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The Teaching Moment Arrives in Tampa Bay Water v. HDR

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We've arrived at a teaching moment in the long, ugly history of Tampa Bay Water v. HDR Engineering Inc., et al. Now that a jury has dispatched Tampa Bay Water's claims of defective reservoir design against HDR after four hours of deliberation, it's a good time to think back on critical decisions during the litigation. They show us that compromise often is the wisest course in the mangrove swamp of construction defects and jury trials.

Following a pre-trial conference in May 2009, when there was still a chance of heading off a trial, federal Judge James D. Whittemore set down deadlines for signing up expert witnesses. The experts were important because their testimony could determine for a jury the causes and the costs of the cracks in the C.W. Bill Young Regional Reservoir, which was completed in 2005.

In the beginning, Tampa Bay Water sued both HDR and the contractors after cracks appeared in the reservoir. Trial was set for July 5, 2011. But before the trial, all kinds of details had to be settled, such as whether Tampa Bay Water would have to turn over 145 documents—narrowed down from thousands—recording its dealings with consultant Golder & Associates about the defects in the reservoir. Judge Whittemore said some of the documents, but not all, had to become evidence. Then, a year or so later, Whittemore had to rule on a motion by one of the contractors being sued by Tampa Bay Water to exclude testimony from one of the expert witnesses. The key attorney for Tampa Bay Water is Richard A. Harrison. Lawyers.com lists rulings on both these motions among Harrison's most prominent "representative cases."

Meanwhile, the judge set a date for mediation. Tampa Bay Water reached settlement with the prime contractor for $750,000 and with the construction manager for $6 million. Further mediation produced an agreed settlement with HDR under which it would pay Tampa Bay Water $30 million. The utility's lawyers took the settlement to the utility board, which said yes in a 4-3 vote in September. But the next month, it rejected the settlement to pursue a better outcome by seeking a trial verdict and much higher damages from HDR. In Florida, there is no cap on designer liability.

There's every reason to believe that the utility's board and Tampa Bay Water's legal team at all times sought the best for ratepayers. But unless ratepayers are empaneled on a jury, they don't get to vote on what caused reservoir cracks, how much and how extensive the repairs should be, and who is to blame and should pay. Even experts found it tough to determine exactly what caused the cracks. In retrospect, passing up the $30-million deal was an unwarranted gamble. One lesson of Tampa Bay Water v. HDR is never to gamble millions on a jury trial because all you may do is spend funds that boost the "gross domestic legal product."

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