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City to pay for business curtailed by airport security

By Daniel Silliman

dsilliman@news-daily.com

The Georgia Court of Appeals has upheld a jury's verdict awarding more than $3 million to an airport business which lost money after the 2001 terrorist attacks.

The ruling, handed down earlier this month, will require the City of Atlanta to pay $3.28 million and about $500,000 in interest to WH Smith Airport Service, Inc., a newsstand company.

The company and the city fought over the terms of the lease of concession space at Hartsfield-Jackson Atlanta International Airport. After the Sept. 11 terrorist attacks in New York City, Pennsylvania and Washington D.C., security at the airport dramatically changed, affecting the way travelers shopped. The company applied for rent abatement, an option, according to the lease, when accesses to the concourses was "severely restricted for longer than seven (7) days by action of the United States of America or the State of Georgia."

"The airport put in the giant maze to direct the security line," said Henry Chalmers, the attorney who represented WH Smith. "Shoppers couldn't shop, because they were spending so much time in security lines ... The psychology of shopping at the airport totally changed and revenue's dropped precipitously."

A Georgia State University economist calculated the company's losses, from 2001 to 2004, at $3,288,083. The company's records showed a 24 percent decrease in profit: Fewer people made purchases, two newsstands were closed by the security measures, and a subtenant went out of business.

Chalmers said the airport was right to increase security after the terrorist attacks, but the abatement clause was supposed to protect WH Smith and help it through the substantial drop in shopping.

"There's no allegation the city did anything wrong," the attorney said. "It seemed like an appropriate and legal response, but the city had drafted itself into the agreement."

The courts ruled the section of the lease was ambiguous, and asked the jury to interpret the scope of the abatement clause, after hearing testimony from both sides.

The city's attorney's argued the terrorist-related security measures weren't included in the intent of that section of the lease. The company's attorneys argued the "action of the United States Government," "resulting in material adverse effect" gave the company the right to an "abatement of a just proportion of the rental," as stated in the lease.

The jury sided with the company.

"They interpreted it, like we did, as encompassing what happened after Sept. 11," Chalmers said.

The city appealed the ruling on the grounds there was "insufficient evidence to support the jury verdict," according to court documents, but the appeals court upheld the authority of a jury, affirming the court's previous ruling that the juries are the "sole and exclusive judges of the weight and credit given evidence."

According to the ruling, if the jury bases its finding on any evidence, then the verdict cannot be repealed for lack of evidence.

The city could appeal the decision to the Georgia Supreme Court.