Court Opinion

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Opinions of the United
2008 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

4-14-2008

Chainey v. Street
Precedential or Non-Precedential: Precedential

Docket No. 06-1061

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                                PRECEDENTIAL

     UNITED STATES COURT OF APPEALS
          FOR THE THIRD CIRCUIT

           Nos. 06-1061 & 06-1256

              NANNIE CHAINEY;
   LEROY HAMPTON, JR.; ERNESTINE M. RICE;
      TRINA McCLAIN; LYNNE JOHNSON;
       TERESA A. GRAYER-CAMPBELL;
       CASSANDRA CARTER JOHNSTON;
     THOMAS MAPP SR.; BETTY MAPP H/W;
      BETTY MAPP1; ERNEST HUBBARD;
  ESTHER HUBBARD H/W; ESTHER HUBBARD1;
    ROBERT FORD; GWENDOLYN FORD H/W;
    GWENDOLYN FORD1; OLAITAN ODENIYI;
   ADEOLA ODENIYI H/W; ADEOLA ODENIYI1;
        LUCRETIA WILSON; ANNE LEE;
GERALD RENFROW; CONSTANCE RENFROW H/W;
       VIRGINIA COX; HAZEL TAYLOR;
  MILTON WILLIAMS; SHERRY WILLIAMS H/W;
  FRANK LEWIS; EVA LEWIS H/W; EVA LEWIS1;
   KERMIT BOSTIC; ELIZABETH BOSTIC H/W;
    MARY J. JACKSON; SAMUEL MATTAWAY;
YVETTE MATTAWAY H/W; YVETTE MATTAWAY1;
 CHARLES RENFROW, JR.; GERALD RENFROW1;
     CARRIE F. FOSKEY; BERIDAN PAYNE;
          CONSTANCE RENFROW1,
                        Appellees at 06-1061/
                        Cross-Appellants at 06-1256

                         v.

JOHN STREET, MAYOR, CITY OF PHILADELPHIA;
           CITY OF PHILADELPHIA;
   EDWARD McLAUGHLIN, COMMISSIONER,
DEPARTMENT OF LICENSES AND INSPECTIONS;
 HERBERT E. WETZEL, EXECUTIVE DIRECTOR;
       REDEVELOPMENT AUTHORITY
       OF THE CITY OF PHILADELPHIA,
                        Appellants at 06-1061/
                        Cross-Appellees at 06-1256

   On Appeal from the United States District Court
      for the Eastern District of Pennsylvania
        D.C. Civil Action No. 03-cv-06248
            (Honorable John P. Fullam)

              Argued January 23, 2007

        Before: SCIRICA, Chief Judge,
    FUENTES and CHAGARES, Circuit Judges

                         2
                    (Filed April 14, 2008 )

CRAIG R. GOTTLIEB, ESQUIRE (ARGUED)
RICHARD G. FEDER, ESQUIRE
City of Philadelphia Law Department
One Parkway, 17th Floor
1515 Arch Street
Philadelphia, Pennsylvania 19102
       Attorney for Appellants/Cross-Appellees

ROBERT T. VANCE, JR., ESQUIRE (ARGUED)
100 South Broad Street, Suite 1530
Philadelphia, Pennsylvania 19110

ADRIAN J. MOODY, ESQUIRE
Law Offices of Adrian J. Moody
1616 Walnut Street, Suite 700
Philadelphia, Pennsylvania 19103
      Attorney for Appellees/Cross-Appellants

                 OPINION OF THE COURT

SCIRICA, Chief Judge.

       This is an appeal from the District Court’s partial denial
of defendants’ post-trial motion after a jury verdict against the

                               3
City of Philadelphia based on its decision to halt repairs on
houses rebuilt in the aftermath of the 1985 MOVE bombing.
Defendants are the city, the city Redevelopment Authority, and
three former city officials: Mayor John Street, former Licenses
and Inspections Commissioner Edward McLaughlin, and
Redevelopment Authority Executive Director Herbert Wetzel.
Plaintiffs are twenty-four of the sixty-one homeowners whose
houses were destroyed in a fire caused by the MOVE bombing.
In 1986, the city agreed to rebuild plaintiffs’ houses and to
repair defects for up to ten years. After having spent $12.8
million over 14 years, the city decided in July 2000 it would
make no further repairs to the houses. A federal jury rendered
a partial verdict for plaintiffs. Defendants filed post-trial
motions, which the District Court granted in part, reducing the
jury award. Both parties appealed. We will affirm in part and
reverse in part. We will remand for an analysis of the
substantive due process claim and Fed. R. Civ. P. 50 waiver and,
if the issue has not been waived, for a determination of whether
each plaintiff proved causation and damages.

                               I.

        This case arises from the city’s 1985 bombing during the
administration of Mayor Wilson Goode (mayoral term
1984–1992) of a home occupied by MOVE, a group formed in
the 1970s as part of a “back to nature” movement. In 1978, the
city attempted to execute an eviction order on MOVE members
living in a home in the Powelton Village neighborhood of
Philadelphia. MOVE members resisted with gunfire, killing one

                               4
police officer and wounding other officers and firefighters.
Nine MOVE members were convicted and sentenced for the
officer’s murder.

       By 1985, at least thirteen MOVE members had relocated
to a single family home at 6221 Osage Avenue in West
Philadelphia. Disrupting the neighborhood with loudspeakers,
MOVE members made violent and profane threats to neighbors,
police, and city officials. According to a police probable cause
affidavit submitted to support arrest and search warrants,
MOVE members carried weapons, blocked the windows of their
house with wooden slats, constructed a bunker on the roof, and
threatened to blow up the entire neighborhood. Arrest and
search warrants were issued on May 11, 1985. On May 12, the
police evacuated residents from the surrounding neighborhood,
anticipating a raid on the MOVE house.

        In the early morning of May 13, police officers and
firefighters surrounded the MOVE residence. At 5:30 a.m., with
a bullhorn, police announced they had arrest warrants for four
MOVE members and gave them fifteen minutes to surrender.
The MOVE members resisted, shouting back threats that they
were prepared for a gun battle. After fifteen minutes, police
fired tear gas and smoke projectiles at the house. Firefighters
sprayed the house with water to provide cover for advancing
police officers. Some minutes later, the police came under fire
from gunshots fired from inside the house. Muzzle flashes were
seen coming from the rooftop bunker.

                               5
        A massive gun battle ensued. Police were unable to enter
the house because the walls of the house were fortified. Police
retreated, and considered other methods to breach the defenses
MOVE had erected. Later that afternoon, a police helicopter
dropped a bomb on the roof of the MOVE residence. The
bomb’s detonation ignited several barrels of gasoline, starting a
fire that killed eleven of the thirteen residents. Houses on the
Pine and Osage blocks were consumed in the blaze. The
bombing, the resultant deaths, and the destruction of neighbors’
homes were viewed as a national tragedy.

       This case involves the owners of houses on the Pine and
Osage blocks. In the fire’s aftermath, the city engaged in
extensive negotiations with the owners of the sixty-one
destroyed houses.      In June 1985, the city asked the
Redevelopment Authority to use its eminent domain authority to
acquire the damaged area for “develop[ment] as a
redevelopment project.” The homeowners filed objections to
the eminent domain/redevelopment plan. In April 1986, the
Philadelphia City Council enacted Ordinance 861, obligating the
city to rebuild the sixty-one houses “destroyed in the
conflagration.” The city also agreed to provide a ten-year
warranty for certain defects from the day each homeowner
moved into his/her home.

       In September 1986, the parties entered into an agreement
(the 1986 Agreement), in which the city agreed to build and
warrant sixty-one new houses in compliance with all applicable
Philadelphia Codes, as required by Ordinance 861, and plaintiffs

                               6
agreed to waive damages claims in the eminent domain
proceeding. The city enlisted the Redevelopment Authority,
which selected a developer, Edwards & Harper, a corporation
specifically formed to rebuild the houses. The city allocated
$6.7 million to Edwards & Harper through the Urban Local
Development Corporation to finance the rebuilding project.
Edwards & Harper hired a general contractor, Ebony
Construction Company, Inc., of which Ernest Edwards was a
director.

       Edwards misappropriated funds and was prosecuted and
convicted of theft. See Commonwealth v. Edwards, 582 A.2d
1078, 1082–90 (Pa. Super. Ct. 1990). Edwards & Harper failed
to complete the project. The city and the Redevelopment
Authority hired another general contractor to complete the
houses. In February 1986, when Edwards’s companies
defaulted, the new general contractor was left with over one
million dollars of unpaid costs.

       For two years, plaintiffs lived in substitute housing at the
city’s expense. In 1987, plaintiffs moved into their newly
constructed homes. But the houses were defective. Within
weeks of moving in, several homeowners experienced problems
including: leaking roofs, defective bathroom and kitchen
plumbing, improper or inadequate flooring, nails popping out of
walls, bursting pipes, defective electrical wiring, flooded
basements and backyards, and non-functioning appliances. In
June 1987, the city amended Ordinance 861 to authorize the city
to hire the Redevelopment Authority to warrant the houses

                                7
against “construction, design and related defects.” In January
1988, the city and the Redevelopment Authority entered into a
new agreement (the 1988 Agreement)—the Redevelopment
Authority agreed to perform the city’s repair obligations and the
city agreed to compensate the Redevelopment Authority.

       Between 1988 and 1997, when the warranties were set to
expire, the Redevelopment Authority conducted piecemeal
repairs of reported problems, replacing roofs, stoves,
dishwashers, and garbage disposals. The record suggests a
continuous flow of money into the project, but does not present
a clear picture of the total expenditures during that time.1 In
1995, the Redevelopment Authority estimated it would cost $8.5
million to repair the original defective construction.

       The city and the Redevelopment Authority hired the
United States Army Corps of Engineers to evaluate the cost of
the remaining repairs.       In 1997, the Corps issued a
comprehensive report outlining the remaining necessary repairs,
estimating it would cost the city and the Redevelopment
Authority $1.657 million to fulfill their warranty obligations and
to bring each house into compliance with city building codes.
The Corps determined that repairs to the building envelope—the
roofing, bricks, sliding doors, siding, and windows—would
account for seventy percent of the total projected remaining
cost.

   1
   Between 1988 and 1990, the city allocated $720,400 to the
Redevelopment Authority for repairs.

                                8
        In 1998, the city, the Redevelopment Authority, and the
Corps designed a solicitation for bids from private contractors
to complete the repair work. On August 30, the Redevelopment
Authority entered into a $1,765,538 contract with the successful
bidder, Allied Construction Company (the Redevelopment
Authority-Allied Construction Agreement). The city allocated
$2 million to pay Allied Construction for the repairs. Shortly
thereafter, Allied Construction workers uncovered several other
problems hidden from view until discovered in the course of
conducting repairs. The Redevelopment Authority subsequently
authorized payment of an additional $800,000. But by the end
of 1999, the estimated cost for modifications rose from
$800,000 to between $2.1 million and $3.5 million, an increase
attributable to items not covered under the work’s original
scope: changed window types, brick wall modifications and
window sill replacements, additional framing, and modifications
to interior walls.2 None of these additional costs had been
included in Allied Construction’s original estimate.

     2
      The total hard construction-cost estimates increased to
between $3.3 million and $4.4 million (including the original
$1.7 million). Additional costs included $439,000 to $482,000
in soft costs for the United States Army Corps of Engineers
contract, an energy consultant contract, and Redevelopment
Authority staff, and $416,000 to $556,000 for warranty
settlement items including interior repairs to be made by
homeowners, lost energy payments, and owners’ administrative
fees.

                               9
Accordingly, the Redevelopment Authority requested another
$2.9 million from the city to satisfy Allied Construction’s
requests and to comply with the warranty obligations.

        On December 22, 1999, outgoing Mayor Edward Rendell
sent a letter (the Rendell Letter) to the homeowners reaffirming
the city’s intent to complete the necessary repairs. But after
Mayor John Street took office in January 2000, city officials
balked at the Redevelopment Authority’s request for the
additional $2.9 million. In a memorandum dated January 4,
2000, the city audit manager estimated the final cost of each
warranty at $129,000 for each of the sixty-one houses, for a total
cost of $7,869,000. On February 10, 2000, the city controller
reported that the city had already incurred almost $13 million for
warranty repairs, or $211,286 per house. In March 2000, the
city estimated the additional cost would range between $4.5
million and $11 million. In the 1986 Agreement, the city
determined the fair-market value of the houses as of May 12,
1985, to be approximately $26,000 per house, or $1,586,000
total. At trial, Plaintiffs’ expert report estimated that as of
March 23, 2005, plaintiffs would need to be reimbursed “in the
neighborhood of $250,000” for each house in order to relocate
to a similar house in another Philadelphia neighborhood.

       In mid-2000, the city’s Department of Licenses and
Inspections inspected the houses and reported that no defects
rendered the houses imminently dangerous. But the report noted
a problem with air vents—an original construction defect that
could potentially draw carbon monoxide into the houses. None

                               10
of the residents had reported any carbon monoxide problems,
but the city’s commerce director prepared a plan for relocating
all of the residents. City officials soon concluded the air-vent
problem rendered the houses imminently dangerous and that the
houses should be treated as a blighted area. On July 21, 2000,
plaintiffs were summoned to a meeting with the mayor at City
Hall. At that meeting, Mayor John Street presented plaintiffs
with a letter informing them that the city would pay $125,000
per house, plus $25,000 for relocation expenses, but that the
parties would be required to vacate their premises no later than
September 6, 2000. The residents were told that if they did not
move, their homes would be taken through eminent domain.
Thirty-seven of the sixty-one sets of residents accepted this (or
a subsequent lower) offer; the remaining twenty-four rejected
the offer, and later initiated this suit.

        Shortly thereafter, Philadelphia Gas Works began to
“red-tag” plaintiffs’ houses, the first step in terminating gas
service. Plaintiffs obtained an injunction in state court against
Philadelphia Gas Works to continue service and against the city
to refrain from demolishing plaintiffs’ houses without a court
order or until the conclusion of the eminent domain proceeding.
Coles v. Philadelphia, No. 0395 (Philadelphia County Ct.
Comm. Pl. Oct. 3, 2000) (order granting injunction).

        On October 22, 2003, plaintiffs filed suit in state court
and defendants removed to federal court. At a federal jury trial,
plaintiffs sought to prove claims based on breach of contract,
substantive due process, the takings clause, state-law conspiracy,

                               11
equal protection, and specific performance. On the contract
claim, the jury was instructed to decide liability and damages for
breach of contract on three alleged contracts: the 1988
Agreement,3 the Redevelopment Authority-Allied Construction
Agreement, and the Rendell Letter.

        The jury found the city and the Redevelopment Authority
liable for breach of two contracts—the 1988 Agreement and the
Rendell Letter, but not the Redevelopment Authority-Allied
Construction Agreement. The jury awarded $250,000 per
plaintiff in contract damages, consisting of $150,000 in
expectation damages against the city and the Redevelopment
Authority and $100,000 in emotional distress damages against
the city ($6 million total). The jury awarded $152,083.33 per
plaintiff for substantive due process violations, consisting of
$70,000 per plaintiff in compensatory damages against Mayor
John Street, $30,000 in compensatory damages against the city,
and $52,083.33 in punitive damages against Mayor John Street
in his individual capacity ($3.65 million total). For the takings
clause claims, the jury awarded $80,000 per plaintiff against the
city ($1.92 million total). The jury also awarded $52,500 per
plaintiff in conspiracy damages against defendants, consisting
of $20,000 in compensatory damages against the mayor,
$14,000 in compensatory damages against the city, $2,000 each
in compensatory damages against Wetzel, McLaughlin, and the
Redevelopment Authority, $4,166.67 in punitive damages

  3
      The jury instructions did not reference the 1986 Agreement.

                                12
against the city, and $8,333.33 in punitive damages against the
mayor ($1.26 million total). The District Court entered
judgment against defendants for a total of $12.816 million, with
each of the twenty-four plaintiffs receiving an aggregate award
of $534,000.

        The case was tried before Judge Clarence Newcomer,
who died after the jury verdict. Defendants filed post-trial
motions.      Newly assigned Judge John Fullam granted
defendants’ motion for judgment as a matter of law with respect
to the takings, civil conspiracy, and punitive damages claims,
but rejected defendants’ motion for a new trial. See Chainey v.
Philadelphia, No. Civ.A. 03-06248-JF, 2005 WL 3263042 (E.D.
Pa. Dec. 1, 2005). The court upheld liability on claims for
breach of contract (under both the 1988 Agreement and the
Rendell Letter) and substantive due process. Id. at *3–4. On
breach of contract, the court upheld the jury’s award of
$150,000 per plaintiff in repair damages ($3.6 million total) and
$100,000 per plaintiff for emotional distress ($2.4 million total).
Id. at *5–6. Although the court upheld the substantive due
process verdict against the city and against Mayor John Street in
his official capacity, it awarded no recovery because plaintiffs
sought only emotional distress damages for this claim. Id. The
court found an unacceptable overlap between the $2.4 million
contractual emotional distress award and the identical award for
substantive due process violations. Id. Moreover, the court
found that any award in excess of $100,000 per plaintiff for
emotional distress damages, caused by either breach of contract

                                13
or substantive due process violations, was excessive. Id.

        Accordingly, the District Court entered judgment for
breach of contract against the city and judgment for substantive
due process against the city and against Mayor John Street in his
official capacity. The aggregate award for each plaintiff was
reduced to $250,000 for a total of $6 million.4

                               II.

       All parties have appealed. Defendants contend the
District Court erred by denying judgment as a matter of law on
the breach of contract claims and substantive due process
claims, and by denying their motion for a new trial. Plaintiffs
contend the District Court erred by overturning the takings
clause verdict and the punitive damage award against Mayor
John Street.

                A. Breach of Contract Claims

   4
    Jurisdiction is proper under 28 U.S.C. § 1291. The District
Court had subject matter jurisdiction under 28 U.S.C. §§ 1331,
1343, and 1367. We exercise plenary review over this appeal
and cross-appeal from a final judgment, granting in part and
denying in part defendants’ post-trial motion for judgment as a
matter of law. Marinelli v. City of Erie, 216 F.3d 354, 359 (3d
Cir. 2000). We review defendants’ request for a new trial based
on alleged prejudicial questioning for abuse of discretion.
United States v. Adedoyin, 369 F.3d 337, 342 (3d Cir. 2004).

                               14
        The District Court declined to disturb the jury’s damage
award based on breach of contract under both the 1988
Agreement and the Rendell Letter. Chainey, 2005 WL
3263042, at *3–4. The court held defendants waived their
statute of limitations defense against the contract claims based
on the 1988 Agreement by failing to raise the defense until post-
trial motions. Id. at *4. It also rejected defendants’ argument
that Mayor Rendell was not authorized to bind the city,
concluding he had apparent authority. Id. at *3.

       We will affirm liability under the 1988 Agreement, but
not under the Rendell Letter. Accordingly, we will affirm the
award of contractual expectation damages based upon the 1988
Agreement and reverse the award of contractual emotional
distress damages based on the Rendell Letter.

                      1. 1988 Agreement

                   a. Statute of Limitations

        Defendants contend that Pennsylvania’s four-year statute
of limitations for written contracts bars recovery under the 1988
Agreement. 42 Pa. Cons. Stat. § 5525(a)(8). Defendants
maintain the 1988 Agreement expired no later than November
1996, requiring plaintiffs to assert their claims by November
2000. The District Court found defendants waived the statute of
limitations defense by failing to timely raise it. We agree.

      Affirmative defenses should be asserted in the
appropriate responsive pleadings. Fed. R. Civ. P. 8(c). “Failure

                               15
to raise an affirmative defense by responsive pleading or by
appropriate motion generally results in the waiver of that
defense.” Charpentier v. Godsil, 937 F.2d 859, 863 (3d Cir.
1991).5 Although “a [statute of] limitations defense does not
necessarily have to be raised in the answer[,] . . . it does not
follow that a limitations defense can be raised at any time.”
Robinson v. Johnson, 313 F.3d 128, 135 (3d Cir. 2002). In this
case, it was raised too late. A statute of limitations defense,
raised for the first time in a post-trial motion, is generally
waived. See Bradford-White Corp. v. Ernst & Whinney, 872
F.2d 1153, 1161 (3d Cir. 1989) (finding statute of limitations
defense waived when raised in the answer but never pursued
until post-trial motions); see also United States v. Big D
Enterprises, Inc., 184 F.3d 924, 935 (8th Cir. 1999) (finding
statute of limitations defense waived when “[a]ppellants failed
to raise the statute of limitations argument until their posttrial
[sic] motion for remittitur”).

   5
    “The purpose of requiring the defendant to plead available
affirmative defenses in his answer is to avoid surprise and undue
prejudice by providing the plaintiff with notice and the
opportunity to demonstrate why the affirmative defense should
not succeed.” Robinson v. Johnson, 313 F.3d 128, 134–35 (3d
Cir. 2002) (citing Blonder-Tongue Labs., Inc. v. Univ. of Ill.
Found., 402 U.S. 313, 350 (1971)). Permitting the limitations
defense after the close of all evidence contradicts the articulated
purpose of the rule.

                                16
         Defendants first raised the statute of limitations defense
to the 1988 Agreement in post-trial motions. They justify their
failure to plead it earlier by contending the 1988 Agreement was
never pleaded nor did it become an articulated theory of
recovery until mentioned in the District Court’s jury
instructions. But in their Amended Complaint, plaintiffs alleged
that “[d]efendants breached the express and implied terms and
conditions of the Settlement Agreement, the Allied
[Construction] Contract, and their other legal obligations . . . ”
and that “[a]s a direct and proximate result of . . . Defendants’
breaches of the Settlement Agreement, Mayor Rendell’s
December 22, 1999 letter, the Allied [Construction] Contract
and related contractual obligations, . . . Plaintiffs were injured
. . . .” Although it should have been specifically pleaded, the
reference to “related contractual obligations” covers the related
contractual obligation in the 1988 Agreement. Furthermore, the
proposed jury instructions expressly referenced the “1988
warranty agreement” as a theory of recovery. Defendants raised
no objection.

       In Bradford-White Corp. v. Ernst & Whinney, we found
a statute of limitations defense waived where, even though
pleaded in the answer, it was not pursued before or at the trial.
872 F.2d at 1160–61 (defendant “did not file a motion or present
argument before the district court on the statute of limitations
issue at any time before or at the trial”). After the jury verdict,
defendant raised its statute of limitations arguments in post-trial
motions. We found “it would be grossly unfair to allow a

                                17
plaintiff to go to the expense of trying a case only to be met by
a new defense after trial.” Id. at 1161. Defendants here never
raised the statute of limitations defense to the 1988 Agreement
until after trial. They have waived the statute of limitations
defense.

        Defendants cite Eddy v. Virgin Islands Water & Power
Auth., 256 F.3d 204 (3d Cir. 2001), as authority to amend at the
post-trial stage. In Eddy, we held the defense of qualified
immunity is not necessarily waived by a defendant who fails to
raise it until the summary judgment stage. Id. at 210. Eddy is
inapposite.

                     b. The City’s Liability

        Defendants contend plaintiffs cannot recover against the
city as a matter of law because the contractual obligations in the
1988 Agreement ran only between the Redevelopment Authority
and the city. Contending only the Redevelopment Authority
promised to repair plaintiffs’ homes, defendants argue the
Redevelopment Authority was the only party responsible to
plaintiffs under the 1988 Agreement.6 But the city assumed
responsibility to repair plaintiffs’ houses in the 1986 Agreement.

      6
      Defendants cite no case law, referring instead to the
Restatement (Second) of Contracts § 304, which states: “A
promise in a contract creates a duty in the promisor to any
intended beneficiary to perform the promise, and the intended
beneficiary may enforce the duty.”

                               18
It then delegated that duty to the Redevelopment Authority in
the 1988 Agreement, and promised to fund the repairs. Before
payment, the Redevelopment Authority was required to provide
the city with bills and vouchers. Plaintiffs were third-party
beneficiaries of the 1988 Agreement, and may properly assert
claims based on the 1988 Agreement against both the city and
the Redevelopment Authority. Accordingly, we agree with the
District Court that the 1988 Agreement was a valid basis for the
jury’s contract award against the city.

                    2. The Rendell Letter

       Defendants contend the Rendell Letter was not a binding
contract because it lacked the approval of the City Law
Department and Finance Department as required by the
Philadelphia Home Rule Charter. See 351 Pa. Code § 4.4-
400(c);7 351 Pa. Code § 6.6-104.8 Plaintiffs presented no

  7
      Contracts and Bonds. The [City Law] Department
      shall prepare or approve all contracts, bonds and
      other instruments in writing in which the City is
      concerned, and shall approve all surety bonds
      required to be given for the protection of the City.
      It shall keep a proper registry of all such
      contracts, bonds and instruments.
351 Pa. Code § 4.4-400(c).
  8
       Contracts. Before any contract shall be effective,
       the [City] Director of Finance shall approve it as

                              19
evidence that the City Law Department or Finance Department
prepared or approved the Rendell Letter. Nonetheless, plaintiffs
contend defendants bore the burden and failed to put forth
evidence to show the letter was not approved in accordance with
the Philadelphia Home Rule Charter. Plaintiffs are incorrect.
Under Pennsylvania law, the party asserting the validity of a
contract bears the burden of proof. Linn v. Employers Reins.
Corp., 153 A.2d 483, 485 (Pa. 1959); Hazleton Area Sch. Dist.
v. Krasnoff, 672 A.2d 858, 862 (Pa. Commw. Ct. 1996).

       At issue is whether Mayor Rendell had actual or apparent
authority to contract for the city, absent the approval of the City
Law and Finance Departments. The Philadelphia Home Rule
Charter provides: “the [City Law] Department shall prepare or
approve all contracts . . . .” 351 Pa. Code § 4.4-400(c).
Furthermore, “[b]efore any contract shall be effective, the [City]
Director of Finance shall approve it as to the availability of
appropriated funds.” 351 Pa. Code § 6.6-104. Under
Pennsylvania decisional law, government officials cannot bind

      to the availability of appropriated funds. He shall
      designate on every such contract, the
      appropriation under which it is made and shall
      give it a number in the order of its date. He shall,
      in the order in which each contract is numbered,
      charge the appropriation out of which
      expenditures thereunder will be made.
351 Pa. Code § 6.6-104.

                                20
the government without the necessary statutory approval. See
City of Scranton v. Heffler, Radetich & Saitta, LLP, 871 A.2d
875, 880 (Pa. Commw. Ct. 2005) (“‘Where a municipality must
execute a contract in a particular manner under legislative
pronouncement, failure to comply with the pronouncement
renders the contract unenforceable.’” (quoting Alco Parking
Corp. v. Public Parking Auth. of Pittsburgh, 706 A.2d 343, 348
(Pa. Super. Ct. 1998))); Pittsburgh Baseball, Inc. v. Stadium
Auth. of Pittsburgh, 630 A.2d 505, 508–09 (Pa. Commw. Ct.
1993) (finding an oral contract with a city mayor was not
binding on the city); see also Innes v. Sch. Dist. of Nanticoke, 20
A.2d 225, 227 (Pa. 1941) (“‘Persons contracting with a
governmental agency must, at their peril, know the extent of the
power of its officers making the contract.’” (quoting Charleroi
Lumber Co. v. Sch. Dist. of Bentleyville, 6 A.2d 88, 92 (Pa.
1939))).

        In Scranton, the Commonwealth Court considered
whether the City of Scranton could be liable for the mayor’s
written promise to pay plaintiff to audit medical claims paid by
the city’s insurance carrier. After plaintiff submitted invoices
for several months of auditing services, the city refused to pay.
Finding the statutory requirements for execution of municipal
contracts mandatory, the court held there was no legally binding
contract. Scranton, 871 A.2d at 880. The City of Scranton’s
Administrative Code provided “all contracts must be reviewed
and approved by the City Solicitor and signed by the Mayor and
the Controller or their designated substitutes and attested to by

                                21
the City Clerk.” Id. Because these requirements had not been
met, the court found no valid contract. Id.

       Similarly in Pittsburgh Baseball, Inc., plaintiff was
attempting to enforce an alleged oral promise by the mayor of
the City of Pittsburgh to contribute $25 million towards the
purchase and operation of the Pittsburgh Pirates baseball
franchise. The Commonwealth Court held the alleged oral
contract with the mayor was not binding on the city where the
relevant city code required all contracts with the city to be in
writing and to be signed by the mayor and appropriate
department head and where the Philadelphia Home Rule Charter
required that all contracts involving city affairs be authorized by
resolution of the city council. Pittsburgh Baseball, Inc., 630
A.2d at 508–09. Construing the plain language of the statute,
the Philadelphia Home Rule Charter, and Pennsylvania
decisional law, we find the Rendell letter lacked actual authority
to bind the city.

       Even if lacking actual authority, the District Court held
the mayor had apparent authority to bind the city: “[It] may well
be [that the mayor lacked actual authority], but he certainly had
apparent authority . . . .” Chainey, 2005 WL 3263042, at *3. To
establish apparent authority, a third party must demonstrate that
he reasonably relied on his agent’s alleged appearance of
authority. Revere Press, Inc. v. Blumberg, 246 A.2d 407, 410
(Pa. 1968). Citing William B. Tanner Co., Inc. v. WIOO, Inc.,
528 F.2d 262, 268 (3d Cir. 1975), plaintiffs assert they
reasonably believed the mayor, as the city’s chief executive, had

                                22
the power to contractually bind the city. In Tanner, an agent of
a radio station who held himself out as a general manager
entered into contracts on behalf of the radio station. We held
that a reasonable person might believe the radio station gave the
agent authority. Id. at 266–67. But that case did not involve
apparent authority where a statute, ordinance, or in this case, a
statute and a city home rule charter dictated the approval
necessary to bind the city.

         Where a statute gives public notice of the required
procedures for governmental contract approval, Pennsylvania
courts have held there is no apparent authority for contracting
government agents who are not authorized by the statute. See
Berkheimer Associates v. Norco Motors, 842 A.2d 966, 970–71
(Pa. Commw. Ct. 2004); Krasnoff, 672 A.2d at 862. In Norco,
the Commonwealth Court refused to enforce a settlement
agreement between a local tax collector and a taxpayer over
township and school district delinquent taxes because it was not
approved by a majority vote of the school board, as required by
the Public School Code for contracts exceeding $100. The
taxpayer contended the tax collector had apparent authority to
settle, citing case law holding that a lawyer may sometimes have
apparent authority to settle a case on behalf of the client even
absent express authority. Norco, 842 A.2d at 969–70. In
rejecting this argument, the court found, “the cases relied on by
Norco and the trial court do not involve a school district where
a statute puts all persons dealing with it on notice that contracts
over $100.00 require approval of the school board.” Id. at 970.

                                23
        Similarly in Krasnoff, the Commonwealth Court rejected
the argument that school board members had apparent authority
to contract absent approval by a majority vote of the school
board. In Krasnoff, an architect contracted with the school
district to perform renovations. After meeting with individual
school board members, the architect provided services beyond
the scope of his original contract. The Commonwealth Court
determined the Public School Code required approval by an
affirmative vote of the school board to create a binding contract
for the additional services.9 Krasnoff, 672 A.2d at 862 (citing
Matevish v. Sch. Dist. of Ramey, 74 A.2d 797 (Pa. Super. Ct.
1950)). Consistent with these cases, the Rendell Letter cannot
constitute a binding contract as the mayor lacked both actual and
apparent authority under the Philadelphia Home Rule Charter to
enter into such a contract. See 351 Pa. Code § 4.4-400(c); 351
Pa. Code § 6.6-104.

   9
    Moreover, the discussion of equitable estoppel in Scranton
counsels against finding apparent authority. The Scranton court
considered whether equitable estoppel bound the city, and
concluded that entering into a contract without the express
approval of the solicitor was unreasonable as a matter of law,
given the requirements of the Scranton Administrative Code.
Scranton, 871 A.2d at 882. The unreasonableness was
particularly manifest considering that the plaintiff relied upon
statements from a “member[] of the outgoing administration in
its waning months.” Id. at 881.

                               24
        Alternatively, plaintiffs contend defendants ratified the
Rendell Letter. “It is well settled that a municipal corporation
may ratify contracts which are within its corporate powers and
made by its officers without authority, or in excess of their
authority.” Eckert v. Pierotti, 553 A.2d 114, 118 (Pa. Commw.
Ct. 1989). A “municipality may waive an irregularity of a
municipal contract and ratify that contract.” Scranton, 871 A.2d
at 881 (citing Eckert, 553 A.2d at 118). Ratification may consist
of affirmative action by the proper officials or by other action or
inaction that amounts to approval of the contract under the
circumstances. Id. But where a previously unauthorized
contract is retroactively ratified by post-contract approval, such
post-contract ratification must be approved by “everyone whose
approval was [previously] required under applicable law.” Id.;
see also Pittsburgh Baseball, Inc., 630 A.2d at 509 (finding no
ratification); cf. Eckert, 553 A.2d at 118 (holding ratification
existed based upon formal post-contract approval of the contract
at issue). In Scranton, where the court found the alleged
contract lacked the required approval of the city solicitor, among
others, the court also held that there was no post-contract
ratification because the evidence “reveal[ed no] approval of the
City Solicitor” between the time of the contract and the alleged
ratification. Scranton, 871 A.2d at 881. Similarly here,
plaintiffs presented no evidence of post-contract approval from
either the City Law Department or Finance Department, so they
cannot establish ratification.

                   3. Contractual Damages

                                25
       Defendants contend the award of contractual emotional
distress damages should be overturned. The trial court
explained to the jury: “I instruct you that only the [Rendell
Letter] is eligible for emotional distress damages . . . .” The jury
awarded $100,000 per plaintiff in emotional distress damages.
In denying the motion for a new trial, the District Court declined
to overturn the award of emotional distress damages totaling
$2.4 million.10 Because the Rendell Letter was not a valid
contract, this award must be overturned as well.

        The District Court declined to overturn the jury’s award
of $150,000 in expectation damages based on the Rendell Letter
and the 1988 Agreement. The trial court instructed the jury they
could award expectation damages for a breach of any of the
three contracts. The trial court instructed that the parties had
stipulated that expectation damages should be the same whether
the jury found that one or all of the potential contracts had been
breached: “[I]f you find that there were three contracts, and all
three of them were breached, your award would be the same as
if there was but one contract breached.” The jury found the city
breached two of the contracts, the 1988 Agreement and the
Rendell Letter. Accordingly, the breach of the 1988 Agreement
supports the jury’s award of expectation damages. We will
affirm the jury award of contractual expectation damages.

   10
     The District Court molded the $2.4 million award to cover
the jury’s awards for the contractual emotional distress claim
and substantive due process claim.

                                26
                 B. Substantive Due Process

        The jury awarded $152,083.33 per plaintiff for
substantive due process violations, consisting of $70,000 per
plaintiff in compensatory damages against Mayor John Street,
$30,000 per plaintiff in compensatory damages against the city,
and $52,083.33 per plaintiff in punitive damages against Mayor
John Street in his individual capacity ($3.65 million total). The
District Court reduced this award to $2.4 million, striking the
punitive damages, and awarded this amount based on both the
emotional distress claims and the substantive due process
claims, finding the jury awards on these claims duplicative.
Chainey, 2005 WL 3263042, at *5–6.

        Plaintiffs contend the jury’s substantive due process
verdict was grounded in evidence the city made inadequate
repairs 11 and then used strong-arm tactics to remove plaintiffs

  11
    The city and the Redevelopment Authority made repairs at
significant expense, but often these repairs were substandard or
temporary. Some homeowners testified they paid for their own
repairs because the city either did not respond promptly or
simply failed to correct certain problems. The problems
persisted for almost ten years. In 1997, the Army Corp of
Engineers report noted several deficiencies in the homes and
estimated the cost of repairs at slightly less than $1.7 million.
As noted, in 1999, the Redevelopment Authority hired Allied
Construction and paid approximately $2 million for repairs.
Soon thereafter, Allied Construction requested an additional

                               27
from their “defective” homes.12 Mayor John Street took office
in January 2000, as work on the homes stalled. Over the next
few months, city agencies decided the continuing cost of repairs
would exceed Allied Construction’s estimates. During this time,
Mayor John Street met with homeowners on at least two
occasions. According to several homeowners, he initially gave
the impression that the repair work would resume. At a meeting
in April 2000, he stated that the city would inspect all houses.

       In June 2000, after inspecting the homes, the Department
of Licenses and Inspection noted an original construction defect
involving certain air vents through which carbon monoxide
could possibly enter the homes. But the Department of Licenses
and Inspection concluded this defect did not render the homes
imminently dangerous. Less than one month later, in July 2000,
the mayor sent the homeowners a letter asking them to come to

$800,000 to complete the repairs. But by the end of 1999, it
increased that amount to $2.9 million.
   12
     As noted, the city determined the fair-market value of the
houses as of May 12, 1985, was approximately $26,000 per
house, or $1,586,000 total. Plaintiffs’ expert report estimated
that as of March 23, 2005, plaintiffs would need to be
reimbursed “in the neighborhood of $250,000” for each house
in order to relocate to a similar house in another Philadelphia
neighborhood. Plaintiffs were living in their homes at the time
of the trial.

                              28
City Hall on July 21.

       Homeowners testified they expected Mayor John Street
to explain how the city would restart repairs. Instead, the mayor
handed each of them a letter stating that their homes were
“imminently dangerous” because of possible carbon monoxide
problems with the air vents. The letter gave the homeowners ten
days to accept $150,000 from the city in exchange for leaving
their homes within forty-seven days, by September 6, 2000.13
The letter explained that if an owner did not accept the offer,
“the City will have no choice but to take your property by
eminent domain proceedings.”

       There was evidence presented at trial that the city and
Mayor John Street “manufactured” the “imminently dangerous”
designation to pressure the homeowners to accept the city’s
offer and move out. The air vents were installed in 1987, but
every homeowner who testified about the issue—most of whom
had detectors in their homes—stated they experienced no
problems with carbon monoxide.14 In August 2000, some of the
homeowners hired a private contractor who tested twelve homes
and found no signs of carbon monoxide. According to one city

    13
      The offer was $125,000 for the home and $25,000 for
relocation expenses.
    14
     One homeowner, who has acute asthma, testified that a
carbon monoxide system she installed in 1987 had never gone
off.

                               29
official, it would have taken only about one month to replace the
heaters if the city had chosen to remedy the “air vent issue”
rather than declare the homes imminently dangerous.
Significantly, just weeks before the July 2000 meeting, the
Department of Licenses and Inspection concluded that the
homes were not imminently dangerous. Even defendants
“accept on appeal that the jury could have found Mayor Street’s
July 21 letter was at least partly pretextual, and that the various
declarations were motivated at least in part to force [p]laintiffs
to accept the Mayor’s $150,000 offer.” Brief for Defendants at
55. But defendants also assert that these “improper motives”
were not legally cognizable because the amount offered for the
homes was reasonable and the mayor’s actions were not for
personal gain.

        Twenty-four homeowners, the plaintiffs in this suit,
rejected the city’s offer. According to their testimony, they were
upset by how the city had treated them for years, they believed
they had been lied to by Mayor John Street, they did not think
the city’s financial offer was fair, and they simply did not want
to move. 15 Soon after deciding to reject the mayor’s offer,
plaintiffs obtained injunctive relief in state court. But the city

   15
     For example, one plaintiff explained that “I don’t think the
City has a right to force me to sell my house to them or to move
out of the neighborhood that I chose to be in,” while another
testified that he “would never trade [his neighbors] for anything
in the world.”

                                30
allegedly continued to pressure them to move out. In August,
the city gas agency turned off gas and water heaters in the
homes because of an “unsafe condition” and “red-tagged” them,
meaning they could not be used. By October, a state court
enjoined the city from demolishing the homes without
conducting full eminent domain proceedings and ordered the
city to pay for replacement heaters.

        In declining to overturn the substantive due process
damages award, Judge Fullam held that “[n]ot without some
difficulty, I conclude that reasonable minds could well differ as
to whether the defendants’ actions in this case were sufficiently
egregious to constitute a violation of substantive due process.”
Chainey, 2005 WL 3263042, at *4. But the court noted that “the
issue is not of crucial importance, since . . . I conclude that most,
if not all, of the damages attributable to the substantive due
process violation would also be recoverable under some of
plaintiffs’ other theories . . . .” Id. Holding that overlapping
damages were awarded for the emotional distress and
substantive due process claims, the court molded the verdict. Id.
at *5. As noted, we will overturn the emotional distress claim.
Therefore the $2.4 million damage award will depend entirely
on the viability of the substantive due process claim.

       The trial court instructed the jury that plaintiffs could
recover damages for substantive due process violations based
upon: “physical pain, emotional pain and suffering, mental
anguish, discomfort, inconvenience, loss of enjoyment of life,
distress, embarrassment, and humiliation.” The bases for the

                                 31
substantive due process claim, instructed the trial court, were the
city’s alleged failure to repair the houses, the “red-tagging” of
houses in the neighborhood, the offer to purchase plaintiffs’
houses, the threat to seize the houses through eminent domain,
and the charge that the houses were imminently dangerous. The
jury instructions limited the relevant conduct to the city’s actions
between July 21, 2000 and the present.

        Defendants contend plaintiffs cannot recover on a
substantive due process claim because plaintiffs never properly
proved damages for emotional distress. In order to recover
compensatory damages for mental distress, a plaintiff must
present evidence of actual injury. Gunby v. Pennsylvania Elec.
Co., 840 F.2d 1108, 1121 (3d Cir. 1988) (citing Carey v. Piphus,
435 U.S. 247 (1978); Spence v. Bd. of Educ. of Christina Sch.
Dist., 806 F.2d 1198, 1200 (3d Cir. 1986)). In Gunby, we held
that testimony of a disappointed job applicant that he was “very
upset” was insufficient to support an award for emotional
distress. 840 F.2d at 1120–22. In Carey, the Supreme Court
noted that “[a]lthough essentially subjective, genuine injury . .
. may be evidenced by one’s conduct and observed by others.”
435 U.S. at 264 n.20. Competent evidence is required to support
a damage award for an injury. Id. (citing Gertz v. Robert Welch,
Inc., 418 U.S. 323, 350 (1974)). Defendants contend the
testimony of several plaintiffs fails to demonstrate that the
failure to properly repair the houses caused emotional distress
damages.

       Defendants point to varying testimony on injury and

                                32
damages from the twenty-four plaintiffs, breaking down their
testimony into five categories. First, some plaintiffs testified
they suffered no harm. See, e.g., Trial Tr. at 91 (Mar. 29, 2005)
(“Q: And Ms. Campbell, have you suffered, had any type of
medical—strike that. Have you suffered in any way because of
this incident? A: No, ma’am.”). Second, some plaintiffs failed
to testify that they suffered any emotional distress. Third, some
plaintiffs claimed emotional harm, but testified the harm was
caused by the 1985 MOVE bombing, rather than by the city’s
later actions:

       Q:     Mr. Williams, have you and your
              family suffered from this situation?
       A:     Quite a bit.
       Q:     How?
       A:     Well, we’ve had counseling after
              1985, my sons, my wife and I, we
              sought counseling.
       Q:     Okay. And is counseling of the
              whole family–
       A:     Well, back then, yes.
       Q:     And this is due from?
       A:     From the original fire, right.
       Q:     Are you still seeking any type of
              counseling now?
       A:     No. Just stressed.

Trial Tr. at 76 (Mar. 29, 2005). See also Trial Tr. at 17 (Mar.
31, 2005) (“Q: Did you or your family seek any medical

                               33
treatment because of this incident? A: In the beginning, after
the bomb was dropped . . . .”). Fourth, some plaintiffs were
unclear whether their harm arose from the 1985 MOVE
bombing or from the alleged July 2000 breach, and allege harm
that the city did not cause:

       Q:     How did your family suffer because
              of this incident?
       A:     Well, my mother and them–she’s
              old . . . and she can’t do nothing.
              And my father, . . . he died last year
              ....
       Q:     Well, let me ask you, is that in
              relation to what happened with this
              M[OVE] incident?
       A:     Yeah—no—I mean, yeah, yeah.
       Q:     Is there anything else that has
              happened to them through suffering
              because of the M[OVE] incident?
       A:     She got Old Timers, Altheimer’s
              (sic), what do you call it?
       Q:     Alzheimer’s?
       A:     Yes.

Trial Tr. at 116–17 (Mar. 30, 2005). Fifth, some plaintiffs gave
vague testimony about “suffering” because of “this incident” or
not being secure because of “this situation.” See, e.g., Trial Tr.
at 109, 155 (Mar. 30, 2005). Defendants contend this testimony
is insufficient to support recovery for emotional distress and

                               34
could relate either to the 1985 MOVE bombing or the city’s
later actions.

        At the same time, some plaintiffs testified they suffered
damages from the city’s actions. One resident testified she
developed high blood pressure, lost weight, and could not sleep
after the July 2000 meeting with Mayor John Street. Trial Tr. at
35–37 (Mar. 31, 2005). Some residents sent the city a letter in
August 2000 indicating they needed stress counseling, and
others testified to the indignity of living in a neighborhood filled
with boarded-up houses. See, e.g., Trial Tr. at 50, 98–99 (Mar.
29, 2005).

       Judge Fullam faced a difficult and sensitive task.
Inheriting a case tried by another judge, he was obliged to sort
through some contradictory rulings and jury instructions. As a
consequence, he did not reach or address defendants’ sufficiency
of the evidence argument. Nor did he analyze the substantive
due process claim because “the issue is not of crucial
importance, since . . . I conclude that most, if not all, of the
damages attributable to the substantive due process violation
would also be recoverable under some of plaintiffs’ other
theories . . . .” Chainey, 2005 WL 3263042, at *4. But as noted
supra, these damages are not recoverable under the Rendell
Letter. Thus, an analysis of the substantive due process claim is
now crucial.

       In addition, the court erroneously relied upon a fictitious
stipulation that “if plaintiffs were entitled to recover damages

                                35
for ‘emotional distress’ each set of plaintiffs should be awarded
the same amount of money . . . .” Id. at *1. The court held, as
a result, “counsel must be deemed to have stipulated that each
set of plaintiffs was to be awarded the same amount of damages,
if damages were found to be recoverable.” Id. But no such
stipulation exists. Post-briefing, we directed all parties to
identify the record citation for the purported stipulation, or if
written, to provide a copy. In letter brief responses, neither
party was able to identify it. Defendants asserted that “we are
not aware of such a stipulation.” The only stipulation identified
by plaintiffs was that damages for breach of one contract would
be the same regardless of how many contracts were breached.

        This is not a class action suit; each plaintiff must prove
he or she is entitled to damages. There are twenty-four sets of
plaintiffs owning separate homes and presenting different and
at times contrasting views of the events in question, including
causation and damages. Even in the class action context, the
ability of each plaintiff to prove damages is often a key issue.
See Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259
F.3d 154, 188 (3d Cir. 2001) (“The ability to calculate the
aggregate amount of damages does not absolve plaintiffs from
the duty to prove each investor was harmed by the defendants’
practice.”). By relying upon the erroneous stipulation, the court
reviewed the sufficiency of the substantive due process award

                               36
collectively instead of individually.16

        Also, the court failed to address waiver with respect to
both plaintiffs and defendants on the sufficiency of the evidence
issue. “[A] defendant’s failure to raise an issue in a Rule
50(a)(2) motion with sufficient specificity to put the plaintiffs
on notice waives the defendant’s right to raise the issue in their
Rule 50(b) motion.” Williams v. Runyon, 130 F.3d 568, 571–72
(3d Cir. 1997). But if a plaintiff does not object to a defendant’s
Rule 50(b) motion “specifically on the grounds that the issue
was waived by an inadequate Rule 50(a) motion, the [plaintiff’s]
right to object on that basis is itself waived.” Id. at 572.

       Post trial, Judge Newcomer, in an August 9, 2005 Order,
directed the parties to supplement their post-trial motions with
briefing on “whether Defendants have properly maintained a

   16
      It is also likely that the court’s erroneous reliance on “the
stipulation” explains the absence of other important analyses.
The court did not reach defendants’ alternative motion for a new
trial based on plaintiffs’ failure to prove that defendants’ actions
caused emotional distress. The court only addressed defendants’
new trial request alleging improper cross-examination of Mayor
John Street. Also, the court noted the lack of “significant
objections to the court’s charge,” but it did not review the
charge for plain error. See Fed. R. Civ. P. 51(d)(2); Alexander
v. Riga, 208 F.3d 419, 426–27 (3d Cir. 2000).

                                37
portion of their Rule 50 Motion.”17 Both parties briefed this
issue for the trial court. But the court’s post-trial opinion neither
decides nor refers to the Rule 50 waiver motions.

       For understandable reasons, the District Court did not
address the substantive due process claim, which is now critical
on appeal. Furthermore, the erroneous reliance on a stipulation
never agreed to and the absence of analysis on important
procedural issues weigh in favor of a remand. Accordingly, we
do not reach the merits of the defendants’ contentions, but
instead will remand to the district court for a substantive due
process and Fed. R. Civ. P. 50 waiver analysis and, if the issue
has not been waived, a determination of whether each plaintiff
can establish causation and prove damages.

       D e f en d a n ts c o n t e n d t h e r e a r e m o re f u n d a m e n ta l
problems with the substantive due process verdict. Section 1983
provides remedies for deprivations of rights established by the
Constitution, including substantive due process under the
Fourteenth Amendment. Kaucher v. County of Bucks, 455 F.3d
418, 423 (3d Cir. 2006). “To state a § 1983 claim, a plaintiff
must demonstrate the defendant, acting under color of state law,
deprived [plaintiff] of a right secured by the Constitution or the

    17
      The Order further recited: “The Parties shall specifically
brief this Court on (1) whether Defendants have properly made
their Rule 50 Motion against Plaintiffs’ Breach of Contract
Claims, and if they have not, (2) whether Plaintiffs have waived
their right to object on this ground.”

                                       38
laws of the United States.” Kaucher, 455 F.3d at 423 (citing
American Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 49–50
(1999)). Accordingly, “[t]he first step in evaluating a section
1983 claim is to ‘identify the exact contours of the underlying
right said to have been violated’ and to determine ‘whether the
plaintiff has alleged a deprivation of a constitutional right at
all.’” Nicini v. Morra, 212 F.3d 798, 806 (3d Cir. 2000) (en
banc) (quoting County of Sacramento v. Lewis, 523 U.S. 833,
841 n.5 (1998)). Furthermore, “the core of the concept [of due
process is] protection against arbitrary action” and “only the
most egregious official conduct can be said to be arbitrary in the
constitutional sense.” Lewis, 523 U.S. at 845–46; see also
United Artists Theatre Circuit, Inc. v. Twp. of Warrington, 316
F.3d 392, 399 (3d Cir. 2003). The Supreme Court has
consistently “spoken of the cognizable level of executive abuse
of power as that which shocks the conscience.” Lewis, 523 U.S.
at 846; see also United Artists, 316 F.3d at 399.

        To establish a substantive due process claim, a plaintiff
must prove the particular interest at issue is protected by the
substantive due process clause and the government’s deprivation
of that protected interest shocks the conscience. United Artists,
316 F.3d at 400–02. For example, we have held “ownership is
a property interest worthy of substantive due process
protection.” DeBlasio v. Zoning Bd. of Adjustment for Twp. of
W. Amwell, 53 F.3d 592, 600 (3d Cir. 1995) overruled on other
grounds by United Artists, 316 F.3d at 401. In other words,
here, plaintiffs must have been deprived of a fundamental

                               39
property interest under the Constitution.     See Gikas v.
Washington Sch. Dist., 328 F.3d 731, 736 (3d Cir. 2003).

        As noted, plaintiffs contend the city deprived them of the
peaceful enjoyment of their residences caused by the failure to
repair the houses resulting in poor conditions, the “red-tagging”
of their houses, the declaration of eminent domain, the city’s
determination that the houses were imminently dangerous, and
the undue pressure applied by Mayor John Street to accept the
offer to purchase their houses. The crux of plaintiffs’ claim is
that the city falsely declared their homes imminently dangerous
as a pretext to avoid completing the promised repairs. Because
plaintiffs remained in their houses at all times, defendants
contend no deprivation occurred. In response, plaintiffs claim
that courts can find a deprivation of substantive due process
without an actual property loss.

       Further, defendants contend the relevant conduct after
July 21, 2000 does not “shock the conscience.” 18 Deprivation
violates due process only when it “‘shocks the conscience,’”
which encompasses “‘only the most egregious official
conduct.’” United Artists, 316 F.3d at 400 (quoting Lewis, 523
U.S. at 846). Applying the “shocks the conscience” standard
“prevents us from being cast in the role of a ‘zoning board of

      18
       Defendants argue, inter alia, that the city’s offer of
$150,000 for each home, an amount almost double the $80,000
per home the jury awarded as just compensation on the takings
claims, cannot shock the conscience.

                               40
appeals.’” Id. at 402 (quoting Creative Environments, Inc. v.
Estabrook, 680 F.2d 822, 833 (1st Cir. 1982) (quoting Village
of Belle Terre v. Boraas, 416 U.S. 1, 13 (1974) (Marshall, J.,
dissenting))). While the meaning of the standard varies
depending upon factual context, merely alleging an improper
motive is insufficient, even where the motive is unrelated to the
merits of the underlying decision. Id. at 400. In Eichenlaub v.
Twp. of Indiana, 385 F.3d 274 (3d Cir. 2004), we applied the
shocks the conscience standard in a zoning dispute. Plaintiffs
alleged that the township “maligned and muzzled” them, applied
standards not applied to similar properties, delayed permits and
approvals, improperly increased tax assessments, and pursued
unannounced and unnecessary enforcement actions in denying
zoning requests. Id. at 286. But in affirming the trial court’s
finding that the alleged conduct did not shock the conscience,
we noted there were no allegations of corruption, self-dealing,
bias against an ethnic group, or additional facts that suggested
conscience-shocking behavior. Id.

        We do not address these issues at this time because the
trial court did not analyze the substantive due process claim or
the Rule 50 waiver issue and erred in not requiring individual
proof of causation and damages. We will remand for an analysis
of the substantive due process claim and Fed. R. Civ. P. 50
waiver and, if the issue has not been waived, a determination of
whether each plaintiff has adequately proven causation and
damages.

                               41
         C. New Trial Based on Trial Court’s Questioning
                      of Mayor John Street

      In post-trial motions, defendants contended Judge Fullam
should have ordered a new trial based on Judge Newcomer’s
prejudicial questioning of M ayor John Street. 1 9

   19
        Defendants referenced three particular instances:
         THE COURT:           In the course of your tenure on City
                              Council and as Mayor, has there
                              ever been any event that has been
                              as traumatic in the City of
                              Philadelphia as this event at Osage
                              Avenue?
         THE WITNESS:         This is way up there, your Honor.
                              It is way up there.
         THE COURT:           Can you explain why you don’t
                              have a better understanding of all
                              these questions that are being asked
                              of you?
         THE WITNESS:         That’s easy to explain.
         THE COURT:           I wish you would.
         THE WITNESS:         Because I am Mayor of the fifth
                              largest city in the country . . . .
                              [describing other duties as Mayor
                              of Philadelphia].
         THE COURT:           Yet, you can’t remember—
         THE WITNESS:         I just can’t remember the details.

                                 42
      THE COURT:           Let me finish. That’s an impressive
                           list [of duties of the Mayor].
      THE WITNESS:         That’s just short or part of the list.
      THE COURT:           Among your responsibilities, aren’t
                           you also responsible for the welfare
                           and the well-being of all of the
                           citizens of Philadelphia and
                           wouldn’t that include the people
                           who live at Osage Avenue.
      THE WITNESS:         Absolutely, your honor.
      THE COURT:           So, if that is your answer to my
                           question, so be it.
      THE WITNESS:         Can I explain?
      THE COURT:           I think you have.

Trial Tr. at 86–88 (Mar. 31, 2005).

      [THE WITNESS]: Because there are—this is a very
                     complicated situation that has been
                     going on . . . for a long, longtime.
                     The incident that occurred that gave
                     rise to all of this litigation, occurred
                     in May of 1985. By the time that I
                     got to be the Mayor, in January of
                     2000, it is 15 years later . . . . I am
                     telling you that I do not agree that
                     the city was responsible . . . .

                              43
THE COURT:     Just a minute. That’s not what your
               counsel has informed the Court or
               this jury. Counsel has informed the
               Court and the jury unless I’m
               grossly in error, that the city has
               accepted responsibility for the
               damage caused on that occasion.
[DEFENDANTS’
 ATTORNEY]:    Your Honor, the plaintiff counsel is
               asking—
THE COURT:     Am I correct or incorrect?
[DEFENDANTS’
  ATTORNEY]:   I would like to explain that.
THE COURT:     Just tell me am I correct or
               incorrect, have you not so stated for
               the record?
[DEFENDANTS’
  ATTORNEY]:   I stated for the record, that the city
               had accepted responsibility.
THE COURT:     Very well, that’s what I thought I
               just said.
[DEFENDANTS’
  ATTORNEY]:   Y o u r H on or, I w o u ld lik e to
               explain. First of all, that—
THE COURT:     No, this is not a time to explain. I
               just wanted you to respond, in view

                 44
                           of the Mayor’s        most   recent
                           testimony here.
      [DEFENDANTS’
        ATTORNEY]:         Then I have an objection to the
                           question as drawing on the—asking
                           for a legal conclusion from the
                           witness.
      THE COURT:           Overruled. Proceed.

Trial Tr. at 90–91 (Mar. 31, 2005).

      THE COURT:           My next question is, do you have
                           any way of knowing, have you ever
                           conducted a study or do you have
                           an opinion, as to what it would cost
                           in the aggregate to fix all of these
                           houses, put them in the shape that
                           they were intended to be in?
      THE   WITNESS:       Today, now?
      THE   COURT:         Today.
      THE   WITNESS:       I don’t know.
      THE   COURT:         Did you ever do that, ever develop
                           a study?
      THE WITNESS:         There were people who were
                           responsible for it, trying to figure
                           out how much it would cost.
      THE COURT:           I’m asking you.

                              45
Defendants contend these questions demonstrated animosity
toward Mayor John Street and defendants’ counsel, and
suggested to the jury an answer to the ultimate issue before
them. Defendants maintain the trial judge misunderstood the
difference between the acceptance of responsibility for the
original MOVE incident and for the current repairs, contending

      THE WITNESS:         Did I ever personally do it? No,
                           your Honor.
      THE COURT:           Someone working for you?
      THE WITNESS:         I think someone working for the
                           city, did that on numerous
                           occasions.
      THE COURT:           You should have some kind of
                           response to my question, shouldn’t
                           you?
      THE WITNESS:         I can get a response, your Honor, I
                           don’t have that with me. I don’t
                           have it in front of me. Nobody told
                           me to bring any documents. People
                           told me to bring my body.
      THE COURT:           You are here because you are the
                           Mayor of the city. You already
                           testified that it would not be
                           feasible to perform repairs, that’s
                           why I’m asking you the question.

Trial Tr. 115–16 (Mar. 31, 2005).

                             46
the jury was either left with the mistaken impression that Mayor
John Street did not accept responsibility for the 1985 MOVE
bombing or that the court believed that the city was legally
responsible for the 2000 repairs.

        Judge Fullam characterized these questions by the trial
judge as “expressing surprise” that Mayor John Street could not
recall key occurrences and suggesting the Mayor should have
“been more solicitous of the welfare of his citizens.” Chainey,
2005 WL 3263042, at *6. But as Judge Fullam noted, the trial
judge immediately issued a curative instruction to the jury after
the third exchange. Id. Moreover, Judge Fullam noted the
questions might have influenced only the punitive damages
award against the Mayor, which he overturned. Id. Because the
evidence on the breach of contract claims likely entitled
plaintiffs to judgment as a matter of law, said Judge Fullam, any
error would be harmless. Id.

       We review for abuse of discretion. Adedoyin, 369 F.3d
at 342 (citing Fed. R. Evid. 614(b)). Evidence Rule 614(b)
provides that the court may interrogate witnesses. Id. This has
been an important and longstanding practice on the part of trial
judges and should not be discouraged. See Riley v. Goodman,
315 F.2d 232, 234 (3d Cir. 1963) (“We have long abandoned the
adversary system of litigation which regards opposing lawyers
as players and the judge as a mere umpire whose only duty is to
determine whether infractions of the rules of the game have
been committed.”). Of course, a judge must not “abandon his
[or her] proper role and assume that of an advocate.” United

                               47
States v. Green, 544 F.2d 138, 147 (3d Cir. 1976). But the
abuse of discretion standard is a deferential one and in order to
meet the standard the conduct of a trial judge must be “inimical
and partisan, clearly evident and prejudicial.” Riley, 315 F.2d
at 235. In making this determination, “[e]ach case must be
viewed in its own setting.” Id. at 234.

         The trial judge instructed the jury that his questioning of
Mayor John Street was directed toward the city’s acceptance of
responsibility for the MOVE bombing itself, not the city’s
responsibility to warranty the rebuilt houses, the central issue in
this case. 20 Furthermore, we fail to see prejudice. See United
States v. Beaty, 722 F.2d 1090, 1093 (3d Cir. 1983) (“We must
determine whether [the trial judge’s] conduct was so prejudicial
as to deprive defendant . . . of a fair, as opposed to a perfect,
trial.”) (citations omitted).

       Defendants also contend the trial judge’s questions
affected their ability to disclaim responsibility for the repairs.

  20
    To support their argument, defendants rely on United States
v. Filani, 74 F.3d 378 (2d Cir. 1996), a criminal case. In Filani,
the defendant was the only defense witness and his credibility
was determinative. The trial judge challenged the defendant
several times and interfered repeatedly with the defense
counsel’s cross-examination of witnesses. Id. at 381–82. In this
case, the crux of the claim was a written contract. Furthermore,
Judge Newcomber emphasized to the jury that they alone must
determine the facts.

                                48
But insofar as the jury awarded contractual expectation
damages, they were based on the 1988 Agreement and the
expectations of the homeowners, not the testimony of Mayor
John Street. We agree with Judge Fullam that the trial judge’s
questioning did not affect the outcome. Accordingly, we will
affirm the denial of a new trial on this ground.

                  D. Takings Clause Verdict

         The jury entered a verdict for plaintiffs on their takings
clause claims and awarded $80,000 per plaintiff. The District
Court reversed this verdict, finding no takings occurred because
at all times plaintiffs continued to reside in their homes. Hence,
there was no deprivation. The District Court noted that if a
taking had occurred “plaintiffs would have been entitled to
pursue remedies under the state eminent domain statute . . . .”
Chainey, 2005 WL 3263042, at *4. Plaintiffs contend we
should reinstate both the verdict and the damage award because
they proved defendants deprived them of all economically viable
uses of their property. They contend they have no remedy under
the state eminent domain code because the city’s actions
“poisoned the market” for their homes.

       The takings claims are not ripe because plaintiffs never
pursued their takings clause claims in state court. A plaintiff
must first “seek compensation through the procedures the State
has provided for doing so” before asserting a federal takings
claim. Williamson County Reg’l Planning Comm’n v. Hamilton
Bank of Johnson, 473 U.S. 172, 194 (1985). In Williamson,

                                49
after the plaintiff purchased land to develop residential housing,
defendant-county adopted a zoning ordinance restricting the
permissible density. Plaintiff alleged a taking, claiming he was
deprived of all economically viable use of the land. Id. at
177–83. The Court rejected plaintiff’s claim because, as yet,
there had been no denial of just compensation. Construing the
Fifth Amendment (“[N]or shall private property be taken for
public use, without just compensation.”), the Court explained
the “Fifth Amendment does not proscribe the taking of
property;” instead, it only “proscribes takings without just
compensation.” Id. at 194 & n.13 (emphasis in original).

        The Fifth Amendment does not require at the time of the
taking that just compensation be paid, but only that a
“reasonable, certain and adequate provision for obtaining
compensation exist.”         Id. at 194 (citations omitted).
Accordingly, if there is an adequate provision for compensation,
“no constitutional violation occurs until just compensation has
been [subsequently] denied.” Id. at 194 n.13. In Williamson,
because Tennessee law provided a procedure by which plaintiff
could obtain just compensation for the alleged diminution in
value of plaintiff’s property, plaintiff’s claim was not ripe. Id.
at 196; see also Stern v. Halligan, 158 F.3d 729, 734 (3d Cir.
1998) (“The plaintiffs have not, so far as the record shows,
sought compensation through state proceedings. Accordingly,
plaintiffs’ takings claim must be rejected.”); cf. County Concrete
Corp. v. Twp. of Roxbury, 442 F.3d 159, 168 (3d Cir. 2006)
(holding takings claim was ripe because plaintiff had exhausted

                               50
state procedures). As the Supreme Court recently stated:

       there is scant precedent for the litigation in federal
       district court of claims that a state agency has
       taken property in violation of the Fifth
       Amendment’s takings clause. To the contrary,
       most of the cases in our takings jurisprudence . .
       . came to us on writs of certiorari from state
       courts of last resort.

San Remo Hotel, L.P. v. City and County of San Francisco, 545
U.S. 323, 347 (2005); cf. First English Evangelical Lutheran
Church of Glendale v. County of Los Angeles, 482 U.S. 304, 312
n.6 (1987) (distinguishing Williamson because California had no
just compensation procedures).

        Pennsylvania provides adequate process for plaintiffs to
obtain just compensation. Pennsylvania’s Eminent Domain
Code provides inverse condemnation procedures through which
a landowner may seek just compensation for the taking of
property. See 26 Pa. Cons. Stat. §§ 308, 502(c), 709. Here,
plaintiffs failed to pursue an inverse condemnation. They
contend they did not need to pursue the takings clause claims in
state court because they were not seeking just compensation.
But in fact that is the basis of their claim—just compensation for
the reduction in fair market value of their homes.

       In Cowell v. Palmer Twp., 263 F.3d 286, 290 (3d Cir.
2001), plaintiffs in a federal suit alleged a taking when the
municipality allegedly reduced the property’s value by

                                51
improperly imposing liens on plaintiffs’ property. We rejected
plaintiffs’ argument that they were not required to file a claim
in state court. Id. at 291. Where there is a procedure for seeking
just compensation, “the property owner cannot claim a violation
of the [Takings] Clause until it has used the procedure and been
denied just compensation.” Williamson, 473 U.S. at 195.

        Accordingly, plaintiffs claims are not ripe, and we do not
reach the issue of whether a deprivation occurred. The District
Court correctly acknowledged that if a taking had occurred,
plaintiffs must pursue their claim in state court. As noted, the
District Court held that no taking occurred and set aside the jury
award on the takings claims. We will affirm but on different
grounds. We will set aside the jury award on the ground that
plaintiffs’ takings claims are not ripe for adjudication.

                               III.

        For the reasons set forth, we will affirm in part and
reverse in part the judgment of the District Court. We will
remand on the issues of substantive due process, Fed. R. Civ. P.
50 waiver, and, if the issue has not been waived, whether each
plaintiff proved causation and damages for the substantive due
process claims.

                               52