Law Firm Big Winner in Canalside Suit


The only winner so far in the nearly four-year-old wrongful termination lawsuit filed against the state by the DiPizio Construction Company on the replica canal project is unquestionably the Buffalo law firm of Phillips Lytle, and the case is far from over.

According to the numbers supplied to this reporter by Empire State Development under several Freedom of Information (FOIL) requests, state taxpayers have paid Phillips Lytle nearly $2.5 million as of January, 2017, to defend the state against the suit by DiPizio which is seeking damages for its termination by the state on the signature canalside project back in July of 2013.

The actual total paid to the Buffalo law firm as of January of 2017, according to Empire State, is $2,477, 657. 25.  And that total is three months old and counting as the case is proceeding through several courts and a key trial on the question of the legality of the termination may not be held until late next year, according to legal sources.

All this money is being paid to defend the state in a case they claimed was open and shut back in 2013 when DiPizio Construction, the low bidder on the $20 million project, was terminated because, according to Erie Canal Harbor Development Corporation, it was falling behind the construction schedule and was not meeting its obligations on materials and with coordinating work with subcontractors.

DiPizio immediately challenged ECHDC, claiming the firm had been made a scapegoat for state problems.  Attorney Michael Ferdman, representing DiPizio, had called the termination notice in May of 2013 a political document issued to cover up “the bad faith administration of the construction agreement” that forced long delays and drove up “not just DiPizio Construction Co.’s costs but taxpayers’ costs.”

The lawsuit brought by DiPizio maintains the 35-year-old local firm has been severely damaged by the negative publicity it received as a result of the termination that was well publicized by ECHDC at the time which was trying to deflect blame for falling behind the schedule laid out by Albany for the replica canal project.

After DiPizio was terminated, possibly without even a board vote by ECHDC (still to be legally determined), the state awarded the signature canalside project to Pike Construction of Rochester, a firm with close ties to former Lt. Gov. Robert Duffy who was also a former mayor of Rochester.

The meter is still running at Phillips Lytle as there is no end in sight to the legal battle which has taken a heavy toll on the construction company and cost state taxpayers millions in legal fees.  No winners so far except the law firm and the day of final reckoning is still in the distance.  But eventually, it will come.