The Metropolitan Transportation Authority has spent more than $34 million in a legal battle with a subway contractor in which the public agency could only hope to win about $15 million, it was reported today.
"Success in the Tutor-Saliba case will protect taxpayers from future unscrupulous contractors," Los Angeles County Supervisor Mike Antonovich told the Los Angeles Times.
He and other MTA board members have accused the Red Line contractor of dragging out the 15-year-old lawsuit, hoping the MTA will give in.
Tutor-Saliba President and Chief Executive Ron Tutor denied that charge and said he's willing to consider a settlement.
Tutor-Saliba sued the MTA in 1995, alleging it was owed about $16 million in unanticipated expenses. But the MTA alleges Tutor-Saliba low-balled the bid to win the job, then inflated costs with change orders.
With the agency facing an operating deficit projected at $251.3 million, the lawsuit has become a politcial issue.
"It's a significant amount of money, and there seems to be a lack of internal controls with respect to the expenditure of resources," county Supervisor Mark Ridley-Thomas told The Times. He has called for an audit of the agency's expenditures on lawsuits.
The MTA's cross-complaint, filed about four years later, alleges that Tutor violated the False Claims Act and Unfair Competition Law, among other violations. The MTA alleged that Tutor was demanding money for claims that were not legitimate.
In 2001, a jury awarded the MTA about $29 million plus lawyer fees and other expenses, according to documents reviewed by The Times. Four years later, an appellate court judge overturned the decision and sent the case back to Los Angeles County Superior Court.
Since then, the MTA received a judgment of about $353,000 in 2006, The Times reported.
MTA Chairman Ara Najarian expressed resolve in pursuing the lawsuit.
"I think there's strong sentiment on the board that the message needs to be sent out to current contractors and future contractors and subcontractors that the MTA is going to expect them to submit fair, verified and legal documents for payment and that they're going to perform a fair and quality
workmanship," he told The Times.