Judge Affirms $383 Million Verdict Against Toshiba
A federal judge upheld a major jury award following a breach of warranty case concerning a Michigan hydro plant.
Updated on Oct. 20, 2026 in Utilities
Live Poll
Should utility ratepayers be responsible for costs following a contractor's breach of warranty?
U.S. District Judge F. Kay Behm affirmed a $383 million jury verdict against Toshiba America Energy in a breach of warranty case. The ruling followed the rejection of Toshiba’s request for a new trial regarding upgrades performed at the Ludington Pumped Storage facility.
Why it matters
The lawsuit centered on alleged engineering and design defects discovered at the power plant in 2019. The court determined that the utilities involved did not waive their warranty rights despite the complexities of the massive infrastructure project.
The original contract for the facility overhaul was valued at $560 million. Following the equipment failures, repairs performed by Voith cost more than $508 million, while operational limits restricted the plant to 50 hours of use per year.
The players
F. Kay Behm
F. Kay Behm is the U.S. District Judge who presided over the litigation and issued the ruling to uphold the jury verdict.
Toshiba America Energy
Toshiba America Energy is a division of the global electronics and engineering conglomerate that faced allegations regarding hydro plant construction standards.
Voith
Voith is a global engineering firm that was hired to conduct the repairs after defects were identified at the pumped storage facility.
The details
The utilities alleged that Toshiba used unsuitable metal and removed stainless-steel overlays, leading to stress-related cracks in discharge ring extensions. While the utilities sought $780 million during the trial, the jury ultimately awarded $383 million for breaches in engineering, design, and construction.
Timeline
2010: Utilities contracted Toshiba for the hydro plant overhaul.
2015: Upgrade work began at the Ludington Pumped Storage facility.
2019: The utilities discovered alleged defects in the equipment.
2023: The MPSC permitted tracking of repair costs.
December 2025: A jury returned the original verdict.
Market Landscape
This dispute highlights the legal and financial risks associated with large-scale utility infrastructure overhauls. The litigation signals a shift in accountability, as utilities increasingly pursue contractors to recover costs following major equipment failures.
The outcome of this case may influence local utility rates if the companies involved are permitted to recover repair costs from customers. Residents should monitor future regulatory filings regarding potential surcharges or service adjustments linked to the facility's restoration.
The takeaway
This case underscores the importance of stringent warranty enforcement in multi-million dollar infrastructure contracts. Utilities must balance rigorous oversight with the need for project completion to avoid long-term operational liabilities.
Further reading
For broader context on energy infrastructure oversight, visit the Utilities section.
Source note: This article includes information reported by Engineering News-Record (ENR) magazine.
Live Poll
Should utility ratepayers be responsible for costs following a contractor's breach of warranty?
