6 Trial

• Library: Eminent Domain: A Handbook on Condemnation Law (ABA) (2011 Ed.)

Charles F. Hudson

The goal of this chapter is to offer useful generalizations. This chapter is not a comprehensive survey of condemnation procedure across the nation, as there is significant diversity in condemnation trial practice and procedure from jurisdiction to jurisdiction. In general, condemnation practice is the province of trial lawyers. The right to just compensation is a constitutional right and, in most jurisdictions, invokes the right to a trial, either initially or as a means of appeal from a commission. This chapter uses a jury trial perspective and a chronological framework, allowing for considerable variations in local practice. What steps should one expect or consider to prepare for a typical condemnation trial?

PRETRIAL

In the months preceding the trial of an eminent domain case, certain events can be decisive in shaping the outcome. The mechanisms for discovery of appraisers and other experts and for formal pretrial settlement offers, and sometimes for determining the order in which the case proceeds, commonly set the stage for what happens later at trial. A number of issues may be raised by the pleadings in a condemnation case that are normally determined by the court prior to trial.

A challenge to the plaintiff's authority to condemn, for example, or the adequacy of the plaintiff's efforts to negotiate a voluntary purchase of the property where that is a prerequisite to condemnation are generally decided by the court on motions for summary judgment or in a separate evidentiary hearing prior to trial.¹ The same may be true if there is an issue as to the ownership of the property or as to a party's standing as a defendant. The court may have to make separate pretrial legal decisions concerning the existence of special benefits, the compensability of access rights, or the treatment of environmental contamination. Some of these issues may be addressed in motions in limine filed at the time of trial, but often their impact on the nature of the trial and on efficient trial preparation calls for a determination earlier in the case. Such issues do not arise in every condemnation case, but when they do, counsel must identify them early and bring them to the attention of the court, or risk distraction and uncertainty at time of trial.

Appraisals and Other Discovery

A condemnation trial primarily determines the value of the property taken. Determining that value generally hinges on the jury's assessment of appraisal testimony. While some jurisdictions rely on the general rules of discovery applicable in all civil cases, others have specific statutes that establish rules for the disclosure of appraisals.² In some states, the disclosures are sequential; in others, single dates are set for appraisal exchange.³ In either case, disclosures may be calibrated a given number of days in advance of the trial date. If the timing of appraisal disclosure is not specified by statute, prudent counsel may seek stipulations or ask the court to establish such deadlines in advance to avoid the risk of the opposing party providing an appraisal too late to permit effective analysis and response. Failure to timely disclose may result in the exclusion of the testimony at trial. Counsel must work closely with appraisers and other supporting experts to ensure that all applicable deadlines are met.

Formal Pretrial Settlement Offers

Another common element in the pretrial landscape is the statutory settlement offer. In many states, the condemnor may limit its exposure to statutory liability for attorneys' fees and, sometimes, to appraisal and expert expenses by making a written settlement offer.⁴ Often the deadline for such offers is a specified time before trial. If the offer is not accepted and the defendant fails to obtain a higher verdict or a verdict that exceeds the offer by a fixed percentage, the defendant cannot recover fees and costs otherwise provided by statute.⁵ Many statutory "30-day" offers differ from the offers made under Federal Rule of Civil Procedure 68 or analogous state procedural rules. Such traditional "offers of judgment" arguably remain available in condemnation absent some rule to the contrary. Often the "30-day" offer is for just compensation for the taking and does not take into account costs or fees incurred to that point. Particularly in a smaller case, such statutory pretrial settlement offers can provide the condemnation plaintiff with significant leverage in settlement negotiations. They may force the defendant to carefully evaluate its prospects in the trial on valuation and perhaps absorb significant costs of litigation already incurred.

A number of related legal and factual questions may not be resolved by the pertinent statute itself and must be determined by case law or by the trial court on first impression or factual evaluation. Consider the following questions: How long must the offer be left open? Is prejudgment interest counted to determine if the defendant "beat" the offer at trial? What process issues occur with multiple defendants with varying interests in the same property? What if the parties disagree about the scope of the taking and/or the statutorily sanctioned offer (e.g., an offer includes the property taken but deems related access to be terminated by the police power, and defendant pleads a separate claim for inverse condemnation of access)? To protect the client's interests, counsel must think through such issues early in the case.

The condemnation defendant may not be confident that it has the plaintiff's best offer until the deadline for a statutory offer passes. Such mechanisms can influence the timing of case preparation and encourage both parties to defer expenses when possible until it is clear that the case will not settle. There is a natural tension between the client's interest in economizing where possible and prudent preparation of the case, which cannot be deferred until the last 30 days before a trial. Experienced counsel can defer many pretrial expenses until the final decision is made.

The statutory pretrial settlement offer also tends to shape case preparation and the trial itself by the evidentiary incentives that the framework creates. In a majority of cases, the value ultimately determined by the trier of fact will be a compromise between the highest value argued by the owner and the lowest value argued by the con-demnor. The statutory settlement offer establishes the hidden goal posts for recovery of costs and fees and will generally reflect plaintiff's assessment of the verdict it can credibly defend. The system reinforces existing incentives that tend to pull the parties to extremes in the interests of maximizing or minimizing the defendant's ultimate recovery. Plaintiff's incentive is to allege the lowest value that it can ethically support with expert testimony and other evidence, both to minimize the ultimate payment and to allow room for later negotiation and protection against liability for costs. Defendant's incentive is to advance the highest value it can ethically support, both to maximize its recovery and to stimulate the best possible offer in later negotiation and allow the greatest cost recovery.

One way to appreciate this dynamic is to contrast the scheme in federal condemnation cases. The federal defendant's ability to recover attorneys' fees under the Equal Access to Justice Act is subject to a number of other prerequisites—e.g., the defendant must be below a net worth threshold and the court must conclude that the government's position was not substantially justified.⁶ After these threshold requirements are met, however, the defendant prevails when the verdict falls closer to its evidence and argument at trial.⁷ Thus in federal cases, defendant's potential fee recovery tends to encourage both parties to place more weight on the credibility of their values in light of the available evidence. Plaintiff has an incentive to argue a higher number in the hope that the verdict comes closer to its evidence and deprives the defendant of fees; defendant has more incentive to argue for a lower number, in the hope that the verdict comes closer to its evidence and supports the recovery of fees.

Burden of Proof and Order of Proof

Other pretrial considerations turn on the burden of proof and order of proof, which are sometimes different in an eminent domain case. Many state statutes shift the burden of proof to the defendant (as in federal cases under Rule 71A), or it may be shared or allocated to neither party.⁸ Some jurisdictions allow the condemnation defendant to proceed first in the presentation of the evidence, either by statute or by case law that has evolved from the reallocated burden of proof. The defendant will usually wish to proceed first for a better opportunity to reach the jury and shape the discussion at trial. The party proceeding first will normally have the right to "open and close," with the ability to call rebuttal witness following the plaintiff's case and to present rebuttal arguments in closing.

Condemnation counsel must be alert to the law of the jurisdiction—statutory or otherwise—in order to protect the client's interest. Where there is a statutory right to proceed first, often it must be asserted in the pleadings or in a formal election filed by a certain deadline.⁹

TRIAL BRIEFING AND MOTIONS IN LIMINE

In any case involving significant legal issues, trial counsel is responsible to educate the court and to advocate effectively for the client concerning the law to be applied. These obligations are greater in a condemnation case. The law of eminent domain has its own logic, evolving from the hypothetical construct of the ready willing buyer and seller and related concepts like "fair market value" and "highest and best use." In this sometimes artificial logic, certain impacts and losses are excluded from consideration and others accepted. The particular logic that applies to the determination of just compensation is one of...