Posted by: Patricia Salkin | August 6, 2011

Fed Dist Court Orders New Trial Due to Inconsistent Verdicts in FHA Discrimination Suit

The Anderson Group and Gail Anderson brought suit under the Fair Housing Act against the City of Saratoga Springs, claiming disparate treatment, disparate impact discrimination and perpetuation of segregation.  The jury found the Anderson Group proved disparate impact discrimination, and the City failed to prove the defense of a legitimate government interest, as well as finding that the Anderson Group proved the City engaged in the perpetuation of segregation, but that the City showed a legitimate government interest and that there was no less discriminatory alternative.  The Jury also found that both plaintiffs failed to prove the City engaged in disparate treatment, as well as finding that plaintiff Gail Anderson failed to prove the City engaged in disparate impact discrimination or engaged in the perpetuation of segregation.  The jury then awarded the Anderson Group $1 million in compensatory damages.  The City proceeded to file a motion for judgment notwithstanding the verdict, for a reduction in damages, or a new trial.  The United States District Court for the Northern District of New York granted the City’s motion for a new trial, or alternatively granted a remittitur of the damages award should the order for a new trial be overturned on review.

Addressing the City’s motions, the court first had to address whether the Anderson Group had standing to bring suit.  The court stated that in order for a party to have standing, the party must show they meet the “irreducible constitutional minimum.”  As such, the party must show an injury in fact, a causal connection, and that it is likely the injury will be redressed.  The court further noted that under this standard, courts admit standing to “developers asserting challenges under the FHA against municipal decisions that present a barrier to developments.”  Under this standard, the court found the evidence at trial was sufficient to grant standing.

The court then addressed the potential inconsistency in the jury’s verdict, as “the proof did not distinguish between Gail Anderson and the Anderson Group and so the jury’s finding in favor of the Anderson Group is inconsistent with its finding against Gail Anderson.”  Also, the City contested the consistency of the verdict since the jury found the City proved its governmental interest defense on the perpetuation of segregation claim, yet failed to prove the same defense on the disparate impact claim.  Addressing the legal standards, the court stated that generally, such an objection must be made prior to the excusing of the jury, but nonetheless may be accepted where the inconsistency was not noticed until after the jury is dismissed, or where the error is fundamental. Under these standards, the court attempts harmonize the verdicts and should order a retrial where no harmony is achievable.

Addressing the jury’s verdict, the court failed to find that the City waived its objection after the jury was dismissed, as the complicated nature of the case and the verdict “made it entirely reasonable, and excusable, for Saratoga not to immediately voice an objection to the verdict’s potential inconsistency.  Even the court, upon several reviews, strained to digest the verdict.”  Thus, the court found the objection to be timely and granted review.

Addressing the inconsistency of the jury’s finding regarding the City’s defense of legitimate government interest with no less discriminatory alternative, the court found the inconsistency could not be reconciled as there were no findings of fact or law “that would make these findings consistent.”  The court came to this conclusion as the elements of the defense are the same under both theories of disparate impact and perpetuation of segregation; thus if the defense is proven for one, it is proven for both.  Given this inconsistency, the court ordered a retrial.

Although the verdict was rendered infirm, the court addressed the damages awarded by the jury.  The court found these damages to be “excessive and unsupported by the evidence.”  The Court said damages should not have exceeded the $81,000 spent by the Anderson Group, and the additional figure entered into evidence of $900,000 should not have been included in the damages award as it was a purely speculative, consisting of an anticipated developer fee, and was “wholly unsubstantiated” by other evidence.  Addressing the remedy to this defect, the court stated that implicit in the court’s ruling on the City’s inconsistency claim is that a new trial on damages should be held as well.  However, if that determination is overruled, the court proposed remittitur, whereby the Anderson Group has the option of accepting a new trial on damages or accept a reduced damages award in the amount of $81,000.

Anderson Group v. Saratoga Springs, 2011 WL 2472996 (N.D.N.Y. 6/21/2011)

The opinion can be accessed at:

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