Federal appeals court hears Anchorage port case with up to $367M on the line

A truck passes near the Port of Alaska on Jan. 25, 2021. (Lex Treinen/Alaska Public Media)

A panel of federal appeals court judges heard oral arguments Thursday in a case with hundreds of millions of dollars on the line for Anchorage. The dispute stems from botched construction work on the city’s port that began in the early 2000s.

The particulars of the case deal with the intricacies of contract law and how damages are calculated. A federal trial court judge decided in 2022 that the federal Department of Transportation’s Maritime Administration breached its contracts with the city by failing to fulfill its project oversight duties. The trial court judge said the Maritime Administration owes the city a whopping $367 million. 

The Maritime Administration appealed. A panel of judges in the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., finally heard arguments in the case on Thursday.

“We feel the oral arguments went great,” said Luke Patrick, a spokesperson for Anchorage Mayor Dave Bronson’s office. “And we feel that the MOA has positioned itself well and we’re optimistic that the outcome will be in our favor.”

The Maritime Administration basically argued that it wasn’t obligated by a 2003 agreement with the city to deliver a defect-free port structure. And, in a subsequent 2011 agreement having to do with how to manage claims against the contractors on the project, Maritime Administration argued it wasn’t obligated to pursue litigation on the city’s behalf.

Department of Justice attorney Evan Wisser argued the case for the Maritime Administration. Here’s a sample of how that went.

“So our argument there is that the trial court simply misinterpreted the plain language of that clause, which says — ”

Appeals court judge Richard Taranto interrupted: “Assume I disagree with you.”

“If you disagree with that,” Wisser continued, “then we have no other argument about the breach on that point.”

The judges seemed a lot less skeptical as they listened to the attorney representing the city, Jason Smith.

Referring to trial court Judge Edward Damich’s opinion, Smith said, “There is not one single witness of the 24 who testified over the course of this trial who disagreed that MARAD had an obligation to design and deliver a port for the Municipality of Anchorage. Those are the witnesses offered by the municipality, and those are the witnesses that were offered by the government. They all said the exact same thing.”

The underlying work led to unstable and hazardous sheet-piling and land at the port, and years of setbacks.

There is no set timeline for when a decision is due from the appeals court, but many local officials are closely following the case. Some state lawmakers may be, too, as they consider two bills that propose the state take over the Don Young Port of Alaskaincluding whatever cash award the city may be due from this litigation.

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