A Powell lawmaker’s effort to make it easier for contractors to sue the Wyoming Department of Transportation was shot down by a House committee this month.

House Bill 131, brought by state Rep. Dan Laursen, R-Powell, died on a 3-6 vote in the transportation committee on March 2.

Laursen told the panel that local companies have had trouble with WYDOT contracts and then been unable to sue the department. 

“Obviously we want to make sure that we don’t bring in a lot of lawsuits,” he said, but “I think if we have an issue inside a contract, they ought to be able to discuss it [in court].”

However, WYDOT Support Services Administrator Taylor Rossetti voiced concern that Laursen’s proposal to weaken the department’s sovereign immunity could lead to increased costs.

“There is a perception that the state has deep pockets — and removing this protection only serves to potentially increase costs to the Wyoming taxpayers,” Rossetti said. He noted WYDOT does allow contractors to file a lawsuit against the department — though with some limitations — if they follow certain procedures.

“We’re curious what problem we’re trying to fix with House Bill 131,” he said.

Laursen said he brought the bill at the request of Powell attorney Joey Darrah, explaining that contractors represented by Darrah have had “probably three issues” with WYDOT contracts. Court records show Darrah filed a suit against the transportation department in 2015 on behalf of Mountain Construction, which had a dispute over work it completed on U.S. Highway 14-A between Powell and Cody. The suit was dismissed by then-Judge Steven Cranfill. He said the state’s contract was “very clear” in stating that Darrah and Lovell-based Mountain Construction should have filed the case in Laramie County instead of Big Horn County.

Laursen brought the same bill last year, and WYDOT put together a working group to address the issues and worked with contractors to simplify the procedures and made some changes.

“Our goal at WYDOT is to always be a team player,” Rossetti said.

However, Laursen still believes it should be easier for contractors to sue over disputes they can’t amicably resolve with WYDOT. Laursen said he’s been told the department’s procedures for handling disputes are “really tough to get through” and fall smack in the middle of a project. He said the current set-up feels like “big government.”

“When the contractor and WYDOT are trying to figure out what they can do inside their procedures, it gets almost to the end that the contractor gives up,” Laursen said, “and then they kind of wave their white flag and say, ‘By the way, you can fight us all you want, we’re not going to court because we have immunity.’”

A couple members of the transportation committee indicated they were unconvinced about the problem.

Rep. Jerry Obermueller, R-Casper, a former CPA, said his experience was that contractors who knew how to keep solid records won their cases.

“The ones that didn’t know how to document were the ones that had problems with WYDOT in this area,” Obermueller said.

Rep. Joe MacGuire, R-Casper, said he also has heard anecdotal accounts that WYDOT has not paid on its contracts.

“But I have yet to see a rightful contract that was entered into by the Department of Transportation where they said, ‘Eh, you know what? We’re only going to pay a half or a third or whatever,’” MacGuire said. “Bring me the hard evidence and I will say yes, bad on WYDOT and something needs to be changed, but I just don’t see it.”

Laursen said that, if the committee advanced the bill to the House floor, “I’ll get you some actual facts on this.”

More broadly, MacGuire said the bill appeared to allow contractors to sue the state for various torts as well as contractual items.

“Oh my goodness, talk about opening the door,” MacGuire said, calling that “a major change.”

A state law currently on the books says the transportation commission “may be sued ... in the courts of this state … upon any contract executed by it.” However, the Wyoming Supreme Court ruled in 1998 that the statute was effectively repealed by a more recent law, the Wyoming Governmental Claims Act. It gives government agencies broad immunity from lawsuits.

Laursen complained the Supreme Court effectively “legislated” by finding the claims act superseded the other statute, and said his bill would assert the Legislature’s power over the court.

“I am only asking that the Legislature formally acknowledge that that statute is still valid,” he said.

Rossetti said WYDOT already waives “large portions” of its sovereign immunity if contractors follow a three-part dispute process. However, it retains immunity from things like exemplary or punitive damages, attorney and consultant fees and damages exceeding actual costs. If that immunity was lifted, “there’s really no way for the state to predict what our financial exposure would be,” Rossetti said. He suggested the extreme example that WYDOT could be liable for $1 million worth of attorney and consulting fees on a $2 million contract.

Rossetti added that it’s critical for the department to know that a $50 million contract will cost exactly that.

Over the past 18 years, he said WYDOT has issued nearly 1,800 contracts, and only four have resulted in lawsuits, with just one being dismissed on the basis of sovereign immunity; Rossetti said that suit had other problems as well.

Following the bill’s defeat, Laursen said he plans to bring it again next year.