Dubose v. Pierce

• Decision Date: 07 February 1984
• Docket Number: Civ. No. H-75-303,H-76-26,H-75-346,H-75-345,H-76-89,H-76-160 and N-76-109.,N-76-44
• Citation: 579 F. Supp. 937
• Court: U.S. District Court — District of Connecticut
• Parties: Vernice DUBOSE, et al. v. Samuel R. PIERCE, Jr., et al. Claudia WALTER, et al. v. Samuel R. PIERCE, Jr., et al. Janette LITTLE, et al. v. Samuel R. PIERCE, Jr., et al. Mae PLEASANT, et al. v. Samuel R. PIERCE, Jr., et al. Pantaleon MORALES, et al. v. Samuel R. PIERCE, Jr., et al. Cathy ADAMS, et al. v. Samuel R. PIERCE, Jr., et al. Merry E. GRUNDMAN, et al. v. Samuel R. PIERCE, Jr., et al. Joann JOHNSON, et al. v. Samuel R. PIERCE, Jr., et al.

579 F. Supp. 937

Vernice DUBOSE, et al. v. Samuel R. PIERCE, Jr., et al.

Claudia WALTER, et al. v. Samuel R. PIERCE, Jr., et al.

Janette LITTLE, et al. v. Samuel R. PIERCE, Jr., et al.

Mae PLEASANT, et al. v. Samuel R. PIERCE, Jr., et al.

Pantaleon MORALES, et al. v. Samuel R. PIERCE, Jr., et al.

Cathy ADAMS, et al. v. Samuel R. PIERCE, Jr., et al.

Merry E. GRUNDMAN, et al. v. Samuel R. PIERCE, Jr., et al.

Joann JOHNSON, et al. v. Samuel R. PIERCE, Jr., et al.

Civ. Nos. H-75-303, H-75-345, H-75-346, H-76-26, N-76-44, H-76-89, H-76-160 and N-76-109.

United States District Court, D. Connecticut.

February 7, 1984.

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James C. Sturdevant, San Francisco, Cal., Dennis J. O'Brien, Conn. Legal Services, Inc., Willimantic, Conn., Norman K. Janes, Conn. Legal Services, Inc., Middletown, Conn., Michael Sheehan, New Haven Legal Assistance, New Haven, Conn., Raymond R. Norko, Legal Aid Society of Hartford County, Hartford, Conn., Sue Ann Shay, Neighborhood Legal Services, Hartford, Conn., for plaintiffs.

Linda Hanten, Legal Services Corp., Washington, D.C., amicus curiae.

Sheila Lieber, June R. Carbone, Merril Hirsh, U.S. Dept. of Justice, Civil Division, Washington, D.C., for defendant. Fred H. Altshuler, Altshuler & Berzon, San Francisco, Cal., William H. Clendenen, Jr., Clendenen & Lesser, New Haven, Conn., Thomas V. Siporin, San Fernando Valley Neighborhood Legal Services, Pacoima, Cal.

RULING ON MOTIONS FOR ATTORNEYS' FEES

BLUMENFELD, Senior District Judge.

Introduction

In recent years, over 100 congressional enactments have provided for the awarding of attorneys' fees to prevailing litigants. Applicants have responded to this potential source of funds by pursuing fee requests with such tenacity and thoroughness that the Supreme Court has recently been led to warn, "A request for attorney's fees should not result in a second major litigation." Hensley v. Eckerhart, ___ U.S. ___, 103 S.Ct. 1933, 1941, 70 L.Ed.2d 40 (1983) (applying 42 U.S.C. § 1988). One beneficial result of the enormous volume of attorney's fee cases has been a substantial, well-developed body of law. With the guidance of cases such as Hensley v. Eckerhart, id., and New York State Association for Retarded Children v. Carey, 711 F.2d 1136 (2d Cir.1983) (applying 42 U.S.C. § 1988), district courts are, for the most part, presented with the task of applying to the case at hand already established principles.

While such is true for many of the issues the parties have brought before this court, this case does raise some novel and unsettled questions. First, is an attorney who began work on a case as a legal services lawyer and continued to act as counsel, both after his transfer to a second legal service firm and after his later entry into private practice, personally entitled to any fees for his work? Second, are prevailing plaintiffs entitled to a multiplier in their fee claim arising under the Equal Access to Justice Act?

Although some issues in this case may be novel, they nevertheless call into play ever-competing policy interests. This court must navigate between the Scylla of Judge Newman's warning in Carey—"attorney's fees are to be awarded `with an "eye to moderation," seeking to avoid either the reality or the appearance of awarding "windfall fees,"'" 711 F.2d at 1139 (citations omitted) — and the Charybdis of Justice Brennan's Hensley dissent—"lower courts must not forget the need to ensure that civil rights plaintiffs with bona fide claims are able to find lawyers to represent them," 103 S.Ct. at 1945.

Plaintiffs' counsel have moved for attorneys' fees against defendant United States Department of Housing and Urban Development (HUD) pursuant to 28 U.S.C. § 2412 (Supp. IV 1980), part of the Equal Access to Justice Act (EAJA).¹ Motions have been filed by five public interest law firms, and by one individual attorney. The five firms are: Connecticut Legal Services (CLS), San Fernando Valley Neighborhood Legal Services (San Fernando), Legal Aid Society of Hartford County (LASH), Neighborhood Legal Services (of Hartford) (NLS), and New Haven Legal Assistance Association (NHLA). The attorney is James C. Sturdevant. In addition, San Fernando and attorney Sturdevant have filed supplemental fee motions concerning work done by Mr. Sturdevant after April 4, 1979, see infra pp. 945-946. CLS has joined in both of San Fernando's motions.

Complicating this case has been a dispute over the right to fees for work performed by Sturdevant.

From October 1975 through April 30, 1978, Mr. Sturdevant worked for CLS. Mr. Sturdevant concedes that CLS has the right to any fees for his work during that time. From May 1, 1978 through October 8, 1978, and also from May 1, 1980 to the present, Mr. Sturdevant asserts that he was selfemployed. None of plaintiffs' counsel have challenged Mr. Sturdevant's claim to any fees awarded for his work during those periods.

There is, however, one dispute among plaintiffs' counsel. San Fernando and attorney Sturdevant both claim the right to any fees awarded for Sturdevant's work from October 9, 1978 through April 30, 1980, during which time Sturdevant was a full time employee of San Fernando.

I. THE HISTORY OF THIS ACTION

This proceeding is the final act of a protracted litigation concerning federal housing subsidies under section 236 of the National Housing Act. Most of the action occurred early on: congressional passage of the subsidy program, the dispute over its implementation, and the ensuing litigation. The settlement of what was by then a national class action provided the case's climax, with the settlement administration as the denouement. The struggle over attorneys' fees is what remains.

In 1968, Congress enacted, as section 236 of the National Housing Act,² a rental housing program which provided mortgage insurance and made interest reduction payments on behalf of owners of qualifying low-income housing projects. Housing and Urban Development Act of 1968, Pub.L. No. 90-448, § 201, 82 Stat. 476. Paragraph (f) of section 236 established that the rental for each unit would be either a "basic rental," equal to the operating cost, or a higher value not to exceed either 25 per cent of the tenant's income or the unit's market value. Codified at 12 U.S.C. § 1715z-1(f) (1970).

In the Housing and Community Development Act (HCDA) of 1974, Pub.L. No. 93-383, 88 Stat. 633, Congress amended section 236 to provide an additional form of subsidy, called an "operating subsidy."³ This subsidy was designed to shield tenants from rent increases due to increases in property taxes and utility costs. The subsidy program paid project owners in full for these increases, except that the subsidies could not be used to drive the basic rent below 30 per cent of the tenant's income.⁴ These subsidies of the owners' operating costs resulted in decreased basic rents.

In addition, the Act established a "reserve fund" from which the operating subsidies could be paid. To build up this fund, project owners were required to contribute all rents received in excess of the "basic rental."⁵

HUD failed to implement the section 236 operating subsidy program while allowing owners to increase rental charges to cover increased operating costs. That squeeze on the tenants prompted this action and similar suits across the country. In 1979, this and several other actions were settled jointly. The settlement called for reimbursements of those increases in rental charges to present and former tenants nationwide. The administration of these payments has been supervised by the court in Underwood v. Pierce, No. 79-1318-HP (C.D.Cal.).

A. Events Preceding Settlement

This matter started before this court as three separate class actions, each brought by tenants in a different section 236 housing project. The tenants were aggrieved by HUD's approval of increases in the "basic rents" for these projects. They challenged the rent increases as excessive in view of the operating costs and sought to compel HUD to pay operating subsidies to the project owners to cover that part of each increase which was due to increased utility costs and property taxes. On December 15, 1975, after a consolidated hearing, this court certified plaintiff classes in each of these actions and issued preliminary injunctions requiring HUD to make operating subsidy payments to project owners, thus relieving plaintiffs of portions of the rent increases which were due to increased utility costs and property taxes. Dubose v. Hills, 405 F.Supp. 1277, 1278-79 & nn. 8, 10, 1280, 1292-93 (D.Conn.1975), modified, 420 F.Supp. 399 (D.C.1976).

HUD did not appeal the order regarding these three projects, see Dubose v. Harris, 434 F.Supp. 227, 229 (D.C.1977); instead, it continued to resist making operating subsidy payments on behalf of tenants in other projects, see Dubose v. Hills, 22 Fed.R. Serv.2d 476, 477 (D.C.1976). Six similar suits were subsequently filed in this district, one of which was withdrawn. On May 27, 1976, this court consolidated the remaining eight pending actions into one statewide class action, and issued a preliminary injunction compelling HUD to pay operating subsidies throughout Connecticut. Id. at 477-79.

HUD appealed this statewide preliminary injunction. On June 28, 1976, this court denied defendants' request for a stay pending appeal. The Second Circuit did the same on July 20, 1976. See Dubose v. Harris, 434 F.Supp. at 239.

Meanwhile, similar actions had been filed across the country. See Dubose v. Harris, 82 F.R.D. 582, 585 (D.C.1979). Understandably, one of these was a nationwide class action filed in the District of Columbia. See Underwood v. Hills, 414 F.Supp. 526, 528 (D.D.C.1976). In Underwood, Judge Pratt, on June 8, 1976, issued a permanent injunction compelling HUD to make operating subsidy payments. Id. at 532. On October 18, 1976, the Supreme Court stayed this order pending appeal. 429 U.S. 892, 97 S.Ct....