Delta Proposal

UNITED STATES DISTRICT COURTFOR THE NORTHERN DISTRICT OF GEORGIA)MESA AIR GROUP, INC. and )FREEDOM AIRLINES, INC., ))Plaintiffs, ) CIVIL ACTION FILEv. ) NO.: 1:08-CV-1334-CC)DELTA AIR LINES, INC., ))Defendant. ))PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAWSUBMITTED BY DEFENDANT DELTA AIR LINES, INC.

Catherine M. O’NeilGeorgia Bar No. 553714David E. MeadowsGeorgia Bar No. 500352Christine A. HopkinsonGeorgia Bar No. 142106Joseph P. RockersGeorgia Bar No. 611220KING & SPALDING LLP1180 Peachtree StreetAtlanta, Georgia 30309(404) 572-4600 (p)(404) 572-5100 (f)Counsel for DefendantDelta Air Lines, Inc.

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TABLE OF CONTENTS

FINDINGS OF FACT............................................................................................1A. Background......................................................................................................1B. The Partnership Between Delta and its Regional Carriers..............................3C. Freedom’s Flying Under the ERJ Agreement.................................................5D. Plaintiffs Attempt to Obtain Agreement from Delta That CoordinatedCancellations Would Not Impact Freedom’s Completion Rate......................6E. Mr. Bates’ Claim That an Agreement Had Been Reached..............................9F. New Documentary Evidence Demonstrates That No AgreementWas Reached.................................................................................................10(i) Evidence Relating to the Lowering of Incentive Goals......................10(ii) Evidence Relating to the Pilot Bonus Program...................................12(iii) Evidence From Other Documents.......................................................15(iv) The July 13 E-mail is Not Sufficient ContemporaneousEvidence of an Agreement..................................................................16G. Mr. Bates’ Conduct Confirms That No Agreement Had BeenReached..........................................................................................................19H. Mr. Bates’ Inconsistent Accounts Undermine the Existence of Any Agreement..............................................................................................24I. Ms. Boyd’s Testimony That No Agreement Was Reached IsCredible and Corroborated by the Record.....................................................28J. September 2007 Was a Challenging Month for Plaintiffs............................32K. Plaintiffs Inexplicably Take Credit For Coordinated Cancellationsin September 2007.........................................................................................32

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- ii -L. Plaintiffs’ September Invoice Intentionally Misreports theCompletion Factor.........................................................................................34M. Delta Discovers the Discrepancy in the Completion Factorbut is Misled About the Reason for the Discrepancy....................................35N. Delta Takes a Credit for the September Invoice in January 2008.................39O. Delta Processes the October Invoice and Takes a Credit inJanuary 2008..................................................................................................41P. Delta Acknowledges its Payment Process Was “Sloppy”.............................42Q. Plaintiffs Could Not Have Relied Upon Delta’s Paymentof the Invoices................................................................................................44R. Delta Uncovers Plaintiffs’ Overbilling..........................................................45S. Delta Has the Right to Terminate the ERJ Agreement.................................49T. Delta Did Not Act in Bad Faith in Terminating the Agreement...................50U. Plaintiffs’ Claim for Attorneys’ Fees and Related Costs IsUnsupported...................................................................................................53(i) Cadwalader..........................................................................................54(ii) Seabury................................................................................................55(iii) Grant Thornton....................................................................................56(iv) Jones Day............................................................................................58CONCLUSIONS OF LAW..................................................................................59A. The Court is Not Bound by its Earlier Decision...........................................59B. Delta Properly Terminated the ERJ Agreement............................................60C. Plaintiffs Have No Viable Claim for Equitable Estoppel..............................61(i) Georgia Law Governs the Claim for Equitable Estoppel...................61

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