Metro to Pay Firms $6 Million

St. Louis Post-Dispatch – Copyright 2008
By Ken Leiser and William C. Lhotka (Phil Sutin of the Post-Dispatch contributed to this report)

CLAYTON – The Metro transit agency and the MetroLink designers it unsuccessfully blamed for cost overruns and delays on the Shrewsbury extension have reached the end of the line in their long-running legal battle.

Metro and the four design and construction management firms declared Tuesday that they had reached a $6 million settlement that includes the $2.56 million judgment a St. Louis County jury awarded the firms in November.

The settlement appears to save Metro from reimbursing tens of millions of dollars in legal fees and costs amassed by the defendant, the Cross County Collaborative, as well as its own additional costs if it appealed the verdicts. Metro told the Post-Dispatch onTuesday that its costs for pressing the lawsuit were $21.4 million through Dec. 31.

The settlement relieves the collaborative firms of the risk of losing an appeal.

Both sides announced the agreement Tuesday in the courtroom of St. Louis County Presiding Judge Carolyn C. Whittington.

“This settlement resolves all claims. There will be no appeals,” Richard Hardcastle, an attorney for the collaborative, told reporters after the hearing. “Our clients are happy to put this behind them and thank the very attentive and dedicated jury for restoring the good names and reputations of the (Cross County Collaborative) companies by their verdict.”

The collaborative included Parsons Brinckerhoff, Jacobs Civil Inc., STV Inc. and Kwame Building Group.

Robert Baer, the interim president of Metro, said the settlement reflects a strong commitment by both sides to move beyond the case. The transit agency considered an appeal, but Baer said it could have been financially risky.

Metro officials told the Post-Dispatch on Tuesday that the suit had cost the agency $21.4 million through Dec. 31. The figure includes legal bills, expert witness expenses and other costs.

Baer, who was not present for Tuesday’s brief court appearance, said Metro can now focus on the meat and potatoes of providing regional public transportation.

“It just was a major distraction,” Baer said. “I felt in my heart and soul that it was the right thing to do.”

Repercussions of the Nov. 30 jury verdicts extended well beyond the courtroom. Metro’s president, Larry Salci, resigned under fire. And St. Louis County leaders cited the legal loss in pulling a half-cent transit sales tax increase for the Metro agency off next month’s ballot.

St. Louis County Executive Charlie A. Dooley said Tuesday he was pleased at the settlement.

“I’m glad it is all behind us,” Dooley said. “It is settled, resolved, and we can move on.”

He said the transit agency can work on restoring its credibility, continue with its on-time service, increase ridership and assist the community in handling the shutdown of part of Highway 40.

Dooley said Tuesday that he had no idea when a tax-increase proposal for Metro would go on the ballot. Dooley had asked Baer and Metro’s board of commissioners to settle the suit to get the matter out of the way.

As part of the settlement, both sides agreed to drop all legal actions that were pending before Whittington.

Those included:

– The request by the defense for $27.3 million in legal fees and costs that 37 lawyers from 10 law firms in four states ran up representing the four companies.

– A last-ditch effort by Metro’s lawyers to blame the loss of their case on some sort of media conspiracy, and to get the judge to sanction the defendants for an amount equal to their request for attorney’s fees.

– A request that Whittington allow Metro’s lawyers to interview jurors to find out if they had been influenced by Salci’s negative press while the trial was in progress.

What began Aug. 22 with the bombast of opening statements ended with a whimper of a nine-minute hearing, in which both sides’ lawyers asked Whittington to sign a five-page final order summarizing the case and jury verdicts against Metro and in favor of the designers.

The settlement itself was not made part of the court record.

In court Tuesday were Mary Bonacorsi and Peter Gullborg for Metro. Representing the defendants were Hardcastle, Roger Edgar, former U.S. Attorney Ed Dowd, and former Missouri Supreme Court Judge Ronnie White.

Dowd said the companies that formed the collaborative were “pro-rail,” and expressed hope that the settlement “helps Metro continue to expand their light-rail system and be very successful.”

Dowd said the defense attorneys have been paid by their employers and the submission for legal fees had been an effort to seek reimbursement.

Metro’s $21.4 million in trial costs, which included attorney fees, expert witness expenses and other expenses, will be borne by taxpayers. But Baer said there will be no service cuts as a result.

Baer said Tuesday that the agency has paid its ongoing legal expenses and other trial-related costs out of the project budget for the $676 million MetroLink train line extension from Forest Park to Clayton and Shrewsbury.

John Noce, the transit agency’s chief financial officer, said those funds were a combination of transit sales taxes collected in the county and bond proceeds. Had they not been used to pursue the lawsuit, they would have been available to retire project debt and cover other capital needs, he said.

Meantime, Metro has 30 days to pay the defendants the $6 million settlement. Metro, which is self-insured, has “ample” insurance reserves and could use those funds to cover the cost, Noce said.

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Billed to taxpayers

Metro public transportation agency’s litigation expenses through Dec. 31:

Lawyers and other major legal fees- $13,065,337.45

Expert witnesses – $8,185,199.86

Testimony – $51,367.36

Miscellaneous – $132,385.36

Total – $21,434,290.03

Source: Metro transit agency