Judge orders minority contractor and large construction companies to resolve differences in arbitration
25th November 2013 · 0 Comments
By Mason Harrison
A federal judge has denied a request to reopen a case involving a Louisiana-based minority contractor and two of the nation’s largest construction firms, encouraging all parties to resolve their legal wranglings, sooner than later, through court-mandated arbitration.
U.S. District Judge Helen G. Berrigan found no reason, in a Nov. 12 decision, to reexamine the issues in a case that has pitted one of the state’s few minority contractors against large out-of-state firms amid charges of race- and gender-based discrimination.
In 2010, J&A Construction Management contracted with F.H. Paschen, a Chicago-based construction firm, to build two schools in the New Orleans area, including Mildred Osborne Elementary School. J&A hired Pennsylvania-based 84 Lumber to help provide materials for the two federally funded school projects, but the relationship between the three firms quickly soured over charges of outstanding debts and mismanagement.
In July, Berrigan backed 84 Lumber’s request to settle J&A’s suit against the company in arbitration, following claims by J&A owner, Addie Mills, that 84 Lumber, one of the nation’s largest suppliers of building materials, failed to secure adequate bond coverage for the construction projects, leaving her firm bankrupt after F.H. Paschen, the lead contractor for the development projects, cut funding over delays.
Mills, one of only a handful of Black women in the construction industry, says she was forced to close her firm and lay off more than a dozen employees after the projects went south, claiming her treatment at the hands of 84 Lumber was steeped in gender and racial bias in an industry not known for its diversity. “I’m glad about this decision,” Mills says. “Anything that keeps 84 Lumber from getting more money is a good thing.”
The Pennsylvania-based company had asked Judge Berrigan to reopen portions of the case not subject to arbitration with J&A, allowing 84 Lumber to relitigate its claim against F.H. Paschen that the firm still owes the building supplier millions of dollars for construction work connected to both school projects. Berrigan, however, issued a decision, reasserting the court’s previous arbitration order, to “stay the proceedings at this time” in the “interests of judicial economy and the prevention of inconsistent results.”
Kristen Morris, with the law firm Gauthier, Houghtaling & Williams, says the decision is good news for J&A construction because it prevents a decision about the case from being made between F.H. Paschen and 84 Lumber that would bar J&A from being able to represent its interests in any new legal proceedings. “If for example,” Morris says, “a decision was made that would indicate F.H. Paschen does, in fact, owe money to 84 Lumber, then we would want J&A to be a part of that decision because it could potentially affect J&A.” James Williams, a partner at Gauthier, Houghtaling & Williams, is representing Mills in the case.
But it remains unclear what happens following the court’s decision. Berrigan noted J&A’s failure, to date, to begin arbitration proceedings with 84 Lumber and stated, “[T]his Court…is sympathetic to 84 Lumber’s desire to effectively resolve the issues” and “is also…troubled by J&A’s announcement that arbitration will proceed ‘at the time it sees fit.’” Morris did not provide a timeline for when J&A and 84 Lumber will meet to resolve the case.
Representatives from F.H. Paschen, which supported 84 Lumber’s request to reopen litigation in the case, did not respond to repeated requests for comment about Berrigan’s decision and Jeff Nobers, vice president of corporate communications for 84 Lumber, said, “We don’t have anything to say about the case at this time.”
This article originally published in the November 25, 2013 print edition of The Louisiana Weekly newspaper.