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Sellick v. Consolidated Edison Company of New York, Inc.

United States District Court, S.D. New York

March 23, 2017


          OPINION & ORDER

          RICHARD J. SULLIVAN. District Judge

         The Court is in receipt of motions by: (1) non-party Legal Momentum ("LM") to assert a charging lien pursuant to N.Y. Judicial Law § 475 (Doc. No. 52) and to permanently redact exhibit seven of its supporting declaration (Doc. No. 55; see also Doc. No. 54-7), and (2) Plaintiff Sharon Sellick to permanently redact certain references in her opposition brief that detail the terms of her contemplated confidential settlement with Defendant (Doc. No. 65). For the reasons set forth below, LM's charging lien motion is granted as to a fifteen (15) percent pro rata share of the attorney's fees collected out of Plaintiff s settlement. The parties" motions to redact are also granted.

         I. Background

         Plaintiff began working for Defendant Consolidated Edison Company of New York, Inc. ("Con Ed" or “Defendant") in 2000. (Doc. No. 63 ("Sellick Dec].") % 3.) On July 18, 2007, Plaintiff retained LM to serve as counsel in connection with her complaints of unlawful sex discrimination by Defendant. (Doc. No. 54-1.) Under the terms of Plaintiff s retainer agreement with LM, LM agreed to represent Plaintiff in proceedings before the Equal Employment Opportunity Commission ("EEOC"). (Id. ¶ 3.) Plaintiff also promised to assign a court award of attorney's fees to LM and to not accept a settlement for her claims "unless it makes some provision for [LM's] costs and attorney's fees.'" (Id. ¶ 7-8.)

         Plaintiff acknowledges that LM "spent considerable time interviewing witnesses and researching the possibility of pursuing a broader, systemic case against Con Ed." (Doc. No. 62 ("Pl. Opp'n") at 6.) In September 2007, LM filed Plaintiffs EEOC charge, which was amended in November 2007. (Sellick Decl. ¶ 19.) Although LM represented Sellick in connection with the EEOC proceedings that followed (Doc. Nos. 54 ¶ 5. 54-4). Plaintiff also retained the services of Mariann Wang ("Ms. Wang") to represent her in August 2009 (Sellick Deck ¶ 22).[1] Since that time, "Ms. Wang has taken the lead in representing" Plaintiff, although a revolving door" of various attorneys at LM remained involved in Plaintiffs representation for the next six years. (Id. 1fl[ 25-26; see also Doc. Nos. 54-3, 54-4.) In November 2011, the EEOC issued a probable cause finding concerning the discrimination claims brought by Plaintiff and eight other women. (Sellick Deck If 27.) Thereafter, Plaintiff engaged in a "years-long conciliation process before the EEOC." along with a private mediation, and Plaintiff cooperated with an investigation brought by the New York Attorney General's Office into employment discrimination by Defendant. (Id. ¶ 27-29.)

         On August 21, 2015, the EEOC issued its "Notice of Right to Sue" letter. (Id. J 32.) On November 18, 2015, LM's representation of Plaintiff was terminated. (Doc. No. 54-8.) That same day, Plaintiff filed suit in this Court alleging unlawful discrimination and retaliation by Defendant in violation of Title VII, 42 U.S.C. § 2000e, et seq. and the New York City Human Rights Law, N.Y.C. Admin. Code § 8-107, et seq. (Doc. No. 1.) Since that date, only two attorneys have entered notices of appearance on Plaintiffs behalf- Ms. Wang and her associate, Alice G. Reiter, of the law firm Cuti Heckler Wang LLP. (Id. at 22; see also Doc. Nos. 2, 5.)

         After several months of discovery, the Court granted the parties' May 11, 2016 request to stay all discovery deadlines in order to facilitate settlement negotiations. (Doc. Nos. 32, 33.) On May 23, 2016, the parties submitted a joint letter indicating that they were "close to a settlement" and requesting that the discovery stay continue. (Doc. No. 34.) However, Plaintiff and Defendant also indicated that "at least one important issue remains to be resolved involving" Plaintiffs "former counsel, [LM]." (Id. at 1-2; see also Doc. No. 54-8.) On May 26, 2016, LM appeared in this action as an interested party and submitted a letter regarding its contemplated motion to impose a charging lien upon any settlement in Plaintiffs favor. (Doc. No. 36.) On June 6, 2016, the Court held a pre-motion conference with the parties and LM concerning LM*s contemplated motion for a charging lien. (Doc. No. 50.)

         The Court ordered a deadline of June 20, 2016 for LM7s charging lien motion. (Id. at 54:6-8.) Although LM initially tiled its motion and accompanying submissions on June 20, 2016 (Doc. Nos. 44, 45, 46), LM submitted an amended charging lien motion, amended declaration, and amended motion to seal exhibit seven of its declaration on June 22, 2016 without seeking leave of the Court (Doc. Nos. 52, 53 ("Mem."), 54, 55, 56). Thereafter, Plaintiff filed a brief opposing the charging lien motion (Doc. No. 62), along with an ancillary motion to permanently redact a handful of references in her opposition brief to the terms of her contemplated confidential settlement with Defendant (Doc. Nos. 65, 66, 67). On July 22, 2016, Defendant filed a brief opposing the charging lien motion. (Doc. No. 68 ("Def. Opp'n").) Although the Court ordered LM to file a single reply brief by July 26, 2016 addressing "both Plaintiffs and Defendant's responses" (Doc. No. 61 at 2), LM tiled a declaration and brief responding to Plaintiffs opposition on July 26, 2017 (Doc. Nos. 70, 71), a brief responding to Defendant's opposition a day later, on July 27, 2017, and a declaration in further support of the motion on July 28, 2017 (Doc. Nos. 72, 73). Notwithstanding LM's repeated failures to comply with the Court's scheduling orders, the Court has considered LM's late submissions on this motion.

         II. Charging Lien

         The Court first turns to LM's motion to impose a charging lien on the proceeds of any settlement in this case. New York Judiciary Law Section 475 ("Section 475") "governs attorneys" charging liens in federal courts sitting in New York." Itar-Tass Russ. News Agency v. Russ. Kurier, Inc., 140 F.3d 442, 448 (2d Cir. 1998).[2] "A charging lien is a security interest in the favorable result of litigation, giving the attorney [an] equitable ownership interest in the client's cause of action and ensuring that the attorney can collect his fee from the fund he has created for that purpose on behalf of the client." Chamow v. Charnow, 134 A.D.3d 875, 876 (2d Dep't 2015) (citation omitted). The charging lien exists "[f]rom the commencement of an action, special or other proceeding in any court or before any state, municipal or federal department, except a department of labor." N.Y. Judiciary Law § 475, but it "only attaches when proceeds from an identifiable fund are created by an attorney's own efforts in the action or proceeding, " In re Air Crash at Belle Harbor, No. 02-cv-4758 (RWS), 2006 WL 3247675, at *2 (S.D.N.Y. Nov. 9, 2006).

         As the Second Circuit and other courts applying New York law have made clear, a charging lien "is for the benefit of an 'attorney of record' only." Itar-Tass, 140 F.3d at 450 (collecting cases). Thus, "before an attorney can be granted a lien pursuant to [Section 475], he or she must have appeared for the client by 'participating in a legal proceeding on the client's behalf or by having his [or her] name affixed to the pleadings, motions, records, briefs, or other papers submitted in the matter.'" Picciolo v. State, 287 A.D.2d 721, 722 (2d Dep't 2001) (quoting Cataldo v. Budget Rent A Car Corp., 226 A.D.2d 574. 574 (2d Dep't 1996)). An attorney of record who has been discharged by her client "maintains . . . her right to enforce the statutory lien, " so long as her "representation terminates upon mutual consent, and there has been no misconduct, no discharge for just cause, and no unjustified abandonment by the attorney." CPMI, Inc. v. Kolaj, 137 A.D.3d 953, 955-56 (2d Dep't 2016) (citation omitted); accord Klein v. Eubank, 87 N.Y.2d 459, 464 (1996). Thus, "an attorney need not be counsel of record at the time the judgment or settlement fund is created in order to be entitled to the lien afforded by Judiciary Law § 475." Klein, 87 N.Y.2d at 462.

         LM maintains that it is entitled to assert a charging lien in this action because of its work on Plaintiffs behalf before the EEOC and based on the retainer agreement Plaintiff entered in connection with that representation in 2007. (Mem. 10-17.) While the Court agrees that LM is entitled to a charging lien, it reaches that conclusion for reasons other than those raised by LM in its principal brief.

         LM repeatedly asserts that it is entitled to fees because its former client, Ms. Sellick, is a "prevailing party" under Title VII. (See, e.g., Mem. 12; id. at 10 (citing Watson v. E.S. Sutton, Inc., No. 02-cv-2739 (THK), 2006 WL 6570643, at *1 (S.D.N.Y. Aug. 11, 2006), report and recommendation adopted as modified, No. 02-cv-2739 (KMW), 2007 WL 2245432 (S.D.N.Y. Aug. 3, 2007)).) This argument reflects a fundamental misapprehension of law. Under Title VII, "the court, in its discretion, may allow the prevailing party... a reasonable attorney's fee (including expert fees) as part of the costs." 42 U.S.C. § 2000e-5(k). However, as the plain language of the statute makes clear, "the person who is entitled to the award of [attorney's] fees is the prevailing party rather than the lawyer." Valley Disposal Inc. v. Cent. Vt. Solid Waste Mgmt. Dist., 113 F.3d 357, 361 (2d Cir. 1997) (internal quotation marks omitted); see also Brown v. Gen. Motors Corp., Chevrolet Div., 722 F.2d 1009. 1011 (2d Cir. 1983) (attorney lacked standing to move for fees "in his own name as the real party in interest"); cf. Watson, 2006 WL 6570643, at *2 (plaintiff, at close of jury trial in which she prevailed, moved for fees under Title VII "oh behalf of each of the three firms which represented her").[3] Accordingly, LM"s argument that it is entitled to fees based on Title VII must be rejected, since it is Ms. Sellick - and not her former lawyers - who has standing to move under that provision, and she has not done so.

         More importantly, the law is clear that only a "prevailing party" is entitled to fees under Title VII. See Buckhannon Bd. & Care Home, Inc. v. W.Va. Dep V of Health & Human Res.,532 U.S. 598 (2001). Thus, "plaintiffs are only eligible for [attorney's] fees if they 'achieve some material alteration of the legal relationship' between them and their adversaries, and that change bears a 'judicial imprimatur.'" Perez v. Westchester Cty. Dep t of Corr.,587 F.3d 143, 149 (2d Cir. 2009) (emphasis in original) (quoting Roberson v. Giuliani, 346 F.3d 75, 79-80 (2d Cir. 2003)). Here, there is absolutely no evidence that the parties intended this Court to "judicially sanction[]" their settlement. See Id. at 151; see also Sanchez ex rel. Sanchez v. Patterson, 328 F.App'x 689, 691 (2d Cir. 2009) (plaintiff was not "prevailing party" where district judge "did not enter a judgment on the merits, a consent decree, or an order of dismissal in which it retained jurisdiction or incorporated the terms of a settlement agreement"). To the contrary, this Court has not had any involvement in Plaintiffs and Defendant's resolution of the Title VII discrimination claim, hi fact, Defendant represents, and Plaintiff does not appear to dispute, that the parties "intend to enter into an ordinary private settlement without the Court's approval or involvement in the settlement's terms." (Def. Opp'n 16); see also United States v. J15-98 Park Lane S, No. 10-cv-3748 (BMC), 2012 WL 3861221, at *5 (E.D.N.Y. Sept. 5, 2012) (plaintiff was not a prevailing party where court was not involved in parties' settlement discussions and did not "make any changes to the terms of their settlement"), aff'd sub nam. United Slates v. Capital Stack Fund, LLC, 543 F.App'x 1 7 (2d Cir. 2013); cf. Perez, 587 F.3d at 148-49 (private settlement bore judicial imprimatur where district judge "played an integral role in the resolution of the suit, " oversaw settlement conferences, "advised the parties on how they should expect the law to come out." and "reviewed and revised the settlement agreement with the parties, " among other things). Thus, even assuming that LM somehow had standing to move for fees under Title VII, the application would almost certainly fail because Plaintiff is not a "prevailing party." LM also relies heavily on a retainer agreement executed in connection with its representation of Plaintiff before the EEOC. (Mem. 8-9, 12; Doc. No. 70 at 6-7.) It is true that Plaintiff signed a retainer agreement with LM in 2007 that includes a provision "assigning] any award of attorney[s] fees to [LM]" and an agreement by Plaintiff "not to accept a settlement" for her claims "unless it makes some provision for costs and [attorney's] fees." (Doc. No. 54-1 ff 7-8.) But the law is well settled that the existence of a retainer agreement between an attorney and client "is insufficient to create a charging lien." Louima v. City of New ...

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