After more than two decades, a $2-million suit between the Jefferson Airplane and Matthew Katz, a former manager, was tossed out of court Monday. San Francisco Superior Court Judge Ollie Marie-Victoire dismissed Katz's suit, which has prevented members of the Airplane--now in the Starship and the KBC Band--from receiving $2 million in record royalties from RCA Records. Katz, who managed the band in 1965 and 1966, maintained he was entitled to royalties from the San Francisco-based group's first two albums, "Jefferson Airplane Takes Off" and "Surrealistic Pillow." Katz's attorney, John Heilman, said that the judge's decision was "an abuse of discretion," adding that his client will probably appeal. In 1977, a trial to settle the suit was held and a jury found Katz had fraudulently obtained contracts with two band members, but contracts with the other three were found valid. Lengthy settlement discussions followed, eventually breaking down several years ago.