Nesbit v. Statesville City Board of Education Brief for Appellants

    UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK ________________________________________X
UNITED STATES OF AMERICA,

Plaintiff, 80 CIV 6761 (LBS)
-and- MASTER'S FEE OPINION

YONKERS BRANCH-NATIONAL ASSOCIATION 
FOR THE ADVANCEMENT OF COLORED PEOPLE, 
et al.,

Plaintiffs-Intervenors, 
-against-

YONKERS BOARD OF EDUCATION; CITY 
OF YONKERS; and YONKERS COMMUNITY 
DEVELOPMENT AGENCY,

Defendants.
X

November 20, 1985
APPEARANCES: (See next page)

HONORABLE LEONARD B. SAND, U.S.D.J.



SAND, J.
In an opinion filed this date the Court has stated its 

findings of facts and conclusions of law with respect to the 
liability aspects of this school and housing desegregation case. 
We address in this opinion the issues raised by the application of 
the Special Master, Alexander D. Forger, Esq., for an allowance of 
fees.

At a pretrial conference in the fall of 1982 this Court 
raised with counsel the possible appointment of a special master 
whose sole responsibility would be to assist the parties in efforts 
to achieve a negotiated settlement of this controversy. The Court 
then advised the parties that it was considering appointment of 
Alexander D. Forger, Esq. to this post and briefly outlined his 
background and experience-^ .

After consideration of the Court's proposal and with the 
sole expression of reservation being as to the liklihood of 
success, all parties consented to the appointment of Mr. Forger.

On September 7, 1982 the Court entered an order appoint­
ing Mr. Forger as Special Master pursuant to Rule 53(a) of the 
F.R.Civ.P.:

To assist the parties in arriving at a con­
sensual resolution of this proceeding. The 
Court anticipates that the Special Master will 
meet with the parties, set timetables for the 
exchange of proposals, mediate where he deems 
it appropriate to do so and generally to serve 
as a catalyst in expediting or promoting 
settlement.
Mr. Forger thereupon embarked upon his duties as set 

forth in his Affidavit and in his statement to the Court on May 15, 
1984 (see Transcript of Proceedings ("Tr.") 10-16).

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With respect to the housing aspects of this controversy, 
to a significant extent as a result of Mr. Forger's efforts, a 
Consent Decree was entered into between the Yonkers Branch-NAACP 
("NAACP") and the United States Department of Housing and Urban 
Development ("HUD") which was approved by this Court on March 19, 
1984. With respect to the school aspects of this case, Mr. 
Forger's efforts contributed to the preparation of a proposed 
Consent Decree which was adopted in public session by the Yonkers 
Board of Education on March 20, 1984 by a vote of 8 to 1. Tr. 12. 
That Consent Decree was then submitted to the Yonkers City Council 
for a determination of whether it would provide the requisite 
financial resources for its implementation. Forger Affidavit in 
Support of Application ("Forger Aff.") K 12. The City Council 
determined not to implement the proposed Consent Decree. Tr. 15.

On May 15, 1984, Mr. Forger's efforts at achieving a 
settlement were placed on a "standby" status. After inquiry by the 
Court, no party objected to his "continuing to serve as Special 
Master in the manner in which he has been functioning". Tr. 25.

By application dated May 14, 1984, Mr. Forger sought 
compensation for his services during the period from September 1982 
to March 31, 1984. That application has been held in abeyance by 
the Court pending a resolution of the liability phase of these 
proceedings and is now ripe for determination.

The application raised several questions. No party 
questioned Mr. Forger's entitlement to compensation pursuant to 
Rule 53(a). Tr. 8022. Questions were raised, however, as to the 
amount sought and the apportionment of the fee among the parties.

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AMOUNT OF COMPENSATION
Mr. Forger seeks compensation in the amount of

$144,031.00 for performance of his Special Master's duties. He
states in his Affidavit (paragraph 16):

The total expenditure of time in matters re­
lating to my duties as Special Master is well 
in excess of 800 hours through the month of 
March 1984. As to a substantial number of 
these hours, I have made only partial billing 
record entry, and in some instances, not at 
all, out of a sense that some of that effort 
was merely ancilliary to my main task (i.e., 
some community meetings, or in some respect 
duplicative and not totally productive). The 
recorded time for consideration on this appli­
cation is approximately 750 hours of which ap­
proximately 100 hours were of my associates' 
and legal assistants', and the balance my own.
These totals exclude all time spent in prepar­
ing this application for compensation. A 
computer printout detailing these recorded 
activites and the time devoted to them, based 
upon contemporaneous time records routinely 
prepared by me and my associates and assis­
tants, is annexed hereto ...
Mr. Forger further states in his Affidavit that his 

regular hourly fee rate is $265.00 and that the time charges for 
associates and assistants range from $25.00 an hour to $125.00 an 
hour. Based on the computation set forth in his Affidavit, 
standard hourly charges would amount to $180,352.50. Mr. Forger 
further states that: "... mindful of the fiscal circumstances of
the City of Yonkers and its school board and of the 'public' nature 
of the work I was assigned ..." he seeks less than his firm's 
standard rates. Thus, he suggests that these be reduced to 

, $140,000.00 together with out-of-pocket disbursements in the amount 
of $4,031.00. Forger Aff. H 19.

Plaintiff United States and third-party defendant HUD

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are the only parties to object to the amount of the fees.—
No objection is made as to the amount of time expended 

nor the nature of the services rendered. These parties take the 
position, however, that this Court should follow the formula 
utilized by Chief Judge Jack B. Weinstein of the Eastern District 
of New York in awarding a Special Master's fee "based upon about 
half that obtainable by private attorneys in commercial matters", 
Hart v. Community School Board of Brooklyn, New York School 
District # 21, 383 F.Supp. 699, 767 (E.D.N.Y. 1974), aff d , 512
F.2d 37 (2d Cir. 1975) , a formula also invoked by the Sixth Circuit 
in Reed v. Rhodes, 691 F.2d 266, 267 (6th Cir. 1982) . For the 
reasons set forth below, we believe the Hart formula is inappropri­
ate in this case.

First, Hart related to the appointment of a special
master after a determination of liability. The nature of the 
master's duties with respect to a remedial phase of a desegregation 
suit differs significantly from those performed by the special 
master here. Cf. Reed v. Rhodes, supra. Second, in Hart Judge 
Weinstein's intention to limit the rate of compensation of the 
master was set forth and known to the parties and to the special
master prior to the appointment. Here, although the appointment of
a special master was discussed with the parties prior to his
appointment and the appointment was made with the consent of the 
parites, no effort was made by the parties to establish a pre­
determined rate of compensation. Absent such a limitation, the 
question of a special master's compensation is governed by the 
general principles applicable to such matters. Rule 53 provides

2/

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that the compensation of the master shall be fixed by the court in 
its discretion. In discussing rates of a master's compensation, 
the Supreme Court has written (Newton v. Consolidated Gas Go., 259 
U.S. 101, -105 (1922)):

The value of a capable master's services can­
not be determined with mathematical accuracy; 
and estimates will vary, of course, according 
to the standard adopted ... [H]e should be ade­
quately remunerated for actual work done, time 
employed and the responsibility assumed. His 
compensation should be liberal, but not exor­
bitant. The rights of those who ultimately pay 
must be carefully protected; and while salar­
ies prescribed by law for judicial officers 
performing similar duties are valuable guides, 
a higher rate of compensation is generally nec­
essary in order to secure ability and experi­
ence in an exacting and temporary employment 
which often seriously interferes with other 
undertakings.
Third, once Mr. Forger embarked on his efforts, the 

parties did not seek to curtail his activities but, we believe, 
encouraged that he continue and intensify these efforts. Fourth, 
and perhaps of greatest importance, Mr. Forger had on his own 
initiative given considerable recognition to the "public" nature of 
his services both in setting hourly rates significantly below those 
of his normal hourly rates in commercial matters and also in 
determining which hours should be treated as billable for these 
purposes. As stated by counsel for the Yonkers Board of Education, 
Mr. Forger came to a point of near success "...beyond my wildest 
expectations when we discussed appointing him, because I had been 
thinking it wouldn't do any good, but we ought to go ahead and do 
it. I don't think we should underestimate the amount of time that 
he had to have kept out of this application, just from watching 
what occurred." Tr. 8033 (Remarks of John Weaver, Esq.).

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We believe that to apply a Hart-type discount to the 
relatively modest application of the Special Master would be in 
effect to "double discount" his services and would deter others 
similarly, situated from exercising Mr. Forger's commendable 
restraint in seeking recompense. We are aware that Mr. Forger 
performed services as Special Master in the evenings and on 
weekends; that the task assigned to him was formidable and
required great skill and diplomacy; that he gained the respect of 
all concerned for those skills which he in fact possesses and which 
led to his appointment. We approve the application in the amount 
requested.

APPORTIONMENT OF FEES
1. The United States and HUD

The initial and "tentative" (Memorandum of Points and
Authorities of the United States Department of Housing and Urban
Development in Opposition to Application for Compensation of
Special Master, filed June 11, 1984, at 2) position of the federal
defendants was that "the doctrine of sovereign immunity may require
denial of the application insofar as it seeks to impose liability
for master's fees and expenses on the Federal Government." Id.

Upon further consideration of the matter, the federal
defendants modified their "tentative" position and stated:

Upon further consideration of this matter, it 
has been determined that, in light of the cir­
cumstances of this case, the United States and 
HUD will not oppose the assessment against the 
Federal Government of reasonable fees and ex­
penses of the Master to the extent that the 
Master's services were rendered in connection 
with particular aspects of the case as to which 
the United States or HUD is found to be a non­
prevailing party. Here, the Federal Govern­

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ment, as well as all other parties, did not 
seek an order regarding compensation prior to 
Mr. Forger's acceptance of the position.
Thereafter, both the United States and HUD 
accepted the benefit of the Special Master's 
efforts to achieve a settlement. The Federal 
Government's positon is based upon the unique 
circumstances of the present case only and not 
upon any general federal policy. Thus, the 
Federal Government continues to assert all of 
the arguments in its prior memorandum relating 
to the timing, apportionment and amount of the 
Master's compensation raised previously, but 
will not assert that absolutely no payment from 
the Federal Government is appropriate.

Supplemental Memorandum of Points and Authorities, filed September
6, 1984, at 2-3 (footnote omitted).
2. The Prevailing Party

As noted, supra, the federal defendants do not oppose the 
assessment of reasonable fees and expenses of the Special Master to 
the extent to which the United States or HUD is found not to be a 
prevailing party. Defendants City of Yonkers and the Yonkers 
Community Development Agency ("CDA") object to any suggestion that 
the master's fee be apportioned according to liability, asserting 
that no mention had been made in the Order of Appointment that fees 
would be so apportioned and that all parties had received the 
benefit of Mr. Forger's services.

This argument fails as to the United States. Master's 
fees are regarded as costs and therefore ultimate liability is 
determined under F.R.Civ.P. 54(d). The consequence of silence as 
to fee apportionment in this Court's order pursuant to F.R.Civ.P. 
53 appointing the Special Master was therefore simply to bring into 
operation the general principles which govern such matters. Under 
F.R.Civ.P. 54(d), "Cost shall be allowed as a matter of course to

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the prevailing party unless the Court otherwise directs; but costs 
against the United States shall be imposed only to the extent 
permitted by law." Federal statutes permit the assessment of costs 
against the United States only if it has not prevailed on the 
merits. See North Atlantic & Gulf S.S. Co. v. United States, 209 
p .2d 487, 489 (2d Cir. 1954); see also Equal Access to Justice Act, 
28 U.S.C. § 2412(a) (limiting reimbursement from the United States 
to the prevailing party). Since we have found in the separate 
Opinion filed this date that the United States has prevailed with 
respect to its claims against all of the defendants, it is beyond 
our power as a matter of law to apportion any of the master s fee to 
the United States.

HUD, however, is not the prevailing party with respect to 
the NAACP, as reflected in the March 1984 Consent Decree, and this 
Court concludes as a matter of discretion that it should bear an 
appropriate portion of the master's fee applicable to that aspect 
of the case.

The NAACP is a prevailing party and the question 
presented therefore is to what extent, if any, it should be held 
responsible for any portion of the master's fee, since with respect 
to it, the Court is not precluded by virtue of any rule or statute 
from apportioning a measure of such fees against it even though it 
prevailed. Thus, the situation with respect to the NAACP is 
different from that of the United States. It is clear that the 
NAACP stood to benefit and, in fact, benefitted from the Special 
Master's services. It is also clear that the Court may in its 
discretion assess a private prevailing party with a portion of a

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master's fee. See E. I. Du Pont De Nemours & Co. v. Purofied Down 
Products Corp., 176 F.Supp. 688, 701 (S.D.N.Y. 1959); Soya 
Processing Co. v. Sirota, 104 F.Supp. 428, 434 (S.D.N.Y. 1952). We 
therefore apportion the master's fee as follows:

1. Equally as among the City of Yonkers and 
the CDA (together treated as one party) , the 
Yonkers Board of Education and the NAACP, as to 
those portions of the master's fees attribut­
able to matters as to which HUD was a 
prevailing party; and

2. Equally among the foregoing parties and 
HUD as to the balance of the master's fees, 
i.e., as to that portion of the master's fee 
attributable to matters as to which HUD is not 
a prevailing party.
We direct that the Special Master prepare an allocation 

of his fee in accordance with the above-stated ruling and that that 
allocation be furnished to the parties and to the Court within ten 
days from the date hereof.

We leave the question as to the time at which payment 
should be made for further discussion among the parties and the
Special Master.

Settle Order.
Dated: New York, N. Y.

November 20, 1985
Leonard B. S ano

U.S.D.J.

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FOOTNOTES

Mr. Forger has been a member of the bar of New York State 
since 1951 and has been a partner in the law firm of Millbank, 
Tweed, Hadley and McCloy since 1958. He has served as 
President of the New York State Bar Association, Vice President 
of the New York Bar Foundation, member of the American Bar 
Association's House of Delegates, Chairman of the Board of the 
New York Legal Aid Society, Trustee of the Rockefeller 
University and Trustee of New York Law School. Mr. Forger 
describes his practice as follows:

I have been engaged principally in the practice 
of law as it relates to individual clients and 
not-for-profit institutions and organizations.
In the course of my practice, I have frequently 
been engaged in the process of negotiations and 
efforts of dispute resolution.

Forger Aff. 1 2 .  Mr. Forger had one other qualification for 
the post under consideration, also disclosed by the Court to 
the parties prior to his appointment: a lifetime familiarity 
with the City of Yonkers.

As discussed at pages 7-8 infra, we conclude that the 
United States has no responsibility for any portion of the 
Special Master's fee. The objection is therefore primarily 
that of HUD.