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The ARC of New Jersey v. Township of Voorhees

93-1399, 1997 WL 736372 (U.S. Dist. Ct. D. N.J. 1997)

ZONING; ATTORNEYS FEES—In the face of litigation challenging the validity of an ordinance that restricted community housing projects, the municipality repealed its ordinance. Nonetheless, the non-profit complainant is entitled to attorneys fees as a “prevailing” party. The Court then analyzes how the fees are to be calculated for attorneys representing a non-profit plaintiff.

A non-profit organization sued the Township of Voorhees, claiming that the Township’s ordinance that required a conditional use permit to locate a community home for the disabled in the Township violated the Fair Housing Act (“FHA”), the New Jersey Law Against Discrimination (“NJLAD”), and the state Constitution. The Township eventually repealed the ordinance. This left a remaining issue as to whether the organization was entitled to collect legal fees from the Township. Under certain civil rights statutes, a prevailing party is not entitled to legal fees. However, the FHA and the NJLAD provide that a court may grant reasonable attorney’s fees and costs to the prevailing party.

First, the District Court had to determine whether the organization was the prevailing party. Case law states that success on any significant issue confers prevailing status on a party, as does an outcome which forces one party to do more than it was already committed to do. It does not matter that a case ends in settlement or without final judicial resolution, as long as the benefit obtained was causally connected to the litigation. The District Court held that the complaint filed by the organization was the action that brought about repeal of the ordinance. To arrive at a reasonable amount of attorney’s fees, the Court calculated the “lodestar figure,” which multiplies a reasonable number of hours by a reasonable hourly rate based on prevailing rates in the relevant market. The actual number of hours claimed is not the same as the reasonable number of hours a court might find appropriate, and a court has discretion to exclude hours if it feels they were excessive, redundant or otherwise unnecessary. When determining the reasonable hourly rate, public interest non-profit firms are treated the same as the most expensive law firm in the market. The Court relied on the Third Circuit for the proposition that the entire state of New Jersey is considered a single market. Although fee enhancement is prohibited under federal law, the Supreme Court of New Jersey has interpreted the NJLAD broadly and enhanced the amount of attorney’s fees in certain circumstances. The prevailing law firm in this case sought double the lodestar figure, an amount permitted only in rare cases where (1) the result achieved is of broad public interest, (2) there was no prospect of compensation by virtue of a percentage of a large damages award, and (3) awarding a lesser amount would be an economic disincentive. The law firm in this case claimed it was retained on contingency, and that since the primary objective of the suit was repeal of the ordinance, the damages sought were minimal. However, the District Court found that the firm was a non-profit public interest firm that paid attorneys a fixed salary, and received only a small portion of its funds from fees. The rest of its funds came from donations and grants. Additionally, the NJLAD claim was only one small part of this case. The Court refused to increase the lodestar amount at all, stating that one of its purposes was to prevent attorneys from bringing frivolous NJLAD claims for the sole purpose of trying to obtain a fee multiplier. The District Court reduced the claimed number of hours, assigned a separate reasonable fee for travel time and work time, and awarded attorney’s fees and expenses to the non-profit organization as the prevailing party.


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