SEATTLE — Taxpayers are off the hook for cost overruns on the Highway 99 tunnel, after the Washington state Supreme Court turned down a hearing request Thursday from contractors on the project.
The court’s decision to decline to hear an appeal by Seattle Tunnel Partners also means the state can keep $77 million in penalties a jury had awarded the Washington State Department of Transportation for project delays.
“The funds will be received in the coming weeks,” WSDOT said in an announcement, after a court case list posted Thursday said justices wouldn’t hear the contractor appeal.
Contractors had sought as much as $600 million above the $1.35 billion tunnel construction contract amount, which was the largest piece of the state’s $3.3 billion project to replace Seattle’s old Alaskan Way Viaduct and connecting streets.
The four-lane tunnel opened three years late on Feb. 4, 2019, primarily because of a stall and massive retrofits to Bertha, the world’s biggest tunnel boring machine. Contractors blamed the damage on a 119-foot-deep steel groundwater testing pipe that was left over from past WSDOT soil research along the Seattle waterfront.
Seattle Tunnel Partners, led by Tutor Perini of California and the U.S. arm of Spanish tunneling firm Dragados, filed claims soon after Bertha overheated and stopped digging in late 2013. Project manager Chris Dixon said then that steel from the shredded pipe got stuck in Bertha’s rotary cutting head and teeth, setting off a chain reaction of problems that ruined internal bearings and gears.
STP requested up to $642 million during the lawsuit, but in the 2019 jury trial Judge Carol Murphy of Thurston County Superior Court capped the potential amount at $300 million. Jurors not only denied STP, but ruled the companies must pay WSDOT $57.2 million in contract penalties for 867 days of the delay, which grew with interest to $77.2 million while STP appealed.
STP’s attorneys then argued to a state appeals court that Murphy’s instructions to jurors cast contractors in a “bad light” — in particular related to Murphy’s finding that STP committed “spoliation of evidence” by losing fragments of the damaged pipe, along with a deputy tunnel director’s journal. Murphy told jurors to consider lost evidence as adverse to STP, and this June the appellate judges found that these and other instructions were proper.
Supreme Court justices Thursday decided not to hear that dispute.
(The issue of spoliation surfaced in an ongoing case by business owners and residents against the city of Seattle for damage during the Capitol Hill Organized Protest in mid-2020. Thousands of text messages from that period were deleted from phones belonging to then-Mayor Jenny Durkan, police Chief Carmen Best, and other high-up city officials.)
WSDOT Secretary Roger Millar, in a statement Thursday, called the $77.2 million tunnel-case result “an incredible effort to recoup funds on behalf of Washington taxpayers.”
An STP executive wasn’t available for comment Thursday.
In a separate case, Washington state is still seeking up to $44 million from insurance companies to recover its costs in connection with repair and reinstatement of the tunnel boring machine.
