Washington state taxpayers still don’t have to pay $300 million for Highway 99 tunnel cost overruns after a state appeals judges upheld a jury verdict against contractor Seattle Tunnel Partners.
The ruling this week represents a win for the Washington State Department of Transportation, but STP might seek a review by the state Supreme Court, WSDOT spokesperson Lars Erickson said.
STP and WSDOT squabbled over a buried steel pipe that tunnel-boring machine Bertha struck in December 2013, and whether WSDOT adequately disclosed its presence to STP in geotechnical reports.
STP project director Chris Dixon claimed the state-owned pipe caused Bertha to stall and kicked off a massive operation to replace cracked gears and bearings. The giant drill finally completed the dig from Sodo to South Lake Union in April 2017, about 2½ years late. WSDOT’s lawyer said in court the pipe was no more significant than a toothpick to the world-record 57-foot-wide cutting disc.
Years before, WSDOT plunged the 119-foot-long steel pipe, known as “Test Well 2,” into Seattle’s waterfront soil to measure groundwater that might flood some future tunnel construction project. WSDOT abandoned the pipe in 2002, but presented evidence in 2019 that STP’s own foreman encountered the pipe lid before Bertha arrived.
Fear of overruns became a bipartisan obsession in Seattle mid-decade, triggering green-leaning highway opponents to renew their arguments the tunnel was a boondoggle, while conservative radio host Dori Monson insisted the public would be soaked for an extra $1 billion.
The four-lane tube opened to traffic in early 2019. STP sought more than $600 million in payments for delay, beyond the $1.35 billion contract both sides signed in 2011. But Judge Carol Murphy limited the jury case to a maximum $300 million in Thurston County Superior Court.
The new 30-page ruling, signed on Tuesday by three Washington state Court of Appeals judges based in Tacoma, upheld a December 2019 jury ruling in Thurston County. Not only did STP lose its claim for $300 million, but owed WSDOT $57 million covering the state’s own costs during tunnel delays, jurors ruled.
Appeals judges said Murphy gave proper jury instructions, or at least didn’t make errors. They rejected arguments that Murphy issued instructions that prejudiced jurors against STP.
For instance, STP argued Murphy should have overtly instructed jurors that a detailed WSDOT reference report, which did show the pipe, was not among the two official underground-surveillance reports which govern the bid contract.
Appeals judges said the STP-requested language wasn’t necessary, and that the companies got their chance to present witnesses and closing arguments about the pipe theory.
Secondly, STP challenged how Murphy instructed jurors after her ruling that STP committed “spoliation,” by losing crucial pieces of damaged pipe and a deputy project manager’s journal. Murphy advised jurors to assume the missing evidence would reflect adversely on STP’s pipe-damage scenario.
Appeal judges said Murphy acted properly. They noted that jurors determined that WSDOT did provide enough notice to STP about underground conditions, so the jury never reached their second key question of whether a steel pipe was the cause of Bertha’s damage.
STP attorney John Dingess of Pittsburgh and Jorge Casado, communications director for STP partner Tutor-Perini Corp. of California, haven’t replied to requests for comment.
WSDOT’s Erickson said he’s unaware of any other legal cases or claims against the state.
“We believe that the jury, the trial court and the Court of Appeals correctly decided the dispute, and that the taxpayers of this state should not have to pay either the costs to repair the contractor’s boring machine or the costs associated with the lengthy delay in completion of the tunnel,” he wrote in a statement.
And the $57.2 million award, currently held by the court as “appeal bonds,” has grown to $74 million with interest, Erickson said.
The entire Highway 99 replacement project, including a nine-year-design process, old-viaduct demolition, interchanges and a huge waterfront boulevard, will cost around $3.3 billion.