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NEW YORK STATE ASSN. OF REALTORS, INC. v. SHAFFER

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK


September 9, 1995

NEW YORK STATE ASSOCIATION OF REALTORS, INC. and CLIFFORD HALL, Plaintiffs, against GAIL S. SHAFFER, Individually and as Secretary of State of the State of New York, Defendant.

The opinion of the court was delivered by: ARTHUR D. SPATT

MEMORANDUM DECISION and ORDER

 SPATT, District Judge.

 The plaintiffs New York State Association of Realtors, Inc. and Clifford Hall moves the Court for an order granting them attorneys' fees and costs, together with post-judgment interest pursuant to 42 U.S.C. §§ 1983 and 1988.

 I. BACKGROUND

 The plaintiffs commenced this action on May 28, 1991, seeking injunctive relief as well as a judgment declaring that several New York State laws pertaining to restraints on certain activities of realtors are unconstitutional and violative of free speech rights secured by the First Amendment. Specifically, the plaintiffs challenged the constitutionality of Chapter 696 of the New York State Laws of 1989, codified at N.Y. Real Prop. Law § 442-h, and two regulations promulgated thereunder at 19 N.Y.C.R.R. § 175.17(a), regarding "antiblockbusting," and 19 N.Y.C.R.R. Part 178, regarding "nonsolicitation orders." These regulations restrict real estate brokers and salespersons from initiating certain communications with residential property owners.

 By Order dated September 30, 1993, this Court denied a motion for summary judgment by the plaintiffs and granted the defendant's motion for summary judgment dismissing the complaint. The United States Court of Appeals for the Second Circuit reversed this Court's Order in an Opinion dated June 23, 1994. See New York State Association of Realtors, Inc. v. Shaffer, 27 F.3d 834 (2d Cir. 1994). In its opinion the Second Circuit remanded the case for further proceedings regarding the plaintiffs' claim for attorney's fees and costs pursuant to 42 U.S.C. §§ 1983 and 1988. On November 14, 1994, the United States Supreme Court denied the defendant's petition for a writ of certiorari.

 A. The Plaintiffs' Fee Application

 The plaintiffs seek attorneys' fees in the amount of $ 77,510.00 and costs and disbursements in the amount of $ 3,686.27, together with post judgment interest. The plaintiffs' fee application represents compensation to its attorneys, the Law Offices of Michael T. Wallender, for a total of 399.1 attorney hours and 10.5 paralegal hours expended in litigating this case. The fee application encompasses the three and one half year period from May, 1991 until November, 1994. The litigation in this case consisted of the following phases: (1) commencement of the action in May, 1991 and discovery until February, 1993, (2) motions by both parties for summary judgment submitted in February, 1993 and argued before this Court on April 2, 1993; (3) appeal by the plaintiffs from this Court's September 30, 1993 Order denying their motion for summary judgment and granting the defendant's motion for summary judgment dismissing the complaint; (4) reversal by the Second Circuit on June 24, 1993 and remand for determination of the fee plaintiff's application; and (5) petition by the defendant for a writ of certiorari, which was denied on November 14, 1994. The plaintiffs note that their fee application does not include (1) charges for travel time, (2) dual billing for conferences between attorneys within the firm representing the plaintiffs, (3) time expended on legal theories other than the First Amendment claim on which the plaintiffs prevailed, and (4) hours expended by plaintiffs' local counsel Howard G. Goldson, a specialist in real estate law who spent approximately 30 hours on the case.

 B. The Defendant's Objections

 The defendants argue that the fees sought by the plaintiffs should be reduced by fifty per cent in light of the fact that they did not prevail on all of the claims asserted in the action. Specifically, the defendant contends that the plaintiffs are not the prevailing party with respect to First Amendment challenges to New York Real Property Law § 442-h and 19 NYCRR § 175.17(a), as the Second Circuit did not reverse this Court's determinations that Section 442-h is facially constitutional and that 19 NYCRR § 175.17 did not interfere with the plaintiffs' First Amendment rights. The defendant notes that the Second Circuit reversed this Court's decision only to the extent of holding that 19 NYCRR § 178, promulgated under NYRPL 442-h to establish nonsolicitation areas in four New York counties, was violative of the plaintiffs' First Amendment rights. The Second Circuit stated,

 

We caution, however, that our decision today is a narrow one, limited solely to the record before us. As should be clear from the discussion above, we do not reach the question of whether under certain facts and circumstances and under a different record, the Secretary night be able to justify some type of nonsolicitation regulation pursuant to section 442-h.

 New York State Association of Realtors, 27 F.3d at 844. The defendant also asserts that the plaintiffs should not be granted fees for time expended in preparation of legal theories other than the successful First Amendment claim. With regard to this subject, the Second Circuit stated,

 

On appeal, in addition to the First Amendment issue, the Realtors resurrect the Equal Protection, Fair Housing, and 42 U.S.C. §§ 1981 and 1982 claims previously rejected by the district court. We agree, however, with the district court's analysis and conclusion that those resurrected claims lack merit. See 833 F. Supp. at 187-88. In any event, our conclusion that the nonsolicitation regulation is an impermissible restriction on commercial speech under the First Amendment is dispositive of the dispute underlying this appeal. Accordingly, we find it unnecessary to address the additional claims and confine our review to the district court's conclusion that the Secretary's ban on real estate solicitations does not violate the First Amendment.

 Id. at 838 (emphasis supplied).

 Finally, the defendant points out that this action sought a declaratory judgment as well as an order enjoining the Secretary of State from taking future action pursuant to Section 442-h. The latter relief was not granted.

 The plaintiffs reply that their prevailing party status rests on their success in achieving what they characterize as their "lead issue, the First Amendment challenge to the nonsolicitation orders." They note that they have identified 12.8 hours as time spent on theories other than First Amendment and deducted that number of hours from their application.

 With regard to the fact that only one of the challenged regulations was invalidated, the plaintiffs state that their efforts concerning both 19 N.Y.C.R.R. § 178 and 19 N.Y.C.R.R. § 175.17 involved one set of facts, one legal theory and one body of legal authority. Based on this, the plaintiffs assert that a fifty per cent reduction is unwarranted.

 The plaintiffs also note that their request for injunctive relief represented a minimal part of the case in chief. Specifically, they note that only two paragraphs of their summary judgment memo of law and one page of their appellate brief was devoted to the matter of an injunction. It is the plaintiffs' position that their failure to succeed in gaining injunctive relief is insignificant and should not operate to reduce the award of attorneys fees.

 II. DISCUSSION

 A. The Degree of Success Attained

 In calculating an award of reasonable attorneys' fees in a civil case, the District Court should focus "on the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation. . . . The most critical factor is the degree of success obtained." Hensley v. Eckerhart, 461 U.S. 424, 435-36, 103 S. Ct. 1933, 1940-41, 76 L. Ed. 2d 40 (1983). Further, "hours spent on claims unrelated to those forming the basis of the claim giving rise to the fee award must be excluded unless the claims 'involve a common core of facts or will be based on related legal theories.'" Rosario v. Amalgamated Ladies' Garment Cutters' Union, 749 F.2d 1000, 1004 (2d Cir. 1984) (quoting Hensley, 461 U.S. at 435, 103 S. Ct. at 1940)).

 The plaintiffs are not entitled to recover attorneys' fees for their unsuccessful claims. "Work that is based on different facts and legal theories than a successful one may not be included in the fee award." United States Football League v. National Football League, 887 F.2d at 408, 413 (2d Cir. 1989), cert. denied, 493 U.S. 1071 (1990) (citing Hensley, 461 U.S. at 434, 103 S. Ct. at 1939-49).

 As discussed above, the defendant urges the Court to reduce the plaintiffs fee application by fifty per cent because they did not prevail on all of their claims. The Court notes that the plaintiffs identified and deducted from their application a total of 12.8 hours for work on the claims that were rejected by both this Court and the Second Circuit, specifically, the claims brought pursuant to the Privileges and Immunities Clause of the Constitution, the Equal Protection Clause of the Constitution, the Fair Housing Act, 42 U.S.C. §§ 1981 and 1982, and 42 U.S.C. § 1983.

 With respect to the fact that the Second Circuit invalidated only one of the challenged regulations, 19 N.Y.C.R.R. § 178, it is the Court's view that the dispute over the nonsolicitation regulation was the essence of this lawsuit. The Second Circuit expressly stated that its decision as to the validity of the nonsolicitation regulation was "dispositive of the dispute underlying this appeal." New York Association of Realtors, 27 F.3d at 838. Therefore, the Court finds that a fifty per cent reduction based on lack of success is not appropriate.

 Furthermore, it is reasonable to expect that the plaintiffs' claims that were related to N.Y. Real Prop. Law § 442-h and the two regulations promulgated under it were based upon a common set of facts and similar legal theories. It would be impractical to divide the hours on a claim-by-claim basis for such related claims, as a large portion of the attorneys' time is likely to have been spent on the First Amendment claims as a whole, rather than on the individual claims. In circumstances such as these, a district court "should focus on the significance of the overall relief obtained by the plaintiff." United States Football League, 887 F.2d at p. 414. Although the plaintiffs here did not attain a favorable outcome on every aspect of their First Amendment claim, the relief they obtained was indeed significant. In addition, the fact that injunctive relief was not obtained is not a major factor in measuring the plaintiffs' success in this action.

 B. The Lodestar Figure The plaintiffs' counsel sets forth the following figures in support of their claim for legal fees incurred in prosecuting the case to its favorable conclusion: Michael T. Wallender 318.1 hours at $ 200/hour = $ 63,620.00 Barbara Billet 81.0 hours at $ 165/hour = $ 13,365.00 Donna Herlihy 10.5 hours at $ 50/hour = $ 525.00 Total 409.6 hours $ 77,510.00

19950909

© 1992-2004 VersusLaw Inc.



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