Gautreaux v. Chicago Housing Authority

• Decision Date: 26 June 2007
• Docket Number: No. 05-3578.,05-3578.
• Citation: 491 F.3d 649
• Parties: Dorothy GAUTREAUX, et al., Plaintiffs-Appellees, v. CHICAGO HOUSING AUTHORITY and Terry Peterson, Defendants-Appellants, v. Daniel E. Levin and The Habitat Company LLC, Receivers-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

491 F.3d 649

Dorothy GAUTREAUX, et al., Plaintiffs-Appellees, v. CHICAGO HOUSING AUTHORITY and Terry Peterson, Defendants-Appellants, v. Daniel E. Levin and The Habitat Company LLC, Receivers-Appellees.

No. 05-3578.

United States Court of Appeals, Seventh Circuit.

Argued September 13, 2006.

Decided June 26, 2007.

As Amended on Denial of Rehearing and Rehearing En Banc August 6, 2007.^*

Alexander Polikoff (argued), Chicago, IL, for Plaintiffs-Appellees.

Thomas E. Johnson (argued), Johnson, Jones, Snelling, Gilbert & Davis, Chicago, IL, for Defendants-Appellants.

Edward W. Feldman, Miller, Shakman & Beem, Chicago, IL, for Receivers-Appellees.

Before CUDAHY, WOOD, and WILLIAMS, Circuit Judges.

WOOD, Circuit Judge.

This appeal presents the latest phase of the long-running litigation over racial discrimination in public housing in Chicago that bears Dorothy Gautreaux's name. See Gautreaux v. Chicago Housing Auth. (CHA), 296 F.Supp. 907 (N.D.Ill.1969) (Gautreaux I) (finding the CHA liable for racial discrimination in site-selection policy and tenant assignment); Gautreaux v. CHA, 304 F.Supp. 736 (N.D.Ill.1969) (Gautreaux II) (entering remedial order). It concerns the district court's decision to grant attorneys' fees to the plaintiffs' attorneys for work they did between August 1, 2001, and July 31, 2003. The CHA, which is responsible for the fees, argues that this court should reverse that order. It starts from the premise that the proceedings before the district court ought to be treated as free-standing litigation. When seen in that light, the CHA continues, the proceedings did not result in the kind of victory for plaintiffs that would make them "prevailing parties" entitled to fees. In the alternative, the CHA urges us to find that even if plaintiffs are entitled to some fees, the district court abused its discretion in the award it granted. We conclude that even if the link between these proceedings and earlier parts of the case is broken, the plaintiffs nonetheless prevailed, and the district court did not abuse its discretion with this fee award. We therefore affirm.

I

For present purposes, all that is necessary is a summary of the history of the case. More than four decades ago, Dorothy Gautreaux and other African-American tenants who lived in public housing projects, along with applicants for public housing, sued the CHA, claiming that its policies with respect to the selection of sites for public housing and for assignment of tenants were racially discriminatory. The plaintiffs prevailed, see Gautreaux I, supra, and the district court entered a remedial decree that was designed to ban racially discriminatory site selection and tenant assignment policies and to undo the harm that had already occurred. See Gautreaux II, supra. Central to the remedial decree was the requirement that for every unit built in an area where the population was more than 30% non-white ("Limited Areas"), the CHA had to construct three housing units in an area where the population was less than 30% non-white ("General Area"). See Gautreaux II, 304 F.Supp. at 737-38. The ratio was later modified to one-to-one. See Gautreaux v. CHA, 178 F.3d 951, 953 (7th Cir.1999). The Gautreaux II remedial order also limited new construction of public apartments that had more than three floors and required changes to tenant assignment practices. Gautreaux II, 304 F.Supp. at 738-40. The order did not, however, require the construction of any new housing.

The CHA reacted to Gautreaux II by instituting a virtual moratorium on the construction of new housing that lasted 18 years. At the plaintiffs' behest, in 1987 the district court appointed Daniel Levin and the Habitat Company as a receiver for the development of all new non-elderly housing for the CHA. See Gautreaux v. Pierce, Order of Aug. 14, 1987. This indeed prompted some change: the receiver built a number of small-scale public housing units, which were scattered throughout the General Area. In the 1990s, in part because of the availability of federal funds through the HOPE VI program (an acronym for "Homeownership and Opportunity for People Everywhere"), see 42 U.S.C. § 1437l, repealed by Pub.L. 105-276, Title V, § 522(a), Oct. 21, 1998, 112 Stat. 2564, the CHA developed plans to overhaul its public housing stock.

This culminated in 2000 with the CHA's announcement of the Plan for Transformation (the Plan), which the CHA optimistically describes as a "blueprint for positive change." The Plan outlines how the CHA proposes to replace all of Chicago's high-rise public housing projects with lower density mixed-income developments. See http://www.thecha.org/transformplan/ plan_summary.html (last visited June 7, 2007). As CHA's Executive Director, Terry Peterson, explains, the "centerpiece" of the Plan is "the creation of new, low-density, mixed-income communities on the sites and in the neighborhoods where [CHA] ha[s] demolished the old high-rises . . . . [These developments] will allow public housing families to live in the same kind of housing and the same kind of neighborhoods as other Chicagoans."

In deciding where to locate new construction that will benefit from HOPE VI funds and be subject to the Plan, the CHA has used the locations of the old high-rise projects almost exclusively. These were the same locations that were branded as racially isolated in Gautreaux I. They fell within the Limited Areas, in which new construction was restricted by Gautreaux II. See Gautreaux v. CHA, 178 F.3d at 953-55. In addition, some of the developments contemplated by the plan are mid-rise buildings in which public housing units are located above the third floor. To avoid the Gautreaux II restrictions when spending federal dollars, the CHA asked the district court in 1998 "to `clarify' the judgment order and read it as not governing the use of HOPE VI funds." The court declined to do so; instead, it concluded that "any construction of public housing in Cook County must conform to the judgment order's locational requirements." Gautreaux v. CHA, 4 F.Supp.2d 757, 760 (N.D.Ill.1998). Other construction under the Plan similarly has continued to operate within the restrictions of Gautreaux II's remedial order.

The result of the continued application of the remedial order to this new construction was, as Terry Peterson attested, that "[t]he Gautreaux case presented a major obstacle to the Plan for Transformation . . . . [U]nless the 1969 judgment order was modified, [the CHA] could not proceed with the Plan." What the CHA has had to do, in essence, is to negotiate new building plans with plaintiffs, whenever the Plan would require something inconsistent with Gautreaux II. The plaintiffs have been cooperative. Beginning with the redevelopment of the Henry Horner housing project on the City's near west side in 1995, the plaintiffs repeatedly have joined the CHA in requests for waivers from the district court of various restrictions in its remedial decree, so that construction of replacement public housing units can go forward.

In these joint motions, the Gautreaux plaintiffs have never conceded that the limits in the decree are no longer relevant. Rather, they have taken a case-by-case approach to waiver requests. For example, in proposing the waiver of Gautreaux II's conditions for the Horner redevelopment, plaintiffs asked the court to relax the site restrictions because they believed "that a proposed mixed-income redevelopment on and around the . . . site offered the prospect of better housing conditions for plaintiff families in the near term as well as the possibility of racial integration in the future." After the Horner redevelopment, plaintiffs have continued to join the CHA in asking the district court to waive the remedial conditions, but only for redevelopment projects that present the right conditions and only with particular restrictions negotiated by the parties.

The agreed order arrived at by the parties to allow the Horner revitalization to proceed in 1996 provided the model for much of what has occurred over the last decade, including the August 1, 2001, to July 31, 2003, period in which the attorneys' fees at issue were accumulated. During those two years, the district court entered five orders, each of which was agreed to by the parties. The first four were, according to Peterson, "examples of the kind of orders that CHA has sought from the Gautreaux plaintiffs so that [it] could proceed with the Plan." An order entered on September 7, 2001, waived the restrictions on units above the third story of any structure in four mid-rise buildings and fourteen walk-ups that were part of the redevelopment of the Cabrini Extension North housing project. An August 29, 2002, order modified Gautreaux II's directives with respect to the Tenant Assignment plan, giving priority for housing in scattered-site units to individuals and families displaced from their public housing units by the Plan; those units formerly had been earmarked for CHA transfer and waiting-list families. The September 11, 2002, order allowed the building of new mixed-income housing on the sites of the former Ida B. Wells, Darrow, and Madden Park projects in the North Kenwood-Oakland neighborhood. The December 12, 2002, order allowed the expansion of the Horner revitalization area and the construction of an additional 271 units of housing. It also modified the height restriction and released Gautreaux funds to be used in the construction. Finally, the order of March 18, 2003, revised the official list of Cook County Limited Area Census Tracts. See Gautreaux II, 304 F.Supp. at 742.

Over the years, the Gautreaux plaintiffs' attorneys have requested attorneys' fees on a number of occasions for their ongoing work on the case. Since the 1969 judgment the court has awarded fees on four occasions: (1) for the period from 1965 to 1980, it awarded $375,375 for 3,003 hours of work; (2) for the period from 1984 through 1996, it...