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HUERTAS v. EAST RIVER HOUS. CORP.

February 28, 1986

JULIO HUERTAS, et al., Plaintiffs,
v.
EAST RIVER HOUSING CORP., et al., Defendants



The opinion of the court was delivered by: CARTER

ROBERT L. CARTER, United States District Judge

 This case has been in litigation since September 12, 1977. The action was commenced by individual Hispanic and black plaintiffs and two organizations (It's Time, Inc. and the Lower East Side Joint Planning Council on Housing) representing blacks and Hispanics. Throughout its pendency, the litigation has been handled by counsel on the legal staff of the Puerto Rican Legal Defense and Educational Fund, Inc. The case was certified as a class action on March 6, 1978, and the class was defined as: "All Puerto Rican, other Hispanic and Black homeseekers who have completed or will complete applications for occupancy in the cooperative apartments owned by the defendants and who have been or may be denied the opportunity to purchase those apartments because of their national origin or race; and (b) all Puerto Rican, other Hispanic and Black homeseekers who have had or will have an interest in buying a cooperative apartment owned by defendants but who have been discouraged and dissuaded from completing an application to do so by any act of defendants prohibited by" federal laws prohibiting violation of one's civil rights (42 U.S.C. §§ 1981 and 1982) and discrimination in housing (42 U.S.C. § 3601 et seq.).

 Defendants are four housing developments on the Lower East Side of New York run and maintained by the East River Housing Corp., Seward Park Housing, Corp., Hillman Housing Corp., and Amalgamated Dwellings, Inc. In addition, Harold Ostroff, as President and Board member of Seward Park Housing Corp., and Ralph Lippman, as President and Board member of the other three corporations, were named as individual defendants.

 In February, 1981, the case was tried to the court without a jury. Thereafter, at the court's urging, beginning in December, 1981, counsel and the parties met periodically to seek a settlement. In March, 1982, the parties and counsel conferred with the court on a proposed settlement. The proposal was accepted by the defendants but rejected by plaintiffs. Beginning approximately in July, 1984, again at the court's urging, the parties and counsel conferred in an attempt to reach an acceptable solution. Finally, in January, 1985, the parties and counsel reached an agreement in principle. Counsel worked together on a stipulation of settlement which was reduced to final form and agreed to by the parties in September, 1985.

 Not included in the stipulation of settlement is the issue of attorneys' fees sought by counsel for the plaintiffs. Defendants have not signed the stipulation of settlement, although agreeing to all of its terms, apparently because they felt they could not accept it until they knew what the award to plaintiffs' counsel would be. Defendants are bound by the settlement whether or not they are contented with the court's decision on the attorneys' fee.

 The court has the inherent power and, indeed, a duty to enforce a settlement in a case pending before it. Meetings & Expositions, Inc. v. Tandy Corp., 490 F.2d 714, 717 (2d Cir. 1974); Ozyagcilar v. Davis, 701 F.2d 306, 308 (4th Cir. 1983); Dankese v. Defense Logistics Agency, 693 F.2d 13, 16 (1st Cir. 1982); Wiltgen v. Hartford Accident and Indemnity Co., 634 F.2d 398, 400 (8th Cir. 1980). See also In re Air Crash Disaster at John F. Kennedy International Airport on June 24, 1975, 687 F.2d 626, 629 (2d Cir. 1982) ("district court erred in not reducing the award of costs to reflect the [settlement] agreement that the claims of certain plaintiffs were settled 'without costs'").

 In January, 1985, the court met with representatives of the parties authorized to act on their behalf. Over a number of hours the court met with the parties jointly and separately to discuss various provisions of the proposed settlement. When one side raised reservations about a particular provision with the court, modifications were proposed until finally a full settlement was reached in principle. As the Ninth Circuit stated in Dacanay v. Mendoza, 573 F.2d 1075, 1078 (9th Cir. 1978), "a litigant can no more repudiate a compromise agreement than he could disown any other binding contractual relationship."

 The agreement was arrived at in lengthy arms length negotiations and seems fair and reasonable and in the best interests of the plaintiffs' class and, indeed, to defendants as well. If defendants find themselves unhappy about the court's attorneys' fee award, their remedy is to challenge it in the Court of Appeals. The settlement itself is binding on them.

 Now to that unresolved issue. Plaintiffs seek $585,134.50 in attorneys' fees as well as costs and expenses totalling $28,083.63. The attorneys' fees applications consist of a lodestar figure of $292,252.25 with a multiplier of 2.0 which by my calculations brings the total sought to $584,504.50, not $585.134.50.

 Defendants object on a variety of grounds but only a few of their contentions have merit. Defendants argue that plaintiffs are not the "prevailing party" because they did not obtain all they sought. Indeed, the plaintiffs in January, 1985, accepted settlement terms substantially similar to those they had rejected in 1982. That they received less than they sought is irrelevant. The critical factor is whether plaintiffs succeeded on the central issue of the litigation; this is demonstrated by whether the primary relief sought has been obtained. Iranian Students Association v. Edwards, 604 F.2d 352 (5th Cir. 1979); American Constitutional Party v. Munro, 650 F.2d 184, 188 (9th Cir. 1981) (to be characterized as a prevailing party, one must establish "some sort of clear, causal relationship between the litigation brought and the practical outcome realized") (emphasis in the original). Defendants are hard pressed to contend seriously that plaintiffs do not meet that standard. They have secured a settlement that secures the plaintiff class against discrimination and provides that a certain percentage of defendants' vacancies will, over time, be filled by members of the plaintiff class. The fact that these results were produced through settlement negotiations rather than by court decree is of little consequence. Robinson v. Kimbrough, 652 F.2d 458, (5th Cir. 1981).

 Defendants argue that the plaintiffs are entitled to an award of attorneys' fees only under the Fair Housing Act, 42 U.S.C. § 3601 et seq., and not under § 1988. Under the former statute the prerequisite to any award is a showing of the plaintiffs' inability to pay. Plaintiffs invoked both statutes. The settlement explicitly eliminates language specifying fault, and the court has made no findings on that score. Indeed, the settlement renders any such findings both unnecessary and potentially harmful. However, plaintiffs should not be penalized for reaching a settlement by being precluded from seeking attorneys' fees under the more liberal § 1988 standard. Since plaintiff sought relief under both the Fair Housing and the Civil Rights Act, are the prevailing parties, and no determination has been made on the merits under either statute, they are entitled to apply for attorneys' fees under § 1988. Gagne v. Maher, 594 F.2d 336 (2d Cir. 1979), aff'd, 448 U.S. 122, 65 L. Ed. 2d 653, 100 S. Ct. 2570 (1980).

 Courts have rejected the notion that fee awards should be affected by the status of the losing party, the theory being that the "reasonable value of the attorneys' time does not depend on who his or her adversary is." Rodriguez v. Taylor, 569 F.2d 1231, 1249 n.32 (3d Cir. 1977), cert. denied, 436 U.S. 913, 56 L. Ed. 2d 414, 98 S. Ct. 2254 (1978); Dennis v. Chang, 611 F.2d 1302, 1304-07 (9th Cir. 1980). Thus, that defendants are not-for-profit organizations, or that the cost of the award may have to be absorbed by the cooperators in higher carrying charges is not a factor to be considered.

 Defendants argue that the fee award should be based on a "cost plus" analysis; that is, that the fee award should be calculated on the basis of salaries paid to its lawyers by the Puerto Rican Legal Defense and Educational Fund. This could undoubtedly result in an award below market rates. However, the United States Supreme Court expressly rejected this approach in Blum v. Stenson, 465 U.S. 886, 104 S. Ct. 1541, 1547, 79 L. Ed. 2d 891 (1984) and held that reasonable attorneys' fee awards are to be based on "prevailing market rates in the relevant community, regardless of whether plaintiff is represented by private or nonprofit counsel."

 In determining the appropriate award, the court calculates the reasonable time expended multiplied by reasonable hourly rates to arrive at the lodestar figure, see e.g., City of Detroit v. Grinnell Corp., 560 F.2d 1093 (2d Cir. 1977), and then ...


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