Keith v. Volpe

• Decision Date: 26 August 1986
• Docket Number: No. CV 72-355-HP.,CV 72-355-HP.
• Court: U.S. District Court — Central District of California
• Parties: Ralph W. KEITH, et al., Plaintiffs, v. John A. VOLPE, as Secretary of Transportation, et al., Defendants. Earl WRIGHT, et al., Additional Plaintiffs on Supplemental Complaint, v. CITY OF HAWTHORNE, a municipal corporation, et al., Defendants on Supplemental Complaint. California Department of Housing and Community Development, et al., Intervenors on Supplemental Complaint. Goldrich & Kest, Inc., a California corporation, Intervenors on Supplemental Complaint.

644 F. Supp. 1317

Ralph W. KEITH, et al., Plaintiffs, v. John A. VOLPE, as Secretary of Transportation, et al., Defendants.

Earl WRIGHT, et al., Additional Plaintiffs on Supplemental Complaint, v. CITY OF HAWTHORNE, a municipal corporation, et al., Defendants on Supplemental Complaint.

California Department of Housing and Community Development, et al., Intervenors on Supplemental Complaint.

Goldrich & Kest, Inc., a California corporation, Intervenors on Supplemental Complaint.

No. CV 72-355-HP.

United States District Court, C.D. California.

August 26, 1986.

COPYRIGHT MATERIAL OMITTED

Center for Law in the Public Interest, Bill Lann Lee, Elsa Leyva, Los Angeles, Cal., for plaintiffs.

Department of Transp., Bruce Behrens, Joel G. Philipp, Sacramento, Cal., for the State of Cal.

Burke, Williams & Sorensen, Richard R. Terzian, Cristina L. Sierra, Los Angeles, Cal., for the City of Hawthorne.

Office of the Attorney General State of Cal., Los Angeles, Cal., for the Dept. of Housing and Community Development.

Richard H. Levin, A Law Corp., Stephen A. Seideman, Los Angeles, Cal., for Goldrich & Kest, Inc., a California Corp.

ORDER RE: AWARD OF ATTORNEYS' FEES AND OUT-OF-POCKET EXPENSES AGAINST DEFENDANT CITY OF HAWTHORNE

PREGERSON, Circuit Judge, sitting by designation.

In September 1985, this court held that the City of Hawthorne's decision to condition its approval of rezoning certain land for rental housing violated both section 804 of the Fair Housing Act, Title VIII of the Civil Rights Act of 1968, 42 U.S.C. § 3604(a), and Cal.Gov't Code § 65008(b)-(d). See Keith v. Volpe, 618 F.Supp. 1132, 1160 (C.D.Cal.1985). The plaintiffs now seek to recover reasonable attorneys' fees and out-of-pocket expenses incurred in connection with this decision. Pursuant to 42 U.S.C. § 3612(c), and Cal.Code Civ.Proc. § 1021.5, the court awards the plaintiffs $175,316.50 in attorneys' fees and $6,641.29 for out-of-pocket expenses.

A.

Section 812(c) of the Fair Housing Act, 42 U.S.C. § 3612(c), permits a court to award "court costs and reasonable attorney fees in the case of a prevailing plaintiff" under the Act. Before making an award, the court must find that "the said plaintiff ... is not financially able to assume said attorney's fees." Id. The existence of a private contingent fee agreement between a plaintiff and counsel will bar a fees' award under this section. See Samuel v. Benedict, 573 F.2d 580, 581 (9th Cir.1978). However, absent such an agreement or where the plaintiffs receive free legal services, as here, there is no bar to a fees' award providing that the statute's financial ability proviso is satisfied. See Hairston v. R & R Apartments, 510 F.2d 1090, 1092-93 (7th Cir.1975) (award of fees under 42 U.S.C. § 3612(c) proper even though legal services provided free by private legal services organization); see also Blum v. Stenson, 465 U.S. 886, 893, 104 S.Ct. 1541, 1546, 79 L.Ed.2d 891 (1984) (statutory fees' award for work performed by nonprofit public interest firm to be assessed as if counsel came from private firm). Here, the plaintiffs obtained only injunctive relief. Where there is no recovery of damages in a Title VIII case, an award of fees under section 3612(c) is particularly appropriate. See Fort v. White, 530 F.2d 1113, 1119 (2d Cir.1976).

A finding of inability to pay is a prerequisite to a fees' award under section 3612(c). See Fountila v. Carter, 571 F.2d 487, 495 (9th Cir.1978); 42 U.S.C. § 3612(c). The Ninth Circuit has not indicated the threshold for determining when a person is "not financially able to assume ... attorney's fees." See Samuel, 573 F.2d at 582 n. 2 ("We do not reach the question of whether the plaintiff has to be indigent in order to qualify for § 3612(c)."). However, other circuits have expressly rejected any implication that only indigent plaintiffs are entitled to fees under section 3612(c). See Smith v. Anchor Building Corp., 536 F.2d 231, 236 n. 9 (8th Cir.1976) ("We do not regard the proviso contained in § 3612(c) as limiting attorney fees to only those persons of indigent status."); Hairston, 510 F.2d at 1091-92 (salary of $436 per month in 1974 is no bar to fees' recovery); Marr v. Rife, 503 F.2d 735, 743 (6th Cir.1974) (family income of $12,847 in 1970 did not bar recovery under § 3612(c)); Steele v. Title Realty Co., 478 F.2d 380, 385 (10th Cir.1973) ("The test is not limited to present ability of the plaintiff to pay but whether he is financially able to assume the cost of the fees.").

The purpose of the attorneys' fees provision of section 3612(c) is to ensure that private parties are able to secure effective legal counsel to protect their fair housing rights guaranteed by federal law. See Samuel, 573 F.2d at 581; cf. Pennsylvania v. Delaware Valley Citizens' Council for Clear Air, ___ U.S. ___, 106 S.Ct. 3088, 3095, 92 L.Ed.2d 439 (1986) (purpose of 42 U.S.C. § 1988 is to permit vindication of federal civil rights). People who have limited financial resources, but who are nonetheless not "indigent," would find it virtually impossible to secure competent counsel because attorneys would know that they would have little or no chance of adequate payment if they took on such people's fair housing cases. Thus, a rigid rule which excluded such people from fees' reimbursement would subvert the purpose of section 3612(c)'s fee-shifting provision and, indeed, would threaten to undermine the effectiveness of Title VIII as a whole.

The court will follow the rule applied, apparently without exception, in other circuits. Thus, the court holds that, having prevailed on their Title VIII claim, the plaintiffs are entitled to reimbursement of appropriate attorneys' fees under section 3612(c) provided that their present financial status makes it unreasonable to expect them to assume the responsibility of meeting the fees in full.

The court's opinion holding Hawthorne liable for violating Title VIII found that two of the named plaintiffs in the supplemental complaint had an annual family income of $12,000, and that the third plaintiff's annual income was $14,000. See Keith, 618 F.Supp. at 1145. Indeed, the principal basis of Hawthorne's unlawful discrimination against the plaintiffs was their low-income status. Id. at 1158-59.

The cost of this litigation was inevitably substantial given the need to develop complex, statistical information to establish a prima facie case of housing discrimination. In declarations to the court, counsel for Hawthorne disclosed that defendants' fees in this matter were over $103,000. Plaintiffs' fees will invariably exceed those of defendants because the plaintiffs must bear "the laboring oar on burdens of proof and presentation." Burgess v. Premier Corp., 727 F.2d 826, 840 (9th Cir.1984).

Balancing the probable financial costs to plaintiffs of pursuing this litigation successfully against their present ability to pay, the court has no difficulty concluding that it would be unreasonable to expect plaintiffs here to assume those costs. Having thus satisfied the statute's ability-to-pay proviso, plaintiffs are entitled to reasonable attorneys' fees under 42 U.S.C. § 3612(c).¹

B.

Plaintiffs also prevailed on one of their two California state law claims. See Keith, 618 F.Supp. at 1160. Because plaintiffs' relief was based partially on state law, the court must also consider their entitlement to attorneys' fees under relevant state law. See Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 259 n. 31, 95 S.Ct. 1612, 1622 n. 31, 44 L.Ed.2d 141 (1975); Lewis v. Anderson, 692 F.2d 1267, 1270 (9th Cir.1982).

Cal.Code Civ.Proc. § 1021.5 permits an award of attorneys' fees to a successful party "in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any." See Woodland Hills Residents Association, Inc. v. City Council of Los Angeles, 23 Cal.3d 917, 933, 593 P.2d 200, 208, 154 Cal.Rptr. 503, 511-12 (1979) (section 1021.5 codifies private attorney general doctrine); Beach Colony II v. California Coastal Commission, 166 Cal. App.3d 106, 110-11, 212 Cal.Rptr. 485, 488 (1985).

The court found that Hawthorne had impermissibly discriminated against the plaintiffs on the grounds of low income and race. The California constitution guarantees the right to be free from unequal treatment because of disparities in family income. See Serrano v. Priest, 5 Cal.3d 584, 595-96 & n. 11, 487 P.2d 1241, 1249-50 & n. 11, 96 Cal.Rptr. 601, 609-10 & n. 11 (1971). Enforcement of the parallel statutory "important right" in Cal.Gov't Code § 65008 is thus clearly in "the public interest" and undoubtedly confers "a significant benefit on the general public." Vindication of the right to be free from racial discrimination similarly meets these criteria. See Woodland Hills, 23 Cal.3d at 935-36; 593 P.2d at 209-10, 154 Cal.Rptr. at 512-13; see also Beach Colony, 166 Cal.App.3d at 112, 212 Cal.Rptr. at 489-90 (conferring significant non-pecuniary benefit on some members of public satisfies section 1021.5).

Additionally, the plaintiffs' successful prosecution of this suit helped secure for the public the benefit of the replenishment housing required by the terms of the amended consent decree governing construction of the Century Freeway. Further, according to a declaration by the then Chief Engineer for the Freeway, the plaintiffs' success saved the state a considerable sum of money. The litigation prevented any significant disruption of the Freeway construction schedule which would have occurred because of the need to accommodate alternative housing arrangements for freeway displacees excluded from...