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EEOC v. SAGE REALTY CORP.

August 26, 1981

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION and Margaret Hasselman, Plaintiffs,
v.
SAGE REALTY CORPORATION, Monahan Commercial Cleaners, Inc., and Monahan Building Maintenance, Inc., Defendants



The opinion of the court was delivered by: WARD

In an opinion filed January 29, 1981, following an eleven-day trial, the Court awarded Margaret Hasselman the sum of $ 33,141.75 in back pay and interest as compensation for defendants' wrongfully discharging her in violation of Title VII of the Civil Rights Act of 1964 ("the Act"), as amended, 42 U.S.C. §§ 2000e-2000e-17. The Court held that defendants discriminated against Hasselman on the basis of sex when they required her to wear a sexually revealing outfit known as the Bicentennial uniform during her employment as a lobby attendant in a large midtown Manhattan office building. In its earlier opinion, which is published at 507 F. Supp. 599, the Court also determined to award Hasselman reasonable attorneys' fees pursuant to section 706(k) of the Act, 42 U.S.C. § 2000e-5(k), and awarded costs to both Hasselman and plaintiff Equal Employment Opportunity Commission ("EEOC"). 507 F. Supp. at 613. Hasselman's application for attorneys' fees and costs and the EEOC's application for costs are now before the Court. An evidentiary hearing has been held. See City of Detroit v. Grinnell Corp., 495 F.2d 448, 468 (2d Cir. 1974).

The EEOC may recover costs pursuant to Rule 54(d), Fed.R.Civ.P. See Rios v. Steamfitters Local 638, 400 F. Supp. 993, 998 (S.D.N.Y.1975), aff'd, 542 F.2d 579 (2d Cir. 1976), cert. denied, 430 U.S. 911, 97 S. Ct. 1186, 51 L. Ed. 2d 588 (1977). Inasmuch as the costs sought by the EEOC are reasonable and were necessarily incurred in the prosecution of this litigation, they are properly recovered from defendants.

 Plaintiff Hasselman seeks to recover for attorneys' fees valued by her at $ 100,788.75. She also requests that this "lodestar" figure of $ 100,788.75 obtained by multiplying the number of hours by an hourly rate for each lawyer, paraprofessional or law student involved be adjusted upward by a multiplier of two, for a total fee award of $ 201,557.50. In addition, Hasselman seeks to recover costs in the amount of $ 534.00.

 Although Hasselman actually has not been billed $ 100,778.75, this lodestar figure represents the amount she claims she would have been billed had her private counsel charged her the full amount appropriate for the services rendered. The $ 100,778.75 total derives from 1243.50 hours of work by lawyers ($ 94,697.50 for 1000.25 hours) and by paraprofessionals and law students ($ 6081.25 for 243.25 hours). From June 1976 through November 1978, Hasselman was represented by the Queens Legal Services Corporation ("QLS"). Since November 1978, she has been represented by the National Employment Law Project ("Project"), a not-for-profit corporation that provides specialized legal services in employment law.

 For the reasons that follow, the Court awards plaintiff Hasselman attorneys' fees in the total amount of $ 90,365.00, plus costs of $ 534.00. The breakdown of this award is summarized in the Appendix to this opinion, Table 1. It is based on a lodestar figure of $ 69,585.00 and includes a bonus of 35 per cent of the lodestar. Of the total award, $ 2,683 is for services provided to Hasselman by QLS during the early stages of the litigation, and the balance is for the Project's representation of plaintiff Hasselman.

 Methodology and Criteria

 The standard to be applied in the Second Circuit to determine an appropriate award for attorneys' fees is set forth in City of Detroit v. Grinnell Corp., supra, 495 F.2d at 470-74. Under the Grinnell standard, the Court is to evaluate the number of hours spent by counsel and to ascertain a reasonable rate for counsel's time. In addition, the Court must assess the risks of litigation and the novelty, complexity and importance of the issues litigated, to determine if the lodestar figure of reasonable rate multiplied by the time allowed should be increased by a bonus or contingency multiplier. Id. at 471-472. See also Ste. Marie v. Eastern Railroad Association, 497 F. Supp. 800, 812-13 (S.D.N.Y.1980), rev'd and remanded on other grounds, 650 F.2d 395 (2d Cir. 1981). Although in this circuit the court of appeals has yet to specify criteria to be considered in determining an appropriate fee award, at the suggestion of the parties the Court has considered the Fifth Circuit's criteria, see Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974); accord, Anthony v. Marion County General Hospital, 617 F.2d 1164, 1171 (5th Cir. 1980), and the factors listed in the ABA Code of Professional Responsibility, D.R. 2-106(B).

 Defendants argue that an attorneys' fee award in this case should be limited to a percentage of the amount recovered by plaintiff Hasselman. They suggest that Hasselman be awarded no more than the customary contingent fee in New York of one-third of the amount recovered, or in this case about $ 11,000. Defendants' argument is without merit. It is by now well settled that, although the size of the recovery is a factor that may be considered by the Court, an award of attorneys' fees is not to be based on the amount recovered. See City of Detroit v. Grinnell Corp., supra, 495 F.2d at 468-74.

 Similarly without merit is defendants' further argument that any amount of attorneys' fees that would otherwise be awarded here must be reduced because the Project receives substantial governmental funding. This very contention was rejected by the court of appeals in EEOC v. Steamfitters Local 638, 542 F.2d 579, 592-93 (2d Cir. 1976), cert. denied, 430 U.S. 911, 97 S. Ct. 1186, 51 L. Ed. 2d 588 (1977), a case involving a fee application in which the plaintiffs were represented by the Project. The court in Steamfitters held only that the factor of public funding may be considered in a district court's determination of an attorneys' fee award, and that it was not an abuse of discretion for the lower court to award less to the Project than it would have awarded to a non-federally funded law firm. Id. at 593. In this Court's view, plaintiff Hasselman should recover an award of attorneys' fees on the same basis as if she had been represented by private counsel.

 The Court also finds that Hasselman's attorneys' fee award should not be limited to the salaries paid to lawyers employed by the Project, even after an adjustment for overhead, non-salary benefits and the like. See Allen v. Terminal Transport Co., 486 F. Supp. 1195, 1199 (N.D.Ga.1980), aff'd mem. sub nom. Beasley v. Terminal Transport Co., 638 F.2d 1232 (5th Cir. 1981). Salaries might well be relevant to a determination of appropriate hourly rates. But, as is nearly always the case, lawyers employed by public interest law firms earn less, often considerably less, than lawyers engaged in private practice. Just as a defendant found liable for attorneys' fees should not be required to pay an award based on rates charged by the most expensive private law firm in the community (if, for example, such a firm took on a Title VII action on a "pro bono publico statutory fee" basis), an unsuccessful defendant should not benefit from the fortuitous happenstance that the successful plaintiff was represented by a public interest lawyer. See generally Berger, Court Awarded Attorneys' Fees: What is "Reasonable"?, 126 U.Pa.L.Rev. 281, 323 (1977).

 As a general proposition, attorneys' fees should be awarded at hourly rates based on the average rate charged by lawyers in the community with similar experience and of comparable quality to those by whom the successful Title VII plaintiff was represented. Experience includes not only the number of years of practice but also the nature of the practice engaged in. Similarly, the Court's assessment of allowable time must be based on an evaluation of the time reasonably necessary to perform the tasks required, given counsel's experience at the bar. Inefficiency cannot be rewarded, and an experienced lawyer who is properly allowed a greater hourly rate should perform more efficiently than a less experienced attorney whose time must be valued at a lower rate.

 A prevailing plaintiff should not be denied an award of attorneys' fees because, as here, she did not herself initiate the action but rather exercised her statutory right pursuant to 42 U.S.C. § 2000e-5(f)(1) to intervene in an action commenced by the EEOC. See EEOC v. Murphy Motor Freight Lines, Inc., 488 F. Supp. 381, 389 (D.Minn.1980). As intervening plaintiff, Hasselman was entitled to full representation by the counsel of her choice. She was not required to stand to the side and let her hopes ride on the EEOC's performance. Although in an action brought on behalf of an individual the EEOC will generally be acting in the interests of the individual intervenor, the interests of the EEOC and the intervening plaintiff will not always be the same. Moreover, the EEOC and the private plaintiff should be free to decide which of them will undertake primary responsibility for the case, and if successful the private plaintiff should not be denied reasonable attorneys' fees because certain aspects of the litigation handled by her counsel could have been handled by the EEOC.

 Nevertheless, in an action such as this, where the EEOC is a participant, the private plaintiff's attorneys must make every reasonable effort to ensure that they do not unnecessarily duplicate work done by the government plaintiff. Just as any private lawyer whose client is footing the bill would do, an attorney representing an intervening Title VII plaintiff should take appropriate advantage of the work effects of the EEOC counsel. Thus, where the Court has found that Hasselman's attorneys failed to avail themselves of EEOC assistance and unnecessarily duplicated work performed by government counsel, it has reduced the fee award accordingly.

 Rates

 To compute the amount of the fee award the Court first determines an appropriate rate for each of the three lawyers who represented plaintiff Hasselman in this case. The Court has assigned an hourly rate to each attorney for each of the calendar years during which this litigation was conducted. Hourly rates are developed for the Project's paraprofessionals and law students as well, whose time may also be considered as part of allowable attorneys' fees.

 In the Court's view, Hasselman received legal representation of a quality well above average for the community. Accordingly, Hasselman's counsel are entitled to value their time at a rate in excess of the prevailing average. Unfortunately for defendants, the legal community from which plaintiff Hasselman's representation was drawn, New York City, is one of the most expensive in the country. However, although Hasselman's counsel argued to the contrary, the Court does not believe that Project lawyers are entitled to value their time at the rates at which the most expensive law firms bill their lawyers' time. While the Court does not dispute that the quality of the Project's work may be as good as that done at New York's most expensive law firms, the Court also ...


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