Posted by: Patricia Salkin | November 7, 2015

Second Circuit Court of Appeals Holds in Fair Housing Discrimination Case City Waived Any Objection to Purported Inconsistencies in Jury Verdict by Failing to Raise Objection Before Jury was Discharged

This most recent opinion addresses procedural issues in protracted litigation concerning Fair Housing claims in Saratoga Springs, NY.

The Anderson Group (“TAG”) attempted to develop a high-density residential project called Spring Run Village on a parcel of land owned by Gail Anderson in the City of Saratoga Springs, New York. Approximately 20% of the rental units in Spring Run Village were to be designated “workforce affordable,” meaning that they would be rented at affordable rates to low-to-moderate income households. However, before TAG could break ground on the project, the City of Saratoga Springs rezoned the underlying property to preclude the construction of high-density developments. TAG and Gail Anderson filed suit, arguing that the City’s zoning policies perpetuated racial segregation and had a disparate impact on African Americans and families with children, thereby violating the Fair Housing Act (“FHA”), 42 U.S.C. § 3604. In July 2010, in the Northern District of New York, a jury returned a verdict in favor of TAG only as to its disparate impact claim. The district court granted the City’s motion for a new trial on the ground that the jury’s verdict for TAG on its disparate impact claim was irreconcilable with its verdict against TAG on its perpetuation of segregation claim. The district court also held that if its decision to order a new trial did not withstand appeal, it would order a conditional remittitur of the jury’s $1,000,000 damages award to $81,000 because the evidence of harm to TAG’s business reputation and loss of a developer’s fee was impermissibly speculative. In 2012, a second jury returned a verdict in favor of the City on both of TAG’s claims. TAG and the City both appealed the resulting judgment.

On appeal, TAG contended that the district court improperly entertained the City’s objection to the inconsistency of the 2010 jury verdict because the City waived that objection by not raising it before the jury was discharged. It also challenged the district court’s alternative conclusion as to remittitur of the 2010 jury’s $1 million compensatory damages award and raised a number of issues relating to the 2012 trial. The City argued that TAG did not have standing because it lacked an ownership or contractual interest in the land where Spring Run Village was to be built and, therefore, TAG is indistinguishable from any other corporation or contractor that “had a future interest in the prospective profits” that the Spring Run Village proposal might have provided. However, the court found TAG’s lost up-front economic expenditures on a detailed development proposal for a specific piece of property, along with the denial of a necessary special use permit, which constituted injuries-in-fact that are fairly traceable to the City’s actions, thus affording TAG standing to maintain this action.

The City next argued that it was entitled to a new trial because the jury’s verdict for TAG on its disparate impact claim was inconsistent with its verdict for the City on TAG’s perpetuation of segregation claim. Although the district court found that the “complicated and unique nature of the case and the questions presented made it entirely reasonable for Saratoga not to immediately voice an objection”, the City had an opportunity to raise an inconsistency objection immediately after the district court finished reading the jury’s verdict and before the jury was polled. Thus, the argument was waived and the district court should not have reached the merits of that argument. The court therefore reinstated the jury verdict to the extent it found the City liable on TAG’s disparate impact claim. Finally, as to the issue of remittitur, the court ordered a new trial limited to the issue of damages unless TAG agrees to a remittitur reducing the $1,000,000 compensatory damages award to $100,000.

Anderson Group, LLC v. City of Saratoga Springs, 2015 WL 6118177 (2d Cir. CA Oct. 19, 2015)

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