Insights

Case Study

Damages Due to Loss of Right to Challenge Taking of Property through Eminent Domain

Cleve Tyler, PhD, engaged by the Institute for Justice (IJ), served as pro bono damages expert in the Brody v. Village of Port Chester et al. matter to estimate the value of the right to challenge the unconstitutional taking of property through eminent domain. As described by the IJ:

The village [of Port Chester, NY] decided to authorize the use of eminent domain against Brody in 1999, and Brody received a notice of condemnation in 2000—when he discovered, much to his surprise, that he had already lost his right to challenge that condemnation. Brody filed a federal lawsuit challenging the condemnation, and, last year, Judge Harold Baer, Jr., of the Southern District of New York issued an opinion finding that the condemnation violated Brody’s right to due process. Unfortunately, that decision came too late to save Brody’s building, which was condemned and replaced with a shopping center in 2003.

Dr. Tyler developed a framework for the court to consider for damages based on a hypothetical negotiation between the parties. As IJ attorneys Dana Berliner and Robert McNamara described:

We were faced, then, with a dilemma: the taking had been ruled unconstitutional, but return of the taken property seemed all but impossible. Brody had obviously been harmed—he would much rather have kept his property than received the property’s fair market value—but quantifying that harm was extremely difficult, both for us and the many experts and professors we consulted.

Dr. Tyler’s solution presents an excellent example of his ability to reliably and persuasively adapt standard economic models to new scenarios. Quickly familiarizing himself with the rather complicated fact pattern (and thousands of documents) that had developed over several years of litigation, Dr. Tyler reasoned that Brody’s legal right to challenge the taking was a unique, intangible asset—something that could be valued using the same tools economists use to value patent licenses in patent-infringement litigation. This key insight transformed the problem from a situation with no guiding principles into a straightforward application of standard economic theory. The skill with which he transformed the situation and crafted a solution simultaneously creative enough to provide a basis for a damages award and conservative enough to appeal to the trial judge illustrates Dr. Tyler’s intellectual agility.

Dr. Tyler provided an expert report and written testimony, and testified at deposition and at trial. According to Ms. Berliner and Mr. McNamara, “Dr. Tyler’s performance was excellent,” and his “answers consistently showed care and precision,” with the case settling on appeal “for approximately the amount of damages Dr. Tyler had specified in his testimony.” The settlement also included an apology from the Village of Port Chester to Mr. Brody and a plaza named after Mr. Brody.

The views and opinions expressed in this case study are those of the expert and do not necessarily reflect the opinions, position, or policy of Berkeley Research Group, LLC or its other employees and affiliates.

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Cleve B. Tyler

Managing Director

Washington, DC