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As the Baxter County Quorum Court prepares for Wednesday’s final vote on dissolving the Airport Commission, a review of federal court documents reveals the current tension follows a long-established pattern of disputes over airport management, lease agreements, and claims of interference with airport operations.
In 2012, Mountain Home Flight Service (MHFS) filed a federal lawsuit against Baxter County, the Airport Commission, and several other defendants that bears striking similarities to today’s controversies. The suit, which was ultimately dismissed by the U.S. District Court and later upheld by the Eighth Circuit Court of Appeals, centered on many of the same issues now at the heart of the dispute between County Judge Kevin Litty and the commission.
Litty has repeatedly stated that the airport commission has been a constant source of controversy for county judges past and present.
The Rise and Fall of Mountain Home Flight Service
Court documents detail a complex history of airport operations dating back to 1987, when Doyle Linck and Hugh McClain first signed a lease with the airport commission to “build a hangar on the property and provide airplane fuel, airplane maintenance, and flight instruction to the public.”
Mountain Home Flight Service entered the picture in 1992, signing its own lease “to charter flights, provide flight instruction, rent airplanes to the public, and sell airplane fuel at the Baxter County airport.” Initially, MHFS was one of Linck and McClain’s fuel customers. That relationship changed in 1994 when they refused to continue providing fuel to MHFS, prompting the company to begin its own fuel services in direct competition.
According to court documents, when MHFS signed its lease in 1992, it agreed to “abide by ‘all Minimum Standards and Rules and Regulations prescribed by the Commission.'” However, the Commission didn’t formally adopt these “Minimum Standards” until 1993, after MHFS was already operating. These standards “purportedly governed many aspects of MHFS’s conduct, including regulating the services offered and requiring approval of the airport manager before MHFS could take certain actions.”
This sequence of events – signing a lease agreeing to follow standards that hadn’t yet been formally adopted – would later become relevant as disputes arose over how the commission selectively enforced these standards among different operators.
By 1996, MHFS had acquired the Linck lease, consolidating both operations. Court records indicate that “from 1996 until at least 2006 MHFS operated both hangars—the Linck hangar and the MHFS hangar—as one combined operation.” During this period, “MHFS had no competition at the airport for any of its services.”
The turning point came in 2003 when MHFS attempted to “divest part of its operation by selling the MHFS hangar to Les Ives for $212,000.” While Ives couldn’t complete the purchase, he continued using the hangar under a month-to-month lease.
Change in Leadership Brings New Tensions
The relationship between MHFS and the county deteriorated significantly after Dan Hall’s election as county judge in November 2004 and his subsequent appointment of Charles Hooper to the commission.
According to court documents, “Nearly all of MHFS’s claims relate to actions taken by the County and the Commission while Hall and Hooper were in office.”
MHFS alleged the commission actively interfered with attempts to sell its operations. In October 2005, the company tried to sell the MHFS hangar to Chris Freeman for $200,000, but “The Commission withheld its approval for this sale, which was required under the lease, and the deal fell through.”
A month later, Dean Shults offered $700,000 for the Linck hangar operations but withdrew before finalizing the sale.
MHFS claimed, “the Commission interfered with the proposed sales because the Commission itself wanted to buy MHFS’s operations.” After the private sales fell through, MHFS offered to sell its combined operations to the commission for $950,000, basing this valuation on a 2004 appraisal of $900,000 and the combined Freeman and Shults offers. The commission countered with $650,000, which MHFS rejected.
Competition Increases
By 2006, the commission began introducing competition, entering an agreement with MacMann Aviation Fueling LLC to build a self-service fuel station. MHFS objected, claiming the proposal violated the airport’s “Minimum Standards” – foreshadowing similar disputes that would arise years later with the Hasselwander lease.
The situation escalated further in 2010 when the commission leased terminal space to Fly Arkansas LLC, owned by Taylor Scott, who had previously rented office space from MHFS. The lawsuit alleged Scott “used his access to the MHFS facilities to send mailers to all MHFS’s customers announcing that Fly Arkansas would now be selling fuel at lower prices.”
Why the Case Failed
The U.S. District Court dismissed MHFS’s claims on multiple grounds. Judge P.K. Holmes III found that MHFS’s breach of contract claim failed because Arkansas law “does not recognize a separate contract claim for breach of a duty of good faith and fair dealing.” Since MHFS based its claim solely on allegations of bad faith rather than specific contract violations, the court dismissed this portion with prejudice.
The court also rejected MHFS’s tortious interference claims, noting that almost all alleged actions fell outside Arkansas’s three-year statute of limitations. For the few claims within the time limit, the court found MHFS failed to demonstrate how the defendant’s actions were improper under the law. As Judge Holmes noted, “Competition, without the allegation of unlawful behavior or impropriety associated with such competition, cannot constitute the basis for a tort action.”
The Eighth Circuit Court of Appeals affirmed this dismissal in 2014, agreeing that MHFS failed to state viable claims under Arkansas law.
The fallout from the MHFS disputes led to significant changes in airport governance under subsequent County Judge Joe Bodenhamer. Taking a dramatic approach to the ongoing conflicts, Bodenhamer effectively neutralized the commission by choosing not to replace departing members, leaving the body without a quorum to conduct business.
During this period of commission inactivity, Bodenhamer took direct control of airport operations, personally signing Chris Freeman’s 30-year lease – the same lease that would later become a point of contention when the current commission attempted to force Judge Litty to modify it after he took office in 2023.
Today’s Controversy
The echoes of the MHFS dispute resonate strongly in the current conflict between Judge Litty and the commission, particularly regarding lease terms and oversight authority.
The push to dissolve the commission comes just two weeks after Circuit Judge Andrew Bailey ordered both parties to work together, ruling that while only Litty can execute leases, the commission has “the right to negotiate and ultimately dictate the terms” of those agreements.
Despite Bailey’s order calling for cooperation, Litty and the Quorum Court are moving swiftly to potentially dissolve the commission entirely. However, Litty emphasized during last Tuesday’s meeting that the decision wasn’t made hastily.
“I didn’t come to this decision that I’ve came to overnight,” he told the court. “I absorbed a lot in 15 months, and I’m tired of it. When I took office in January of 2023, this commission coming at me swinging,” Litty said last Tuesday.
“If you can see the venom that’s here. And I know you guys are the majority here, but there’s a lot of people that are also for decommissioning and when you cannot get along and we are taxpayers, and a lot of us pay a lot of tax dollars in this room,” Justice of the Peace Lisa House said.
Commissioner Sally Hall, defended the commission’s actions: “We have no ulterior motive. We have attempted to work with Mr. Litty, we have offered compromises. Why dissolve the commission without a good reason of wrongdoing, which there is none?”
The dispute over the Hasselwander lease mirrors elements of the MHFS case, particularly regarding claims of preferential treatment. Airport Commission Chairman Dr. Stephen Vester, whose performance on Tuesday night was seen as weak by airport supporters, questioned the accounting behind lease credits.
“You’re giving away windows, you’re giving away all sorts of things that are not part of the lease,” Vester said.
Litty countered that he inherited these problems and had to protect the county from litigation.
“In 2017, the Commission agreed to it. This man had the money to make it happen. Who else had $425,000 to come to the airport and say, ‘Hey guys, I’ll put this money in it out of my pocket with the grant money and we’ll build this hangar, and I’ll lease it?'”
Just as the MHFS case involved claims about minimum standards enforcement, Hall raised similar concerns about the Hasselwander arrangement: “We included judge Litty in a meeting with the FAA and the FAA is the one that has a problem with this lease. This is jeopardizing our funding, which has been suspended already.”
Litty refuted the claim by saying the funding wasn’t at risk over a lease and that a friend of a commissioner filed a discrimination complaint over rental rates, putting FAA funding at risk again.
“The reason the FAA is looking into our rental rates is one of our commissioners sitting out here had his buddy that shares a hangar with him send the letter to the FAA,” Litty revealed during the meeting.
The Quorum Court will hold its final reading and vote on the ordinance to dissolve the commission Wednesday evening at 5:30 p.m. in the second-floor courtroom of the courthouse.
