UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ______________________________ ) UNITED STATES OF AMERICA, ) ) Plaintiff, ) ) v. ) Civil Action No. 08-1164 (RWR) ) SIGNATURE FLIGHT ) SUPPORT CORPORATION et al., ) ) Defendants. ) ______________________________)

MEMORANDUM OPINION AND ORDER

Defendant Signature Flight Support Corporation (“Signature”)

moves under Federal Rules of Civil Procedure 60(b)(5) and

60(b)(6) to extend the deadline in the final judgment entered in

this case for Signature to dispose of a fixed base operation

(“FBO”) at Indianapolis International Airport from December 10,

2008 to December 10, 2009. Plaintiff United States of America

cross-moves to enforce the final judgment and to appoint a

trustee to run the FBO at Indianapolis International Airport.

Because Signature does not show that applying the judgment

prospectively is no longer equitable or that there is any other

reason that justifies modifying the final judgment, Signature’s

motion will be denied, and the United States’ motion to appoint a

trustee will be granted.1

1 Signature also moves for a partial stay of the execution of the final judgment pending resolution of its motion for modification of the final judgment. The motion for a partial stay will be denied as moot. - 2 -

BACKGROUND

Signature owns and operates FBOs2 at more than sixty

airports in the United States. Defendant Hawker Beechcraft

Services, Inc. (“Hawker Beechcraft”) operated FBOs at seven

airports in the United States. Both Signature and Hawker

Beechcraft operated FBOs at Indianapolis International Airport.

(Compl. ¶ 1.) Signature contracted to purchase Hawker

Beechcraft’s FBO assets in February, 2008. Signature and Hawker

Beechcraft allocated approximately $25.9 million of the purchase

price to Hawker Beechcraft’s FBO located at the Indianapolis

International Airport. (Signature’s Mem. in Supp. of Mot. for

Relief From and Modification of J. (“Signature’s Mem”), Ex. A

(“Johnstone Decl.”) at ¶ 4.) The United States brought this

civil antitrust action to enjoin the proposed acquisition

asserting that the acquisition would create a monopoly in the

market for FBO services at the Indianapolis International

Airport, in violation of Section 7 of the Clayton Act,

. (Compl. ¶ 17.)

The United States filed its complaint in this action on

July 3, 2008, along with a hold separate/preservation of assets

stipulation and a proposed final judgment, both of which were

2 FBOs “provide flight support services, including fueling, ramp and hangar rentals, office space rentals, and other services, to general aviation customers.” (Signature’s Mem. in Supp. of Mot. for Relief From and Modification of J. (“Signature’s Mem”) at 2.) - 3 -

consented to by the defendants. The hold separate/preservation

of assets agreement required Signature to operate the FBO at

Indianapolis International Airport formerly owned by Hawker

Beechcraft as a separate, independent ongoing competitor to the

FBO owned by Signature. (See Pl’s Mem. in Opp’n to Signature’s

Mot. for Relief From and Modification of J. (“Pl.’s Opp’n”)

at 3.) On October 30, 2008, a consent final judgment was entered

in this case requiring Signature to divest one of its two

Indianapolis FBOs within either 90 days of the date that the

complaint was filed, or within five days of the entry of the

final judgment.3 The final judgment allowed the United States to

petition the court to appoint a trustee to operate and divest one

of the two Indianapolis FBOs if Signature did not divest one of

them by the deadline.4 Signature has moved to alter the final

judgment to extend the deadline through December 10, 2009 by

which it must divest the Indianapolis FBO, arguing that the

“global financial crisis” makes it no longer equitable to require

Signature to fulfil its obligations under the final judgment

because “the market for the sale of FBOs has completely

3 On November 4, 2008, the United States filed a notice that it consented to extend the deadline to divest one of the FBOs to December 10, 2008. 4 On October 21, 2008, Signature informed the United States that it intended to sell the FBO formerly owned by Hawker Beechcraft at Indianapolis International Airport, not the FBO that Signature previously owned. (See Signature’s Mem. at 2.) - 4 -

collapsed.” (Signature’s Mem. at 3.) Signature asserts that it

received bids of “up to $20 million” dollars for the Hawker

Beechcraft FBO facility in September 2008, but that by November

2008, “several bidders had dropped out” and only two bidders

submitted bids, in the amount of $5 million dollars and

$7 million dollars.5 (See Signature’s Mem. at 3; Johnstone Decl.

at ¶ 6.) The United States opposes Signature’s motion and has

cross-moved to appoint a trustee to run the Indianapolis FBO

formerly owned by Hawker Beechcraft.

DISCUSSION

I. MODIFICATION

Rules 60(b)(5) and 60(b)(6) provide that “[o]n motion and

just terms, the court may relieve a party or its legal

representative from a final judgment” if the movant shows that

“applying [the judgment] prospectively is no longer equitable,”

or if there is “any other reason that justifies relief” from the

judgment. Relieving a party from its obligations under a final

judgment “is an extraordinary remedy, as would be any device

which allows a party . . . to escape commitments voluntarily made

and solemnized by a court decree.” NLRB v. Harris Teeter

Supermarkets,

(D.C. Cir. 2000) (quoting Twelve

John Does v. Dist. of Columbia,

(D.C. Cir.

5 Signature asserts that the bidder who offered $7 million dollars withdrew its bid and resubmitted a bid for $6 million dollars. (Johnstone Decl. at ¶ 6.) - 5 -

1988)). A party seeking modification of a consent decree bears

the burden to establish that a “significant change in facts or

law warrants revision of the decree and that the proposed

modification is suitably tailored to the changed circumstances.”

Harris Teeter Supermarkets,

. The changed

circumstances do not have to be entirely unforeseeable; it is

enough that the parties did not actually contemplate the changed

circumstances. Evans v. Williams,

(D.C. Cir.

2000). “Modification of a consent decree may be warranted when

changed factual conditions make compliance with the decree

substantially more onerous.” United States v. Western Electric

Co. Inc.,

(D.C. Cir 1995) (quoting Rufo v.

Inmates of Suffolk County Jail,

(1992)).

However, in this circuit, a movant who wants relief from a final

judgment must show that the changed circumstances were not taken

into account during the formulation of the consent final

judgment. Harris Teeter Supermarkets,

.

Signature argues that it would be inequitable for the United

States to enforce the final judgment against it by forcing

Signature to sell the Hawker FBO for approximately 25% of the

value that it was listed for in the asset purchase agreement,

because the decrease in value was caused by a financial crisis

that neither party anticipated when negotiating the consent final

judgment. (See Signature’s Mem. at 6-7.) Signature argues that - 6 -

the financial crisis prevented potential buyers from obtaining

the credit necessary to purchase the FBO, and that credit worthy

purchasers were being denied credit solely because of the crisis.

(Id.) As true as that may be, the United States points out in

its opposition that the final judgment was negotiated in the

midst of troubling economic news, and the parties specifically

countenanced the possibility that Signature would have difficulty

selling the Hawker Beechcraft FBO. The final judgment

specifically states:

[D]efendants have represented to the United States that the divestitures required below can and will be made, and that defendants will later raise no claim of hardship or difficulty as grounds for asking the Court to modify any of the divestiture provisions contained below[.]

(Final Judgment, Docket Entry 12, at 2.) Section V of the final

judgment also states:

If defendants have not divested [the FBO] within the time period specified in . . . this Final Judgment, defendants shall notify the United States of that fact in writing. Upon application of the United States, the Court shall appoint a trustee selected by the United States and approved by the Court to effect the divestiture[.]

(Final Judgment at 8.) These provisions appear to show that the

parties contemplated the possibility of difficulty selling the

FBO, and that they allocated to Signature the risk that there

would be difficulty with the divestiture after the entry of the

final judgment. Signature explicitly agreed to raise no claim of

hardship or difficulty as grounds for asking the court to release - 7 -

it from its obligation to divest the FBO. Signature did not

limit its promise to raise no claim of hardship or difficulty by

creating an exception in the case of global financial or credit

crises. Moreover, the parties created a provision that

explicitly deals with the possibility that Signature would face

hardship in timely divesting the FBO. Where a consent final

judgment contemplates the occurrence of the circumstances that

form the basis of a party’s motion to modify the final judgment,

the parties contemplated the “changed circumstances” and the

final judgment should be enforced contrary to the movant’s

request See United States v. Caterpillar, Inc.,

(D.D.C. 2002) (where the defendants moved to modify a

consent decree pertaining to emission standards for engines

manufactured by the defendants arguing that unanticipated cost

increases made compliance with the consent decrees substantially

more onerous, the district court denied the motion because the

decrees expressly contemplated the possibility of cost

increases); Thompson v. HUD,

(4th Cir. 1996)

(holding that a circumstance would not be considered

unanticipated for purposes of modifying a decree where a

provision of the decree was “specifically directed” to that

circumstance and would be needed only in that circumstance).

In addition, Signature has not shown that it cannot sell the

FBO; Signature acknowledges that at least two bidders have - 8 -

offered to purchase the FBO. Instead, Signature complains that

selling the FBO to one of the current bidders would bring in a

far lower sales price than it had originally hoped for, a problem

that does not constitute a changed circumstance necessary to

modify a final judgment. See Harris Teeter Supermarkets,

(where a chain of grocery stores moved to vacate a

consent decree that pertained to labor law violations asserting

that the consent decree was costing the defendant a substantial

amount of money because of its rapid growth, the court of appeals

denied the defendant’s request, determining that the grocery

store chain had not shown that the difficulty of applying the

provisions of the consent decree to a larger company was an

unforseen obstacle that was not taken into account during the

formulation of the consent decree, and that self-imposed hurdles

such as a desire to avoid losing money do not count as

obstacles). While Signature argues that modifying the final

judgment is in the public interest because it would support their

business at a time when the United States government has been

supporting many other businesses, this very case was filed to

assure the public interest in preventing a monopoly in the market

for FBO services at Indianapolis International Airport, the risk

of which would only increase by extending Signature’s ownership

of the second FBO for an additional year. (See Pl.’s Opp’n at 8-

10.) Therefore, because the parties anticipated the - 9 -

circumstances of which Signature complains, and because Signature

has not shown that it is unable to comply with the consent final

judgment, Signature’s motion to modify the final judgment will be

denied.

II. APPOINTMENT OF TRUSTEE

The United States has moved under Section V of the final

judgment to appoint James A. Knauer as trustee of the FBO

formerly owned by Hawker Beechcraft at Indianapolis International

Airport. As is set forth above, Section V directs the court to

appoint at the request of the United States a trustee the United

States selects to sell the FBO if Signature has not sold the FBO

by the deadline. The United States has shown that Signature has

not sold the Indianapolis FBO within the time period required by

the final judgment. The United States also asserts that because

of Knauer’s previous experiences as an appointed receiver, where

he sold assets similar to the FBO formerly owned by Hawker

Beechcraft, he has the necessary skill to effect the divestiture.

(See Pl.’s Mem. in Supp. of Mot. to Appoint a Trustee, at 2, 4-

5.) Signature opposes only to the extent that if its motion to

modify the final judgment were granted, the motion to appoint a

trustee would not be timely until December 2009. Because

Signature’s motion to modify the final judgment will be denied,

and because Signature does not present any opposition to - 10 -

appointing this specific trustee, the United States’ motion to

appoint Knauer as trustee will be granted.

CONCLUSION AND ORDER

Because Signature has not shown that applying the terms of

the final judgment is not equitable, it is hereby

ORDERED that Signature’s motion [17] to alter the final

judgment be, and hereby is, DENIED, and Signature’s motion to

stay [18] be, and hereby is, DENIED as moot. Because the final

judgment specifically directs that a trustee be appointed on

request of the United States if Signature does not divest the

FBO, it is further

ORDERED that the United States’ motion [23] to appoint a

trustee under Section V of the final judgment be, and hereby is,

GRANTED. James A. Knauer is appointed Trustee under Section V of

the final judgment.

SIGNED this 23rd day of March, 2009.

/s/ RICHARD W. ROBERTS United States District Judge