Massachusetts Bay Transportation Authority v. United States

36 Cont. Cas. Fed. 75,912, 21 Cl. Ct. 252, 1990 U.S. Claims LEXIS 304, 1990 WL 107736
CourtUnited States Court of Claims
DecidedJuly 31, 1990
DocketNo. 283-89 C
StatusPublished
Cited by20 cases

This text of 36 Cont. Cas. Fed. 75,912 (Massachusetts Bay Transportation Authority v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Massachusetts Bay Transportation Authority v. United States, 36 Cont. Cas. Fed. 75,912, 21 Cl. Ct. 252, 1990 U.S. Claims LEXIS 304, 1990 WL 107736 (cc 1990).

Opinion

OPINION

RADER, Judge.

Massachusetts Bay Transit Authority (plaintiff or MBTA) entered into agreements with the Federal Railroad Administration (FRA) between 1980 and 1983 to renovate the South Station in Boston. Under these agreements, FRA promised to fund a portion of the renovation. Plaintiff promised to remodel the station according to FRA’s design.

During construction, plaintiff’s contractors complained about defects in the design documents. These defects caused delays and cost overruns. In this lawsuit, plaintiff seeks to recover the damages allegedly caused by the design defects.

Defendant has moved to dismiss plaintiff’s claim for lack of jurisdiction. Defendant contends primarily that plaintiff’s cause of action is not ripe for decision. Defendant also requests summary judgment on a warranties issue. Plaintiff [255]*255has moved for summary judgment, claiming that FRA jeopardized plaintiffs chance to recover from the design consultants’ liability insurance policies. This court grants in part defendant’s motion to dismiss, grants defendant’s motion for summary judgment, and denies plaintiff’s motion for summary judgment.1

FACTS2

In 1976, Congress enacted the Railroad Revitalization and Regulatory Reform Act (Rail Act). 45 U.S.C. §§ 801-855 (1982). Congress intended the Rail Act to improve the infrastructure and financial strength of the nation’s railway system. The Declaration of Policy states:

It is the purpose of the Congress in this Act to provide the means to rehabilitate and maintain the physical facilities, improve the operations and structure, and restore the financial stability of the railway system of the United States____

45 U.S.C. § 801(a).

Congress specifically enacted legislation to deal with improvement of the eastern seaboard railway system from Massachusetts to the District of Columbia. 45 U.S.C. §§ 851-855. This aspect of the Rail Act is the Northeast Corridor Improvement Project (NECIP). The NECIP set several objectives for the Secretary of Transportation (Secretary). Under NECIP, the Secretary must establish dependable intercity rail service, improve stations, enhance rail freight service, upgrade equipment, and eliminate rail congestion. 45 U.S.C. § 853. Congress authorized appropriations in excess of $2.3 billion to accomplish these goals. 45 U.S.C. § 854.

The Secretary delegated authority over NECIP to FRA, an agency within the Department of Transportation. FRA funded and supervised the rehabilitation and improvement of 13 railroad stations, including the South Station Project.

The South Station Project

South Station is an intercity rail passenger depot in Boston, Massachusetts. Plaintiff, a quasi-public corporation created under Massachusetts law, owns South Station. FRA targeted South Station for improvements under NECIP. Thus, plaintiff and FRA entered into the Boston South Station Improvement Project. FRA earmarked a $33.3 million grant for this project.

On or about November 5, 1980, plaintiff and FRA executed the Boston South Station Improvement Project Design Agreement. Under this agreement, FRA agreed to supply designs for construction of platforms and tracks, renovation of the station house, construction of additions to the station house, and correction of building code deficiencies. FRA retained engineering consultants to prepare these plans.

FRA had ultimate authority over the designs. Plaintiff had no authority to make design decisions or to supervise the design engineers. Further, FRA was responsible for coordinating its plans with Amtrak, which daily operated trains into and out of South Station.3

On or about September 8, 1983, plaintiff and FRA entered into the Boston South Station Transportation Center Project Cooperative Construction Agreement. This agreement generally set in motion construction according to FRA’s designs.

Plaintiff agreed to construct operational, cost-shared, and local improvements in ac[256]*256cordance with the designs. FRA agreed to pay for 100% of the operational improvements and 50% of the cost-shared improvements. The Construction Agreement explained:

FRA will bear 100 percent of the costs of the “operational” improvements (those primarily benefitting Amtrak service) and 50 percent of the costs of the “cost-shared” improvements (rail-related improvements not primarily benefitting Amtrak). MBTA will bear 100 percent of the costs of certain “local” improvements.

See Contract No. DOT-FR-76048, quoted in Plaintiffs Brief, No. 283-89C, filed Dec. 11, 1989 (Pl.Br.), Appendix (App.), at 5. Plaintiff represented that it had sufficient funds to meet these obligations.

Under the Construction Agreement, plaintiff could not deviate from the design documents without first obtaining written permission from FRA. FRA could not withhold permission unreasonably. Moreover, FRA agreed to review requests for modifications within a reasonable time. When FRA approved change orders, the Construction Agreement required the parties to attempt in good faith to determine their proportionate funding obligations.

The Construction Agreement addressed resolution of potential liability issues. The agreement gave FRA authority to approve or reject settlements of contractor claims proposed by plaintiff. FRA, however, could not withhold approval unreasonably. Further, the Construction Agreement required either FRA or plaintiff to pay contractor claims based on which one was at fault. In the case of contractor delay claims caused by Amtrak, FRA agreed to hold plaintiff harmless.

The Construction Agreement also discussed the prospect of defective designs and specifications. The agreement obligated FRA to seek compensation from its consultants for design defects. FRA thus promised to secure from these consultants endorsements on their professional liability insurance policies to cover any defects. In the Construction Agreement, FRA also disclaimed all express and implied warranties on the design documents.

After receipt of FRA’s designs, plaintiff awarded a $48,775,062.10 contract to J.F. White Contracting Company (White) for much of the work on the site. During performance, White informed plaintiff that the design plans contained serious defects.4 White also informed plaintiff that it could not perform timely because Amtrak did not remove railroad track on schedule. White has submitted to plaintiff for payment a $23,500,000.00 delay claim.5

During construction, plaintiff submitted to FRA proposed change orders and contractor claims for approval. FRA withheld consent on these changes and claims. Plaintiff nevertheless has incurred over $3 million in costs to pay for change orders allegedly necessitated by defective designs.6

[257]*257

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Bluebook (online)
36 Cont. Cas. Fed. 75,912, 21 Cl. Ct. 252, 1990 U.S. Claims LEXIS 304, 1990 WL 107736, Counsel Stack Legal Research, https://law.counselstack.com/opinion/massachusetts-bay-transportation-authority-v-united-states-cc-1990.