Vargas v. Calabrese

• Decision Date: 14 November 1990
• Docket Number: Civ. A. No. 85-4725.
• Citation: 750 F. Supp. 677
• Parties: Josephine VARGAS, Martin Ellerbee, Marion Gargiulo, Joann Wheeler, Janice Sellers, Maria Rivera, Margarita Gonzalez, Plaintiffs, v. Christine CALABRESE, individually and in her capacity as former Chairperson of Hudson County Board of Elections, Frank Caleca, Lee S. Lichtenberger, the Hudson County Superintendent of Elections, Harvey L. Birne, as Hudson County Superintendent of Elections, Gerald McCann, individually and in his official capacity as former Mayor of the City of Jersey City, Matthew Burns, John Finn, Mark Munley, Defendants. Gerald McCANN, Mark Munley, John J. Finn, Matthew Burns, Defendants/Third-party Plaintiffs, v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., Third-party Defendant. Gerald McCANN, Defendant/Third-party Plaintiff, v. J.R. INSURANCE BROKERAGE, INC., Third-party Defendant.
• Court: U.S. District Court — District of New Jersey

750 F. Supp. 677

Josephine VARGAS, Martin Ellerbee, Marion Gargiulo, Joann Wheeler, Janice Sellers, Maria Rivera, Margarita Gonzalez, Plaintiffs, v. Christine CALABRESE, individually and in her capacity as former Chairperson of Hudson County Board of Elections, Frank Caleca, Lee S. Lichtenberger, the Hudson County Superintendent of Elections, Harvey L. Birne, as Hudson County Superintendent of Elections, Gerald McCann, individually and in his official capacity as former Mayor of the City of Jersey City, Matthew Burns, John Finn, Mark Munley, Defendants.

Gerald McCANN, Mark Munley, John J. Finn, Matthew Burns, Defendants/Third-party Plaintiffs, v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., Third-party Defendant.

Gerald McCANN, Defendant/Third-party Plaintiff, v. J.R. INSURANCE BROKERAGE, INC., Third-party Defendant.

Civ. A. No. 85-4725.

United States District Court, D. New Jersey.

November 9, 1990.

As Amended November 14, 1990.

Juan Cartagena, Law Office of Ignacio Perez, Jersey City, N.J., Dept. of Puerto Rican Community Affairs, New York City, Samuel Issacharoff, University of Texas Law School, Austin, Tex., Ruben Franco, Arthur Baer, Ken Kimerling, Puerto Rican Legal Defense & Education Fund, New York City, Frank R. Parker, Lawyers Committee for Civ. Rights Under Law, Washington, D.C., and Seth Kreimer, Philadelphia, Pa., for plaintiffs.

Arthur L. Porter, Jr., Brach, Eichler, Rosenberg, Silver, Bernstein, Hammer & Gladstone, Roseland, N.J., for defendants Harvey L. Birne, Hudson County Superintendent of Elections.

William J. Prout, Jr., Ellen Nunno Corbo, George Gerard Campion, Richard A. Roche, Tompkins, McGuire & Wachenfeld, Newark, N.J., for defendants Gerald McCann, Mark Munley and Matthew Burns.

Clifford A. Herrington, Margulies, Wind, Herrington & Katz, Jersey City, N.J., for Hudson County Bd. of Elections.

David Dembe, Deputy Atty. Gen., Robert J. Del Tufo, Atty. Gen. of New Jersey, Dept. of Law & Public Safety, Trenton, N.J., for Atty. Gen. of New Jersey.

OPINION

DEBEVOISE, District Judge.

The matter is now before the Court upon plaintiffs' application for attorneys' fees pursuant to 42 U.S.C. § 1988. Before addressing the contentions of the parties it is necessary to summarize the history of this case.

A. PROCEDURAL BACKGROUND

Plaintiffs, who are registered voters of Jersey City, filed the complaint in this action seeking declaratory relief and monetary damages on behalf of a proposed class consisting of all registered black and Hispanic voters in Jersey City. It was alleged in general that during the June 11, 1985 municipal run-off election persons favoring mayoral candidate Gerald McCann had conspired with each other and had engaged in a number of activities designed to discourage or prevent black and Hispanic registered voters from voting. A more specific description of these alleged activities is set forth in a 1986 Opinion, Vargas v. Calabrese, 634 F.Supp. 910 (D.N.J.1986).

The original defendants were the four members of the Hudson County Board of Election; Joseph Brady, the Hudson County Superintendent of Election; candidate McCann; six named District Election Board members individually and on behalf of all District Election Board members; and twelve named challengers individually and on behalf of all McCann challengers. Plaintiffs voluntarily dismissed the District Election Board members and challengers. After discovery was undertaken plaintiffs were given leave to add as defendants three McCann campaign workers — Matthew Burns, John J. Finn and Mark Munley.

On October 8, 1985, fearing a repetition of the events of the previous June, plaintiffs moved for a preliminary injunction requiring the Hudson County election officials to take steps to protect the voting rights of minority voters in the upcoming gubernatorial election. On October 1, 1985, after a hearing, I signed a consent order specifying rather elaborate election procedures agreed to by the parties. Subsequently, the Attorney General of the State of New Jersey moved to intervene in his own behalf.

Plaintiffs moved for certification of the plaintiff and defendant classes. They moved for summary judgment against the defendants for violation of (1) the First Amendment, (2) the Voting Rights Acts of 1965 and 1957, (3) the Civil Rights Act of 1866, 42 U.S.C. § 1985, and (4) the Fourteenth and Fifteenth Amendments. New Jersey's Attorney General moved for summary judgment on the challenged constitutionality of four New Jersey election laws.

I denied plaintiffs' motion for summary judgment on the ground that there were contested issues of material fact. I certified a plaintiff class. I denied plaintiffs' motion to certify defendant classes, finding that there was no assurance that the class members would have common defenses or that the class representatives would provide adequate representation. Further, I was deeply concerned about the chilling effect such a certification would have upon the legitimate exercise of political rights by citizens of this country. I granted the Attorney General's motion for summary judgment on Counts One, Two and Six of the complaint which challenged the four provisions of New Jersey's election laws. The reason for these rulings are set forth in the opinion cited above.

Very intensive discovery was undertaken by all parties, and numerous motions were filed and argued. During the course of the proceedings I granted summary judgment in favor of Hudson County Board of Election members Christine Calabrese, Frank Caleco, Lee S. Lichtenberger, and Julius D. Canter. Hudson County Superintendent of Election Joseph Brady died and he was dismissed from the case in his individual capacity. Substituted in his place in an official capacity only was his successor, Harvey L. Birne. I denied McCann's motion for summary judgment.

An important subsidiary issue, in which the plaintiffs were not directly involved but which had an important bearing on the monetary recovery which they could expect to obtain, was whether defendants Burns, Finn, Munley and McCann were covered by a comprehensive general liability insurance policy which third-party defendant National Union Fire Insurance Company of Pittsburgh, PA ("NUFI") had issued to the McCann campaign organization. In June, 1989 I concluded that the policy provided coverage with respect to the claims asserted against these four individuals in the instant case. Vargas v. Calabrese, 714 F.Supp. 714 (D.N.J.1989).

For a considerable period of time both before and after my decision on the claims against NUFI the parties engaged in settlement discussions while simultaneously filing substantive motions, completing discovery and making final preparations for trial.

Plaintiffs settled with the four individual defendants who, in plaintiffs' judgment, had varying degrees of responsibility for the untoward events which occurred before and during the June 11, 1985 run-off election.

The first to settle was John J. Finn. That settlement did not involve the payment of any money by Finn to plaintiffs.

In 1988 Matthew Burns completed negotiations of a settlement agreement with plaintiffs. The agreement provides that he is to pay $45,000 in any event, and if it is ultimately determined that the insurance policy covers the claim, he will be obligated for a total amount of $90,000.

Gerald McCann was the principal defendant, having the greatest exposure to an adverse judgment, and the next most vulnerable defendant was Mark Munley. McCann and Munley each agreed to refrain from the kind of conduct which was the subject of the complaint and each agreed to pay damages in the amount of $250,000 and, in recognition of the contingent nature of that recovery, to assign to plaintiffs 25% of any net recovery in bad faith punitive damages he collects from NUFI and to assign to plaintiffs' counsel 25% of any such net recovery. The assigned sums will be in addition to any amount plaintiffs may recover on their own application for attorneys' fees and costs.

During the course of proceedings in which NUFI's liability was determined I held that under the circumstances of this case bad faith and punitive damages cannot be collected from NUFI and therefore, unless I am reversed on appeal, the agreement to assign a total of 50 percent of bad faith recoveries is a nullity.

Under the settlement agreements with McCann and Munley the $250,000 payments are totally contingent on NUFI's being liable for them. Under the settlement agreement with Burns, $45,000 of the $90,000 payment is similarly contingent. This issue is being raised on appeal and to the extent that the Court of Appeals finds that NUFI is not obligated to provide coverage to McCann, Munley and Burns for these sums, those individuals will be relieved of their obligation to pay plaintiffs.

The settlement funds are to be distributed to the class plaintiffs pursuant to a plan described in a memorandum which was incorporated in the final judgment.

The public defendants, namely the Hudson County Board of Elections and Harvey L. Birne, Superintendent of Elections, also entered into settlement negotiations with plaintiffs. This resulted in injunctive provisions designed to ensure that members of the class (and, incidentally, other voters as well) would not be deprived of their right to vote through inappropriate methods of challenging. Procedures were established for establishing residency and to assist Spanish-speaking voters. Many of the procedures incorporated in the October 1985 consent decree became a part of the final decree and other provisions were added. Prior to its acceptance the Attorney General of New Jersey reviewed the terms of the proposed settlement to ensure that it did not violate the New Jersey Election Laws. The public defendants did not agree to pay damages.

The settlements with the various defendants resulted from negotiations which were intensive and prolonged. The question of attorneys' fees was...