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ORTIZ v. REGAN

November 26, 1991

BERNICE ORTIZ, PLAINTIFF,
v.
EDWARD V. REGAN, AS COMPTROLLER OF THE STATE OF NEW YORK AND AS TRUSTEE OF THE NEW YORK STATE AND LOCAL RETIREMENT SYSTEMS, THE NEW YORK STATE AND LOCAL RETIREMENT SYSTEMS, GREGORY O. CHILD, PERSONALLY AND AS DIRECTOR, RETIREMENT BENEFITS OF THE NEW YORK STATE AND LOCAL RETIREMENT SYSTEMS, AND JANE A. O'CONNOR, PERSONALLY AND AS ASSISTANT DIRECTOR OF THE RETIREMENT BENEFITS BUREAU OF THE NEW YORK STATE AND LOCAL RETIREMENT SYSTEMS, DEFENDANTS.



The opinion of the court was delivered by: Mukasey, District Judge.

OPINION AND ORDER

The last phase of this pension benefits case is plaintiff's application for counsel fees, most of which were incurred after plaintiff was offered and declined the identical relief she won after more than a year of additional litigation. Because I do not read the Equal Access to Justice Act to require that defendants subsidize such profligacy, plaintiff's counsel will recover a fee of $4750, instead of the requested $57,378.75.

I.

Defendants cut off completely plaintiff's retirement benefits, without a pre-deprivation hearing, because of an apparent discrepancy between her claimed birth date and what they believed to be her actual birth date. That discrepancy translated into a difference of $1.01 per month in her benefits. Compare Complaint Exh. E ($296 per month) with Complaint Exh. P ($294.99 per month) By any standard, defendants' summary termination of plaintiff's benefits was an unfair and gross bureaucratic overreaction. After plaintiff fended off defendants' motion to dismiss in October 1990, see 749 F. Supp. 1254 (S.D.N.Y. 1990), she won a summary judgment in August 1991, see 769 F. Supp. 570 (S.D.N.Y. 1991), recognizing that she had been denied due process and awarding her a hearing and nominal damages of $1. No other relief was warranted because plaintiff's correct birth date has yet to be determined definitively, defendants have resumed plaintiff's retirement benefits albeit at the lesser rate, and defendants have waived any Eleventh Amendment bar to an award of back benefits should plaintiff prevail at a hearing on that issue. Familiarity with both of those earlier opinions is assumed for current purposes.

The response was a letter from plaintiff's counsel dated April 30, 1990 expressing both skepticism and confusion about the proffered hearing. (Colucci Aff. Exh. D) In a somewhat exasperated reply ("If you say you are confused, I have no choice but to believe you. Let me make it simple."), defendant's counsel reiterated and explained the offer. (Colucci Aff. Exh. E) That generated yet another skeptical letter from plaintiff's counsel, dated May 9, 1990, demanding to know on what authority a hearing was offered, a copy of "the written procedures and/or regulations, if any, that might exist," and restoration of plaintiff to a pension level consistent with the birth date she is not claiming. (Colucci Exh. F) In a letter dated May 10, 1990, defendant's counsel again cited the statute as authority, disclosed where the regulations could be found, and took the position that plaintiff should receive her pension at the diminished rate until her right to the higher rate, based on an earlier birth date, was established. Once again, it bears emphasis that we are talking here about a difference of $1.01 per month.

On May 31, 1990, before the dismissal motion was decided, defendant's counsel again sought to resolve the matter along the lines previously suggested, to no avail (Colucci Aff. ¶ 12, Exh. I), as he did again in June and December 1990, with the same result. (Colucci Aff. ¶¶ 12-15, Exhs. J-M)

As noted above, the result of the summary judgment motion was to grant plaintiff what she could have had more than a year earlier. Moreover, that result was predictable. Plaintiff's birth date was disputed throughout and there was no proffer of any evidence to suggest that any defendant acted with the willfulness that would justify an award of punitive damages. Plaintiff's current application seeks fees for the entire duration of the case, and therefore raises the question of whether defendants should be made to pay for fees incurred after defendants offered plaintiff what she could reasonably have expected to get if she prevailed in the litigation.

II.

In order to assure that plaintiffs with worthy but monetarily small claims arising from denial of civil rights are not discouraged from seeking legal redress, the Equal Access to Justice Act provides that in an action to enforce civil rights statutes, "the court, in its discretion, may allow the prevailing party . . . a reasonable attorney's fee as part of the costs." 42 U.S.C. § 1988; Hensley v. Eckerhart, 461 U.S. 424, 429, 103 S.Ct. 1933, 1937, 76 L.Ed.2d 40 (1983). Although the language of the statute seems merely permissive, there is "a presumption that successful civil rights litigants should recover reasonable attorney's fees unless special circumstances render such an award unjust." DeFilippo v. Morizio, 759 F.2d 231, 234 (2d Cir. 1985).

Ordinarily, the proper measure of fees to the prevailing party is "the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate," Eckerhart, 461 U.S. at 433, 103 S.Ct. at 1939, the so-called lodestar amount, with the caveat that when plaintiff presses more than one claim, no fee may be awarded for services rendered in connection with an unsuccessful claim. Id. at 435, 103 S.Ct. at 1940. The Supreme Court cautioned that "where the plaintiff achieved only limited success, the district court should award only that amount of fees that is reasonable in relation to the results obtained." Id. at 440, 103 S.Ct. at 1943. However, the Second Circuit has held "a reduction made on the grounds of a low award to be error unless the size of the award is the result of the quality of representation." Morizio, 759 F.2d at 235. See also, Cowan v. Prudential Ins. Co., 935 F.2d 522 (2d Cir. 1991) (barring strict reliance on the size of the damage award as a measure of attorneys' fees). Even an award of nominal damages justifies attorneys' fees if the nominal damages did not result from inadequate representation. Fassett v. Haeckel, 936 F.2d 118, 121-22 (2d Cir. 1991) (per curiam). Therefore, "the appropriate question is whether the size of the award is commensurate with awards in [cases of the type under consideration] generally." Morizio, 759 F.2d at 235. The Second Circuit also has recognized, however, that "[e]fforts put into research, briefing and the reparation of a case can expand to fill the time available, and some judgment must be made in the awarding of fees as to diminishing returns from such further efforts." Morizio, 759 F.2d at 235-36.

The first inquiry must be "whether the substantive claim was so strong on the merits and so likely to result in a substantial judgment that private counsel in similar cases could be easily and readily obtained." Id. at 234. Here, although there was always a strong substantive claim to restoration of benefits at least to the level defendants concede is due regardless of which party is right about plaintiff's birth date, even that claim was monetarily small. The claim to enhanced benefits of $1.01 per month is smaller yet. Therefore, the prospect of a large recovery was not "sufficiently bright to attract competent private counsel on a contingent fee basis," Zarcone v. Perry, 581 F.2d 1039, 1044 (2d Cir. 1978), cert. denied, 439 U.S. 1072, 99 S.Ct. 843, 59 L.Ed.2d 38 (1979), and an attorneys' fee award is justified here, assuming other factors are consistent with such an award.

The rates at which plaintiff's counsel should be compensated does not depend on whether they work for a profit making or a nonprofit entity. In Blum v. Stenson, 465 U.S. 886, 895, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984), the Supreme Court held that, "[t]he statute and legislative history establish that `reasonable fees' under § 1988 are to be calculated according to the prevailing market rates in the relevant community, regardless of whether plaintiff is represented by private or nonprofit counsel." However, if the rates for assessing fees are those of the marketplace, so too are the other relevant standards those of the marketplace. In particular, "`[h]ours that are not properly billed to one's client also are not properly billed to one's adversary pursuant to statutory authority." Eckerhart, 461 U.S. at 434, 103 S.Ct. at 1940, quoting Copeland v. Marshall, 641 F.2d 880, 891 (D.C. Cir. 1980) (en banc) (emphasis in original). Thus, to the extent plaintiff's ...


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