When you’re a billionaire, a little jet fuel shouldn’t be a big deal. But apparently it’s enough for two of L.A.’s wealthiest men to get personal.
Robert Maguire’s Maguire Aviation Inc. last week sued David Murdock’s Castle & Cooke Aviation Services Inc., alleging it has been unlawfully providing aviation services beyond the scope of its lease at Van Nuys Airport, including selling jet fuel to pilots.
“We regret we had to take this action, but felt it was necessary to stop these abuses,” said Maguire, a notoriously irascible real estate developer, in a press release.
Murdock, who rarely comments on litigation and is best known as the owner of Dole Food Co., was sufficiently annoyed to fire back a public response.
“We have never done anything illegal at Van Nuys Airport, and the suit is totally a lie without any merit at all,” Murdock told the Business Journal a day after the suit was filed Aug. 26. “We run straight-on honest.”
The lawsuit filed in Los Angeles County Superior Court contends that Castle & Cooke Aviation, a Van Nuys subsidiary of Castle & Cooke Inc., Murdock’s real estate development arm, has been marketing itself as a so-called “fixed based operator” without being authorized to do so by airport operator, Los Angeles World Airports. The lawsuit alleges unfair competition and false advertising among other things. It does not cite a specific damage figure.
FBOs, including Maguire Aviation, are regulated by the airport and generally pay higher rents for the ability to provide services to the general pilot population, not just the pilots who rent hangar space from them. Other aviation service operators at the airport, including Castle & Cooke, also offer some services but can only sell fuel to their own tenants.
The dispute pits two men who made their fortunes in real estate development and grew their general aviation business from the hangars they acquired to house their own business jets.
Maguire is one of the largest shareholders in Maguire Properties Inc. downtown L.A.’s largest commercial landlord but stepped down as chief executive last year as the real estate downturn decimated the company’s holdings. The Business Journal in May estimated the 74-year-old Bel Air resident’s net worth at $1.04 billion, placing him 29th on the list of Wealthiest Angelenos.
The 86-year-old Murdock enlarged his fortune as the chief executive of Westlake Village fresh fruit and vegetables giant Dole Food. The Business Journal estimated his net worth at $3.7 billion, making him L.A.’s fourth wealthiest resident.
Given their fortunes, it might seem surprising the two would get into a dogfight over as small an issue as an FBO at Van Nuys Airport. However, Maguire has focused on the business as a growth opportunity since stepping down from his namesake real estate firm.
Moreover, Chris Lewis, a prominent L.A. dealmaker and partner at Riordan Lewis & Haden, said it can be surprising the kind of issues the rich sue over.
“There are a myriad of reasons why people would want to sue each other, whether they are multibillionaires or just trying to make ends meet,” said Lewis, who noted he did not know the particulars of the Maguire suit. “Sometimes it’s just ego. Sometimes people just never want to lose. Sometimes people in business are ultracompetitive.”
In good economic times, renting hangar space, and providing refueling, maintenance and concierge services to business jets can be a lucrative business. But traffic at Van Nuys has fallen with the faltering economy, with the number of takeoffs and landings down at least 9 percent so far this year.
“Van Nuys Airport is a competitive place to do business,” said Coby King, former chairman of the airport’s citizen advisory committee. “When the economy goes down, then what is a naturally competitive place becomes even more competitive.”
Castle & Cooke, which has authorized FBO businesses in Hawaii and Washington state, has been trying to convert its existing Van Nuys business into an FBO. It has been in negotiations with the airport over the matter, but those negotiations have not concluded.
In fact, a letter sent by Deputy Executive Director Debbie L. Bowers of airport operator Los Angeles World Airports, cited in Maguire’s complaint, orders Castle & Cooke to immediately stop referring to itself as an FBO at Van Nuys. It also calls for the company to limit its operations to what is authorized under its master lease.
