FedEx Corp. has won an appeal that overturns a $66 million verdict in favor of defunct Indianapolis airline ATA Airlines
Inc.
The Seventh Circuit Court of Appeals in Chicago heard the appeal in November and issued the reversal Tuesday morning.
ATA initially won a jury verdict over the breach-of-contract case in October 2010. FedEx unsuccessfully appealed the decision to the U.S. District
Court of Southern Indiana before taking it to the higher court.
ATA charged in its initial lawsuit that FedEx’s unexpected decision in January 2008 to drop it as a military-charter
partner forced it into bankruptcy liquidation that spring. ATA had been flying military charters for more than two decades,
and it said FedEx was legally obligated to keep it on board through at least September 2009.
The appeals court said ATA’s legal experts failed to prove the amount of damages suffered because of the breach of
contract. The court said ATA may well have suffered some losses due to FedEx’s actions, but because there was “no
reasonable confidence in the jury’s damages award,” the case should be reversed.
The case hinged on a September 2006 letter that described how business was to be divvied up through September 2009 between
ATA and another airline that was part of the FedEx military-charter team.
FedEx argued that
was not a legal contract because it didn’t address financial terms and other key issues. It noted the legal
standard for an enforceable contract is “a meeting of the minds of the parties, in mutual assent to all essential terms.”
In a court filing, FedEx attorneys wrote, “Given the uncontroverted evidence and the relevant law … there is
simply no reasonable basis in the record on which the jury could find that an agreement on just one term of FedEx Team membership
was an enforceable contract for FedEx Team membership.”
FedEx balked at the size of the jury's award, noting that in fiscal 2007, ATA earned just $2.1 million from its military
charter business.
The $66 million judgment was supposed to go to ATA's creditors, who are still owed millions in the company's Chapter
7 bankruptcy.

















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