Disabled in Action v. Mayor & City Council of Baltimore

• Decision Date: 09 August 1982
• Docket Number: 81-1896,Nos. 81-1846,s. 81-1846
• Parties: DISABLED IN ACTION, an Organization of Disabled Persons, and Robert Ardinger, Individually and as Co-Founder, Disabled in Action, and Tom Turner, and Mac Arthur Crawford, Appellants, v. MAYOR & CITY COUNCIL OF BALTIMORE, a Municipal Corporation, and Baltimore Baseball Club, Inc., Appellees. DISABLED IN ACTION, an Organization of Disabled Persons, and Robert Ardinger, Individually and as Co-Founder, Disabled in Action, and Tom Turner, and Mac Arthur Crawford, Appellees, v. MAYOR & CITY COUNCIL OF BALTIMORE, a Municipal Corporation, Appellee, and Baltimore Baseball Club, Inc., Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 881

685 F.2d 881

DISABLED IN ACTION, an Organization of Disabled Persons, and Robert Ardinger, Individually and as Co-Founder, Disabled in Action, and Tom Turner, and Mac Arthur Crawford, Appellants, v. MAYOR & CITY COUNCIL OF BALTIMORE, a Municipal Corporation, and Baltimore Baseball Club, Inc., Appellees.

DISABLED IN ACTION, an Organization of Disabled Persons, and Robert Ardinger, Individually and as Co-Founder, Disabled in Action, and Tom Turner, and Mac Arthur Crawford, Appellees, v. MAYOR & CITY COUNCIL OF BALTIMORE, a Municipal Corporation, Appellee, and Baltimore Baseball Club, Inc., Appellant.

Nos. 81-1846, 81-1896.

United States Court of Appeals, Fourth Circuit.

Argued March 30, 1982.

Decided Aug. 9, 1982.

C. Christopher Brown, Baltimore, Md., for appellants/cross-appellees.

Donald N. Rothman, Jerrold A. Thrope, Baltimore, Md. (Robert W. Katz, Gordon, Feinblatt, Rothman, Hoffberger & Hollander, Baltimore, Md., on brief), William R. Phelan, Jr., Asst. City Sol., Baltimore, Md. (Benjamin L. Brown, City Sol., Richard Jacobsen, Chief Sol., Baltimore, Md., on brief), for appellees/cross-appellants.

Before WINTER, Chief Judge, BRYAN, Senior Circuit Judge, and HALL, Circuit Judge.

HARRISON L. WINTER, Chief Judge:

The district court awarded plaintiffs counsel fees against the City of Baltimore (the City) and the Baltimore Baseball Club, Inc. (the Club) under § 120 of the Rehabilitation, Comprehensive Services, and Developmental Disabilities Amendments of 1978, 29 U.S.C. § 794a(b) (Supp. II 1978), after the parties settled their controversy. Plaintiffs appeal, contending that the award was inadequate in amount. The Club also appeals, contending that it is not liable for counsel fees pursuant to the Act.

We reverse the award against the Club and vacate the award against the City, remanding the case for a new determination of the amount of fees which the City shall be required to pay.

I.

Plaintiffs are certain disabled individuals and an organization which promotes the interests of disabled persons. They sued the City and the Club, alleging that Baltimore's Memorial Stadium was illegally inaccessible to disabled persons. The Club, which fields the Baltimore Orioles baseball team, leases the stadium during the baseball season, but it is not the exclusive lessee. ¹ The object of the suit was to obtain declaratory and injunctive relief requiring defendants to provide facilities for disabled spectators equal to and integrated with facilities for persons not disabled. Upon filing suit, plaintiffs sought but were denied a temporary restraining order. Plaintiffs also filed a separate complaint with the Maryland Commission on Human Relations.

After the temporary restraining order was denied, the court action lay dormant, except for formal pleadings, while the parties pursued the matter before the Commission. Ultimately the dispute was settled when defendants agreed to take certain corrective actions to accommodate disabled patrons and plaintiffs waived their right to litigate their claims further.

Plaintiffs then moved to dismiss the court action except for a motion for an award of attorney's fees. Although plaintiffs requested fees of $24,321, the district court awarded only $6,000. There was no dispute before the district court either as to the number of hours expended by plaintiffs' attorneys in the overall settlement of the dispute or the reasonableness of the rate of compensation per hour for the time expended. The district court, however, was of the view that counsel should not be compensated for forty-eight hours of work expended in the unsuccessful effort to obtain a temporary restraining order and that the time spent by plaintiffs' attorneys on the issue of attorney's fees and other matters was excessive, unnecessary and unreasonable. It specifically rejected a claim that plaintiffs' lawyers were entitled to a twenty-percent bonus over their usual rates to reward their skill in handling the case and the risk involved in taking a case of this type on a contingent basis.

We will state other facts as they relate to particular contentions.

II.

Plaintiffs' suit was brought pursuant to § 504 of the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 974 (Supp. II 1978). That section provides: "No otherwise qualified handicapped individual in the United States ... shall, solely by reason of his handicap, be excluded from participation in, be denied the benefits of, or be subject to discrimination under any program or activity receiving Federal financial assistance ...." Plaintiff's claim for attorney's fees is predicated on 29 U.S.C. § 794a(b) (Supp. II 1978), which reads: "In any action or proceeding to enforce or charge a violation of a provision of this subchapter, the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs."

In light of the contentions of the parties, we must address two threshold questions before considering the amount of the fee award. First, does the Club's use of the stadium for professional baseball games constitute a program or an activity receiving federal financial assistance within the meaning of § 794, so that an award of fees under § 794a(b) against the Club is authorized in a proper case? Second, were plaintiffs prevailing parties within the meaning of § 794a(b), so that an award of fees against the City or the Club is proper in this case? We address these issues seriatim.

A. The Club.

The City received a $300,000 grant in 1977 from the Federal Economic Development Administration for improvement of the stadium's elevators. The district court concluded that, since the Club was an indirect beneficiary of this assistance, its use of the stadium as a nonexclusive lessee is an "activity receiving Federal financial assistance." In arriving at this conclusion, the district court relied on a regulation defining a "recipient" of federal financial assistance as "any person to which Federal financial assistance is extended directly or through another recipient including any successor, assignee, or transferee of a recipient, but excluding the ultimate beneficiary of the assistance." 45 C.F.R. § 84.3(f) (1981). It was the district court's view that, although the City was the direct recipient of the grant, the Club, as the major tenant of the stadium, was "the greatest and most immediate beneficiary of federal aid."

The problem of distinguishing an indirect recipient of federal assistance from a nonrecipient for purposes of the Rehabilitation Act arose in the recent decision of Angel v. Pan American World Airways, 519 F.Supp. 1173 (D.D.C.1981), which bears a significant factual analogy to the instant case. The plaintiff in Angel sought damages and injunctive relief against an airline which had refused to transport him because he suffered from cerebral palsy and was not accompanied by an attendant. Plaintiff asserted that the airline was subject to the Rehabilitation Act since it was the indirect beneficiary of various forms of federal financial assistance to airports, such as construction grants and the payment of air controllers' salaries. Unwilling to extend the statute that far, the court held: "Subsidies to airports, to be sure, subject those locales to the broad proscription of Section 504, but this does not translate into binding law upon the users of the airports, whether they be commercial airlines or individual passengers." Id. at 1178.

Plainly, a recipient of federal assistance cannot escape its obligations under the Rehabilitation Act simply by funneling such assistance through an intermediary. See Bob Jones University v. Johnson, 396 F.Supp. 597, 602-03 (D.S.C.1974), aff'd mem., 529 F.2d 514 (4 Cir. 1975). Angel suggests, however, that one does not become subject to the Rehabilitation Act merely by enjoying indirectly the benefits of federal assistance to another. We think that distinction is sound and fully applicable here.

If the Club had purchased the stadium outright from the City, it might well be subject to the Rehabilitation Act as a "transferee" of federally funded improvements. See 45 C.F.R. § 84.3(f) (1981). In fact, however, the Club possesses only a nonexclusive leasehold. The lease gives the Club a right of consultation respecting improvements to be made to the stadium, but it expressly reserves to the City the right of "final decision as to the expenditure of funds" for such improvements. Even if the Club, in practice, wields a veto over stadium improvements, it would have been legally powerless to make the extensive physical alterations demanded by plaintiffs if the City had chosen to resist such demands. ² Thus, although the Club may be, in the words of the district court, the "greatest and most immediate beneficiary" of federally funded improvements in the stadium, it is the City, as lessor, which retains paramount control over and responsibility for the premises.

At the very least, it is plain that the City is no mere conduit of federal assistance to the Club. Here, as in Angel, the benefits of federal assistance have accrued both to the direct recipient (the airport, the City) and to another entity (the airline, the Club) which shares in those benefits by virtue of business dealings with the direct recipient. If the Rehabilitation Act extends to such indirect beneficiaries of federal largesse, consistency would demand that it apply to every customer of every enterprise subsidized by the federal government. Nothing in the language or legislative history of the Act indicates a congressional intention to reach so far. Furthermore, the antidiscrimination policy of the Act can be fully vindicated as regards Memorial Stadium by holding the City accountable, without stretching the Act to encompass the City's tenants.

We therefore hold that the Club was not a "recipient" of federal funds. From this holding, it follows that the Club may not be held liable for...