The basic facts were that the feds offered the owner $1,875,000, but then in a classic old-fashioned lowball move, put on a witness at trial who opined to only $186,000 (less than 10% of the offer). The commissioners awarded $6,100,000 and the court eventually awarded $3,800,000 .
The classic “lowball” of this type (that was common in older California condemnation cases and is still seen from time to time) was to make a high deposit and take possession, thus forcing the owner to move out and use the deposit to acquire replacement property. Then, after the money was spent, the condemnor’s appraiser would show up at trial and testify to a much lower figure. The evident purpose of that sort of stuff was to put pressure on the condemnees by threatening them with the possibility of a negative judgment against them, and force them to settle on terms advantageous to the condemnor. This practice is warned against in the California Continuing Education of the Bar (CEB) book on condemnation. It is sometimes referred to as “sandbagging.”
In this case, to make matters worse, the feds also cheated on discovery for which they were sanctioned $50,000.
But the court refused to award the owners attorneys fees under the Equal Access to Justice Act (28 U.S.C. Sec. 2412 (d)(2)(H)) which allows them when the owner’s evidence is closer to the award than the condemnor’s evidence. The owners’ problem was that they at one time took the position at a couple of early hearings that the subject property was worth around $30 million because of its mineral deposits. But they abandoned that position at trial and asked that the Commissioners’ award stand instead. So they argued that if you disregard that $30 million part which they had disavowed, and use the Commissioners’ $6.1 million award, they qualified under the EAJA. The court disagreed.
The case is United States v. Harrell, ___ F.3d ___ (10th Cir. 2011), Filed April 29, 2011, No. 10-2153.
Follow up. Two of our fellow bloggers, Robert Thomas of Hawaii (www.inversecondemnation.com) and Rick Rayl of California (http://www.californiaeminentdomainreport.com/) have commented on this case and we recommend that you read their stuff which provides other perspectives on the problem. All we wish to comment on here is the court’s assertion that inasmuch as EAJA, the statute allowing recovery of attorneys fees by condemnees who prevail against the government in these cases and recover a judgment that is closer to their evidence than to the condemnor’s offer, is one in derogation of sovereign immunity, and as such must be strictly construed. Maybe. We also seem to recall a rule of statutory construction holding that where the legislature reforms the law in order to remedy hardship that preexisting common law imposes on litigants, the new statute must be liberally, not strictly, construed. See e.g., Garrett v. Superior Court, 11 Cal.3d 245, 519 P.2d 588 (Cal. 1974).
So we wish that the Harrell court had provided us with an analysis of this conundrum, instead of limiting itself to an ipse dixit.