Kiewit Power Constructors Co. v. City of Los Angeles

Central District

U.S. District Judge Andre Birotte Jr.

$45 million

Plaintiff's Lawyers: David F. McPherson, Rebecca Shu-Yu Glos, Watt, Tieder, Hoffar & Fitzgerald LLP

Defense Lawyers: Harold J. Wulfsberg, Gregory Robert Aker, Burke, Williams & Sorensen LLP; Eric H. Rosenblatt, Los Angeles city attorney's office

When a storm at sea struck a cargo ship en route to Los Angeles from South Korea, the resulting on-board damage to electrical gear destined for a $440 million modernization project at a Playa del Rey power plant caused significant delays.

The challenge for project contractor Kiewit Power Constructors Inc. and its lead lawyer, David F. McPherson, was to persuade a federal jury that the Los Angeles Department of Water and Power should be on the hook for the cost of Kiewit's efforts to fix the damage and accelerate its work to meet completion deadlines. Jurors agreed, voting unanimously in June to award the contractor $45 million.

The water and power department asserted numerous warranty claims and at trial sought damages of $163 million; the jury gave it $1 million. Kiewit Power Constructors Co. v. City of Los Angeles, 16-CV02590 (C.D. Cal., filed April 14, 2016).

"The equipment included 100-foot stacks that were actually welded to the inside of the ship but was dislodged in the storm," said McPherson, a veteran litigator at construction law firm Watt, Tieder, Hoffar & Fitzgerald LLP. "It was one of the most unusual circumstances you'll find in this business."

On his team was firm senior partner Shelly L. Eward of Watt Tieder's McLean, Virginia office. "She's one of the firm's most experienced power plant litigators," McPherson said.

His argument was that because the department had contracted with General Electric Co. to supply the turbines and other equipment and had then required Kiewit to repair it and to speed up its timeline to get the job done as planned, the department was wrong to refuse to pay for the extra costs involved.

The city and Kiewit have filed cross appeals with the 9th U.S. Circuit Court of Appeals.

Opposing counsel Harold J. Wulfsberg of Burke, Williams & Sorensen LLP, another longtime construction law litigator, did not respond to a request for comment. The defense argued that it had fulfilled all of its contractual obligations and that the issues cited by Kiewit either didn't result in actual delays or shouldn't have.

"In order to make up for the delays, Kiewit hired hundreds of craft laborers -- pipefitters, electricians and others -- and had them working double shifts," McPherson said. "My client made a December 2015 deadline with two days to spare. I don't know what L.A. was thinking, but when we pursued payment it was turned down. The case was a lot of work, but Kiewit was pleased with the result."

-- John Roemer