Fair Housing verdict is sustained after City waives objection to inconsistent verdict

When developers in Saratoga Springs wanted to build rental units in the City, they envisioned that 20 percent of the units would be designated "workplace affordable," rented out to low to moderate income households. The City then rezoned the property to prohibit high-density housing developments. The developers sued under the Fair Housing Act, arguing that the new zoning rules had a disparate impact on racial minorities and families with children. The long and winding road in this case results in a plaintiff's victory.

The case is The Anderson Group v. City of Saratoga Springs, decided on October 19. When the case went to trial in 2010, the jury ruled that the City had violated the civil rights laws, awarding the plaintiffs $1 million in damages. But the jury also said the City had not "engaged in a perpetuation of segregation against African Americans." No one objected to the verdict form leading to this result, which the City said post-trial was inconsistent. The trial court agreed with that argument and ordered a new trial, which resulted in a verdict favoring the City on all claims. The plaintiffs appeal, arguing that the trial court should not have ordered a second trial.

The Court of Appeals rules that the trial court should not have ruled that the initial verdict was inconsistent because the City had waived that objection in the first instance. It was supposed to alert the trial court to the inconsistent verdict before the jury was discharged. The reason we make these timely objections is to allow the trial court to properly guide the jury to a just verdict. One the jury goes home to watch TV, that option is lost forever. For civil procedure mavens who care about issues like waiver and inconsistent verdicts, this ruling is a a good read. This all means the second trial never should have happened, and the initial verdict in favor of the plaintiff developers on the disparate impact claim is revived.

Now that the developers got their verdict back, they ask the Second Circuit to reinstate the $1 million verdict that the trial court took away as too high. The Court of Appeals finds that amount was too high and the plaintiffs are entitled to no more than $100,000. That amount covers the developer's lost costs and harm to its reputation.

The issue of waiver is always serious. The Court of Appeals does not like to take up issues that could have been raised in the district court. On rare occasions, the appellate court will resolve waived issues, but as this case shows us, you cannot count on it. The consequences of waiver cannot be overstated. If the City had a good argument that the initial verdict really was inconsistent, and if a timely objection to that verdict could have ended the case for good once the retrial resulted in a verdict for the City, than that waiver could cost the City hundreds of thousands of dollars in attorneys' fees to the developer's attorneys and God knows any other costs and hassles that came with the second trial and appeal.