Tunneling through Miami: Subterranean Legal Matters

The promise that tunnels can significantly improve the throughput of our transportation systems is here. Perhaps inspired by Miami Mayor Francis Suarez’s belief that tunnel-makers could build a new mass transit system in Miami’s urban core, Fort Lauderdale commissioners recently voted to accept a proposal to build underground transportation in the city. Not to be outdone, it now appears that Miami Beach wants to be boring, too. According to a July 28, 2021, City of Miami Beach commission memorandum, Miami Beach planners could soon be directed to study the possibility of building underground tunnels to modernize—and streamline—transportation on the world-famous barrier island. 

Miami-Dade County is no stranger to tunnels. On Aug. 3, 2014, the PortMiami Tunnel, which was developed using a public-private partnership approach, opened five years from its inception. The tunnel diverts over 80 percent of the street-clogging cargo trucks headed for the port away from downtown Miami. Thousands of cruise-ship passengers follow suit. While it has been largely smooth sailing for the $643-million tunnel, the type of subterranean transportation infrastructure now being considered by local officials is on an entirely different scale. With all of that digging comes a mound of legal issues. Issues all construction-related entities must be leery of when helping to create such transformative projects.

Notwithstanding the possibility of immeasurable rewards, tunneling and underground construction works impose risks on all parties involved, and on those not directly involved, in the project. The very nature of tunnel projects implies that any potential tunnel owner will be facing considerable risks when developing such a project. Due to the inherent uncertainties, including ground and groundwater conditions, there might be significant cost overrun and delay risks, as well as environmental risks. Accordingly, upfront risk analysis and contractual origination are essential for any party to an underground project. The best way to avoid litigation is to be prepared for litigation, and the person with the best documentation will win most cases.

The system of competitive bid contracting is based on the assumption that the work to be performed, and the conditions under which it is to be performed, are perfectly and unambiguously defined in the contract documents, so that a simple comparison of bid prices is sufficient to determine a fair selection and the contract award is made to the lowest responsive bidder. In practice, this ideal is rarely reached in any construction contract, but it is incredibly illusory for tunnel construction, owing to several peculiarities inherent in underground work:

• Tunnels are invariably lengthy structures, and over extended lengths the characteristics of the ground (and groundwater) may vary widely and unpredictably. Despite the most comprehensive geotechnical investigations, the exact nature of the ground is never completely revealed until it is exposed by excavation at the tunnel heading. As a result, the work that is actually performed may differ in small or large measure from that expected by either or both parties at the time of contract award;
  
  
• The methods, equipment, and skills required for safe and economical tunnel construction depend on the nature of the ground, and may be disproportionately sensitive to small changes in ground characteristics.  In particular, small changes in groundwater content or permeability (as present in South Florida), which are especially difficult to predict accurately, may have significant effects on how the work must be performed;
  
  
• Preconstruction investigations can determine the characteristics of the existing ground. The processes of construction may change these characteristics (e.g., distressing rock joints by excavation may cause them to open, and convert a dry tunnel into a waterfall). The contractor’s choice of equipment and construction methods, and the skill of his workers, may increase or decrease deleterious changes in ground characteristics during construction;
  
  
• In urban tunnel work, the existence and location of unknown buried obstructions and hazardous conditions (such as gasoline derived from abandoned leaking underground storage tanks) is difficult to determine beforehand and can have major effects on the work; and
  
  
• In urban work, it is not uncommon that the cost of dealing with third parties (government regulations, adjacent structure protection, support and relocation of utilities, hauling and disposal of excavated materials, traffic maintenance, site clearance and preparation, and restoration of the surface after completion of construction) may equal or exceed the cost of constructing the desired facility. 
  
  

Correspondingly, for tunnel construction, one of the greatest sources of conflict during a project is the allegation of “changed conditions,” or more specifically, “differing site conditions.” Typical industry contracts will not promote any parties’ interests when these disputes arise. Therefore, it is imperative that parties are protected by finely tailored and innovative contracts; otherwise, protracted and expensive litigation will certainly ensue.

Tunnel construction can be an arcane art to many in the legal profession, and much of the time and cost of litigation is expended on educating the lawyers and judges to say nothing to the trier of fact on the technical terms and practicalities of tunnel construction. Since this education is perforce rudimentary, some lawyers may tend to try to find grounds for deciding the case on the basis of fine points of law and alleged legal precedents, rather than what is practicable, realistic, and effective in the tunnel heading (which they do not understand). This situation satisfies neither the owners nor the contractors. While sometimes unavoidable, adept counsel can steer parties out of these burdensome fights.

Ultimately, tunnel construction remains an esoteric endeavor. It will always be a field in which honest professionals can and will disagree. However, an experienced party with legal assistance—during the entire life cycle of the project—can and will take advantage of the inexperience of other parties.