MTA Suit Goes to Jury for Damages

A Los Angeles Superior Court judge sent a landmark six-year case between construction giant Tutor-Saliba Corp. and the Metropolitan Transportation Authority to a jury Thursday after finding the contractor liable for more than 1,000 acts of business misconduct on the Metro Rail subway project.

Attorneys for Tutor-Saliba and the MTA finished two days of closing arguments in a bitter 10-week trial pitting the public agency against one of its largest contractors, which received about $945 million for work on the rail system.

The jury will begin deliberating Monday morning on the amount of damages to award the agency.

In his instructions to the jury on Wednesday, Judge Joseph Kalin explained that he had found Tutor-Saliba liable for in excess of 1,000 unfair business practices, minority contracting violations, false claims of payment and other misconduct.

Last week, Kalin ruled that Tutor-Saliba intentionally withheld and destroyed documents during the case. The judge terminated the contractor’s case against the MTA and barred Tutor-Saliba from presenting evidence in its defense of MTA’s countersuit. The ruling effectively granted the MTA victory.

The case could alter the standing of Tutor-Saliba and its powerful chief executive, Ron Tutor, a major supporter of Los Angeles Mayor James K. Hahn. The judge’s decision about Tutor-Saliba’s liability under the state’s False Claims Act and the jury’s damage award could severely damage the company’s ability to bid on future public works jobs. Government contracts are the company’s lifeblood.

In a written decision issued Monday, the judge said Tutor-Saliba had engaged in “a long and consistent pattern of discovery abuse” over a period of years and had failed to produce documents despite court orders and the recommendations of a former state Supreme Court justice.

During the trial, Kalin also assessed more than $100,000 in monetary penalties against Tutor-Saliba and its lawyers for failure to comply with court orders.

Kalin was particularly troubled when, during cross-examination of MTA witnesses, Tutor-Saliba lawyers tried to introduce documents that they had insisted did not exist or could not be located.

The construction industry has closely monitored the litigation, and the small courtroom was jammed this week as attorneys presented their closing arguments. Both sides used dramatic language to illustrate the highly technical case, comparing witnesses to characters out of a “Perry Mason” television show and an Ernest Hemingway novel.

David B. Casselman, outside attorney for the MTA, called Tutor-Saliba arrogant and unrepentant, and asked the jury to send the company a message with its verdict. Meanwhile, Tutor attorney Nomi Castle said the contractor is being punished for demanding fair payment from the transit agency.

The legal battle began when Tutor-Saliba sued the MTA in 1995, seeking about $16 million in damages because the agency allegedly failed to pay a number of claims involving construction on three Wilshire Boulevard subway stations. By the end of the case, Kalin had reduced the amount of its claim to $2.5 million.

Last week, the judge threw out that suit and left standing the countersuit the MTA filed in 1999.

The agency is seeking at least $41 million in penalties for false claims, breach of contract, unfair competition and violations of licensing and subcontracting laws. The MTA also is asking the jury to award an even larger sum to deter the company from future misconduct.

In his closing statement, Casselman called Tutor-Saliba’s attitude “Catch me if you can.”

“We’re not here to talk about innocent mistakes,” Casselman said at the beginning of his closing argument, which lasted more than three hours. “We’re here to talk about a pattern of years, many years.”

Casselman said the company used fronts to claim it was hiring minority business subcontractors and misrepresented its revenue by moving costs from one subway project to another. He said the company knowingly used unlicensed subcontractors and submitted false claims for payment.

He asked the jury to send a verdict that says, “Don’t do that anymore. Stop.”

“You’re the jury,” he added. “You’re the conscience. If you say it’s OK, you can bet it will continue.”

Tutor-Saliba attorney Castle dismissed MTA’s evidence as “distortions” and said the agency is trying to put the company out of business as punishment for demanding fair payment.

“The MTA lawyers and consultants nit-picked their way through haystacks of information and misinformation to look for a needle here, a needle there,” she said. “They spun it all together as their case.”

Castle acknowledged that some mistakes may have been made in the course of the complex subway construction, but denied a pattern of misconduct.

“If there’s any message to be sent, it’s to the MTA,” she said. “They cannot strong-arm an honest contractor.”

Times staff writer Jeffrey L. Rabin contributed to this report.