Kelo Fallout--Jurors Stepping In Where Judges Fail?

A reader sends along this article reporting on a $7.7 million judgment awarded to a small business owner in San Diego whose property was condemned in order to make way for a new luxury hotel. The article implies that this was an unexpectedly high award. His lawyer "called the verdict a 'home run' ... and important for other property owners." The city had offered $3 million before trial. The city has not announced whether it will appeal.

Given the public choice and other political failures that are endemic to use of the eminent domain power for the benefit of private interests, and the unwillingness of the Supreme Court to do anything about it, it will be interesting to see if verdicts like this signify a beginning for jurors to step up and become more vigilant in ensuring that private property owners are being fully compensated for Kelo-style takings. If so, that would be an interesting and heartening development.

On the other hand, at least some of the award in this case resulted from the business owner's goodwill associated with operating in that location, which presumably would be absent from a homeowner's award.

This is personally interesting to me as well in that several years ago I actually published an article in the Case Western Reserve Law Review where I argued that one function of common law juries was to replicate James Buchanan's Wicksellian unanimity test at the time of application of the law, thereby making up for the non-unanimous voting rules applicable at the time of the enactment of the law. So that juries are one response to the political failures predicted to arise by public choice theory.

david blue (mail) (www):
From your description, it sounds to me as though this jury took the law into its own hands and awarded a judgment well beyond what the evidence warranted. This is a "heartening development"? How is it different from "runaway malpractice awards," other than that it is in keeping with a particular political agenda?
10.31.2005 7:46am
Anderson (mail) (www):

it will be interesting to see if verdicts like this signify a beginning for jurors to step up and become more vigilant in ensuring that private property owners are being fully compensated for Kelo-style takings.

David Bernstein, why are you commenting as "David Blue"? At least change the initials! ;)
10.31.2005 8:53am
Riskable (mail) (www):
In an era where people have lost trust in corporations, it is easy to see how a jury of peers could award a victim damages greater than the norm.
10.31.2005 9:20am
cw (mail):
I agree with David Blue. Todd, please explain how this is different?
10.31.2005 9:29am
frankcross (mail):
Well, this does presnet an interesting juxtaposition with David Bernstein's post on the WTC award and the argument for preemption of antigun litigation.

All these things are the jury system at work, doing justice (one hopes within the perimeters of the law). If the jury ignores the law, the verdict can be reversed or reduced.
10.31.2005 9:36am
John Thacker (mail):
Well, no one said that all the Conspirators had to have the same opinions on issues.
10.31.2005 9:53am
Larry (mail):
This jury ignored the law and is a reason that juries are outdated and should never be employed except in cases of criminal convictions. They are activists who wish to make law rather than apply it.

This jury verdict has ruined the rule of law in America and I doubt that the republic can survive. It is as if they let a killer loose on a "technicality."
10.31.2005 10:14am
Robert Schwartz (mail):
"it will be interesting to see if verdicts like this signify a beginning for jurors to step up and become more vigilant in ensuring that private property owners are being fully compensated for Kelo-style takings."

Either that, or its another example of a jury gone nuts, which would be the more parsimonious explanation.
10.31.2005 10:51am
Rich (mail):
Well Larry what would you suggest as a replacement? I've been jury foreman and the system seemed to work better than the "star chamber". Nice broad brush you used about all juries.
10.31.2005 12:23pm
J. Allan (mail):
What a great thing to happen. This has been my belief for many years.

Most cities will increase property taxes 5 fold on commercial property, when it changes from res. to comm. Also if cities build roads, bridges, highway ramps or other type commercial property, the surrounding property in may cases go down in value.

If, as in KELO, private interests should have to bid market value for what they want. Example: an acre of vacant property in a commercial area may go, even in a small city for a millon or more dollars. Why should a homeowner receive any less than what the city property assessor will eventually appraise the then commercially improved property.
10.31.2005 3:02pm
frankcross nailed it.

It would be interesting to see Bernstein comment about Zywicki's pro-jury nullification post.

It would also be interesting to see if Zywicki thought it was OK for juries to give big awards for individual plaintiffs against large corporations when the plaintiffs' claims were morally strong, but legally weak.

The message I get from Bernstein and Zywicki is that juries should follow the law, except when breaking the law would advance a conservative cause.

Personally, I think Zywicki has the better point. Juries were designed as a democratic (small "d") check against the government employees who make, enforce and apply the law. This concept of juries is a key factor behind Scalia's Blakely decision.
10.31.2005 3:22pm
jeanneb (mail):
The hotel developer will have to pay the judgment under terms of its agreement with the city.

So much for the city learning a lesson. They have nothing to fear from over reaching.
11.1.2005 4:58am
Robert Cote (mail) (www):
The presumption of a runaway jury is just that presumption. Lawyers fees alone will eat up much of the "windfall" even if the city decides not to appeal. Seeing final purchase prices double is not uncommon in these cases. From a recent San Buenaventura case:

"The city will pay $599,000 for the single-story house at 169 S. Ventura Ave., about double what it offered earlier this year after an independent appraisal valued the 3,144-square-foot property at $315,000, according to a city memo released Friday."

The tragedy of ED is not in its use but its abuse. Since ED is not a criminal issue and it isn't really possible to punish the bad actors there's no reason to object to using monetary punishment to ameliorate bad behavior.
11.1.2005 6:34am