Federal claims court sides with Anchorage in lawsuit over Port of Alaska expansion project

ANCHORAGE, Alaska (KTUU) - After seven years pending in the court system, the U.S. Court of Federal Claims on Thursday ruled in favor of the Municipality of Anchorage in the lawsuit it filed against the U.S. Maritime Administration over the city’s port expansion project.

“It’s an enormous vindication of what we’ve been saying all along, and that’s basically that the federal government had control of this project and they didn’t perform — they messed it up,” Assistant Municipal Attorney Robert Owens said.

The municipality sued contractors involved in construction in the Port of Anchorage Intermodal Expansion Project over a decade ago. In 2013, the city sued PND Engineers Inc. for $100 million in damages for the failed construction at the Port of Alaska, and in 2017 a settlement was filed with that contractor. The Port of Anchorage was renamed the Port of Alaska in 2017.

Seven years ago the city then filed a suit against the U.S. Department of Transportation’s Maritime Administration, or MARAD, for more than $300 million in failed construction at the port. In 2020, a federal judge allowed that lawsuit to proceed.

In an opinion and order released on Thursday, U.S. Court of Federal Claims Judge Edward J. Damich found that the government breached its 2003 and 2011 agreements, or memorandums of understanding, with the municipality.

The court heard from 24 witnesses during a trial that lasted nine days earlier this spring, according to the opinion. The city had argued that the government’s 2003 and 2011 agreements had required the U.S. Maritime Administration to provide technical expertise to oversee, design and construct the expansion project “free of defects,” according to the court documents.

Anchorage had requested more than $367 million in damages.

“In contrast, the Government countered with its evidence and arguments alleging that Anchorage was the party responsible for managing and executing the Project, thus, MARAD did not breach any duties under the Agreements,” the opinion reads.

In Thursday’s opinion, Damich agreed that the Maritime Administration had failed to enforce its contractual remedies or administer funds properly.

The federal court has not yet made a final decision regarding damages that could be awarded to the municipality, a press release from Mayor Dave Bronson’s office notes.

“The Port of Alaska is a vital piece of infrastructure for all Alaskans, with roughly 90% of our population touched by goods that come through the Port,” Bronson is quoted as saying in the press release. “This is a victory for Alaska. The Court’s decision comes at a crucial time as we are working with state and federal partners to secure nearly $1.6 billion to repair the Port, to ensure our supply chain is kept intact, and guarantee food security for our citizens.”

Owens said the municipality will find out how much they’ll receive when the court makes its second decision regarding damages in this case. Owens said both sides have 10 days to submit their final arguments over the damages as they look forward to replacing the aging docks through the Port of Alaska Modernization Program.

“This decision gives us hope that we’ll be able to move on with the next phases and keep things going the way we expect them to,” Owens said.

Editor’s note: This article has been updated with additional information.