Wednesday, February 09, 2005

City of San Diego v. D.R. Horton San Diego Holding Co. (Cal. Ct. App. - February 7, 2005)

Here's a local case with local flavor on a topic close to my heart. It involves a jury verdict of approximately $5.6 million in favor of a local developer in an eminent domain action arising out of the City of San Diego's taking of 12.69 acres of Horton's land in order to extend State Route 56. Horton thought that this verdict was too low, and filed a motion for (and eventually obtained) a new trial on the ground that the jury's special verdict was inconsistent. Judge Amos granted the new trial because in deciding one portion of the verdict, the jury appears to have used the City's expert's valuation of $445,000 per acre, while on another portion of the verdict, the jury appears to have used Horton's expert's valuation of $850,000 per acre. Horton's argument is that because these two components are inconsistent, a new trial was warranted. Justice O'Rourke agreed, and affirmed the grant of a new trial.

The problem of inconsistent jury verdicts is one that has interested me for quite some time. Early in my academic career, I wrote a law review article on the subject (Rationalizing the Irrational: The Treatment of Untenable Federal Civil Jury Verdicts, 28 Creighton L. Rev. 683 (1995)). More recently, I argued a case in the Ninth Circuit that involved a multimilliondollar jury verdict that had been tossed by the district court on the precise grounds at issue here (inconsistency), and persuaded the Ninth Circuit to reverse the grant of the new trial and reinstate the verdict (Duk v. MGM, 320 F.3d 1052 (9th Cir. 2003)). So I have fairly considered views on the subject, even beyond reading the opinion of the California Court of Appeals.

I'm not a guy who believes that jury verdicts are sacrosanct; indeed, my law review piece argues that in many realms, inconsistent verdicts should indeed be tossed. But this case isn't one of them. Justice O'Rourke -- who's a fellow Harvard Law graduate, and is hardly a dummy -- cogently demonstrates that it looks like the jury applied two different valuations to the two different components of the verdict. But it might well have done so rationally.

The main portion of the verdict -- and the part I'm quite certain the jury focused on -- was the straightforward "value of the land the City took" portion, and on that central issue, it used the City's valuation. (Which is why, of course, Horton wants a new trial.) True, on the second part -- the severance portion -- it looks like the jury used Horton's valuation. But why not? Why should it bother to do anything else? The critical portion of this part of the verdict simultaneously concluded -- against consistent with the City's expert -- that the severance resulted in over $5.4 million in benefits to Horton, which was more than the damages that even Horton's expert claimed the severance caused. So regardless of which valuation you used, the jury was holding that Horton was entitled to no severance damages. It's entirely plausible that the jury, in its deliberations, simply said "look, we all can agree that even if we use Horton's valuation, Horton's not entitled to severance damages, so we all can easily agree on the following result . . ." This part of the verdict is just like dicta in an appellate opinion. We utterly don't care what we say, since it doesn't matter, so let's just say the easiest thing and get it done.

In a case like this, where the jury has done something entirely consistent with the evidence, and has issued a verdict that almost uniformly rejects the testimony of the losing party's expert (on both parts of the verdict), the fact that the jury includes a (meaningless) portion of its verdict that favors the losing party is not properly grounds for the losing party to complain. There's a more complicated waiver issue as well here (for example, why didn't Horton request redeliberation to clarify the ambiguity? Answer: Because it definitely did not want the jury to explain -- quite rationally -- what it had done), but that's just more reason to uphold the verdict.

So I think Justice O'Rourke gets this one wrong. And this from no fan of inconsistent verdicts.

P.S. - I was also somewhat surprised to see the City of San Diego using counsel from Oakland in this case. Do we really have no good appellate lawyers on this issue in San Diego?