Florida Under Attack For Favouring Constructors In Patent Suits

by Leroy James, for LawAndTax-News.com, New York

06 March 2003

The Miami Daily Business Review reported this week that at a time when the Florida Legislature is grappling with a huge budget shortfall, the Florida Department of Transportation (FDOT) with approval from Secretary of Transportation Thomas F. Barry Jr, has agreed to indemnify a number of private highway contractors in patent infringement suits brought against them by State Contracting & Engineering Corp.

FDOT agreed to defend four highway contractors who lost a federal patent infringement suit last year, and promised to cover the $9.5 million verdict against them if they lose their appeal. The four contractors had infringed on State Contracting & Engineering Corp.'s patented way of building highway noise barrier walls which were erected along I-95 and Florida's Turnpike.

In addition, the Department of Transportation has agreed to cover the legal costs and indemnify nine more private contractors in another, nearly identical federal patent infringement suit brought by State Contracting. FDOT is the lone defendant in a third suit filed by State Contracting in Broward Circuit Court. A lawyer for the plaintiff in the state court suit says his client is seeking $100 million in lost profits and lost business value.

Critics ask what prompted the FDOT to post the appeal bond, cover the legal fees and promise to pay the damages incurred by the private contractors, and point to FDOT's eagerness a decade ago to use State Contracting's cost-saving construction techniques.

"It's extraordinarily rare if not unprecedented for the state of Florida to intervene on behalf of a private road contractor and to assume potential liabilities of up to $10 million," said Dominic M. Calabro, president of Florida TaxWatch, a non-profit government watchdog group in Tallahassee. "It's especially difficult to understand why the state would do that when we are facing such a significant multibillion-dollar fiscal challenge. Even if it's legal, why would you do it?"

"Why would the state gratuitously, without any justified benefit, put itself out to create potential liability for taxpayers?" asked state Senator Ron Klein (Dem - Boca Raton), vice chair of the Senate Transportation Committee. "If there is a good reason, I'd like to know about it."

Klein promised to raise the issue at the SenateTransportation Committee meeting next week.

Recommended