PAGE ONE COMMENTARY: The $8 Million Ducks Fiasco: Who Should You Be Mad at? Let’s Name Names!

THE 1995 CITY COMMISSION:
WARDLOW, WEEKLEY, TURNER,
BETHEL, CURRY, LEWIS, McCOY

by Dennis Reeves Cooper

We told you on our front
page last Friday morning that a
settlement in the long-running
Duck Tour Seafaris vs. the City
of Key West lawsuit was probably
going to happen Friday. At
noon that day, the City’s public
information officer sent out
a press release reporting that
the City Commission, sitting in
special session Friday morning,
had agreed to pay the Ducks’
investors $8 million!

This settlement ends a dishonorable
chapter in the history
of Key West government that began
in 1995 when City officials
began a systematic campaign
to illegally run the Ducks out
of business. Although the owners
of the Ducks had obtained
a City occupational license
to conduct tours of Key West
Harbor using brightly-painted World War II amphibious
vessels, City officials— under
pressure from Historic Tours of
America (HTA), the company
that owns and operates the
Conch Tour Trains and the Old
Town Trolleys— alleged that
the Ducks’ staff was also running
sightseeing tours on land;
and that violated the City’s
exclusive sightseeing franchise
with HTA.

The Ducks sued, claiming
that the City’s exclusive franchise
with HTA violated both
the Florida Antitrust Act as well
as the Commerce Clause of the
United States Constitution.

Not surprisingly, two
local judges— Richard Payne
and Reagan Ptomey— dutifully
supportd the City, ruling
against the Ducks. But in 2004,
the Third District Court of Appeal
(DCA) of Florida slapped
down the rulings of both of
those judges, finding that the
City’s exclusive franchise with
HTA did, indeed, violate the
state Antitrust Act.

“The first problem is that
the ordinance grants monopoly
rights to the trains and trolleys,”
the DCA ruling said.

In essence, the appeals
court said that both Payne and
Ptomey had screwed up, accidentally
or on purpose, when
they threw the Ducks lawsuit
out of court.

The DCA ruling enabled
the Ducks case to go to trial.
And in May 2005, a jury took
only three hours to award the
Ducks’ investors $13.5 million
in damages and attorneys fees!
(NOTE: HTA was originally
being sued along with the City
in this case. But before the case
got to trial, HTA settled with the
Ducks’ investors for an amount
that has never been officially
disclosed.)

Then, Senior Judge Howard
Harrison dropped the other
shoe. He issued an order that
confirmed that the City’s exclusive
sightseeing franchise
with HTA is illegal, at least in
part, and he enjoined the City
from enforcing it by refusing to grant occupational licenses
to competing sightseeing operators.
The City appealed— and
got a mixed response from the
appeals court. The DCA refused
to overturn the decision of the
2005 jury that found that the
City was guilty of illegally running
the Ducks out of business.

They didn’t use these exact
words but, in essence, the three
judges on the panel said that the
City was guilty as sin!

But they also ruled that
the jury used the wrong methodology
in coming up with the
$13.5 million judgment. There
would have to be a new trial to
recalculate the damages.

After a week of jury selection,
the second trial took place
last week. But by Thursday, the
City lawyers were apparently
starting to get a little nervous.
Based on the numbers being
presented by expert witnesses
for both sides, the projections
for a potential judgement were
ranging from $4.5 million to a
whopping $30.6 million!

To avoid a possible catastrophic
impact on the City,
officials offered $8 million to
the Ducks’ investors— and they
took it. Actually, we understand
that the City lawyers had come
to the Ducks people on the very
first day of jury selection and
settlement negotiations went
on for almost two weeks before
agreement came on the $8 million
settlement.

Of note, the deal may have
saved the City from possible
bankruptcy. $8 million is not
$13.5 million or $30.6 million.
But it is still $8 million that has
to come out of the City’s meager
recession-ravaged funds. In
fact, that $8 million— which has
to be paid by mid-April— will
reportedly leave only $4 million
in the City’s general fund
reserves!

If you’re a Key West taxpayer,
you might be outraged
that illegal behavior on the part
of your City officials would put
taxpayers in such a predicament.

If so, who should you be
mad at?

Certainly not the current mayor or city commissioners or
city management. They inherited
this mess and they dealt
with it the best they could.
Do you want to know who
you should be mad at? Do you
think you can handle the truth?
If so, let’s name some names.
In 1995, Dennis Wardlow was
mayor of Key West. The city
commissioners were Harry
Bethel, Percy Curry, Sally Lewis,
Merilee McCoy, Carmen Turner
and Jimmy Weekley. The city attorney
was Diane Covan.

Here is how these people
cost your city $8 million:
The Ducks went operational
in May 1995 with an
occupational license to conduct
harbor tours. Since the Ducks
vessels were amphibious, the
same vessels were used to pick
passengers up and drop them
off at their hotels or at various
other points around the island.

This would be similar to a van
owned by a scuba diving operation
picking up customers at
their guest house or a hotel on
the beach offering complimentary
transportation to and from
Old Town.

A highlight of the Ducks
tour was the “splashdown” into
the harbor at a ramp at the north
end of Grinnell Street.

But almost immediately,
City officials began getting pressure
from HTA officials, alleging
that the Ducks drivers were also
conducting sightseeing tours on
land— which violated HTA’s exclusive
sightseeing franchise.

John Murphy, the Ducks
managing partner, denied that
allegation. And, frankly, none
of the evidence we have seen as
we have covered this story over
the past 13 years ever supported
the allegation that the Ducks
were running sightseeing tours
on land.

In fact, I took that tour in
1995. The fun part was the harbor
tour. On land, I recall that, for the
most part, the driver avoided
the most congested part of the
island, taking the most direct
routes to the various drop-off
points. For example, I recall that
we went down White Street. The
next time you drive down White
Street, see how many “sights”
you see.

There were times when a
passenger would ask the driver
what a particular building was
and the driver would tell him.
But taxi drivers do that all the
time— and I don’t recall ever
hearing any allegations that taxi
drivers were violating the City’s
exclusive sightseeing franchise
with HTA.

But no matter. City officials
planned and conducted a
systematic campaign to put the
Ducks out of business. At one
time, a Key West police officer
was ordered to take the Ducks
tour with a video camera. City
officials were probably disappointed
when he reported back
that he did not see any violations.
But they didn’t give up.

Ducks drivers were repeatedly
harassed by the police. At one time, a Ducks driver was
ticketed for driving a vehicle
with headlights too high— in
the middle of the afternoon! We
don’t make this stuff up!

Then, City officials decided
that the Ducks had to have occupational
licenses for “vehicles
for hire.” But when Murphy applied
for those licenses, he was
told that none were available.
Then, one of his drivers got a
ticket for operating a vehiclefor-
hire without a license! Are
you getting the picture?

Then, the City Commission
made operating a vehiclefor-
hire without a license a
criminal offense— and, then,
arrested and jailed Murphy for
operating vehicles-for-hire without
a license. The plan was for
one of the in-the-bag local judges
to rule on Murphy’s guilt or innocence.

But Murphy demanded
a jury trial and got it. It took two
years for that case to finally get
to court but, when it did, the jury
only required 10 minutes to find
Murphy not guilty!

For the jury in the first
trial in 2005, the “smoking gun”
may have been the transcript of
a closed-session City Commission
meeting that took place
on the evening of November 1,
1995. Then-City Attorney Diane
Covan asked the mayor and
commissioners, “Would you like
me to propose any change in
our law or would you like me to
proceed with my previous plan,
which is to just charge ahead
and grind them (the Ducks) into
the dirt?”

Then-Mayor Wardlow told
Covan, “Charge on.”

No one in that room raised
their hand and asked, “Is what
you are planning to do legal?
Isn’t anyone else here uncomfortable
that we are authorizing
our city attorney to grind a local
business into the dirt?”

Jimmy Weekley didn’t
protest. (And we understand
that he might be planning to
run for the City Commission
again this year!) Carmen Turner
didn’t protest, either. Nor did
Commissioners McCoy, Lewis,
Curry or Bethel.

NOTE: Most of these people
are still alive. And if any of
them want space in this newspaper
to explain their action or
inaction in the Ducks case, they
can have it.

WHAT HAPPENS NOW?

Now that the Ducks case is
over and the court has declaraed
the City’s exclusive sightseeing
franchise with the City at least
partially illegal, what will happen?
Maybe not much.

Attorney Ed Scales, a
former Key West city commissioner,
now represents HTA, He
told Key West The Newspaper
this week that HTA still has a
sightseeing franchise with the
city and that, “as long as the
city does not grant a franchise
to a competitor on terms more
favorable that those that govern
the operation of the Trains and
Trolleys, or otherwise violate
the terms of the franchise ordinances,
it is HTA’s intention to
continue to pay the franchise
fees which equal 5 percent of the
gross Train/Trolley income.”

Reportedly, that payment
was more than $400,000 last
year.

var addthis_pub = ‘Saratica’;

Go Back Where You Were