# Presentation: 021241

## LITIGATING IN THE DARK

**THE 14****TH**** STREET TUNNEL CASE**
_**KISKA-KAJIMA v. WMATA**_
- Presented at the 22nd FTA Construction Roundtable
- Newark, NJ
- May 4, 2004

## WMATA SOFT-GROUND TUNNELING BEFORE 14th STREET

## WMATA SOFT-GROUND TUNNELING BEFORE 14th STREET

**CIVIL ENGINEERING LANDMARK**
- One of 40 projects of the century recognized in November 2002 by the American Society of Civil Engineering, along with the Hoover Dam, the Panama Canal and the Brooklyn Bridge.
**103 MILES, 83 STATIONS COMPLETED IN THREE PHASES**:
- Phase I:    1972-1982,  39 miles, 43 stations;  $ 8B
- Phase II:   1983-1992,  42 miles, 27 stations;  $ 7B
- Phase III:  1992-2002,  22 miles, 13 stations;  $ 3B
- 	(in 2002 $)

## DEWATERING LEFT UP TO CONTRACTOR
Assumed contractors more knowledgeable
Allowed flexibility during construction
Estimated costs built into bid

USED PERFORMANCE-BASED SPECIFICATIONS
2’ below invert standard

- Assumed contractors more knowledgeable
- Allowed flexibility during construction
- Estimated costs built into bid
**USED PERFORMANCE-BASED SPECIFICATIONS**
- 2’ below invert standard

- WMATA SOFT-GROUND TUNNELING BEFORE 14th STREET

## WMATA SOFT-GROUND TUNNELING BEFORE 14th STREET

**USED CLOSED-FACED TUNNELING WITH ONE-PASS LINERS**
- Was state-of-the-art
- Thought to be faster than other methods
- Required precise tunnel guidance
- Proved not to be watertight

## WMATA SOFT-GROUND TUNNELING BEFORE 14th STREET

**TWO-PASS LINERS OVERTOOK ONE-PASS AS STATE OF THE ART**
- Contractors submitted value engineering proposals
- Cut mining time
- Final liner over waterproof membrane resulted in dry final tunnel
- However: open-faced mining was thought to permit more surface subsidence

## DESIGNING THE 14TH STREET TUNNELS

## DESIGNING THE 14TH STREET TUNNELS

- 14th Street

## DESIGNING THE 14TH STREET TUNNELS

**LAY OF THE LAND**
- Twin 3,200' soft-ground tunnels with three shaft structures
- Twin tangents in most shallow ground
- Urban vs. rural setting
- Overhead properties, utilities

## DESIGNING THE 14TH STREET TUNNELS

**REASSESSED EXPERIENCE**
- Under-whelmed with contractor-chosen ground control measures
- Impressed with two-pass tunnel construction, particularly dry final tunnels
- Could open-face two-pass method work in an urban setting?

## ITERATIVE DESIGN PROCESS

First TAR: one-pass approach with closed-face machine
WMATA: reconsider two-pass open-face
Second TAR: still one-pass with closed-face
WMATA: reconsider all ground control methods
Third TAR: two-pass with open-face possible if
install grout canopy 
contractor performs extensive dewatering

- First TAR: one-pass approach with closed-face machine
- WMATA: reconsider two-pass open-face
- Second TAR: still one-pass with closed-face
- WMATA: reconsider all ground control methods
- Third TAR: two-pass with open-face possible if
- install grout canopy
- contractor performs extensive dewatering

**DESIGNING THE 14****TH**** STREET TUNNELS**

## ITERATIVE DESIGN PROCESS

WMATA required design contractor to make recommendation
Letter recommended two-pass with grout canopy and extensive dewatering

Dewatering design
Computer modeling called for over 300 wells
Human experience estimated 60 wells

- WMATA required design contractor to make recommendation
- Letter recommended two-pass with grout canopy and extensive dewatering
- Dewatering design
- Computer modeling called for over 300 wells
- Human experience estimated 60 wells

**DESIGNING THE 14****TH**** STREET TUNNELS**

## DESIGNING THE 14TH STREET TUNNELS

**OBSERVATIONAL DEWATERING SYSTEM**
- 60 initial wells
- Complete shafts
- Observe draw-down for 90 days
- Additional wells as needed by unit price

## DESIGNING THE 14TH STREET TUNNELS

**DEWATERING SPECIFICATION**
- warned that contractor may encounter water during excavation:
- “The designed dewatering system may not eliminate all groundwater from the tunnel excavation.”
- mixture of initial design criteria and performance standards

## DESIGNING THE 14TH STREET TUNNELS

**DEWATERING SPECIFICATION (continued)**
- “For mined earth tunnels, additional wells beyond the specified minimum dewatering system may be required to effectively reduce hydrostatic pressure and control groundwater in soil surrounding each tunnel in order to prevent the following:
- Heaving of the invert, blowups, hazardous seepage and sudden loss of soil in tunnel face.
- Loss of ground and surface subsidence.
- Maintain groundwater 2' below invert.”

## DESIGNING THE 14TH STREET TUNNELS

**GEOTECHNICAL REPORT**
- Advantages and disadvantages of tunneling methods considered
- Reasons for choice of two-pass open-face
- Anticipated ground conditions
- “Because of concerns about the difficulties of effectively dewatering the [excavation], the contractor is required to pre-support the ground...”
- “[T]here are no assurances that, even with fairly extensive dewatering, i.e. closely spaced ejector wells, face stability problems can be entirely eliminated...”

## DESIGNING THE 14TH STREET TUNNELS

**DISPUTES CLAUSE**
- Disputes Review Board (DRB)
- Contracting Officer final decision
- Board of Contract Appeals

## BIDDING AND PERFORMANCE

## BIDDING THE CONTRACT

**SEALED BID METHOD**
**WINNING BIDDER:  KISKA-KAJIMA**
- Joint venture of two experienced tunnel contractors
- Both new to DC area
- Award amount: $42.9 million including estimated quantity items and safety incentive
- Immediately submitted VECP - closed-face mining with one-pass liners

## PERFORMANCE HIGHLIGHTS

**SLOW START-UP**
**OBSERVATIONAL SYSTEM NOT FOLLOWED**
**DIFFICULTIES PREPARING AND MAINTAINING MINING EQUIPMENT**
**WMATA GEOLOGIST MAPS TUNNEL FACE**
**EXTENSIVE SURFACE SUBSIDENCE DETECTION EQUIPMENT**

## LITIGATION

- U.S. District Court

- U.S. Court of Appeals

- United States Supreme Court

## U.S. DISTRICT COURT
DISTRICT OF COLUMBIA

- DISTRICT OF COLUMBIA

**LITIGATION**

## U.S. DISTRICT COURT

**DEMANDED $44 MILLION ON FIVE CLAIM THEORIES**
- Including fraud and breach of contract
- All “outside the contract”
**DEMANDED TRIAL BY JURY**
**NEW TO WMATA**
- Never accused of fraud before
- Never tried contract case before jury or in District Court

## U.S. DISTRICT COURT

**WMATA’S MOTION TO DISMISS**
- For failure to exhaust contract remedies
- Dressed-up contract claims
- KiSKA-Kajima argued that it had no remedy through contract disputes provisions
- Court considered for six months, and sided with KiSKA-Kajima

## NO CONSIDERATION BY DRB OR BOARD OF CONTRACT APPEALS
Panel expertise
Project knowledge; construction knowledge

STRATEGY CHANGES
Less detail
WMATA must file motions aimed at eliminating claims
Exhibits must tell story
Witnesses

HIRED OUTSIDE FIRM AS LEAD COUNSEL

- Panel expertise
- Project knowledge; construction knowledge
**STRATEGY CHANGES**
- Less detail
- WMATA must file motions aimed at eliminating claims
- Exhibits must tell story
- Witnesses
**HIRED OUTSIDE FIRM AS LEAD COUNSEL**

**U.S. DISTRICT COURT**

## DISCOVERY
Approximately one year
Thousands of documents
Dozens of depositions

E.G. DOCUMENTS
Superseded tunnel alternative reports
Letter from design team: worried about liability during construction
Edited geotechnical report
300-well estimate

- Approximately one year
- Thousands of documents
- Dozens of depositions
**E.G. DOCUMENTS**
- Superseded tunnel alternative reports
- Letter from design team: worried about liability during construction
- Edited geotechnical report
- 300-well estimate

**U.S. DISTRICT COURT**

## MOTIONS TO ELIMINATE MISPRESENTATION CLAIMS – SOVEREIGN IMMUNITY
Sovereign Immunity – without consent, state cannot be sued
WMATA has not consented to non-contract suits related to discretionary decisions
One type of discretionary decision: Design
Example: Noise level of trains
Example: Omitted steel beam
Court agreed that decisions regarding mining, dewatering and other construction methods were protected by design immunity
Misrepresentation counts thrown out
Hollow victory: KiSKA-Kajima permitted to bring all of the same evidence in support of remaining claims

- Sovereign Immunity – without consent, state cannot be sued
- WMATA has not consented to non-contract suits related to discretionary decisions
- One type of discretionary decision: Design
- Example: Noise level of trains
- Example: Omitted steel beam
- Court agreed that decisions regarding mining, dewatering and other construction methods were protected by design immunity
- Misrepresentation counts thrown out
- Hollow victory: KiSKA-Kajima permitted to bring all of the same evidence in support of remaining claims

**U.S. DISTRICT COURT**

## MOTIONS TO EXCLUDE CERTAIN EVIDENCE

Example: Dewatering specification

KiSKA-Kajima argued “2 feet below invert” was a guarantee for dry mining conditions

WMATA argued that read as a whole, specifications warned that mining could encounter wet conditions

Court held that it was ambiguous and jury should determine its meaning 

- Example: Dewatering specification
- KiSKA-Kajima argued “2 feet below invert” was a guarantee for dry mining conditions
- WMATA argued that read as a whole, specifications warned that mining could encounter wet conditions
- Court held that it was ambiguous and jury should determine its meaning

**U.S. DISTRICT COURT**

## LITIGATION - U.S. DISTRICT COURT

- TRIAL

## TRIAL

**JURY IMPANELED**
- 8 members, plus 4 alternates
- The passing of juror no. 2
**CORPORATE REPRESENTATIVE**
- Contractor choose assistant project manager for 14th Street
- WMATA choose assistant project manager for entire Mid-E line

## TRIAL

**BATTLE OF THEMES**
- Contractor’s theme: WMATA purposefully duped innocent contractor into underbidding contract through massive conspiracy involving designers, their subcontractors and hundreds of WMATA employees
- WMATA’s theme: Experienced tunnel contractors agreed to build tunnels for $42 million and now want another $44 million

## TRIAL

**TECHNOLOGY COURTROOM**
- Both paper and electronic exhibits could be displayed and manipulated
- Large-flat panel screen plus small displays for judge, attorneys and jury
- Real-time transcript
- KiSKA-Kajima took full advantage of, including 3D animation
- WMATA chose lower-tech. approach

## TRIAL

**TRIAL BEGAN JANUARY 22, 2001 – KEY WITNESSES**
- KiSKA-Kajima key witnesses were managers and experts
- WMATA’s key witnesses were field personnel and managers
**CLOSING ARGUMENTS FEBRUARY 20**
**VERDICT DELIVERED MARCH 5**
- Unanimous verdict
**MOTION FOR NEW TRIAL DENIED**

## LITIGATION – FIRST APPEAL

- U.S. COURT OF APPEALS
- FOR THE D.C. CIRCUIT

## U.S. COURT OF APPEALS

**D.C. CIRCUIT IS ONE OF THIRTEEN CIRCUITS NATIONALLY**
**FIRST APPEAL IS A MATTER OF RIGHT**
**KISKA-KAJIMA HIRED KEN STARR**
- Recognized it was futile to argue jury verdict was incorrect
- Concentrated on court’s legal decisions: granting motions dismissing claims and leaving interpretation of dewatering specification up to jury

## U.S. COURT OF APPEALS

**REVIEWED DISTRICT COURT’S DECISION DISMISSING MISREPRESENTATION CLAIMS**
- KiSKA-Kajima: design immunity does not permit misrepresentation
- WMATA: design immunity includes choosing methods of construction
- Court
- Issue not design but what WMATA chose to put into contract
- Found new type of immunity: immunity to decide what to include in contract

## U.S. COURT OF APPEALS

**REVIEWED TRIAL COURT’S DECISION THAT JURY SHOULD INTERPRET AMBIGIOUS DEWATERING SPECIFICATION **
- Parties agreed that District Court was wrong
- KiSKA-Kajima argued that once District Court found provision ambiguous it should have been read against WMATA
- WMATA argued that District Court should not have found provision ambiguous
- Court: patently ambiguous
- So obviously ambiguous that KiSKA-Kajima had duty to inquire
- Because KiSKA-Kajima failed to inquire, provision read in WMATA’s favor
- Had KiSKA-Kajima won this issue, they could have argued
- WMATA breached contract by definition
- Jury clearly mistaken in finding no breach
- Entitled to new trial

## LITIGATION – SECOND APPEAL

- UNITED STATES
- SUPREME COURT

## SUPREME COURT REVIEW IS DISCRETIONARY
Must petition for right to have case heard
Few petitions granted; statistics from 2002-03 term:
8,255 new cases
Only 84 reached argument
If petition granted, further briefs on the merits are filed, followed by oral argument
Decisions on merits typically published toward end of session in May

- Must petition for right to have case heard
- Few petitions granted; statistics from 2002-03 term:
- 8,255 new cases
- Only 84 reached argument
- If petition granted, further briefs on the merits are filed, followed by oral argument
- Decisions on merits typically published toward end of session in May

- U.S. SUPREME COURT

## U.S. SUPREME COURT

**PETITION MUST ESTABLISH REASON FOR COURT TO GRANT REVIEW**
- Conflict between circuits
- Issue of national import
- Not enough: wrong decision

## U.S. SUPREME COURT

**KISKA-KAJIMA’S PETITION**
- Because circuits in agreement on WMATA’s sovereign immunity, KiSKA-Kajima had to argue there was an issue of national import
- KiSKA-Kajima argued that WMATA’s sovereign immunity was too broad
- If Supreme Court did not overturn decades of caselaw, all compact agencies could continue using immunity against public interest
- Because other compact agencies involved, issue one of national import

## U.S. SUPREME COURT

**WMATA COULD HAVE DECLINED OPPORTUNITY TO FILE OPPOSITION**
- Advantage: sends message that respondent does not believe there is any reason for court to grant the petition
- Disadvantage: though court will typically request briefing from respondent if they are seriously considering granting certiorari, there are no guarantees
**WMATA ELECTED TO FILE MINIMAL BRIEF IN OPPOSITION**
- Waiver - KiSKA-Kajima had not previously made argument that caselaw was wrong and therefore should not be able to raise it now
**KISKA-KAJIMA FILED BRIEF REPLY**

## U.S. SUPREME COURT

**MOTION FOR LEAVE TO FILE AMICUS BRIEF**
- “Amicus” – friend-of-the-court, a brief in support of one side
- General Contractors Association of New York
- Must request permission of the parties to the case before filing
- WMATA did not grant permission
- GC Assoc. had to motion Court for permission to file
**YES, THE SUPREME COURT DOES HAVE A SENSE OF HUMOR**
- Issued decision by granting motion to file amicus, but denying petition
- No briefs on the merits; no oral argument

## LESSONS LEARNED

## LESSONS LEARNED

**DO NOT MIX PERFORMANCE-BASED AND DESIGN TYPE SPECS**
- Lest owner be held to high performance standards
**DESIGN DATA**
- Include and incorporate appropriate data and opinions into contract
- Highlight that information in contract is not complete
- State in contract that contractors are encouraged to seek the additional information available in project library, and make library materials as available as possible
- Include superseded opinion matter in library, appropriately labeled

## LESSONS LEARNED

**DISTRICT COURT LITIGATION**
- Lengthy
- Costly
- Claims that would be easily dismissed by review boards or administrative boards are more likely to get serious consideration
- Juries smarter than expected
**AT TRIAL, HE WITH THE EASIEST-TO-FOLLOW STORY WINS**

## LITIGATING IN THE DARK

**THE 14****TH**** STREET TUNNEL CASE**
_**KISKA-KAJIMA v. WMATA**_

- Presented by:
- Phillip T. Staub
- Assistant General Counsel, WMATA
- 600 Fifth St., N.W.
- Washington, D.C. 20001
- (202) 962-2555
- pstaub@wmata.com