Friday, December 13, 2013

Charlotte/Douglas International Airport (KCLT), Charlotte, North Carolina: With Charlotte Douglas in limbo, legal bills pile up

As the fight over who will run Charlotte Douglas International Airport drags on, combined legal bills for the city and a new commission are approaching $1 million.

The lawyers’ fees are likely to continue growing, as the nearly year-old conflict shows no signs of resolution. The legal drama over the new American Airlines’ second-busiest hub has taken up much of the past year, dividing state legislators and city leaders and deepening political divisions. 

The city so far owes three outside law firms a little more than $397,000 for their work, city attorney Bob Hagemann told the Observer Thursday. With the firms’ help, Charlotte has successfully stalled a state law passed in July that would shift control of the airport from the city to a new commission.
Robert Stolz, chairman of the Charlotte Airport Commission, declined to say how much the commission has been billed by its lawyers. “We’re finalizing what the previous bills have been, and those will be reported out at the commission next week,” said Stolz. The commission meets Thursday night.

But a person with knowledge of the situation said the commission’s legal bills are similar to the city’s in size.

While Stolz didn’t say exactly how much the commission’s bills are, he did say the legal fight is eating up too much time and money.

“The amount of money being spent on this situation is outrageous,” said Stolz. He said state legislators who supported the airport authority and city leaders who want to keep Charlotte Douglas under city control should work out their issues outside of the courts. 

“I would hope that both sides would lay down their arms and have some thoughtful dialogue,” he said. “What we need is for people to sit in a room and resolve this thing.”

The commission’s bill sets up a potentially awkward situation at Thursday’s meeting. The airport commission is currently blocked by a judge’s ruling from exercising almost all of its powers and doesn’t have any money to spend.

That means the commission will have to discuss whether and how it will pay its lawyers. The commission is represented by former Charlotte Mayor Richard Vinroot and Martin Brackett, of Robinson, Bradshaw & Hinson.

Vinroot could not be reached Thursday. Former Charlotte aviation director Jerry Orr, who is executive director of the commission, also could not be reached.

Orr retained Vinroot and his firm in July, the same day the N.C. General Assembly passed a bill creating the commission. Orr was removed from his city job – the city said he resigned, while Orr said he was fired – but he was automatically named to head the commission, under the terms of the law. 

Orr is still receiving his $211,000 salary from airport revenues, as he fights for the commission to begin running Charlotte Douglas. But so far, the commission has largely been stymied.

In a series of inconclusive hearings in front of Superior Court Judge Robert Ervin, the judge has declined to lift his injunction against the commission. The Federal Aviation Administration has yet to say whether it will give the commission a certificate needed to run the airport. 

Seven of 13 commissioners were appointed by the Charlotte City Council and the mayor. At their first meeting, some commissioners questioned why the body was meeting when it can’t do much. The group intends at its meeting next week to discuss Orr’s role and whether it’s appropriate to keep paying him, as well as the role of its lawyers.

For now, the airport has two directors: Orr, who can’t exercise his powers, and interim aviation director Brent Cagle, who is running the airport day-to-day. Cagle’s $152,640 salary is also coming from airport revenues. The airport remains a city department, and Cagle reports to City Manager Ron Carlee and the City Council. 

Outside firms, escalating bills

The city’s legal tab has primarily come from two North Carolina-based firms. Brooks Pierce has billed the city for $221,367, while Poyner Spruill has submitted $166,757 in invoices. A Boston-area firm, Anderson & Kreiger, is owed $9,221.

Hagemann said Brooks Pierce brought an experienced trial litigator, Jim Phillips, while Poyner Spruill offered the city a state constitutional expert in Robert Orr, a former N.C. Supreme Court justice. Phillips is a Democrat; Robert Orr, a Republican.

“We did not want to appear partisan, but that is not the main reason (for picking the two firms),” Hagemann said. “Both are high-quality, highly regarded firms.”

Anderson & Kreiger is known for its expertise in issues involving the Federal Aviation Administration, he said.

Poyner Spruill came on board first. It started working with the city July 11, a week before the legislature passed the airport bill. Its lawyers were on hand in a Mecklenburg courtroom when Hagemann successfully asked a judge to block the new law. 

“It turned out to be a whole lot of work in a short period of time,” he said. “We could not have done it all in-house.”

Hagemann said he has handled most of the in-house work himself, making strategy calls and orchestrating work by the outside firms. 

In June, the Charlotte City Council voted to “vigorously resist any outside, unilateral” efforts to transfer Charlotte Douglas from city control to an independent authority.

Opponents of the move to transfer the airport “feel that the whole effort by the legislature was unfair and not needed,” Hagemann said. “We did not ask for this fight. We did not pick this fight.”

The city will face still more court hearings in the case, and potential appeals, but much of the legal research and analysis is already “in the bank,” Hagemann said.

“We will incur significantly more legal fees,” he said. “But I don’t see it doubling or tripling.” 

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