You may have been following the battle between STITA taxi, which has bought exclusive rights to pick up fares at Sea-Tac Airport, and the Port of Seattle. In the latest round of bidding for the contract, Yellow Cab offered the port more money, nudging out STITA (which formed a nonprofit in 1989 to satisfy the port's request for an exclusive cab company at the airport). In response to losing the bid, STITA, claiming the bidding process was illegal and would impair the local taxi industry, sued the port last week (the lawsuit is in this .pdf). Losing the contract would likely destroy the company, the company says, thereby putting the 450 drivers out of work.

Earlier today, STITA looked defeated when King County Superior Court Judge Steven Gonzalez denied a request for a restraining order. But STITA appealed to a state court, which granted a stay, thereby preventing the port from signing a contract with Yellow Cab until the parties resolve their issues.

A statement from STITA is after the jump.

The Port of Seattle will not be able to sign a contract with Yellow Cab, after a State Court of Appeals Commissioner issued a stay late Monday.

Earlier Monday, a King County Judge denied a restraining order filed by the Seattle-Tacoma International Taxi Association (STITA) to block the Port from signing the contract.

The contract for on-demand taxi service at Sea-Tac airport won’t be awarded until the court determines if the Port acted illegally. King County Superior Court Judge Steven Gonzalez heard STITA’s case on Feb. 4, and issued his decision this afternoon.

STITA vowed to continue fighting. They immediately took the case to the State Court of Appeals, which agreed to issue a stay — meaning the Port cannot sign with Yellow Cab until the legal issues are resolved.

The commissioner is expected to consider the merits of the case this week.

“We’re thrilled with this late-breaking win,” said Jesse Buttar, STITA cab owner. “We know we have a case. We just want a fair shot at the airport contract.”

On Jan. 29, STITA filed a complaint asking the court to halt the Port from signing a contract that violates state law. STITA seeks a fair and legal proposal process in which all bidders can compete on a level playing field.

In 1989, STITA — a non-profit co-op with the greenest cab fleet in the country — was created by the Port of Seattle to exclusively serve the airport and provide reliable service to airport users. Now, after an unfair proposal process, STITA and its approximately 450 members and drivers will essentially be put out of business.

In its lawsuit, STITA contends the Port’s bidding process violated the state Airports Act because the Port discontinued its prior practice of charging fees to taxicabs based on the airport’s actual cost of services provided to the cabbies. Instead, it required bidders to commit to pay an unfair concession fee of at least 10 percent of their airport-based revenues. This violates the Airports Act, which says airport concession fees must be based upon the Airport’s actual cost of operations and be reasonable and uniform.

STITA contends the Port’s bidding process caused a predatory bidding war among taxi companies which not only was illegal but will be financially devastating to the King County taxi industry.

STITA’s lawsuit also contends that the Port’s new concession fee violates the King County Code, which requires the King County Council to set the taxi meter rate at a level that is “just and reasonable.” The Port’s new concession fee cuts directly into the county’s taxi meter rate and prevents cab operators from receiving the gross receipts that they legally are entitled to receive.

Despite notice from STITA protesting these glaring problems with the process and proposed contract, the Port of Seattle declined to re-do its flawed proposal and said it would sign an agreement with Yellow Cab. STITA had no recourse but legal action.T