Looking for something different to do this holiday season? Reach out to 100 of your favorite friends and family members, play a single-round game of Family Feud, and ask them to name a U.S. Supreme Court decision. Even if they have had more than their share of spiked eggnog, they will likely have the presence of mind to think about the Kavanaugh hearings and big constitutional and social issues. I suspect that the overwhelming number one answer will be Roe v. Wade. Maybe Bush v. Gore will show up on the list. But will anyone mention U.S. v. Spearin? Be honest. Did that decision ever cross your mind? Did you even know that the Spearin Doctrine – our country’s most important construction law doctrine – was decided by the U.S. Supreme Court?
Well, as a reminder, U.S. v. Spearin was decided by our country’s highest court on December 9, 1918, exactly 100 years ago on Sunday. Here’s something you probably didn’t know. It was a unanimous opinion written by Justice Louis Brandeis, who ranks as one of the greatest and most influential Supreme Court justices of all time. Among his many attributes, Brandeis was a strong defender of individual civil liberties, freedom of speech, and the right to privacy – “the right to be left alone – the most comprehensive of rights and the right most valued by civilized men.” He was also skeptical of both big government and big business. And that is evident by his decision.
In classic Brandeis form, the Spearin decision is short, but with a concise factual description and clear and understandable holding. It reflected his view that big government should not take advantage of relatively small enterprises – in this case by giving George B. Spearin, a small contractor, misleading contract documents that didn’t work. I won’t go into the facts of the case – you can find the discussion of the drydock and sewer relocation project that Spearin agreed to build elsewhere. But the doctrine, as it has been applied over the past century, bears repeating.
When a contractor follows the owner’s plans and specifications, and those plans and specifications turn out to be defective or insufficient, the contractor is not liable to the owner for any resultant loss or damage.
Importantly, the doctrine Brandeis established created an implied warranty – not something that has to be included expressly in the contract to be enforceable.
Spearin is as important today as it was for George B. Spearin 100 years ago when he learned that he had finally won his dispute with the federal government. Is it fair for a construction contractor to be responsible for errors in design documents that it could not have reasonably discovered before award? Is it fair for a design-builder to be responsible for design errors in RFP documents that could not be reasonably discovered until its design team performed its post-award design development? Is it fair for owners to tell their contracting parties, “You can’t rely on these bidding documents, but if you do, buyer beware – you own the risk?”
The answers to these questions should be rhetorical, but unfortunately aggressive owners and aggressive lawyers may have a different answer than perhaps you or I would. Spearin helps level the playing field.
So after you finish that game of Family Feud and impress everyone with your Supreme Court acumen, lift a glass to Justice Brandeis and George B. Spearin and toast to the health of the doctrine they helped create. The industry is far better off for their efforts.
Mike Loulakis is President of Capital Project Strategies, LLC, a specialized consulting firm that provides strategic procurement, contracting, and risk management advice to clients that develop and construct capital projects. Mike is both a civil engineer and lawyer, and has been in the construction industry for 40 years. He has a broad range of design-build experience, and currently serves as a member of the WDBC Board of Directors.