BRIGHTON VILLAGE NOMINEE TRUST v. MALYSHEV

2005 | Cited 0 times | D. Massachusetts | June 23, 2005

MEMORANDUM AND ORDER ON APPLICATION FOR ATTORNEYS' FEES

The third-party plaintiffs' ("Tenants") application forattorneys' fees (No. 87) is GRANTED.

Following the entry of judgment in their favor on some of theirclaims against the third-party defendant, United StatesDepartment of Housing and Urban Development ("HUD"), the Tenantsfiled an application seeking the award of attorneys' feespursuant to 28 U.S.C. § 2412(d)(1)(A). The statute provides that"a court shall award to a prevailing party other than the UnitedStates fees and other expenses1 . . . incurred by thatparty in any civil action . . . unless the court finds that the position of the United States was substantially justified or thatspecial circumstances make an award unjust." There is no realdispute that the Tenants qualify as "a prevailing party" underthe statute (although as discussed below the extent to which theyhave prevailed is in dispute). The primary dispute is whether theposition of the United States was "substantially justified."

"The burden is on the government to demonstrate that itsposition was `substantially justified.'" Schock v. UnitedStates, 254 F.3d 1, 5 (1st Cir. 2001). "The government need notshow that its position was `justified to a high degree'; rather,it must show that its position was `justified in substance or inthe main — that is, justified to a degree that could satisfy areasonable person.'" Id. (citation omitted). In other words,there must be a "reasonable basis both in law and fact" for itsposition. Id. Further, the Court is to consider the agency'spre-litigation action as well as the litigation position of theUnited States. Id. I conclude that HUD has not satisfied itsburden.

As described in the Memorandum and Order dated March 23, 2004,I resolved two of the three claims against HUD in the Tenants'favor. First, I concluded that HUD had failed to comply with12 U.S.C. § 1715z-15(a) when it accepted the project owner'sprepayment of its mortgage. HUD admitted its non-compliance butargued that the statute did not apply because the project was"unsubsidized." That position was not substantially justified.

As noted in the Memorandum and Order, thesubsidized-unsubsidized distinction that HUD relied on is notexpressly set forth in the plain, unambiguous text of thestatute. HUD, nevertheless, urged that the statute should beinterpreted in light of the legislature's intent, which HUDargued was to exclude certain projects from the statute's reach.HUD's reliance on the so-called legislative history of thestatute is unjustified. First, the words of the statute areunambiguous, making it unnecessary to turn to the legislativehistory for elucidation, especially where HUD's proposedconstruction actually conflicts with the text. Second, what HUDcharacterizes as "legislative history" amounts to no more than a brief remark from a single Senatorexpressed more than a year before the provision's adoption. Inaddition, HUD's internal policy memorandum, which does not carrythe persuasive force that HUD would like assigned to it, adds nosupport to its position.

Finally, HUD finds no refuge in the scant case law it cites.The primary case HUD relies on, Walker v. Pierce,665 F. Supp. 831 (N.D. Cal. 1987), does not say what HUD says it does. Rather,the district court in Walker, called on to decide whether toissue a preliminary injunction barring HUD's sale of severalmortgages, never conclusively construed the statute. It engagedin a preliminary analysis, indicated its inclination to agreewith HUD's construction of the statute, also recognized thepossible merit of the plaintiffs' construction, and granted theinjunction because the plaintiffs had "raised a serious legalquestion" concerning the proper construction of the statute.Id. at 836-37. The court in Walker did not finally concludethat HUD's construction of the statute was correct. Further, forthe same reasons I have rejected HUD's arguments (describedabove), I find that the California district court's reasoning,with respect to the merits of HUD's construction, unpersuasive.

HUD's reliance on Rubanenko v. Martinez, No. CV S-02-582,2002 WL 2008107 (E.D. Cal. Apr. 11, 2002), which it cites for thefirst time in its opposition to the attorneys' fees application,adds nothing, as that court cited and relied on the reasoning ofWalker to reach its conclusion. Moreover, in Rubanenko, thecourt was also concerned with a different construction andapplication of the statute than that which was at issue here.

The second issue resolved in the Tenants' favor concerned HUD'sfailure to renew the rental assistance contract when it expired.In its opposition to the Tenants' attorneys' fees application, HUD offered no justification for its position on this issue.Consequently, it has failed to show that its position wassubstantially justified.2

Having resolved in the Tenants' favor the threshold issueconcerning the availability of attorneys' fees, it is necessaryto determine the appropriate amount. "Ordinarily, the trialcourt's starting point in fee-shifting cases is to calculate alodestar; that is, to determine the base amount of the fee towhich the prevailing party is entitled by multiplying the numberof hours productively expended by counsel times a reasonablehourly rate." Lipsett v. Blanco, 975 F.2d 934, 937 (1st Cir.1992). "[H]ours which were duplicative, unproductive, excessive,or otherwise unnecessary" should be excluded. Id. "Onceestablished, the lodestar represents a presumptively reasonablefee, although it is subject to upward or downward adjustment incertain circumstances." Id.

In measuring the basis and scope of any needed adjustment, acourt should consider whether "the plaintiff has failed toprevail on a claim that is distinct in all respects from hissuccessful claims." Hensley v. Eckerhart, 461 U.S. 424, 440(1983). In such instances, "the hours spent on the unsuccessfulclaim should be excluded in considering the amount of areasonable fee." Id. However, when a plaintiff has achievedlimited success on related claims — those that "involve a commoncore of facts or [are] based on related legal theories" — it willbe "difficult to divide the hours expended on a claim-by-claimbasis." Id. at 435. Consequently, the court "should focus onthe significance of the overall relief obtained by the plaintiffin relation to the hours reasonably expended on the litigation,"and "should award only that amount of fees that is reasonable inrelation to the results achieved." Id. at 435, 440. The Tenants have provided a lodestar calculation totaling$96,038.23. In support, they have submitted several affidavitsdescribing the tasks completed and the time spent on each task.They have also provided detailed memoranda explaining how theycompiled their time analysis, including how they excluded hoursthat may have been considered duplicative, unnecessary, orunrelated to the successful claims. They have also substantiatedtheir argument that the hourly rate awarded should be adjusted toinclude a cost of living increase. See28 U.S.C. § 2412(d)(2)(A) ("attorney fees shall not be awarded in excess of$125 per hour unless the court determines that an increase in thecost of living or a special factor . . . justifies a higherfee"). HUD has not attacked the Tenants' calculation; it has notsuggested any fault with respect to the tasks included, thenumber of hours represented, or the cost of living adjustment. Ifind no fault with the Tenants' calculation and conclude that itis reasonable and appropriate as a starting point for determiningthe appropriate fee award.

HUD argues that the fee award should be adjusted downward,without making a specific proposal, to reflect that the Tenantsdid not prevail on all of their claims and because of the limitedextent of the relief awarded. I find that HUD's arguments areunconvincing and that neither adjustment is needed. First, withrespect to the Tenants' losing claim concerning disabilitydiscrimination, the Tenants have indicated that they excludedfrom their attorneys' fees application any hours that wereattributable to that claim. The support for their approach issufficient and reasonable, and HUD has offered no rebuttal. Areduction of the fee award, therefore, is not necessary as therequested award does not include time spent on the unrelated,unsuccessful claim.

Second, I conclude that the attorneys' fees sought arereasonable in light of the relief obtained. The Tenants' victory,while partial, was significant. They won not only monetarycompensation because of HUD's failure to comply with its ownstatutory mandate but also achieved important legal rulings with respect to the construction andapplication of those statutes. Those victories have importantimplications for the rights of these Tenants and theirrelationship with HUD, as well as broader societal benefits. Tothe extent that the Tenants did not prevail, especially withregard to some of the relief sought, the issues were interrelatedwith their successes, and consequently, it is not possible tomathematically divide the award among the successes and failures.Nevertheless, in their reply brief, the Tenants voluntarilyagreed to reduce the award they seek by $7,360.00 to reflecttheir failure to win some of the relief they sought. Theremaining award, totaling $88,678.23, is appropriate andreasonable in light of the results achieved and the reliefawarded.

Finally, the scope of the litigation is another factor thatjustifies the award. This case has spanned more than four yearsand involved numerous complex and important issues. With that inmind, the award is plainly reasonable and in some respects evenmodest.

Accordingly, the Tenants are awarded attorneys' fees of$88,678.23.

It is SO ORDERED.

1. "`[F]ees and other expenses' includes . . . reasonableattorney fees." 28 U.S.C. § 2412(d)(2)(A).

2. HUD's argument at summary judgment concerning the issue wasthat 42 U.S.C. § 1437f(c)(9) did not apply to the contract inissue. The record evidence, however, showed that at the time thecontract was up for renewal HUD acted as if the statute didapply. The contradictory positions cannot be credited assubstantially justified.

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