An expansion of the Denver E-470 toll road triggered a costly contract dispute between AECOM and contractor Flatiron for which legal costs exceeded the damage award. Photo: krblokhin/ Getty Images
Judge Orders Flatiron to Pay AECOM $14.2M in Lawsuit Costs
The design giant got most of what it sought from its former Denver design-build toll road teammate
A federal judge in Denver has awarded AECOM $14.2 million in legal and expert witness expenses in its successful breach-of-contract lawsuit against contractor Flatiron. The two companies had been design-build teammates adding lanes opened in 2020 to the E-470 toll highway in that city.
The judge, in two separate orders, provided AECOM $8.3 million in attorney costs and $5.9 million for expert witness and other expenses. His orders represent one of the final chapters in a costly five-year struggle between the two companies that involved entire teams of attorneys and expert witnesses testifying about complex contract terms, engineering standards of care and technical aspects of the work.
Following an 18-day trial completed in February 2024, a jury awarded AECOM $5.26 million for its claim against Flatiron involving unpaid design work. The jurors rejected Flatiron’s $263.5-million counterclaim for cost overruns and delays it blamed on AECOM's “botched” bid design on the added lanes.
In both his lawsuit cost orders, Judge William J. Martínez cites a clause in the subcontract executed by Flatiron and AECOM. The clause said the party submitting claims must pay its opponent's costs if the plaintiff prevails "on less than half of the claims it makes, including reasonable attorneys’ fees.”
Flatiron lost on two of its three individual lawsuit claims against AECOM.
In making the two orders, Martínez relied on briefs and affidavits as well as his familiarity with the case. Flatiron’s legal team had requested an evidentiary hearing but Martinez said no.
AECOM, the Los Angeles-based design giant, got most but not all that it had asked for. It had initially sought $16 million in combined attorney and expert opinion costs.
About $10 million was for attorney costs, including more than $700,000 in post-trial legal expenses.
Martinez used what is known as the “lodestar” method of calculated fair legal cost—multiplying reasonable hours by rates—to shave AECOM's initial $10.28 million request.
AECOM did cut about $300,000 from its original request, part of that to exclude fees involving separate litigation in state court.
The law firm representing AECOM, Polsinelli PC, did not come cheap. The requested reimbursement included work by firm attorneys Stephen Gurr, clocking 2,693 hours at $638.38 an hour for a total of $1.72 million, and Adam Lewis, reporting 6,551 hours at $497 an hour for $3.26 million. They are identified as "shareholders." Flatiron objected to a 2024 rate increase for Gurr from $500 to $980, calling it opportunistic.
Martinez deducted from AECOM's costs in several instances. He cut the hourly rate for another Polsinelli attorney, Garrick Vanderfin, from $731 to $450; as well as $31,272 for timekeepers, citing a lack of documentation, and $302,000 for what the judge ruled was top-heavy staffing and poor judgment.
The judge also cut back somewhat on AECOM's requested compensation for expert witness fees, from $6 million to $4.8 million, saying they included administrative fees. He made other cuts because he said he saw a lack of staff credentials for some of the work.
Martinez made a big cut on E-discovery costs, $527,000, partly for what he said was a lack of supporting documentation for the work done. He allowed $985,000. While approving $32,000 for a trial technician, he excluded costs for trial supplies, office space and meals, about $25,000 total, as unnecessary.
