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Sat, Oct 28, 2006

Airport Looks To FAA For Help With RICO Suit

Says "Illegal" Monopoly, Isn't

A Cape Cod-area airport is looking for help from above in a federal civil suit... specifically, from the FAA.

The Barnstable Patriot independent newspaper reports officials at Barnstable Municipal Airport (KHYA) have called on the agency for help against a suit filed by Rectrix Aerodrome Centers, which operates an FBO at the Hyannis, MA airport. The lawsuit claims the airport is siphoning funds to the town, through what it terms an illegal monopoly in jet fuel sales.

Rectrix claims that's a violation of the federal Racketeer Influenced and Corrupt Organizations Act. (Fans of "The Sopranos" may recognize that by its more familiar RICO acronym.) Currently, the city-owned FBO is the only source of Jet-A at the airport -- requiring Rectrix, which caters to the business aviation crowd, to purchase fuel from them and truck it over to its facility.

That's not illegal, however, argues attorney, Scott Lewis for the Barnstable Municipal Airport Commission (BMAC) -- and he's asked the FAA to step in. Lewis has asked the court to postpone its ruling on Rectrix's lawsuit, until the FAA can rule on the alleged monopoly.

If the FAA says the city is in the clear, then that ruling would invalidate the entire lawsuit, Lewis says, as Rectrix's claim centers on an "illegal scheme."

"If the FAA finds no violations, as the BMAC expects it will, there will be no foundation for the allegations of unlawful predicate acts upon which all of the RICO claims rest," reads the airport's motion. "The Court should therefore decline to act on the RICO claims until Rectrix has obtained a determination from the FAA."

In his response to the town's "motion to stay" pending review by the FAA, Rectrix attorney Marc Kasowitz maintains such a motion doesn't exist for a case such as this. Kasowitz does acknowledge the FAA's opinion could prove helpful to the court, however, but he says it shouldn't sway what is, essentially, a matter between the city and Rectrix.

"While the [defendants’] motion contains a lengthy recitation of federal aviation law and certain prior proceedings before the FAA, defendants do not, because they cannot, provide any authority or valid basis for staying this action in favor of FAA proceedings, because no such authority or basis exists," the response reads. "To the contrary, Rectrix’s claims arise from defendants’ racketeering, fraudulent and monopolistic practices, as well as the common law tortuous conduct."

In other words... the Feds can butt out.

Kasowitz has also filed a cross-motion for a default judgment... asking the court to rule in Rectrix's favor, as the town's response (calling on the FAA) is not allowed in this type of lawsuit.

For now, the matter is still before the courts... with a ruling expected sometime next month. Stay tuned.

FMI: www.town.barnstable.ma.us/Airport2/airport.asp, www.rectrixaviation.com

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