LOS ANGELES — Milwaukee-based rolling stock manufacture Talgo and transit agency LA Metro have settled a pair of lawsuits filed in 2022 over a cancelled contract for Talgo to refurbish LA subway cars, an attorney for Talgo reports.
LA Metro sued Talgo in September 2022, saying Talgo had defaulted on the contract to refurbish 74 railcars under a $90.5 million contract/ Talgo filed a countersuit the following month seeking $48.8 million that it said it was owed after the contract was cancelled [see “Talgo, LA Metro sue each other …,” Trains News Wire, Oct. 24, 2022].
Thomas Borncamp of the LA law firm Yukevich Cavenaugh said in a recent email to Trains News Wire that under the settlement after three years of litigiation, LA Metro’s lawsuit has been dismissed, while LA Metro paid Talgo $12 million to address the Talgo suit.
“We are very pleased with the result that shows that Talgo performed on the rail car refurbishment project and the contract,” Borncamp wrote, “and deserved compensation for its work when it was terminated by Metro.”
Court documents show the suit was dismissed with prejudice, meaning it cannot be brought again, on June 23. Talgo said in a statement from its headquarters in Madrid that the settlement will result in a net cash surplus of $6 million and a negative net project result of $8 million “based on the most prudent scenario. However, the company continues to work with its suppliers to minimize the resulting negative impact as much as possible.”
I would guess Talgo kind of regrets it’s decision to ever enter the U.S. market.
(Although Nippon-Sharyo and CRRC are kind of in the same boat).