CT Port Authority claims immunity from lawsuit; its own co-defendant objected

The Connecticut Port Authority (CPA) is claiming in court that it is “an arm of the state,” and that its Harbor Development Agreement (HDA) constitutes a public-private partnership under state statute making them immune from being sued for money allegedly owed to a subcontractor , according to court documents.

The CPA is seeking to be dismissed from the lawsuit, but in an interesting turn, the Port Authority’s own construction manager and co-defendant in the lawsuit, Kiewit Infrastructure, which is overseeing the redevelopment of the State Pier into an offshore wind power hub, and Travelers Casualty and Surety Company of America, objected, arguing in court that the CPA is not immune from lawsuits.

Blakeslee Arpaia Chapman, Inc, the subcontractor suing the CPA and Kiewit for unpaid work, argued that, according to state statute, the CPA “shall not be construed to be a department, institution or agency of the state,” and that it “shall have the duty and power to… sue and be sued in its own name.”

The Port Authority, however, is arguing that is a “limited, narrow interpretation of the CPA’s enabling statutes,” that ignores the fact that the redevelopment of the State Pier is a public-private partnership under the HDA and that such a partnerships “shall not be construed as waiving the sovereign immunity of the state or as a grant of sovereign immunity to the contractor or any private entity,” under state statute 55d.

Whether the Harbor Development Agreement entered into by the CT Port Authority, Gateway New London, LLC, and Northeast Off Shore, LLC constitutes a public-private partnership was a question that went before the State Contracting Standards Board (SCSB) and the Office of the Attorney General in 2022 and 2023.

According to the SCSB’s findings , while the Harbor Development Agreement says it’s a public-private partnership, the Port Authority never went through the proper legislative procedures to authorize such a partnership under the state’s 55d statute, like a public hearing, and because the statute had sunset roughly one month prior to the HDA and was only extended by the legislature to include the Department of Transportation.

The SCSB asked Attorney General William Tong to weigh in on the matter with a formal legal opinion. Tong basically indicated the designation of public-private partnerships for quasi-public agencies are essentially public-private partnerships in name only.

According to the formal opinion , issued in 2023, Tong says the partnership “might be characterized – colloquially, in business documents, and by the General Assembly – ‘as public-private partnerships,’ since they are partnerships between government and private entities even though they are not created under the authority of Chapter 55d of the General Statutes.”

Despite not jumping through the legislative hoops for a public-private partnership, Tong ultimately concluded the Port Authority “was eligible for Chapter 55d partnerships to the same extent as other quasi-public agencies from 2015 until June 27, 2021.”

“There is no record that the CPA followed or attempted to follow the approval and notification process of the statute, despite the project being in progress for close to two years before the statute lapsed,” the SCSB wrote in their report. “The HDA, which is a public-private partnership, was executed a month after the lapse of the public-private partnership statute.”

Kiewit and Travelers, however, not only reiterate the Port Authority’s statutory language allowing them to be sued, but also cite their establishment of an alternative dispute framework in the contract as evidence, and then the CPA’s own public statements denying the HDA was a public-private partnership, citing comments made by both the CPA and the Office of Policy and Management (OPM) in the SCSB’s 2023 report .

In those comments, the CPA and OPM indicate that the use of the words “public-private partnership” “does not cause the HDA to fall under Chapter 55d.”

“While the phrase ‘public-private partnership’ is widely used, the type of P3 enabled by Chapter 55d is very specific in that it allows for the privatization of public facilities so that the private partner can take on the typically public responsibilities of design, finance, build, operate, and maintain of that asset with agreed upon objectives to be met set by the public sector,” the CPA and OPM wrote in their comments. “That is demonstrably NOT what is happening through the HDA.”

The Port Authority’s argument in court that they are immune from lawsuits has raised some eyebrows at the SCSB, according to meeting minutes, in which the SCSB staff attorney Felman provided a brief report reminding the board they have no authority to intervene, and “the concerns about improprieties, ethical violations, and illegal conduct were unfounded.”

The Connecticut Office of State Ethics did find ethical violations and issued fines against Seabury Capital , a consulting firm, twice and against former CPA board member Henry Juan.

The State Pier project has faced numerous issues, including a ballooning cost , delays, ethical violations found by the Office of State Ethics, possible contractual issues raised by the SCSB, and finally this lawsuit.

The Port Authority issued its own objection to Kiewit and Traveler’s objection, reiterating their claims of sovereign immunity, and then appealed to a higher court for a decision on whether the Port Authority should be dismissed from the lawsuit based on its sovereign immunity claim.

“The CPA was created as a quasi-public agency authorized to enter into public-private partnerships,” the Port Authority argued. “Connecticut statutory and common law make clear that the CPA is an arm of the state and is entitled to sovereign immunity.”

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