Christian Eaddy's cousin called police in 2013 to say the 26-year-old had stabbed himself and was wielding two knives.
Police say Eaddy was shot once when he advanced toward them with the blades.
The Los Angeles Times says the family lawsuit claimed Eaddy was shot after he had turned away from officers.
City News Service says a jury awarded the family USD 2.2 million on Tuesday but found the city liable for only USD 1.4 million. The panel concluded Eaddy was partly responsible for the incident.
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