Wednesday, September 20, 2006

Border Business Park, Inc. v. City of San Diego (Cal. Ct. App. - Sept. 19, 2006)

I'm conflicted about this one.

My conflict doesn't arise, as is typically the case, from an uncertain view of the merits. But, unusually, I'm conflicted about this one instead for utterly results-oriented reasons.

On the one hand, I'm a citizen of -- and, perhaps more importantly, a taxpayer in -- the City of San Diego. As a result, I've got to say that I'm pretty happy that Justice McKinster decided to reverse a huge judgment that the De La Fuente family obtained against the City of San Diego. Huge as in $65.3 million in compensatory damages, $26.4 million in prejudgment interest, and probably another $20 million or so in postjudgment interest. In other words, over $100 million. Plus Justice McKinster affirms the grant of a new trial regarding a related breach of contract claim in which the jury awarded the De La Fuente family another $29.2 million, which (again) would probably be $40 million-plus after interest.

The City has massive financial problems as it is. The last thing we need is to have to pay a $140 million+ judgment. Which it looked like we might well have to do; indeed, the City already offered to settle the case (alongside similar, related claims) for $50 million. But now those essentially all go away (or at least the meat of the cases) in light of Judge McKinster's holding that there was insufficient evidence to support a judgment, essentially holding that these sorts of claims are not cognizable. Whew!

On the other hand, at a different -- again, entirely personal -- level, I'm also a member of the faculty at the University of San Diego School of Law, which has a very tight connection to the counsel for plaintiff in this matter. Two of these attorneys -- Michael Fish and David Niddrie -- are graduates of USD Law School. And one of the (recently retired) named attorneys of the principal law firm for plaintiff -- Thorsnes, Bartolotta & McGuire -- is not only also a USD Law graduate, but is also a very strong (and admired) supporter of the institution.

The contingency fee on a $140 million+ judgment would have been a pretty penny. Even the fee on the $50 million+ settlement offer would have been darn nice. But then there's Justice McKinster's opinion. Darn it.

So there you have it. The City of San Diego is up $140 million+. Plaintiffs' attorneys whom I like are down $50 million+. For me, a mixed bag.

P.S. - One more tangential comment. With all due respect, California appeals are somewhat different. Counsel for plaintiff retained an incredibly smart consultant -- Professor Geoffrey Hazard of the University of Pennsylvania Law School -- to assist with the difficult civil procedure and other issues relevant to the appeal. Which is wise, especially for an appeal of this significance.

But, that said, legal disputes on appeal in Southern California are slightly different than what they may appear to be from the perspective of someone who resides in an ivory tower in Philadelphia. Not that there wasn't plenty of intellectual and local appellate firepower on the plaintiff's side already; after all, both Mr. Fish & Mr. Niddrie are certified appellate specialists. Still, in the end, hiring Professor Hazard -- at no small cost, I can assure you -- was money down the drain.

Sorry about that as well, guys. (At least you knew this was coming, since Division Two gives tentative rulings. Still, I'm sure it's a bummer to see it actually happen.)