Copyright © 2019 Albuquerque Journal
The city has put its Build Your Dreams nightmare to bed, but it will not get any money in the high-profile dispute.
Albuquerque recently settled its lawsuit against the Chinese bus company it claims delivered problem-plagued vehicles for Albuquerque Rapid Transit, a $135 million public transportation project that remains on hold.
BYD Motors – short for Build Your Dreams – will pay the city nothing under the terms of the agreement, which resolves the case in U.S. District Court in New Mexico.
But the settlement prevents the company from countersuing the city for breach of contract.
It also formally terminated both parties’ obligations under the original 2017 purchase agreement and established the conciliatory statement both would provide the media.
The city’s lawsuit, filed in December, had sought undisclosed damages, attorneys fees, court costs and more. It alleged breach of contract, breach of warranties, fraudulent misrepresentation and more.
Robert Desiderio, the city’s outside legal counsel, said it would have been difficult to demonstrate the city had incurred significant monetary damages because of the 60-foot electric buses it sent back to BYD in November.
That’s partly because the city never paid BYD any of the approximately $22 million it would have owed under the terms of the original agreement.
Given that BYD could also countersue, Desiderio said, settling was the best option.
“A lawsuit like this would take years – discovery would be extensive – therefore the costs would be very great,” he said Friday. “And comparing to what we saw would’ve been the possible damages (to the city) it wasn’t worth proceeding. It was better for the city to move forward.”
The city has paid $138,322 in outside legal fees in the case, but one top city administrator contends the city was right to pursue it.
“Our contractual obligation to purchase these buses was still there as long as … this issue hadn’t been resolved,” said Albuquerque Chief Operating Officer Lawrence Rael, adding that the city has used the money it would have spent on BYD vehicles to order an ART fleet from another company.
Those buses – which are diesel as opposed to electric – are cheaper, Rael said.
BYD’s Albuquerque-based attorney declined to comment Friday.
The settlement, signed May 19 by the city’s chief administrative officer, Sarita Nair, outlined the language both parties agreed to issue to the media. The statement reflected a tone change from the acrimony displayed last year. It said, in part:
“Although the parties made public statements in defense of their respective positions during the dispute, they are now committed to moving forward and wish each other success.
“The City supports BYD’s pursuit of its mission to expand zero-emission public transportation with the next generation of high-quality electric buses. BYD supports the City’s commitment to the Albuquerque Rapid Transit project and wishes the City best of luck on its completion and successful operation.”
Mayor Tim Keller had previously called the BYD buses “problematic” and unsafe, and the city in November rejected the 15 the company had produced. In filing the lawsuit against BYD, the mayor said, “We need to hold them accountable for what they’ve done to our city.”
BYD said in its own statement at the time that it disputed the mayor’s “false and misleading statements” about its buses.
The city’s lawsuit alleged numerous problems with BYD’s 60-foot articulated electric buses. They include malfunctioning brakes, cracked and rusting frames, exposed wires and batteries “that could catch on fire with little possibility of putting out the fire.” It also said the vehicles did not meet the represented miles-per-charge standard.
BYD never filed a response to the complaint in court, and the parties spent the past few months in mediation, according to federal court records.
Since returning BYD’s buses, the city has ordered ART buses from New Flyer of America. But ART – which includes bus-only lanes in the middle of Central Avenue – is not expected to start running until next year, more than two years after originally scheduled.