Department Of Transportation v. White Oak Corporation
The 2008 Connecticut Supreme Court held in Department of Transportation v. White Oak Corporation that "whether an arbitration is barred by the doctrine of sovereign immunity pursuant to Connecticut General Statutes §4-61(a) is a matter for the courts, not for the arbitrators, to decide." White Oak Corporation filed two notices of claims and demands for arbitration under C.G.S. §4-61(b) against the Department of Transportation. Each sought damages for the department's alleged wrongful termination of a public works contract. The first concerned the reconstruction of the Tomlinson Bridge in New Haven. The second, at issue in this appeal, concerned the reconstruction of a bridge and parts of Interstate 95 in Bridgeport. The department commenced an action in the Superior Court to enjoin the arbitrations, alleging a lack of subject matter jurisdiction due to the state's sovereign immunity given White Oak's failure to comply with notice requirements in C.G.S. §4-61(b). The court rendered judgment for White Oak on the Bridgeport contract allowing a sole claim of wrongful termination to proceed. The court dismissed as moot the Tomlinson injunction action after the Tomlinson arbitration panel issued a final award rejecting the wrongful termination claim, which the court confirmed. White Oak filed a second Tomlinson action, which the court declined to enjoin. The 2008 Supreme Court reversed that decision in White Oak I, finding sovereign immunity barred the claim. Thereafter, the Bridgeport arbitration panel determined that the department did not terminate the contract but, finding a separate claim for damages, awarded $4.7 million in liquidated damages and prejudgment interest of $4.9 million. The court denied the department's application to vacate the award. The department appealed. The Appellate Court reversed the judgment. After determining that no wrongful termination transpired, the panel lacked jurisdiction to award damages. By adopting White Oak's proposition that arbitration rules authorized the panel to determine the parameters of its own jurisdiction and, then, determiningcontrary to the court's decision in the injunction actionthat White Oak's demand for arbitration contained claims beyond that for wrongful termination, the panel exceeded its authority and rendered an award predicated on claims over which it lacked jurisdiction. The panel's determination of the scope of its own jurisdiction under C.G.S. §4-61 ran directly contrary to the holding in White Oak I. The department did not waive judicial review of arbitrability.