Closed Meeting May Only Produce More Questions About Legal Standing For The County To File Suit

There may be another reason that the Shelby County Board of Commissioners’ discussion about suing the builder of the FedExForum was closed other than the reasons given at the time: lawyer-client privilege. It may have been also to eliminate public embarrassment about the basis of the county attorney office’s opinion that Shelby County had “no standing” to file a lawsuit – the county has already given that right away.

The revelation, as one county commissioner termed it, came in response to Commissioner John Willingham’s call for a lawsuit to be filed against general contractor M.A. Mortenson and architectural firm Ellerbe Becket, both of Minneapolis, as a way to get answers to questions that continue to trouble the $250 million project – which, second only to airport runways, is the most expensive construction project undertaken by the public sector here.

With the clock counting down the last days of his term before he and other FedExForum critics Walter Bailey and Julian Bolton leave office, Commissioner Willingham continues his dogged demands to get answers that have eluded him for four years. There is a deep feeling at the Board of Commissioners that extends far beyond the project’s critics that the New Arena Public Building Authority has stonewalled questions, provided information that was tangential or marginally responsive, and played the political card when it would been simpler just to answer the questions put to them.

Most notable was the time when the PBA sent former State Senator John Ford – also vice-president of the PBA – to answer questions when the board of commissioners summoned PBA Chairman Arnold Perl. It resulted in oft-repeated stories in the county government as staffers recount the senator’s “trust me” assurances that everything with the arena project was as it should be.

Signs of Trouble

The first sign of serious trouble hit the news media with the filing of a multi-million lawsuit seeking payment by Memphis firm Morgan & Thornburg Inc., a mechanical subcontractor at FedExForum. The lawsuit was not only a threat to the PBA’s “on time, on budget” mantra, but it posed some political risks, too, in an election cycle for county government.

In mid-January, representatives of Morgan & Thornburg, the PBA, Shelby County, City of Memphis, Mortenson Co. and Ellerbe Becket met in Nashville in a mediation session in hopes of resolving the legal claim. At that time, Mortenson officials said the problem was caused by the design drawings of Ellerbe Beckett, and about midday, the representatives of the architectural firm walked out, saying that there were no design flaws in their work.

Mediation continued without the firm until later in the day when Morgan & Thornburg walked out, complaining that the mediation was not producing any progress on settlement. While eating in a nearby restaurant, Morgan & Thornburg officials were called by the representatives of city, county and Mortenson, and the major points of the settlement were essentially hammered out over the phone.

The agreement: Morgan & Thornburg would be paid $1 million - $350,000 from Shelby County, $350,000 from City of Memphis, $200,000 from Mortenson and $100,000 from the PBA.

Settlement Approval

Because approval by the Shelby County Board of Commissioners was required, the settlement was placed on its agenda in early February to resolve “all…construction claims relative to FedExForum.” The agreement was approved by the commissioners on February 6.

This was pre-garage controversy, so most of the news media dismissed suggestions by complaining commissioners that there were remaining questions that needed to be answered, even with Commissioner Bolton specifically mentioning the garage. With the new realities of the Memphis media – short staffs, emphasis on the sensational and little investment in serious investigating reporting – a number of outlets seemed to join in a celebration that all the loose ends had been tied up (“Cheers For FedExForum, CA editorial, 2/13/06). A notable exception was Jeni DiPrizio of Eyewitness News, whose suggestions that all was not well with the garage elicited mainly dismissive comments from her peers.

Once the agreement was approved by the county board of commissioners, the attorney’s office was instructed to prepare the primary agreement. As part of that process, it appears that Memphis and Shelby County agree to sign away any rights to sue M. A. Mortenson.

Typically, since the administration is charged with complying with county resolutions, the final settlement document is prepared after approval by the commissioners and does not go back for their review. Knowing that Commissioners Bolton, Bailey and Willingham raised no questions at the time, it seems a safe bet that they never saw the waiver of litigation, or all of us would have heard about it.

No Standing

As a result of the settlement, it seems that the county doesn’t have standing in court because it (along with the city) has already given away that right, thus producing the county attorney’s opinion on Commissioner Willingham’s request for a lawsuit.

Despite the meeting closed on the grounds of attorney-client privilege, it seems certain that this question is anything but dead. Clearly, more information about the waiver is needed to explain who made the decision, why the commissioners weren't notified and the ramifications of the limits on the county’s ability to seek damages, such as in a catastrophic event, such as something falling off the ceiling and killing a concert-goer at the arena or a serious building deficiency caused by obvious negligence.

With 13 more days left for this commission, more questions are guaranteed to be in the offing, and depending on the response by the public, it’s an issue that may continue into the term of the new commissioners taking office September 1 desperately hoping that all FedExForum questions will be put to bed once and for all so they won’t have to deal with them.