Great Plains settlement reversed; BOK must repay City of Tulsa

UPDATED 2011/10/13 with links to further reaction and my interview with KRMG's Nicole Burgin. Just remember, though, BatesLine had the story first, thanks to an email from an alert reader.

This post is worthy of a flashing light, a flaming skull, and 72-point type. Tulsa's taxpayers get our $7 million back.

The Supreme Court of Oklahoma has thrown out the Great Plains Airlines settlement by a 5-4 vote with three of the four dissenters concurring in part. From the decision (emphasis added):

¶26 In the present matter, the settlement was not based on a contract, but rather under the equitable theory of unjust enrichment to the City of Tulsa. The City of Tulsa, at all times, presented the settlement issues to the District Court of Tulsa County. The Judgments Against Municipalities Act does not apply. Therefore, the sinking funds requirement also does not apply. However, since we find the unjust enrichment claim to be unviable and the Statute of Limitations would bar the unjust enrichment claim against the City, we remand the instant matter back to the District Court of Tulsa County to direct the repayment of the settlement funds from BOK back to the City of Tulsa.

See my July 2, 2008, column, The Great Plains Ripoff, for background.

The Supreme Court ruling, sadly, lets Kathy Taylor off the hook for triple damages payable to the taxpayers who brought the Qui Tam suit over the Great Plains settlement. I'd hope Taylor would feel ashamed of ripping off Tulsa's taxpayers as she did, but I don't expect any remorse. The taxpayers of the City of Tulsa weren't as important to Kathy Taylor as the legal and financial well-being of her cronies.

UPDATE: Here's a link to a more readable version of the Supreme Court decision. Thanks to UTW's Jennie Lloyd for the tip.

MORE REACTION (2011/10/13):

City Councilor John Eagleton called it back in 2008 and in 2010, he cited the Great Plains Settlement as one of eight instances demonstrating Deirdre Dexter's incompetence as City Attorney, in a letter urging Mayor Dewey Bartlett Jr to replace her.

News Talk Radio KRMG's Nicole Burgin spoke to me Wednesday afternoon about the Great Plains settlement. You can listen to the full interview via that link. I discuss what should happen with the money repaid by BOK to the City of Tulsa, what lessons should be learned, and speculate about why the Supreme Court's vote was so close.

(My radio chops are very rusty. Way too many ums and ahs. I probably should have asked for a few minutes to gather my thoughts and mentally shift gears from engineering back to politics before doing the interview.)

The KRMG story has a statement from the City of Tulsa:

"The City of Tulsa and the Tulsa Airports Improvement Trust are currently reviewing the Opinion from the Oklahoma Supreme Court setting aside the settlement between the Bank of Oklahoma and the City and TAIT, and considering their options. The City is pleased the Court recognized the City entered into the settlement in good faith, but the ruling by the Court was a mixed result for the City. The ruling obviously will cause BOK to return to the City the $7.1 million the City paid to BOK under the terms of the settlement. The ruling also makes it clear that the City has no liability to BOK arising out of the Great Plains transaction. However, the settlement the court set aside was global in that it included all of the claims BOK had against both the City and the airport. The result is that although the City has no liability to BOK, BOK can now pursue its previous claim against the airport."

KJRH reports that BOK will be resuming its lawsuit against the Tulsa Airports Improvements Trust:

BOK issued a statement to 2NEWS saying, "The Supreme Court's invalidation of the settlement with the City has freed Bank of Oklahoma to assert its $12.5 million claim against the Airport Trust for not fulfilling its obligation to the bank. While we'd hoped this issue would have been put to rest with the settlement back in 2008, the court's decision now requires that it continue."

Here's an idea: BOK should pursue repayment from the investors in Great Plains Airlines, who stood to profit if the airline had succeeded. Or from the vendors who were paid for goods and services with money GPA borrowed from BOK. Or from the individuals and companies that bought GPA's transferable state tax credits. Of the city officials who -- it is claimed -- promised BOK that city would cover any default. If all of the above had an attack of conscience and each paid a bit, they could raise that money very quickly, I imagine.

KOTV's report includes extensive comments from City Councilor Rick Westcott:

"This loan should never have been made. There's nobody that's on the hook for this," said Tulsa City Councilor Rick Westcott....

"What is important is the Supreme Court has ruled that the City of Tulsa has no liability to the Bank of Oklahoma. And the Bank of Oklahoma has to give taxpayers back $7.1 million."...

And don't start looking for a property tax rebate check in the mail anytime soon. The money will likely go into an account to guard against future lawsuits.

"The $7.1 million could be used to pay off judgments in the future and not have to levy citizen's property taxes to pay for those small judgments," Westcott said.

Fox 23 seems to get a key point wrong in their brief report. (It's quite understandable.) Kathy Taylor did not say the settlement "was illegal and unfair to taxpayers because it was paid with property taxes." She and the City of Tulsa asked the district court to affirm that the settlement to which she agreed was lawful. The court action that she filed included the complaining taxpayers as defendants. Taylor was pursuing this action to protect herself against liability for treble damages as a result of the taxpayers' claim; Taylor did NOT agree with the taxpayers that her agreement to the settlement was unjust. (See sections 11 through 15 of the Supreme Court's decision.)