District of Columbia, et al. v. Tri County Industries, Inc. (01/17/2001)

By: Felicia Oliver, Medill News Service

Questions presented

Is there a consistent standard upon which a judge can set aside a jury verdict?

Brief

In a 1998 trial in federal court, a judge set aside a jury verdict that would have forced the city of Washington, D.C. to award Tri County Industries $5 million in damages.

The company originally sued the District of Columbia for over $11 million in lost revenues when its building permit to convert an empty warehouse into a hazardous waste decontamination site was revoked.

But when the city filed a post-trial motion, the judge granted a new trial, believing evidence pertinent to an accurate assessment of damages was not heard in court.

At the end of the second trial in 1999, the jury awarded Tri County only $100.

Tri County originally obtained its building permit on Feb. 26, 1993. But by September of that year, it was still waiting for delivery of equipment needed to begin operations.

With contaminated soil mounting at the site, and bolstered by community outcry, the city suspended Tri Countys building permit on Sept. 20, 1993.

The city sent several letters to Tri County between September and December 1993, asking them to explain what was going on, issuing a stop-work order, and demanding payment of a fine for storing soil without the required certificate of occupancy.

Tri County did not respond to any of the letters sent by the city's Department of Regulatory Affairs. The building permit was completely revoked by the city in December 1993.

Believing an appeal would be too costly and fearing that the process would be ""politically influenced,"" Tri County decided to abandon the project and sue the city for damages.

At the first trial, the U.S. District Court for the District of Columbia agreed that the city violated Tri Countys 5th Amendment right to due process in suspending its license.

But the court cited several reasons for the re-trial.

According to court documents, the jury was not made aware of Tri Countys failure to ""mitigate,"" that is, the company offered no explanation for its delays in occupying the facility nor did it ""expend any resources to seek reinstatement of É[the] permit.""

""They were claiming that $11 million was at stake,"" said Charles L. Reischel, Deputy Corporation Counsel, a few days after notification of the U.S. Supreme Courts acceptance of the case. ""How much does it take to send a letter back saying you misunderstood something?""

Also noted was ""the speculativeness in Tri Countys future profits,"" since harsh community opposition might have halted its plans to open with or without a permit.

The court also felt the jury verdict of $5 million was ""grossly excessive.""

Tri County appealed the second jury award of $100. A unanimous panel of Circuit Court of Appeals for the District of Columbia ruled that the original jury verdict of $5 million should stand.

Writing for the court, Judge Karen Lecraft Henderson expressed concern about how a jurys role is diminished when a verdict is set aside.

Quoting a 1978 Supreme Court decision in Vander Zee v. Karabatsos, Henderson said, ""A judges nullification of the jurys verdict may encroach on the jurys important fact finding function.""

""Its surprising to many people, including, I suppose, the Supreme Court,"" Reischel said, ""[that] the standard upon which a judge can set aside a jury verdict has not been established after all this time.""

""Federal courts are asked every day to set aside jury verdicts. Its very fundamental, and there cannot be any disagreement about what the standard is,"" he said.

On Sept. 26, 2000, the U.S. Supreme granted certiorari in the case.

On Jan. 17, 2001, the Court issued a per curiam order without comment, dismissing the writ of certiorari as improvidently granted.