the market can sustain only one operator.
It is well established law that the anti-competitive conduct that violates the
Sherman Act must have more than a temporary effect on the market. Taking all of Dr.
Nelson’s assumptions at face value, the net effect of his analysis is that if JetAway had
been able to compete as a second FBO on equal terms with JCP the result would have
been that JCP’s business would fail and JetAway would be the sole survivor. In
essence, the plaintiff admits that the size of the business opportunity at the Airport limits
that market to a single FBO operator. Thus, their case falls within the rule that the
antitrust law does not criminalize the protection of one monopolist from the aggressive
efforts of another seeking to replace it.
JetAway has gone to great lengths to attempt to prove sinister motives to keep it
out of the Airport. It makes much of the notes taken by Commissioner David White
during two conversations with Kevin Scott after Scott left JCP and during White’s
exploration of his concerns about JCP’s leases with the County. The plaintiff’s
interpretation of these notes are suggestive of manipulation of the former
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commissioners and the partisanship of William Patterson to control the process to
ensure JCP’s success.
The notes are inadmissible double hearsay. In his deposition, White could not
explain his notes and the plaintiff’s interpretation is not supported by Scott’s testimony in
his deposition. At best what is shown is favoritism toward JCP and antagonism toward
JetAway, particularly Stuhmer.
It may be that the Commissioners who signed the FBO agreement with JCP did
not act in the best interest of their constituents and permitted themselves to be unduly
influenced by personalities. That is a matter of political concern; it is not an antitrust
conspiracy.
JetAway has sued Patterson individually. He is protected from liability for
damages by the Local Government Antitrust Act of 1984 (LGAA), 15 U.S.C. §§ 34-36.
The plaintiff seeks to avoid that immunity by contending that Patterson’s conduct was
not within the scope of his official capacity. There has been a vigorous effort to prove
by inference that Patterson’s actions were improperly motivated by personal interest.
His prior experience at the Airport with Rumble, his friendship with Rumble and his
distaste for Stuhmer have been stressed.
The plaintiff argues that the die was cast for privatization and the preferred
selection of JCP at a meeting with Scott and Rumble after Patterson’s election and
before he took office. Assuming the fairness of that interpretation, all of the actions that
were necessary to accomplish the presumed plan were taken by Patterson in his official
capacity. There is no evidentiary support for the suggestion that Patterson’s official
actions were corrupted by any presumed personal advantage.
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Because the LGAA precludes a damages recovery from Montrose County,
JetAway asks for injunctive relief by requiring that it be given an airport access for a
competing FBO. There has been a collateral controversy in this case regarding a 9
acre site that may be developed. That, however is, in itself, a problematic matter.
Compliance with the safety related requirements of the FAA and other regulatory
restrictions of the County would entail such extensive involvement of this Court into the
governance of Montrose County that would itself be an extension of equitable power of
questionable validity under the constitutional limitations of federalism. At any rate, the
relief sought is impracticable.
The Montrose County Building Authority is a Colorado Nonprofit Corporation
formed for the limited purpose of holding legal title to the Airport land. It is not protected
by the LGAA. It leases the Airport to the County and its non-government status was
used to issue certificates of participation to obtain financing for improvements to the
Airport, including the construction of an access road and an aircraft parking apron for
the benefit of JCP’s operation. The plaintiff protests the use of public funds for private
benefit but it has not shown the illegality of these financing arrangements and there has
been no showing of any active involvement of the MCBA in any of the actions claimed
to be in violation of the Sherman Act.
JetAway claims damages from JCP and its principals, Kevin Egan and James
Rumble as conspirators with the County and as direct actors in creating a monopoly.
They defend by asserting that all of these dealings with the County are within the shield
of the First Amendment under the Noerr-Pennington Doctrine.
The Supreme Court, in deciding Columbia v. Omni Outdoor Advertising, Inc., 499
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U.S. 365 (1991), emphasized the distinction between the purpose of the antitrust laws
to protect competition in the business world and the political decisions of governmental
officials even when those decisions have been infected by “selfishly motivated
agreement with private interests.” Id. at 383.
The Tenth Circuit Court of Appeals applied Noerr-Pennington in G F Gaming
Corp. V. City of Black Hawk, Colo., 405 F.3d 876 (10th Cir. 2005) and Coll v. First
American Title Ins. Co., 642 F.3d 876 (10th Cir. 2011). In the latter case, the court
concluded that even bribery of public officials to induce decision making with anticompetitive effect does not create an exception to this immunity. All of the conduct
complained of in this case against the non-government defendants required decision
making by County officials and, therefore, all of it comes within Noerr-Pennington
immunity.
The defendants are entitled to summary judgment of dismissal of the claims of
violation of Sections 1 and 2 of the Sherman Act.
JetAway claims a violation of the equal protection clause of the Fourteenth
Amendment because it was intentionally treated differently from JCP. This is a “class of
one” claim requiring proof that the County acted arbitrarily by imposing requirements
that were different from those affecting JCP for the purpose of barring JetAway’s entry
to the Airport. This argument has no merit. Assuming that Patterson and others were in
part motivated by ill will towards Stuhmer and his company, there are a myriad of
reasons for the County’s preference of JCP for this business relationship. Many of
those reasons are identified in the rulings of the state court that resulted in the closure
of the plaintiff’s through the fence operations.
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The final effort to obtain some relief in this civil action is the claim that in
establishing JCP’s monopoly the County has imposed a burden on interstate commerce
by enabling JCP to manipulate prices. This argument runs contrary to the plaintiff’s
contention that the relevant market for measuring competition is the local airport. There
is nothing to support a finding that there has been harm to the free flow of commerce
between the states.
Upon the foregoing, it is
ORDERED, that the defendants’ motions for summary judgment are granted.
The Clerk shall enter judgment for the defendants, dismissing this civil action and for an
award of costs.
DATED: March 28th, 2012
BY THE COURT:
s/Richard P. Matsch
__________________________
Richard P. Matsch, Senior Judge

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