Most of the attention given to our country’s aging infrastructure has concerned what we should do to fix it. Most of the attention contractors have given it has concerned how they can fix it. However, contractors should also be giving attention to their current liabilities on aging – and long ago completed – infrastructure projects. Think you don’t have to worry about the overpass you completed twenty years ago, based upon the U.S. Supreme Court’s decision not to reviewJacobs Engineering, Inc. v. State of Minnesota, which concerned a decision of the Minnesota Supreme Court regarding the statute of repose, think again.
The issue before the Supreme Court was whether the State of Minnesota could resurrect through legislation liabilities the statute of repose had extinguished. Understanding why this issue is so important to the design and construction industry requires a basic understanding of the statute of limitations and statute of repose. Generally, a statute of limitations bars claims brought a certain period of time after the injury giving rise to the claim occurs (or a claimant first learns of the injury). Whereas, a statute of repose bars all claims occurring after a certain period of time no matter when the injury occurs (or a claimant first learns of the injury).
For example, in Pennsylvania there is a two year statute of limitations on negligence claims. If I am injured because of contractor’s faulty workmanship today (and I know about my injury) I have two years from today to bring a lawsuit against the negligent contractor. Otherwise, the statute of limitations bars my claim.
On the other hand, the Pennsylvania statute of repose is 12 years. Therefore, if I am injured today because of a contractor’s faulty workmanship, which the contractor completed more than 12 years ago, my claim is barred no matter how soon I bring it after learning of my injury.
Seems straightforward and basic until you consider what happened in Minnesota following the infamous (and tragic) I-35 bridge collapse. In 2008, after the bridge collapse, the Minnesota Legislature enacted a statute called the “compensation statute” that allowed the State of Minnesota to recover from contractors any payments it made to victims of the bridge collapse to the extent that the contractor caused or contributed to the bridge collapse. The problem was that the I-35 bridge was completed in 1962 and the Minnesota 15-year statute of repose had long ago run.
Jacobs Engineering, who did not actually work on the bridge project in the 60’s but had acquired a firm that did, challenged the Minnesota Legislature’s ability to retroactively change the statute and revive extinguished claims on constitutional due process grounds. The Minnesota Supreme Court upheld the retroactive nature of the compensation statute effectively vitiated the state’s statute of repose. Jacobs Engineering then sought review of the Minnesota Court’s decision by the U.S. Supreme Court. While several construction trade groups filed amicus (“friend of the court”) briefs in support of Jacob’s appeal, the Supreme Court ultimately declined to review the case. Therefore, effectively letting the Minnesota Court’s decision to stand.
AGC was one of the trade groups that filed a brief urging the Supreme Court to review the Minnesota Court’s decision. The AGC’s brief underlined the obvious vital role that statutes of repose play for the design and construction industry and also why contractors should care about the Minnesota Court’s decision even if you do not perform work there.
So, why should you care? Because as our nation’s aging infrastructure continues to deteriorate it is reasonable to assume that a similar catastrophe (or even a less tragic accident like a water main break causing property damage), while unfortunate, will occur. If and when an incident involving aged infrastructure does occur, Minnesota’s actions (and now the Court’s decision not to review the case) will encourage other state governments to pass legislation that retroactively revises extinguished claims against potentially liable contractors. Indeed, prior to Minnesota, several other states had already done what Minnesota did with varying levels of success. In essence, your state’s statute of repose is only good so long as your state feel like it is. This uncertain affects not only the potential liable contractors but also their insurers who rely upon the statute of repose in determining risk.
What this all means is that if you live in a jurisdiction that does not pass ex post facto laws which seek to recover from contractors for unfortunate catastrophes for work completed beyond the statute of repose date, then the statute of repose in your jurisdiction should protect you from certain claims. On the other hand, with elected officials beholden to constituents that demand that a wrong be righted and that someone be held accountable, it is certainly possible that other jurisdictions could take actions similar to Minnesota, especially considering the U.S. Supreme Court’s decision not to review the case.
Add this to the list of concerns that infrastructure contractors have when considering whether state and federal governments will ever get around to addressing the aging of our nation’s infrastructure.
Wally Zimolong
Wally represents contractors (and subcontractors) and developers. His clients build and develop residential, commercial, and industrial properties nationwide. Wally enjoys working with the owners of the businesses he represents because they tend to be entrepreneurs and all around interesting people.
