Donna McGrath et alia, Plaintiffs, -against -Toys "R" Us, Inc., Defendant.

CV-01-3071 (CPS)

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK

2002 U.S. Dist. LEXIS 22610

October 8, 2002, Decided

October 16, 2002, Filed

COUNSEL:
For Donna Venza Magrath, Robert Jinks, Nobert Lopez, PLAINTIFFS: Thomas D Shanahan, Esq, Shanahan & Associates, PC, New York, NY USA.

For Toys "R" US, Inc, DEFENDANT: H Nicholas Goodman, Quirk & Baylor, New York, NY USA.

JUDGES:
Charles P. Sifton, United States District Judge.

MEMORANDUM AND ORDER

SIFTON, Senior Judge.
Plaintiffs Donna McGrath Venza, Tanya Medina, and Tara Lopez apply for an award of attorneys fees following a jury verdict in their favor in an action brought pursuant to the Administrative Code of the City of New York Û Û 8-801 et seq. (hereinafter, the "Code"). For the reasons discussed below, plaintiffs are awarded $ 193,551. n1

n1 Plaintiffs have filed a separate application for costs, which is currently pending before the Clerk of Court as provided for by Local Civil Rule 54.1.

BACKGROUND
Plaintiffs brought this [*2] action against defendant Toys "R" Us, Inc., claiming that defendant violated their rights under the Code. Plaintiffs alleged that defendant engaged in unlawful discriminatory practices when it denied them the accommodations, privileges, or facilities of the store because of their actual or perceived gender or sexual orientation, in violation of the Code. See N.Y. Admin. Code Û Û 8-502, 8-107(4).
The action was tried before a jury from June 17 to June 27, 2002, and on June 27, 2002, the jury rendered a verdict in favor of all three plaintiffs on their claims, awarding, however, only nominal damages. The jury declined to award compensatory or punitive damages.
DISCUSSION
Plaintiffs seek attorneys fees in the amount of $ 206,162, n2 as the prevailing party, pursuant to [HN1] Section 8- 502(f) of the Code, which provides: "In any civil action commenced pursuant to this section, the court, in its discretion, may award the prevailing party costs and reasonable attorneys fees." Code, Û 8-502(f). Plaintiffs seek attorneys fees."

n2 In their second amended notice of motion, plaintiffs state that they request $ 202,760.50 in fees, which includes fees incurred in drafting and arguing this current application. This Court's review of the supporting documentation suggests that they are, in fact, seeking the higher amount set forth in the text.

While plaintiffs seek fees under the Code of the City of New York, plaintiffs and the defendant rely (in the absence of case law interpreting the City Code) on federal law applying analogous federal civil rights statutes, such as Title VII of the Civil Rights Act of 1964, 42 U.S.C. Û 2000e-5(k), and 42 U.S.C. Û 1988(b), in discussing the standards applicable to fee awards. The fee provision of Title VII provides that "in any action or proceeding under this subchapter the court, in its discretion, may allow the prevailing party ... a reasonable attorneys fee." 42 U.S.C. Û 2000e-5(k). Most cases that allege a violation of the Code also allege an analogous claim for relief under Title VII, and in those cases, courts have applied federal law in determining fees. See, e.g., Wilson v. Nomura Securities Int'l, Inc., 2002 U.S. Dist. LEXIS 12668, 2002 WL 1560614 (S.D.N.Y. July 15, 2002). In these cases, while courts recognize two distinct statutory bases for fees, they complete a single analysis in determining the amount of the award.
In an action under Title VII, a court must complete a two-step analysis to determine if an [*4] award of fees is appropriate. First, the party must be a "prevailing party" in order to recover, Farrar v. Hobby, 506 U.S. 103, 121 L. Ed. 2d 494, 113 S. Ct. 566 (1992), and second, the requested fee must be reasonable, Hensley v. Eckerhart, 461 U.S. 424, 433, 76 L. Ed. 2d 40, 103 S. Ct. 1933 (1983). The Second Circuit has stated that plaintiff is a "prevailing party" when he or she "succeeds on any significant issue in litigation which achieves some of the benefit" the party sought in bringing suit. Bridges v. Eastman Kodak, Co., 102 F.3d 56, 58 (2d Cir. 1996). Plaintiffs who win nominal damages are considered "prevailing parties" for the purpose of fee awards. Farrar, 506 U.S. at 112.
Defendant argues that, although plaintiffs are prevailing parties, it would be unreasonable for this Court to award attorneys fees to the plaintiffs because they only received an award of nominal damages. In Farrar v. Hobby, the Supreme Court stated that the most important factor in determining the reasonableness of a fee is the degree of success obtained. Farrar, 506 U.S. at 114. "In some circumstances, even [*5] a plaintiff who formally 'prevails' ... should receive no attorneys fees at all. A plaintiff who seeks compensatory damages but receives no more than nominal damages is often such a prevailing party." Id. at 115. The Court noted that, "when a plaintiff recovers only nominal damages because of his failure to prove an essential element of his claim for monetary relief ..., the only reasonable fee is usually no fee at all." Id. at 115. The Court added that fee awards are not appropriate where, having failed to prove compensatory damages, the "litigation accomplished little beyond giving petitioners 'the moral satisfaction of knowing that a federal court concluded that [their] rights had been violated.'" Id. at 114. (quoting Hewitt v. Helms, 482 U.S. 755, 762, 96 L. Ed. 2d 654, 107 S. Ct. 2672 (1987)). In awarding fees, it is necessary for the court to "consider the relationship between the extent of success and the amount of the fee award." Hensley v. Eckerhart, 461 U.S. 424, 438, 76 L. Ed. 2d 40, 103 S. Ct. 1933 (1983).
There is, however, no rule that an award of nominal damages will never support [*6] a fee award. Farrar and subsequent cases state simply that such an award will be unusual and infrequent. See id. at 438. In Cabrera v. Jakabovitz, 24 F.3d 372 (2d Cir.), cert. den., 513 U.S. 876, 115 S. Ct. 205, 130 L. Ed. 2d 135 (1994), this Circuit held that an award of attorneys fees was appropriate after a jury award of nominal damages when the plaintiff prevailed on a novel issue of law. Id. at 393. In Carbrera, the plaintiffs succeeded on proving landlords liable for employing real estate brokers who engaged in racial steering, creating a new rule of liability. Id.
This case is one of those unusual and infrequent instances in which attorneys fees should be awarded. Plaintiffs state without contradiction that this was the first public accommodations case to go to trial under the Code, as well as the first case in which the rights of transsexuals were asserted and vindicated. This Court's own review of the New York cases under the Code and cases before the City Human Rights Commission confirms this. Moreover, in May 2001, when plaintiffs filed the complaint in this action, there was a substantial legal question whether [*7] the protections provided by the Code against gender and sexual orientation discrimination extended to transsexuals. This ambiguity was resolved legislatively only two months prior to the trial in this case when the New York City Council passed a bill, signed into law by the mayor on April 30, 2002, amending the definition of "gender" under the Code to include discrimination on the bases of "gender identity or expression." "The function of an award of attorneys fees is to encourage the bringing of meritorious civil rights claims which might otherwise be abandoned because of the financial imperatives surrounding the hiring of competent counsel." Raishevich v. Foster, 247 F.3d 337, 344 (2d Cir. 2001). This purpose is served by an award of fees to plaintiffs' counsel in this case.
In fixing the amount of fees to be awarded under Section 8-502(f) of the Code, New York courts have worked within an analytical framework similar to that employed to determine fees pursuant to Title VII. Compare McIntyre v. Manhattan Ford, Lincoln-Mercury, Inc., 176 Misc. 2d 325, 672 N.Y.S.2d 230, 231-33 (Sup. Ct. 1997) (calculating lodestar award amount under Section 8-502(f) [*8] as product of reasonable hourly rate and number of hours reasonably expended) with Greenbaum v. Svenska Handelsbanken, N.Y., 998 F. Supp. 301, 301-05 (S.D.N.Y. 1998).
In determining a reasonable attorneys fee, a lodestar estimate amount is calculated from the product of a reasonable hourly rate and the number of hours reasonably expended by the attorneys. See Hensley v. Eckerhart, 461 U.S. 424, 437, 76 L. Ed. 2d 40, 103 S. Ct. 1933 (1983). To determine the hours reasonably expended, New York courts consider the following:

(1) hours which reflect the inefficiency or duplication of services should be discounted; (2) hours that are excessive, unnecessary or which reflect "padding" should be disallowed; (3) legal work should be differentiated from nonlegal work such as investigation, clerical work, the compilation of facts and other types of work that can be accomplished by nonlawyers who command lesser rates; (4) time spent in court should be differentiated from time expended for out-of- court services; and (5) the hours claimed should be weighed against the court's own knowledge, experience and expertise as to the time required to complete similar [*9] activities.

McIntyre, 672 N.Y.S.2d at 232 (citing Rahmey v. Blum, 95 A.D.2d 294, 466 N.Y.S.2d 350, 356-58 (App. Div. 1983)).The reasonable hourly rate should be based on the customary rate for similar services by lawyers in the community with like experience and of comparable reputation to those by whom the prevailing party was represented. See McIntyre, 672 N.Y.S.2d at 232; see also Blum v. Stenson, 465 U.S. 886, 896 n.11, 79 L. Ed. 2d 891, 104 S. Ct. 1541 (1984) (stating that rates should be "in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation").
Once the lodestar estimate amount is calculated, predicated on an objective assessment of reasonableness, the estimate may be adjusted based on equitable "considerations that may lead the district court to adjust the fee upward or downward, including the important factor of the 'results obtained.'" Greenbaum, 998 F. Supp. at 303-04 (quoting Hensley, 461 U.S. at 434). Such considerations may include:

(1) the novelty and difficulty of the [*10] questions presented; (2) the skill requisite to perform the legal services properly; (3) the preclusion of other employment by the attorney due to the acceptance of the case; (4) whether the fee is fixed or contingent; (5) time limitations imposed by the client or circumstances; (6) the nature and length of the professional relationship with the client; (7) the amount involved and the results obtained; (8) the undesirability of the case; and (9) awards in similar cases.

McIntyre, 672 N.Y.S.2d at 232 (citing Rahmey v. Blum, 95 A.D.2d 294, 466 N.Y.S.2d 350, 356-58 (App. Div. 1983)).
Plaintiffs seek $ 206,162 as compensation for the work of three attorneys: Thomas D. Shanahan ("Shanahan") and Miquel A. Lopez ("Lopez"), of Shanahan & Associates, P.C., and Anthony A. LoPresti ("LoPresti"), of Davidson & LoPresti, LLP. Specifically, plaintiffs request compensation for 524.56 hours for Mr. Shanahan, a partner, at a rate of $ 350/hour for trial work and $ 250/hour for all other work; n3 220.8 hours for Mr. LoPresti, a partner, at a rate of $ 350/hour for trial work, $ 250/hour for work done after the verdict, and $ 225/hour for all other work; n4 [*11] and 27.3 hours for Mr. Lopez, an associate, at a rate of $ 150/hour.

n3 Of the 524.56 hours billed by Mr. Shanahan, 433.89 are at a rate of $ 250/hour and 90.67 hours are at the higher trial rate of $ 350/hour.
n4 Of the 220.8 hours billed by Mr. LoPresti, 105.2 are at a rate of $ 225/hour and 92.9 hours are at the higher trial rate of $ 350/hour. After being given an opportunity to submit additional documentation of time spent while litigating this application for fees, Mr. LoPresti submitted a supplemental invoice for 22.7 hours at a rate of $ 250/hour.
Billing Rates
Mr. Shanahan states that his firm's standard billing rate for clients who pay by the hour is $ 250 for partner time and $ 150 for associate time and that these rates have been in effect for over one year. Mr. LoPresti states that he routinely charges an hourly rate of $ 225 an hour and that this rate has been in effect for almost one year. n5 While customary rates are relevant, they must be measured against the prevalent market rate in [*12] the district in which the court sits. See Blum v. Stenson, 465 U.S. 886, 896 n. 11, 79 L. Ed. 2d 891, 104 S. Ct. 1541 (1984); In re "Agent Orange" Prod. Liab. Litig., 818 F.2d 226, 232 (2d Cir. 1987). "Fee awards in other recent Eastern District of New York cases have ranged from $ 200 to $ 250 for partners and from $ 100 for junior associates to $ 200 for senior associates." Fink v. City of New York, 154 F. Supp. 2d 403, 407 (E.D.N.Y. 2001) (citing Hiller v. County of Suffolk, 199 F.R.D. 101, 109 (E.D.N.Y. 2001); Fernandez v. North Shore Orthopedic Surgery & Sports Medicine, P.C., 2000 U.S. Dist. LEXIS 5285, No. Civ. 96-4489, 2000 WL 130637 at *2 (E.D.N.Y. 2000); Greenidge v. Mundo Shipping Corp., 60 F. Supp. 2d 10, 12-13 (E.D.N.Y. 1999); Perdue v. City Univ. of New York, 13 F. Supp. 2d 326, 345-46 (E.D.N.Y. 1998). n6

n5 Plaintiffs make no argument that Mr. LoPresti's standard billing rate is $ 250 as opposed to $ 225 per hour, as claimed on the supplemental invoice submitted by Mr. LoPresti, or that such a rate is reasonable. Because there is no reason given as to why work done in preparation of this application for attorneys fees should be billed at a rate higher than Mr. LoPresti's other work outside of trial, I do not consider his rate of $ 250/hour reasonable. [*13]
n6 Defendant argues that this Court should recognize the following as the prevailing market hourly rate: $ 200 for partners, $ 135 for associates, and $ 50 for paralegals, citing Cush-Crawford v. Adchem Corp., 94 F. Supp. 2d 294, 302 (E.D.N.Y. 2000). The court in that case relied on Savino v. Computer Credit, Inc., 164 F.3d 81, 81 (2d Cir. 1998), which was decided by the Second Circuit over four years ago. The rates sought by plaintiffs are comparable to the rates specified in Fink v. City of New York, 154 F. Supp. 2d 403, 407 (E.D.N.Y. 2001), cited above, after adjustment for inflation.

In addition to market rates generally, the Court must consider an attorney's "skill, experience, and reputation" in determining a reasonable hourly rate. Mr. Shanahan graduated from law school in 1997 and founded Shanahan & Associates, PC to concentrate on anti-discrimination law. Mr. Shanahan has been practicing as an attorney for five years and, as he inappropriately told the jury during trial, this was his first trial. Mr. LoPresti, who was retained as co-counsel [*14] approximately one month in advance of trial, graduated from law school in 1996 and became licensed to practice law in New York in September 2001. Mr. Lopez, an associate at Shanahan & Associates, P.C., left the firm at some point prior to trial, and the plaintiffs provide no information on his experience in these matters or his skill and reputation.
In light of their experience in these matters and rates found reasonable in the Eastern District and considering the effect of inflation, this Court finds that the requested rates of $ 250/hour for the work of Mr. Shanahan and $ 225/hour for the work of Mr. LoPresti are objectively reasonable. Because this Court is told nothing of Mr. Lopez' skill, experience, or reputation, the prevailing market rate of $ 100/hour for junior associates is more reasonable than the $ 150 sought by plaintiffs. This Court finds Mr. Shanahan's and Mr. LoPresti's trial rate of $ 350 per hour excessive, particularly considering that this trial represented Mr. Shanahan's first trial. Instead, I find an award of $ 300 per hour more reasonable.
Adjustments to Claimed Hours
Defendant challenges two billing entries by Mr. Shanahan on his invoices submitted [*15] to the Court. Plaintiff concedes that the invoice submitted to this Court erroneously states that a deposition occurred on February 28, 2002, lasting six hours. In fact, there was no deposition on that date, and six hours will be subtracted from Mr. Shanahan's claimed hours. Defendant also opposes Mr. Shanahan's invoice in that he bills his client for 13.5 hours over the course of two days for his time in connection with three depositions. The documentation provided by the defendants shows that the elapsed time of the three depositions themselves was approximately 340 minutes, or 5.6 hours. Mr. Shanahan states that it is and was at the time his practice to actively prepare for the depositions. I accept this explanation and do not find the time claimed unreasonable.
Lodestar Total
Based on the previous analysis, the lodestar is $ 193,551 and is calculated as follows:


______________________________________________________________________
Attorney Hours Rate Attorney Total
Shanahan 427.89 $ 250 $ 106,972.50
90.67 $ 300 $ 27,201
Lopez 27.3 $ 100 $ 2,730
LoPresti 127.9 $ 225 $ 28,777.50
92.9 $ 300 $27,870
____________________________________________________________________

Modification to Lodestar
Plaintiffs argue that the lodestar award amount should be increased [*16] because (1) the lawsuit was novel, and (2) plaintiffs' counsel turned down other opportunities for employment during the pendency of this trial. I am unpersuaded by the arguments and find that the lodestar amount constitutes adequate encouragement for novice attorneys to commence novel litigation and for any lost opportunities passed up because of the litigation.
Defendant argues that the lodestar amount should be reduced in light of plaintiffs' "lack of success." However, the jury returned a verdict of liability against the defendant on a novel theory under a law designed to proscribe socially reprehensible conduct. While the jury found that plaintiffs themselves did not suffer compensable injury and that defendant's conduct was not egregious enough to warrant punitive damages, the verdict in plaintiffs' favor will serve to deter defendant and others from engaging in similar misconduct in the future. Given this accomplishment under a new law, I find that an award of fees is appropriate, taking into account the purpose behind fee awards and the intent of the City of New York to "make the prevailing party as whole as possible, as well as to deter others from engaging in similar reprehensible [*17] conduct." McIntyre, 672 N.Y.S.2d at 231.
CONCLUSION
After full consideration of the papers in support of and in opposition to this application, the Court awards, pursuant to Section 8-502(f) of the Administrative Code of the City of New York, the sum of $ 193,551 in attorneys fees.
The Clerk is directed to enter a final judgment in this case in accordance with this Memorandum and Order and to furnish a filed copy of the within together with the judgment to all parties and to the magistrate judge.
SO ORDERED.

Dated: Brooklyn, New York
Oct. 8, 2002
Charles P. Sifton
United States District Judge