Newark Coalition for Low Income Housing v. Newark Redevelopment Housing Authority Plaintiffs' Memorandum of Law

    IN THE UNITED STATES DISTRICT COURT 
DISTRICT OF NEW JERSEY

NEWARK COALITION FOR LOW INCOME )
HOUSING, et. al. )

)Plaintiffs, )
)- v - )
)NEWARK REDEVELOPMENT AND HOUSING )

AUTHORITY, and JACK F. KEMP, )
Secretary of the United States )
Department of Housing and Urban )
Development, )

)Defendants. )

CIVIL ACTION 
No. 89-1303 (DRD)

PLAINTIFFS' MEMORANDUM OF LAW IN SUPPORT OF APPLICATION 
FOR ATTORNEY'S FEES, COSTS AND EXPENSES

MELVILLE D. MILLER, JR.
JOSEPH HARRIS DAVID
Legal Services of New Jersey
78 New Street
New Brunswick, N.J. 08901
(201) 246-0770
RUBEN FRANCO 
RICHARD RIVERA 
ARTHUR A. BAER 
Puerto Rican Legal 
Defense & Education 
Fund
99 Hudson Street 
14th Floor 
New York N.Y. 10013 
(212) 219-3360

JULIUS L. CHAMBERS 
JOHN CHARLES BOGER 
JON C. DUBIN 
NAACP Legal Defense 
& Educational Fund, 
99 Hudson Street 
16th Floor
New York, N.Y. 10013 
(212) 219-1900

MARGARET WELCH 
7 South Street 
Newark, N.J. 07107 
(201) 292-6542

ON THE BRIEF
Joseph Harris David 
Jon C. Dubin 
Arthur A. Baer



TABLE OF CONTENTS

PAGE
INTRODUCTION ........................................  i
ARGUMENT .............................................  1

I. PLAINTIFFS ARE ENTITLED TO ATTORNEY'S FEES
AGAINST THE NHA UNDER THE CIVIL RIGHTS 
ATTORNEY'S FEES AWARDS ACT OF 1976, 42 U.S.C.
§1988, AND AGAINST THE NHA AND THE SECRETARY 
OF HUD UNDER THE FAIR HOUSING ACT OF 1968,
42 U.S.C.§ 3613(c) (2)......................  1

II. PLAINTIFFS ARE ENTITLED TO ATTORNEY'S FEES
AGAINST THE SECRETARY OF HUD UNDER THE 
EQUAL ACCESS TO JUSTICE ACT ("EAJA")
28 U.S.C. §2412 ............................ 12

A. Plaintiffs Are Entitled To 
Attorney's Fees Against 
The Secretary Of HUD Under 
28 U.S.C. § 2412(d)(1)(A)
Of The EAJA....................... 13

B. Plaintiffs Are Entitled To 
Attorney's Fees Against The 
Secretary Of HUD Under 28 U.S.C.
§ 2412(b) of the EAJA............. 25

III. THE AWARD REQUESTED IS REASONABLE AND
SHOULD BE APPORTIONED BETWEEN THE
RESPECTIVE DEFENDANTS ...................... 29

CONCLUSION 32



INTRODUCTION
Although this case has been settled, one need only compare 

the tangible gains plaintiffs have secured as a result of the 
agreement with the situation that existed at the time the 
complaint was filed to understand the importance of this lawsuit 
and the extent of plaintiffs' success. Before the filing of this 
case, the NHA, pursuant to a misguided Master Plan, was in the 
process of implementing the largest demolition program in the 
history of public housing in the country. Asbestos removal was 
occurring at Columbus Homes. The NHA had entered into a 
contract for demolition and destructive steps towards it were 
imminent. Even before the required demolition approval, the NHA 
had entered into a contract to sell the Columbus Homes site to a 
private developer.

HUD, armed with the trappings of agency discretion and 
expertise, had approved a replacement "plan" for Columbus Homes 
which violated virtually every applicable statute and regulation. 
HUD's approval had also failed to take into account fair housing 
considerations in violation of its own explicit regulations and 
its statutorily imposed duty to further fair housing. There were 
no protections for the plaintiff classes, or for the community.

The authority had entered or was seeking to enter into 
similar demolition contracts for Kretchmer Homes. (Bids. 3,4 & 
5) . Constructive demolition was occurring at Kretchmer Homes 
(Bldgs. 2 & 6) in clear violation of the 1987 Housing and 
Community Development Act. Tenants were being relocated against

i



their will from buildings for which there was no approval for 
demolition. Plaintiffs had complained directly and in vain to 
HUD about these issues.

The waiting list for admissions was closed; there was no 
movement on vacancies, which numbered over 4,000, and was the 
largest of any public housing authority in the country. HUD had 
known about this state of affairs for years yet had done nothing.

Replacement housing at the Scudder site was seriously behind 
schedule. Sites had not even been selected for an additional 271 
units for which funding had been approved. Townhouses, which had 
been completed and available for occupancy in September, 1988, 
were still empty.

On the other hand there was a desperate need for public 
housing —  a waiting list of over 7,000, a homeless population of 
16,000, and 14,000 families living in substandard conditions at 
exorbitant rents in the private market. Conditions in much of 
the Newark Public Housing were deplorable. The federal 
government and local authority seemed uncaring and unwilling to 
address the thousands of families needing housing, and indeed 
committed to a destructive course of conduct that would only 
exacerbate Newark's desperate low-income housing shortage.

Plaintiffs' commencement of this suit resulted in immediate 
relief. Within two days of the filing of the complaint and 
motion for preliminary injunction and temporary restraining 
order, defendants consented to a temporary restraining order 
which prohibited demolition or actions that could result in

ii



structural damage to any of its buildings and the relocation of 
any Kretchmer (Bldg. 2 & 6) tenants against their will —  a halt 
on constructive demolition. HUD immediately backed away from its 
approval of the demolition plans and threatened to withdraw 
approval if the litigation continued.

Because of this suit, a mediation process was established in 
which defendants were forced to negotiate with plaintiffs over 
crucial issues involving NHA public housing —  a major 
achievement that would never have happened absent litigation. 
Plaintiffs through the mediation process, obtained several items 
of interim relief. Plaintiffs vigorously sought and obtained a 
HUD inspection of Kretchmer Homes. They also obtained an order 
which required a substantial cleanup of all NHA projects, 
barred the relocation of any Columbus tenants against their will 
(except for reasons of health and safety), and required the NHA 
to disclose vacancy information and its plans for filling 
vacancies within 30 days. Plaintiffs also obtained an order 
which required the NHA to provide information on vacant 
townhouses and the NHA's plans for their future occupancy. This 
information was provided and the townhouses were finally occupied 
in approximately June, 1989. Thus even before a final settlement 
had been reached, there had been a substantial chain of success.

Plaintiffs have achieved exceptional and excellent results 
through this litigation and full settlement agreement. Because 
of this lawsuit long-term institutional reform in the operation 
of the Newark Housing Authority, resulting in literally thousands

iii



of newly available low-income units, will be ensured. By 
securing the September 14, 1989 settlement from defendants HUD
and NHA, plaintiffs have obtained a de facto mandatory injunction 
that provides, through required reports and time deadlines, a 
mechanism for the monitoring and enforcement of numerous 
substantive benefits. In the words of this Court, the settlement 
was an "extraordinary development," that achieved a "truly 
remarkable result," —  "something which in my view is 
extraordinarily fine." It "addresses each of the issues which 
plaintiffs raised and resolves them in a manner which insures 
that the constitutional, statutory and regulatory requirements 
will be met . . .1,1

It provides "enormous benefits to the class and all public
housing tenants in the city."2 It confers "substantial benefits
not only upon the class members, but also upon every person who
is truly concerned about public housing in the City of Newark."3
Tenants and those on the waiting list:

"are assured of the availability of the greatly 
increased number of housing units by virtue of the 
renovation requirements and the guarantees that as 
vacant Columbus home units are demolished 
replacement will be erected on a one-for-one basis. Collectively all three categories of the class
plaintiffs benefit from what promises to____be
dramatic improvements in the quality and quantity of

Transcript of Proceedings (Herein "Tr.")
30, In.12-15; P* 31, In.10; pp. 27-28.
Tr. September 14, 1989, p. 93, In. 16.
Tr. September 14, 1989, p. 88, In. 16-18

(Aug. 17,

3

iv



all of Newark's low income public housing. "4 (emphasis added).
Virtually all discovery and substantial essential work on 

most issues occurred prior to the filing and institution of the 
action. There was a 41-page complaint, a 93-page memorandum of 
law, and lengthy moving papers. When the complaint was filed, 
plaintiffs had compiled a trial record (61 Exhibits), and were 
ready for a trial or evidentiary hearing on the numerous issues 
raised, or for summary judgment.5

In the Court's words, the ultimate settlement reached was 
"achieved through the extraordinarily skilled and dedicated 
efforts of counsel for the class plaintiffs."6 It is the 
"product of dedicated, aggressive litigation and negotiation by 
the attorneys for the class plaintiffs,"7 attorneys "with a long 
track record of effective work in the field of housing and civil 
rights."8 (emphasis added).

4 Tr. August 17, 1989, p.30, In. 2-10.
5 The litigation has constituted a substantial drain on 

the resources of the non-profit legal organizations involved. 
Cf. Missouri v. Jenkins. 105 L.Ed. 229, 240 n.6 (1989)
(recognizing drain on NAACP LDF resources and upholding 
enhancement of attorney fee award). Because of it, other major 
problems of the poor and disadvantaged have gone unaddressed. 
Apart from reimbursing these organizations' scarce resources for 
addressing other critical needs of the poor and racial 
minorities, an award of attorney fees may also have the salutary 
effect of reducing further litigation over the monitoring and enforcement of the court order.

Tr. September 14, 1989, p. 88, In.12-14. 
Tr. Sept. 14, 1989, p.92, In.18-19.
Tr. August 17, 1989, p.16, In.15-17.

v



ARGUMENT
POINT I

PLAINTIFFS ARE ENTITLED TO ATTORNEY'S FEES 
AGAINST THE NHA UNDER THE CIVIL RIGHTS 
ATTORNEY'S FEES AWARDS ACT OF 1976, 42 U.S.C.
§1988, AND AGAINST THE NHA AND THE SECRETARY OF 
HUD UNDER THE FAIR HOUSING ACT OF 1968, 42
U.S.C. § 3613 (cn ( 2 )_____________________________

A prevailing party is entitled to attorneys fees and costs 
under 42 U.S.C. §19889 for claims brought under 42 U.S.C. § 1983, 
and 42 U.S.C. § 2000d (Title VI of the Civil Rights Act of 1964) 
and under 42 U.S.C. §3613(c)(2)10 for claims brought under Title 
VIII of the Fair Housing Act. A plaintiff prevails for purposes 
of Sections 1988 and 3613(c)(2) if the plaintiff has "succeeded 
on any significant issue 'in the litigation which achieve(d) some 
of the benefit the parties sought in bringing the suit.'" Texas 
State Teacher Ass'n, et. al. v. Garland Ind. School District., 
103 L.Ed. 2d 866, 875 (1989); see Hensley v. Eckerhart. 461 U.S.

42 U.S.C. § 1988 provides:
In any action or proceeding to enforce a provision of 
sections 1981, 1982, 1983, 1985, and 1986 of this title, 
title IX of public law 92-318, or title VI of the Civil 
Rights Act of 1964, the court, in its discretion, may 
allow the prevailing party, other that the United 
States, a reasonable attorney's fee as part of the costs.

10 42 U.S.C. § 3613(c) (2) provides:
In a civil action under subsection (a) of this section 
the court, in its discretion, may allow the prevailing 
party, other than the United States, a reasonable 
attorney's fee and costs. The United States shall be 
liable for such fees and costs to the same extent as a 
private person. (Emphasis added).



at 424, 433, n.7. (1983).
Where a plaintiff has obtained excellent results, 
his attorney should recover a fully compensatory 
fee. Normally this will encompass all hours 
reasonably expended on this litigation, and indeed 
in some cases of exceptional success an enhanced award may be justified.

Hensley. 461 U.S. at 439.
Further, a plaintiff who has succeeded through settlement is 

considered a prevailing party within the meaning of §§ 1988 and 
3613(c)(2). Maher v.Gagne, 448 U.S. 122 (1980); see Hensley.
461 U.S. at 433 n.7.11. Legal Services and other public interest 
organizations, such as the NAACP and Puerto Rican Legal Defense 
Funds, are entitled to attorney fees, measured by the "prevailing 
market rates in the relevant community." Blum v. Stenson. 465 
U.S. 886, 895 n.ll (1984).
A. Plaintiffs Are Prevailing Parties

There is no question that plaintiffs have obtained excellent 
results, and are the prevailing party in this case. They have 
prevailed on many "significant issue[s]'in the litigation which 
achieved some of the benefits the plaintiffs sought in bringing 
the suit.'" See Texas State Teacher's Ass'n. 103 L.Ed. 2d at 
875; Henslev. 461 U.S. at 433.

The purpose of statutory fee awards in civil rights 
litigation was to enable litigants to enforce 
federal rights based on a "private attorney general" 
theory . See eg. Newman v. Piggie Park Enterprises. 
390 U.S. 400 (1968). Without the promise of 
attorney fees few litigants would be able to absorb 
their own attorney fees and thus would not be able 
to enforce the public interest. Newman. 390 U.S. at 
402.

2



1. Columbus Homes. One major goal of this litigation was 
to establish a viable replacement plan for Columbus Homes that 
would guarantee that replacement housing be built in conformity 
with federal law and regulations. The original "plan,"12 was 
clearly defective. (See Plaintiffs Brief in Support of Motion 
for Preliminary Injunction, pp. 39-57) (Herein "P.I. Br. at
___") . The plan, and the process by which it was achieved,
violated virtually every applicable federal statute and 
regulation. HUD and the Court recognized this immediately after 
they had an opportunity to read plaintiff's papers. As stated by 
Frank Armour: "The turning point (in the litigation) came two 
days into the case when HUD decided its position was 
indefensible." 124 N.J.L.J. 541 (September 7,1989).

There is no question that substantial defects in the plan 
have been cured, and that the settlement has achieved a viable 
plan in conformity with applicable law.

a) First the settlement requires phased demolition of 
Columbus Homes. This was crucial so that the buildings could 
remain as leverage to ensure the construction of replacement 
housing. Phased demolition will ensure that:

i) substantial construction will begin before any 
demolition in phase 1 occurs; (this includes 271 units approved 
prior to the approval of the 1,506 Columbus replacement units).

12. Exhibit 7, Enclosure 6 in support of Plaintiffs' Motion 
for a Preliminary Injunction, (Herein "P.I. Ex.____")

3



ii) construction in addition to that undertaken in 
phase 1 must begin before phase 2 of the demolition;

iii) land for replacement housing must be secured 
(and cannot be disposed of) prior to any demolition; (this 
ensures that land is available upon which to build the 
replacement housing; it alleviates the danger that no land would 
be available in Newark —  a relatively small city for the massive 
construction required).

iv) land will be identified prior to demolition so 
that plaintiffs have the opportunity to assess it for compliance 
with HUD's Site and Neighborhood Standards; (this will help 
ensure that appropriate land is utilized, and that fair housing 
requirements are met).

v) almost all funding for replacement housing 
will have been committed to Newark by the time the last phase of 
the demolition occurs;13

b. Six year construction schedules. Second, the 
settlement provides for six year construction schedules, as 
required by federal law; (plaintiffs will, moreover, have the 
right to comment on and object to the schedules).

13. Currently two years funding (Years 1 and 2, 388 units) 
has already been committed. By the time that the NHA is ready 
for Phase 3 of the demolition, three years should have elapsed, 
and the funding for Years 3, 4, and 5 of the Plan should have 
been committed. If Congress does not approve funding for a 
particular year, the leverage of the standing buildings will 
provide a platform for plaintiffs and the NHA to convince HUD and 
the Congress that they should honor their commitment in a timely 
fashion, so that the job can be completed. This is far more 
security than would have existed if the buildings had been 
demolished first, before the funding had been committed.

4



c. Reporting requirements. To ensure NHA complies with 
these schedules, there are reporting requirements which allow 
plaintiffs to monitor the pace of construction; (this is 
important in view of the NHA's extremely poor construction 
record).

d. Construction manager. Similarly, the settlement 
requires NHA to hire a construction manager to supervise and 
manage the construction. (this will help improve the chances 
that the construction will be completed in a quality and timely 
manner).

e. National Funding Priority. Third, to ensure that 
the replacement funding is a reality, and occurs on schedule so 
that the plaintiff classes can obtain sorely needed housing as 
soon as possible, the NHA has received priority for funding over 
all other HUD funding needs, with minor exceptions.

f. Fair Housing. Replacement sites must be suitable 
from the standpoint of the 1964 and 1968 Civil Rights Acts, 
Executive Order 11063 , and HUD implementing regulations; 
plaintiffs will have the right to object to and to monitor these 
plans; (this is critical in view of the pervasive, continuing 
racial discrimination, and racially segregated housing patterns 
that exist in Newark and in Essex County).

g. Preservation of the Columbus site for housing for 
poor families. At least 300 public housing family units must be 
constructed on the Columbus Homes site; (this will preserve 
valuable land convenient for poor people for public housing, and

5



has interdicted previous NHA plans to sell all the land to a 
private developer).

2. The Rights of Columbus Tenants.
a. relocation rights have been secured;
b. those remaining at the time of relocation shall 

receive a priority for a newly constructed, rehabilitated, or 
modernized unit;

c. tenants may transfer immediately from Columbus
Homes;

d. maintenance and security (similar to that given 
other high-rise projects) is to be maintained while tenants 
remain in the buildings;

3. The filling of vacancies. Another major goal of the 
litigation was to force the NHA to fill vacancies both to provide 
much needed housing opportunities and to reduce the vandalism, 
crime and deterioration that occurs when apartments are left 
vacant. The settlement provides substantial relief in this area.

a. Vacancy Repair Program. 1,632 units (at the rate of 
136 units/month) are scheduled for repair and occupancy in the 
first year;

b. thereafter 68 units/month are to be repaired and 
occupied unit all units requiring moderate repairs are filled;

c. beyond that the NHA has an ongoing continuing 
obligation to fill units requiring moderate repairs as they 
become vacant due to normal attrition;

d. HUD Grant. HUD has provided $1.8 million for this

6



program;
e. Opening the waiting list. 40% of the vacancies will 

be filled from the waiting list. (Prior to this litigation the 
waiting list had been closed for approximately two years.)

f. Monthly Reporting Reguirements. There are 
substantial reporting requirements that will enable plaintiffs to 
monitor the vacancy repair program?14

g. The Study of Public Housing. HUD will commit 
$500,000 to a study of the viability of all NHA public housing, 
including the high-rise units. The NHA will prepare a new 
comprehensive modernization plan based on the study and apply 
for funding to effectuate the study. This will undoubtedly lead 
to the filling of even more vacancies.

h. Lowering the elderly eligibility age to 55. The 
eligibility age for entry into the elderly buildings has been 
lowered to 55. This will benefit that class in the community 
and help ensure that the vacancies in the elderly units will be 
filled.

4. The Reversal of the NHA demolition policy. In the 1984 
Master Plan and as re-affirmed and explained in the June, 1987 
Comprehensive Plans, the NHA announced plans to demolish all of 
its 39 high-rise projects. Now with the vacancy repair program,

14. One major success of the litigation that runs 
throughout the agreement is the reporting requirements. They 
will enable plaintiffs to monitor and enforce the agreement. 
More importantly, they will publicize the NHA's activities 
thereby ensuring a much greater degree of accountability than 
existed before the litigation.

7



the comprehensive study, the comprehensive modernization plan, 
and the potential improvements that may occur as a result of that 
plan, the NHA has changed its policy. The NHA has agreed that 
its "Comprehensive Plan shall be designed to maintain or increase 
low income housing in the City of Newark whenever feasible." 
(Settlement Agreement, f 3) .

5. The Success at Kretchmer Homes.
a. Another goal of the litigation was to stop the 

constructive demolition (and planned demolition) at Kretchmer 
Homes. (Complaint, 5 53).15 The first immediate goal was to 
stop the relocation of tenants from decent apartments at 
Kretchmer (Bldg. 2 & 6). At the time the litigation was commenced 
the NHA was in the process of transferring tenants from decent 
units at Kretchmer (Bldg. 2 & 6) as a step towards demolition.16 
There has been complete success on this claim.

First, defendants immediately consented to a 
temporary restraining order enjoining the transfer of any tenants 
against their will. This occurred on the first return date of 
the order to show cause and continued in effect throughout the

15. The plans of the NHA were to demolish those buildings. 
(P.I.Ex.46). The NHA's massive relocation of tenants in early 
1989, its willingness to allow decent apartments to be stripped, 
its failure to fix the roofs, and its willingness to allow the 
elevator in building 6 to go unattended, even to the point of 
waiting 8 months just to file an insurance claim, were 
deliberate steps towards this goal.

16. See eg. Exhibits K1 through K4 attached to this brief. 
See also the report of the HUD inspection of Kretchmer Homes on 
May 12, 1989. (Ex. L, Inspection Report, pp. 1-2). Of the 14 
apartments inspected at Building 2, HUD found 10 to be habitable 
after a day's cleaning or minor repairs.

8



litigation.
Second, there will be substantial repairs on those 

buildings17, and in addition an electrical system for the entire 
project. In addition the vacancies in buildings 2 and 6 are 
scheduled for repair and occupancy in the Vacancy Repair Program 
of the settlement.18

b. The demolition of Buildings 3, 4, and 5 at Kretchmer 
Homes has been delayed at least a year. During this time 
plaintiffs may submit proposals for the rehabilitation or 
replacement of buildings at Kretchmer Homes which the NHA has 
agreed to consider at a public board meeting of the Board of 
Commissioners. Plaintiffs believe that any such proposals will 
be considered in good faith by the Board of Commissioners.

c. While there is no per se one-for-one replacement at 
Kretchmer Homes (3, 4 & 5), the Vacancy Repair Program (1,632 
units) was touted by the mediator as the quid pro quo for 
Kretchmer, and cited as an actual increase in the number of 
units. Viewed in this light, there is a substantial increase in 
replacement of units over the 372 at Kretchmer which the NHA 
retains the right to demolish. In addition there is no question 
that the NHA1 s continued right to demolish 3,4 & 5, after in 
effect, a year and one half injunction against demolition, was a

17. There will be a new elevator in building 6 and new 
roofs on buildings 2 and 6, 1 and 7. HUD must provide $600,000. 
Already, NHA has solicited requests of proposals for new roofs at 
Kretchmer, including new roofs for buildings 1 and 7.

18. The NHA's application for the $1.8 million grant for 
the repair program includes the vacancies at Kretchmer Homes.

9



concession plaintiffs had to make to obtain the remarkable 
success in the rest of the agreement.

6. Remedying racial imbalance. There are several projects 
in the NHA which are greatly disproportionately white-occupied. 
The NHA has agreed to develop a plan to remedy these and other 
substantial racial imbalances to comply with the 1964 and 1968 
Civil Rights Acts, and then to implement the approved plan. The 
ability to obtain in essence, a desegregation plan, in a case 
which did not primarily involve a challenge to public housing 
tenant segregation, is an unusual achievement.

7. Tenant participation. The NHA has agreed to encourage 
the development of tenant participation in the rehabilitation and 
operation of its public housing. While such notions float 
through the HUD regulations, this concept is now enforceable in a 
court order.

8. Achieving greater HUD supervisory responsibility over 
the NHA to ensure that the goals of the National Housing Act are 
carried out. A goal of the litigation was to make HUD a more 
active participant in seeking to provide decent public housing. 
This has been achieved in a number of ways.19

19 a) As a defendant in this lawsuit, and as a party that 
is providing at least $2.9 million in funds to effectuate the 
settlement, plus $110,000,000 in replacement housing funding, to 
which it has accorded Newark a national priority, HUD will have a 
great interest in seeing to it that the NHA performs according to 
the terms of the agreement. This is especially so since the 
litigation has forced Newark and HUD into a national spotlight, 
and further litigation will occur if the terms of the agreement 
are not satisfied.

For example HUD will be receiving regular reports
10



9. Making the NHA Publicly Accountable. The NHA has become 
publicly accountable to a much greater degree. First, because of 
the reporting requirements contained in the settlement, its 
actions will become known, and the public will have a chance to 
react.

Second, because of the publicity surrounding the litigation 
and the settlement, there is a national and local spotlight on

under the agreement, and is required to turn these reports over 
to plaintiffs, and to notify plaintiffs if the reports reflect 
that NHA has failed to achieve the goals of the agreement.

For another example, Bill Elias of the HUD Newark 
Area Office attended a meeting of the Newark Collaboration on the 
future of public housing. According to the Newark Star Ledger 
Mr. Elias stated: "(t)he Newark Housing Authority has a very 
difficult road to hoe," and that the NHA will have "strict" 
guidelines to adhere to in meeting its obligations under the 
federal agreement. (Exhibit A to this memorandum.)

b) under the terms of the agreement HUD has to approve 
the suitability of the replacement housing sites according to 
Site and Neighborhood Standards, including the fair housing 
requirements. In order to avoid litigation over its decisions, 
HUD will act with great care in its decision-making to ensure 
that the law is being implemented.

c) HUD is requiring the NHA to enter a new Memorandum 
of Understanding (MOA) with HUD, which may require substantial 
reporting and performance requirements of the NHA. This 
memorandum of understanding is subject to the terms of the 
settlement agreement. (Settlement Agreement, f 6) . It is an 
effort by HUD to ensure greater performance by the NHA. While 
the new MOA has not been finalized, it seems at this point, a 
vast improvement over the watered down MOA entered into just 1 
1/2 years ago.

d) HUD has been forced to negotiate over four months 
with plaintiffs during which time, it has become more educated 
and pressured regarding the failures of the NHA. The NHA has 
become a national embarrassment to HUD, and the education 
received by HUD will have the effect of forcing HUD to pay more 
attention to the NHA.

11



the NHA. For example, on October 25, 1989, the Newark
Collaboration held a meeting entitled: "Beyond Demolition: The
Future of Public Housing in Newark." (Ex. A.) The NHA did not 
attend, and Mayor James, Chairman of the Collaboration, and 
others criticized the NHA for this, and for faltering in its 
commitment to provide low income housing. The next day, 
according to the Newark Star Ledger, the Executive Director of 
the NHA sought to explain its absence, and said that the NHA 
plans "a full report to the Collaboration and the public" on the 
agency plans for the future. (Ex. B to this memorandum).

10. Enforceability of the agreement through a Federal Court 
Order. The agreement is enforceable as a federal court order. 
The defendant agencies are thus subject to the enforcement powers 
of this Court for many years into the future and plaintiffs will 
have a meaningful ability to monitor implementation. Obtaining 
mandatory injunctive relief against defendants for years into the 
future is a substantial achievement in institutional litigation.

POINT II

PLAINTIFFS ARE ENTITLED TO ATTORNEY'S FEES 
AGAINST THE SECRETARY OF HUD UNDER THE 
EQUAL ACCESS TO JUSTICE ACT ("EAJA")
28 U.S.C. 5 2412___________________________

Plaintiffs are entitled to attorney's fees against the 
Secretary under two separate and distinct sections of the EAJA 
which mandate the award of fees from the United States to 
prevailing parties in certain circumstances. Since as discussed 
above, there is no question that plaintiffs are the prevailing

12



party, the only question is whether the additional requirements 
of either § 2412(d) or § 2412(b) are met. Because both sections' 
criteria are satisfied, plaintiffs are entitled to fees against 
the Secretary.

A. Plaintiffs Are Entitled To Attorney's Fees Against The 
Secretary Of HUD Under 28 U.S.C. § 2412(d)(1)(A) Of The 
E A J A . ____________________________________________

28 U.S.C. § 2412(d)(1)(A) provides in pertinent part that a 
court "shall" award to a prevailing party fees and expenses in 
civil actions brought against a United States agency or official 
unless the government demonstrates that its position was 
"substantially justified."20 The phrase "substantially 
justified:"

was a Congressional attempt to fashion a 'middle ground' 
between an earlier unsuccessful proposal to award fees 
in all cases in which the government did not prevail, 
and the Department of Justice's proposal to award fees 
only when the Government's position was 'arbitrary, 
frivolous, unreasonable or groundless'

Pierce v. Underwood. 101 L.Ed.2d 490, 512-13 (1988) (Brennan,
Marshall, and Blackmun, J.J. concurring) (citing S. Rep. No. 96-
253 pp. 2-3 (1979)). Hence, to be 'substantially justified'
means more than merely non-frivolous; rather "it can be
substantially (i.e. for the most part) justified if a reasonable

20 Under § 2412(d) of the EAJA the rates are limited to 
$75/hr. plus a cost of living adjustment (COLA) since the date 
of the EAJA's enactment in 1981. See 28 U.S.C. § 2412(d)(2)(A). 
The Third Circuit has approved use of the Consumer Price Index 
("CPI") for calculating the COLA to the $75/hr. base rate. See 
Allen v. Bowen. 821 F.2d. 960, 967-68 (3d Cir. 1987). Plaintiffs 
have ordered the CPI from the U.S. Bureau of Labor Statistics. 
On information and belief, the COLA will raise the base rate to 
approximately $100/hr.

13



person could think it correct, that is, if it has a reasonable 
basis in both law and fact." Underwood. 101 L.Ed.2d at 490 and 
n. 2.

The government's position is "'not only the litigation
position ... but also the agency position [that] made the lawsuit
necessary.'" Taylor v. Heckler. 835 F.2d 1037, 1040 (3d Cir.
1987) (citing cases). As stated by the Third Circuit:

The burden of proving that each of its positions was 
substantially justified belongs to the government. We 
recently summarized the series of proofs it must make as 
follows:

In order to prevail, the government must show: 
1) a [solid and well-founded] basis in truth 
for the facts alleged; 2) a [solid and well- 
founded] basis in law for the theory it 
propounded; and 3) a [solid and well-founded] 
connection between the facts alleged and the 
legal theory advanced. Washington v. Heckler. 
756 F.2d 959, 961 (3d Cir.1985) (citing Citizens 
Council of Delaware County v. Brineqar. 741 F.2d 
584, 593 (3d Cir.1984)).

Garcia v. Schweiker. 829 F.2d 396, 399 (3d Cir.1987);
accord Coup v. Heckler. 834 F.2d 313, 319 (3d Cir.1987). 
In short, unless the government clears six hurdles 
(three required showings for each of two positions), 
EAJA renders it liable for the prevailing party's 
reasonable fees and costs.

Taylor, 835 F.2d at 1042.
To simplify matters, Plaintiffs primarily claim that the 

government will not be able to clear the three "hurdles" 
pertaining to its pre-litigation or agency position. The EAJA 
defines this position as "the action or failure to act by the 
agency upon which the civil action is based" 28 U.S.C. § 
2412(d)(2)(D). (Emphasis added).

14



1. There was no substantial justification for HUD's approval of 
the demolition plan for Columbus Homes.
There is no question that the approval of the flagrantly 

deficient "plan” for one-for-one replacement was without 
substantial justification. The plan set forth does not even come 
close to meeting the many federal statutory and regulatory 
requirements. In view of this, the Secretary's approval of the 
plan was not an action that would have been authorized by a 
reasonable person. Underwood. 108 S. Ct. at 2550, or which 
comes close to clearing the Third Circuit's three hurdles. See 
Taylor supra.

After the litigation commenced, HUD recognized this and 
immediately advised plaintiffs and the court that it was 
considering withdrawing its approval of the Columbus Homes 
demolition. It maintained this position throughout, even as late 
as the final negotiations —  that if forced to litigate, it would 
simply withdraw its approval and moot the issue.

HUD would not have so easily threatened to withdraw its 
approval (a $110,000,000 commitment to one of the most 
impoverished cities in the country), unless it realized that its 
position was totally untenable. The Court also immediately 
recognized the deficiencies in the plan, and expressed this to 
the parties. Again, as noted by Mr. Armour, the NHA attorney: 
"The turning point came two days into the case when HUD decided 
its position was indefensible." 124 N.J.L.J. 541.
2. There was no justification for HUD's failure to enforce the 

1987 Housing and Community Development Act with respect to 
the constructive demolition of Kretchmer Homes (Bids 2 & 6).

15



The Housing and Community Development Act of 1987 prohibits 
steps towards demolition prior to satisfaction of the criteria of 
the Act, including the approval of a plan for one-for-one 
replacement. 42 U.S.C. 1437p(d). This prohibits the relocation 
of tenants from buildings prior to the approval of a plan.

Since the passage of the new Act, and even before, 
plaintiffs have repeatedly in writing, and in person, requested 
HUD to direct the NHA to cease the relocation of tenants from 
buildings for which there was no approval of demolition.21

21. In December, 1987, plaintiffs filed an administrative 
complaint and requested that HUD direct the NHA to cease 
relocation, pending a decision on the complaint. (See excerpt 
from letter of Harris David to Michael Dorsey, HUD General 
Counsel, dated December 29, 1987, p.4, at Exhibit C) On January 
28, 1988, James Baugh, General Deputy Assistant Secretary of HUD 
wrote that the NHA would not take any further action demolishing 
units, pending a decision on plaintiffs' comments, but said 
nothing regarding stopping relocation pending a decision. 
(Exhibit D)

On February 11, 1988, six days after the 1987 HCDA became 
law, plaintiffs reiterated their request that relocation cease, particularly in light of the new requirements of the 1987 Act. 
(See letter of Harris David to James Baugh, dated Feb. 11, 1988, 
pp. 4-5, (Exhibit E) . On February 16, 1988 plaintiffs sent Mr. 
Baugh a copy of a HUD letter which directed the Detroit Housing 
Authority to refrain from relocation pending HUD approval. (See 
Exhibit F) . On April 18, 1988 HUD replied to plaintiffs letter 
of February 11, 1988. HUD did not speak to the issue of ceasing 
relocation pending a decision, and therefore HUD declined to 
issue that relief. (Exhibit G)

On March 29, 1988 the Newark Coalition for Low-Income 
Housing met with the Director of HUD's Newark Area Office and 
complained about depopulation of the housing projects in 
violation of the 1987 HCDA. When he expressed uncertainty about 
the applicability of the new Act, plaintiffs asked him to seek a 
legal opinion; he refused. (Ex. M).

On November 7, 1988, plaintiffs reiterated their request
16



HUD in person, and in writing, repeatedly ignored plaintiffs' 
requests, and failed to take the requested or other corrective 
action.

Specifically with respect to Kretchmer Homes counsel wrote 
to James Baugh, General Deputy Assistant Secretary of HUD on 
November 7, 1988. That letter, attached as Exhibit H, stated in 
part:

In addition the NHA is taking continuous steps 
in furtherance of and in preparation for 
demolition in other buildings not approved for 
demolition, and for which there is no approved 
plan for one for one replacement. These steps 
include:

a) the relocation of tenants from 
buildings the NHA seeks to demolish. 
Currently there is relocation going on 
at Columbus, Scudder, Hayes, and 
Kretchmer Homes. . . . The purpose of 
the relocation is to empty buildings so 
that they may be demolished. Once a 
tenant is relocated, the apartment is 
sealed. Thereafter it may be stripped 
and parts may be utilized as a source 
of materials for other apartments. The 
result is that a housing resource which 
could be available to the thousands of 
families on the waiting list is 
eliminated.

*  *  *

These actions are a clear violation of the 
proscriptions of the 1987 Act. There are to be 
no steps in furtherance of demolitions until 
there is an approved plan for one for one 
replacement. Instead there has been

again arguing that the relocation violated the new Act. (Exhibit 
H, letter from David to Baugh, pp. 6-8) On January 17, 1989 Mr. 
Baugh again declined to stop relocation pending HUD approval of 
demolition with the feeble excuse that it did not wish to 
prejudice either party in the then - existing state court 
litigation. (Exhibit I).

17



substantial NHA activity in furtherance of 
demolition.

In addition, plaintiffs pointed out that such activity violates
HUD's regulations. (Exhibit H, p.8)

On January 17, 1989, Mr. Baugh wrote back. With respect to
this issue, he stated merely:

"We are aware of the litigation against the NHA 
wherein Legal Services of New Jersey is 
representing the plaintiffs. Therefore HUD 
does not deem it appropriate to address the 
alleged violations on the part of the NHA that 
could prejudice either party in these 
proceedings." (Exhibit I)

HUD therefore allowed a continuing violation of the HCDA of 1987, 
and its own regulations. It simply ignored the Congressional 
mandate. Its excuse for failing to Act lacked substantial (if 
any) justification. No reason is given as to how HUD action 
could prejudice the litigation, and it is hard to see how forcing 
an agency to comply with federal law is prejudicial. Moreover, 
HUD's obligations to oversee a PHA do not terminate upon the 
filing of a suit against the PHA. If anything, such a suit 
should heighten HUD's scrutiny of the PHA.

Indeed, in identical situations in Augusta, Georgia and 
Detroit, Michigan, HUD took the very step requested by plaintiffs 
that it declined to take in Newark.22 In each instance HUD

22. In 1985 the Augusta Housing Authority (AHA) sought 
approval by HUD of the sale of one of its projects. HUD directed 
the AHA to refrain from relocation, and to refrain from failing 
to fill vacancies, prior to receiving HUD approval of the sale. 
See Exhibits F and J attached to this memorandum. For example, 
with respect to relocation, HUD stated:

You should not take any action to
18



directed the local housing authority to cease relocation or 
vacating projects prior to HUD approval of disposition. In each 
case HUD stated that such action would be contrary to HUD 
regulations.23 The failure to Act in Newark is even more 
egregious since Congress had just expressly strengthened the 
protections against constructive demolitions in the 1987 Act, (42 
U.S.C. § 1437p(d) ) , and HUD had prohibited such conduct in 24
C.F.R. § 970.12 of its regulations.24

encourage tenants to vacate or expend 
any project funds for relocation prior 
to receiving approval of the sale by 
the Secretary of the Department of 
Housing and Urban Development. Such a 
practice threatens the viability of the 
project and is contrary to Departmental 
requirements.(Exhibit J)

Similarly HUD wrote to the Director of the Detroit Housing 
Authority "to clarify what actions you can take prior to the 
demolition . . ." HUD stated: "We want to emphasize that the
vacating of projects or portions of projects prior to official 
approval is contrary to HUD regulations and the ACC." (Exhibit
F, p.2)

23 As noted, plaintiffs brought the HUD directive to the 
Detroit Housing Authority to the attentiion of Mr. Baugh. 
(Exhibit F). He tried unsuccessfully to distinguish it. (Exhibit
G, p.2).
6 24 HUD's inaction and unwillingness to enforce the 1987
HCDA resulted in harm and hardship to plaintiffs. In the first 
few months of 1989 the NHA transferred a large number of tenants 
from Buildings 2 and 6 at Kretchmer. Tenants were transferred 
from decent apartments. (See tenants affidavits at Exhibits K1 
through K4; K4, par. 8-11). That there were vacant apartments 
that were habitable is demonstrated by the HUD inspection report 
that was made of the inspection that occurred in the middle of 
the negotiations. See Exhibit L, and discussion at n. 16 supra. 
These apartments are still vacant, but HUD now plans to fund 
their repair under the vacancy repair program.

19



3. There was no substantial justification for HUD's 
failure to take steps to see that vacancies in the NHA 
were filled.____________________________________________

HUD knew about the substantial vacancies —  the highest of
any major public housing authority in the United States —  yet
did nothing about them. There was report (1982) after report
(1984), after report (1986), that recognized this problem, yet
nothing was done.

In 1984, the HUD Audit found a rise in vacancies since
1978 of 642 percent. (P.I.Ex. 21, p.21). Over the two year period
from 1981 to 1983 it found that the percentage of vacancies in
the family low rises had risen from 14.5% to 41.6%, an increase
of 65%. HUD did nothing in response to this Audit, and the
problem grew worse as vacancies continued to skyrocket. (See
Complaint, p. 27,n.2)

The 1986 HUD Audit stated:
Over 5,000 of the NHA's public housing units 
are vacant. Approximately 3,800 of these units 
are located at family high-rise projects 
(excluding NJ2-15) or are at projects undergoing comprehensive modernization. This 
leaves approximately 1.200 units vacant at 
family low-rises or elderly high-rises.

* ★ *

Judging from the volume of phone inquiries this 
office receives from applicants. it would 
appear that all habitable units could be 
filled.

P.I. Ex. 14 at 5, (emphasis added). The HUD Audit further noted 
that the NHA had been awarded modernization funds for the
modernization of vacant uninhabitable units, but had failed to 
meet the promised 100% occupancy rate of September 30, 1984. (Id.

20



at p.6) HUD did nothing in response to this Audit.
In response to this Audit the NHA made the startling (in

view of the desperate need for these units) statement as to the
numbers of vacancies in the NHA. It stated:

Another 1,100 units are in Projects undergoing 
Comprehensive Modernization. These units are
therefore being reserved for relocation 
purposes. There are therefore less than 1.400 
vacant units available for regular occupancy.
The vacancy rate of the NHA based on "real" 
vacancies would then be around 15%, rather than 
40% computed by your office. (P.I.Ex. 15, p.2).

HUD again failed to take appropriate corrective action.25 26
In February, 1988 plaintiffs pointed out to HUD the 40% 

vacancy rate, the relocation and creation of vacancies, and 
requested that HUD direct the NHA to "promptly rent all habitable 
units . . ."26 HUD rejected this, and continued to allow the 
highest vacancy rate in the country to go unaddressed. It
continued to ignore the glaring vacancy findings in its 1986 
Audit Report.

Once the lawsuit against HUD was filed, however, things 
changed dramatically. HUD put pressure on the NHA to fill 
vacancies. The NHA developed an Apartment Turnover Team, and 
began to fill vacancies. The NHA began to market the elderly 
units. During the negotiations HUD initiated the idea of a grant

25 Under HUD regulations a vacancy rate in excess of 3% is 
considered abnormal and requires the PHA to develop a five-year 
comprehensive occupancy plan demonstrating how it will return to 
full occupancy. 24 C.F.R. § 990.118.

26. Exhibit E, p. 5

21



to fill vacancies, and asked the NHA to submit a proposal for 
funds, and to advise HUD how much it cost to repair and occupy 
vacant units. HUD decided to double the efforts of the Apartment 
Turnover Team, and to grant the $1.8 million that is part of the 
vacancy repair program of the settlement.

In view of the fundamental sole purpose of the National 
Housing Act to provide housing to low income people, in view of 
the numerous HUD reports, and plaintiff complaints, the failure 
of HUD to take meaningful steps to force the NHA to rent 
vacancies is without substantial justification.

4. HDD's Approval of the Demolition of Kretchmer Homes 
(Bldgs. 3. 4 & 5) Was Without Substantial Justification.

Even without considering the question of the applicability 
of the 1987 HCDA to the 1985 Kretchmer demolition approval, HUD's 
decision lacked substantial justification under the law in effect 
in 1985. Plaintiffs refer the court to their earlier brief on 
these points. P.I. BR. at 31-39, 63-65. To meet this standard, 
HUD's approval would have to be substantially justified under 
both § 1437p(a) and under the replacement plan requirements. 
Since HUD's decision lacked any justification under either one of 
those provisions (and their relevant regulations in effect in 
1985), HUD's approval plainly failed to meet the EAJA standard.

To summarize, the demolition of buildings (3,4 & 5) cannot 
be substantially or otherwise justified as a measure to assure 
the useful life of the remaining projects at Kretchmer pursuant 
to § 1437p(a), since the NHA had informed HUD in its demolition 
application of its' intentions to demolish or dispose of

22



substantial portions of the remainder of the project (Bldgs.2 & 
6). HUD's alternative holding, under § 1437p(a), that it was not 
feasible "to rehabilitate those projects to their original 
condition." also lacked any justification since HUD applied an 
incorrect legal standard. The test under § 1437p(a) was whether 
"it is feasible to return the project or a portion of the project 
to useful life." See P.I. Br. at 35-36 (explaining the 
significance of this misapplication of legal standards).

Under replacement plan requirements (now in § 1437p(b)) HUD 
regulations in effect in 1985 required preparation of a one-for- 
one replacement plan if there was a local need for low-income 
housing. 44 Fed. Reg. 65,368-69 (November 9, 1979). Although, 
Newark's 1985 HAP approved by HUD, plainly revealed desperate 
low-income housing needs in Newark (see P.I. Ex. 19), no such 
plan was developed nor did the NHA even request a waiver of the 
replacement plan requirements from HUD. The Secretary's 
unilateral waiver plainly lacked substantial justification. 
Although 24 C.F.R. § 999.111(a) indicates that the Secretary may 
waive requirements under the demolition regulations provided that 
there is both a "determination of good cause" for such a waiver 
and "documentation of the pertinent facts and grounds" supporting 
such a determination, nowhere in the lengthy administrative 
record compiled by HUD and filed with the Court is there even a 
good cause determination, much less supporting documentation for 
this non-existent finding as required under HUD regulations. 
Accordingly, HUD's approval of the Kretchmer demolition (Bldg.

23



3,4 & 5) lacked substantial justification under two separate and 
distinct grounds [§ 1437(d) and HUD regs] and fails to come close 
to clearing the Third Circuit's three hurdles. See Taylor supra.

5. There was no justification for HUD's failure to even 
consider the racial impact of the demolitions.

The NHA's plans provided for the demolition and construction 
of thousands of units —  a massive undertaking and commitment of 
federal funding. Yet the approval failed to take into account 
racial and fair housing considerations at every step. It 
specifically failed to require the NHA to identify the land for 
Columbus Homes replacement units and to assess the suitability of 
the land according to HUD Fair Housing Site and Neighborhood 
Standards as plainly required by HUD regulations. See P.I.Br. at 
40-42. Had HUD insisted upon this, it would have been able to 
assess whether the goals of racial integration and fair housing 
would have been furthered by the replacement plans. There is 
also no consideration of the racial impact of the relocation 
plans nor any consideration of less racially restrictive 
alternatives to the NHA's overall plans. See P.I.Br. at 71-84.27

27 These are some plain examples of HUD's lack of 
substantial justification in its many agency actions and 
omissions which necessitated the filing of this action. These 
examples are not intended to be exhaustive. There are other such 
actions, such as HUD's acquiescence and failure to act in the 
face of gross NHA mismanagement notwithstanding repeated audits 
and reports, its failure to take appropriate corrective measures 
in response to the NHA's repeated miss-use or non-use of scarce 
modernization funds, and its inability timely to construct new 
housing, see P.I. Br. at 42-47, or the disregard of environmental 
impact statement requirements. P.I. Br. at 67-70.

24



B. Plaintiffs Are Entitled To Attorney's Fees 
Against The Secretary of HUD Under 28 U.S.C. §
2412 (b3 of the EAJA.__________ _________________

Pursuant to Section 2412(b) of the EAJA, the United States 
may be liable for fees under the Civil Rights Attorney's Fees 
Awards Act, 42 U.S.C. § 1988.28 Section 2412(b) pertinently
provides that the "United States shall be liable for 
[attorneys] fees and expenses to the same extent that any other 
party would be liable under the terms of any statute which 
specifically provides for such an award."29

Here, under the terms of 42 U.S.C. § 1988, plaintiffs are 
entitled to attorney's fees for prevailing on their § 1983 and 
Title VI claims and thus are entitled to fees under § 2412(b). 
Rodriguez v. Hardy. 873 F.2d 814, 817 (5th Cir. 1989); Savage v. 
Toan. 636 F. Supp. 156, 158 (W.D. Mo. 1986); Schrader v. Idaho. 
Deo't of Health and Welfare. 631 F. Supp. 1426, 1429 (D. Idaho
3.986) ; see Kniahts of Ku Klux Klan v. East Baton Rouge Parish, 
735 F. 2d 895, 899 (5th Cir. 1984) (noting § 2412(b) was intended
to change the result of Shannon v. HUD. 577 F. 2d 854 (3rd Cir.) 
cert denied. 439 U.S. 1002 (1978)(which barred award of
attorney's fees against HUD to prevailing party in a Title VI 
action)); United States v. Miscellaneous Pornographic Magazines,

28 The legislative history of this provision reflects that
"(t)his subsection clarifies the liability of the United States 
under such statutes as the Civil Rights Attorney's Fees Awards 
Act of 1976, ..." H.Rep. No. 1418, 96th Cong., 2d Sess. 17,
reprinted in 1980 U.S. Code Cong. & Ad. News 4984, 4996.

29 Unlike fee awards under § 2412(d)(1)(A), fee awards under 
§ 2412(b) are at market rates and the substantial justification 
defense is unavailable.

25



541 F. Supp. 122, 128 n. 4 (N.D. 111. 1982) (same).
It is well established that "[w]hen the United States 

Government itself, acting under color of state law, violates the 
federal rights of individuals, it may be liable under § 1983." 
Rodriquez v. Hardy. 873 F.2d 814, 817 (5th Cir. 1989); see,
Johnson v. Orr, 780 F.2d 386 (3rd Cir.), cert denied sub nom., 
Me Daniel v.Johnson. 479 U.S. 828 (1986); Premachandra v. Mitts, 
753 F. 2d 635, 641 n. 7 (8th Cir. 1985) (en banc);30 Knights of 
the Ku Klux Klan 735 F.2d at 900; Kletschka v. Driver, 411 F.2d 
436, 448-49 (2d Cir. 1969); Toan, 636 F. Supp. at 158; Schrader, 
631 F. Supp. at 1429; Lyons v. Weinberger, 376 F. Supp. 248, 254 
(S.D.N.Y 1974); English v. Town of Huntington, 335 F. Supp. 
1369, 1372 (E.D.,N . Y. 1970); cf Black V. Bayer, 672 F.2d 309, 318 
(3rd Cir. 1982), cert denied sub nom. Stoica v. Stewart, 459 U.S.

30 premachandra. and other similar cases, which hold that 
§ 2412(b) does not allow attorney's fees against federal 
defendants because their actions are not "under color of state 
law" and therefore not actionable under §1983 (and therefore fees 
are not collectable under § 1988) are distinguishable.

Xn Premachandra. the sole basis asserted for § 2412(b) fees 
was that the claims against the federal defendant were 
"analogous" to claims actionable under § 1983 (thereby triggering 
fee entitlement under § 1988), if those claims were asserted 
against a state rather than a federal actor. IcL. at 636.

Here, HUD's own actions in violation of plaintiffs' federal 
rights are "under of color of state law" based on its joint 
action with the NHA (a state actor) and thus are actionable under 
§ 1983. Consequently, fees are obtainable under § 2412(b) through 
§ 1988. See Toan. 636 F.Supp. at 158 (fees awarded under § 
2412(b) based on joint action theory; Premachandra distinguished 
as relying solely on "analogy" theory) ; See also Clients_|— Council 
v. Pierce. 778 F.2d 518, 520 (8th Cir. 1885) (Eighth Circuit 
distinguishes its decision in Premachandra and awards § 2412(b) 
fees against HUD), vacated as moot, 785 F.2d 1387 (8th Cir.
1986).

26



916 (1982). It is enough that a party "is a willful participant 
in joint action with the state or its agents" for that party to 
be acting "under color of" state law for § 1983 purposes. Dennis 
V. Sparks. 449 U.S. 24, 27 (1980); (private party); see Kniqhts 
of Klu Klux Klan 735 F.2d at 900 (federal party); Bayer, 672 
F.2d at 318 (private party) Kletschka, 411 F.2d at 448-49 
(federal) ; Toan. 636 F. Supp at 158 (federal) Schrader, 631 F. 
Supp. at 1426; Lyons. 376 F. Supp. at 254-55 (federal); Town of 
Huntington. 335 F. Supp. at 1372 (federal). When the violation 
is the joint product of the exercise of state power and federal 
power, the federal agency or official is acting under color of 
state law if "the state or its officials played a significant 
role in the result." Kletschka. 411 F.2d at 449; cf*. Orr, 780 
F.2d at 386.

Here plaintiffs have alleged that their rights under the 
United States Housing Acts and other protections were violated as 
the result of the joint exercise of state and federal power by 
the NHA and HUD. The public housing program established pursuant 
to the Act is a cooperative arrangement under which the federal 
defendants employ "funds and credit ... to assist the several 
states and their political subdivisions to remedy the shortage of 
decent affordable housing for families of lower income" 42 U.S.C. 
§ 1431. The State of New Jersey has authorized subdivisions of 
the State to participate in the program by enacting N.J.S.A. 
55:14A-1 et seq. NHA was established, pursuant to this provision 
by Newark municipal ordinance, to own and operate low-income

27



public housing projects pursuant to the United States Housing 
Act.

The "significant role" played by NHA here is 
uncontrovertible. NHA's actions are fully outlined in
plaintiffs' complaint, preliminary injunction papers and fee 
applications . See. e.g. Plaintiffs' Complaint for Injunctive
Relief M  (46-60).31

HUD willfully participated in NHA's clear violation of 
plaintiffs' federal rights through both active conduct and 
through its acguiescence and failure to act in the face of NHA 
misconduct. The Secretary approved the demolitions of Columbus 
and Kretchmer Homes (knowing fully of the defects in NHA's 
applications for demolition) , refused to halt the illegal 
constructive demolition of Kretchmer (Bldgs. 2 & 6) , failed to
fill thousands of vacant units, failed to take appropriate 
corrective action in response to gross NHA mismanagement, and 
failed to take any action or even consider the racially disparate 
effects of the NHA's conduct.

It is well settled that a party in a supervisory position, 
such as the Secretary in this case, may be held liable under § 
1983 if there has been a showing that the party was either

31 The role of the state and its officials is at least as 
significant here as it was in, for example, English v .— Town of 
Huntington supra♦ In that case the town established an urban 
renewal project in cooperation with HUD. The town and HUD failed 
to take action to provide relocation assistance to displaced 
families, in violation of 42 U.S.C. §1455(c) and HUD regulations. 
The court found that the joint federal-state endeavor and the 
significant role the state played in it met the standard of 
Kletschka v. Driver. 335 F. Supp. at 1372.

28



directly involved in, or had knowledge of and acquiesced in, the 
violation of federal rights. See Hampton v. Holmesburg Prison 
Officials. 546 F.,2d 1077, 1081-82 (3rd Cir. 1976); Hodgin v.
Agents of Montgomery County. 619 F. Supp. 1550, 1554 (E.D. Pa.
1989) ; Hodgin v. Roth. 536 F. Supp. 454, 460 (E.D. Pa. 1982) . 
The Secretary thus is liable for fees under 28 U.S.C. § 2412(b) 
of the EAJA via 42 U.S.C. §§ 1988 and 1983.32

POINT III
THE AWARD REQUESTED IS REASONABLE AND 
SHOULD BE APPORTIONED BETWEEN THE 
RESPECTIVE DEFENDANTS_______________

A. The Hours & Costs
The amount of hours worked and items of expenses and costs 

incurred have been reduced in several notable ways by counsel.
See eg. Affirmation of J. Harris David, 55 __ - — ; Declaration
of Jon C. Dubin 8-10; Affirmation of Arthur A. Baer 16-17. 
In addition to those reductions, plaintiffs do not request fees 
or expenses for any of the work performed by the numerous 
attorneys and law students from the Seton Hall Clinical Program 
or, to date, from Essex-Newark Legal Sevices, who contributed 
time and resources to plaintiffs' cause. Nor do plaintiffs' seek 
an enhancement of the fee award as is often provided in similar 
cases due to the contingent nature of the case, delay in payment

32 Similarly, HUD and NHA's joint actions in violation of 
and Title VI, render both parties liable for fees, under § 
2412(b) through §§ 1988 and 1983.

29



or other factors. See eg Missouri v. Jenkins, 105 L.Ed.2d at 
235-240 (upholding enhancement in NAACP LDF case).

Although Counsel have worked in a manner intended to 
minimize duplication of co-counsel's efforts, the Courts 
recognize that a litigation team approach is required in a 
complex or difficult federal case. See eg^ Boston & Maine Corp.. 
v. Moore. 776 F.2d 2, 7-8 (1st Cir. 1983), N.Y.S.A.R.C. v . Carey,
711 F. 2d 1136, 1146 (2d Cir. 1983). This large class action
civil rights/public housing institutional reform lawsuit 
involving many issues of first impression —  plainly fits into 
the category of cases requiring a "litigation team."
2. The Market Rates Requested

New Jersey counsel representing Plaintiffs are basing their 
rates requested on the affidavits of several local private
attorneys (attached to supplemental affidavit of J. Harris
David). These affidavits support the rates of $240/hr. for J. 
Harris David, $250/hr. for Melville Miller and $125/hr. for 
Margaret Stevenson relying on the prevailing rates of attorneys 
with comparable experience in Newark and Northern, New Jersey.

New York City Counsel representing Plaintiffs, while 
recognizing their entitlement to New York City rates, see 
S.P.I.R.G. of New Jersey v. AT&T, 842 F.2d 1436 (3rd Cir. 1988) 
awarding fees based on Washington, D.C. rates in case litigated 
in Newark) and receiving assessments of their appropriate rates 
under the New York City market, see Affirmation of Jay Topkis, 55 
2-3, Ex.N. (Assessing John Boger market rate at $280/hr., Jon

30



Dubin at $240/hr); Affidavit of Paul Kazenoff (Assessing Arthur 
Baer rate at $165/hr.), have requested rates largely based on the 
Newark market. See letter of Richard Hill.33 The rates chosen 
(Boger $240/hr.; Dubin - $170/hr.; Baer - $130/hr.) are 
considerably lower than the prevailing New York City market 
rates. The rates of law student clerk and paralegals are also 
below the New York City rates. See Topkis aff. at f 4. [All of 
counsels' relevant professional experience, qualifications and 
time records are included in the Plaintiffs' application for 
Attorney's Fees, Costs and Expenses filed October 15, 1989 and in 
the supplemental affidavit and materials of J . Harris David].
3 . Allocation of Fee Responsibility

Where, as here, facts and claims are closely entwined, 
defendants should be held jointly and severally liable for the 
full amount of fees and expenses. See eg^ Riddell— v_*— Nat' 1 
rn*mncratic Party. 712 F.2d 165, 169 (5th Cir. 1983); Pekarsky. jv̂  
Arivoshi. 575 F. Supp. 673, 675 (D. Haw. 1983). In this

3 3 plaintiffs have determined the rate of Jon Dubin based 
directly on the letter of Richard Hill, Esq. of McCarter & 
English and his statements of the rate of an eighth year 
associate or junior partner. See Dubin Decl. at ? 19.
Plaintiffs have determined John Boger's rate at a senior or 
managing partner rate. See Hill letter. Mr. Boger is a program 
director and has extensive nationally-recognized expertise m  
civil rights litigation, including nine cases in the U.S. Supreme 
Court in his 15-16 years of practice. Boger aff. at 1 3.
Hence, Plaintiffs' believe his experience is comparable to the 
more senior or managerial partners as described in Mr. Hill's 
letter. Plaintiffs have determined Arthur Baer's rate
commensurate with the rate of an associate with three years 
experience. See Hill letter (new associates billed at $95/hr; 6- 
7 year associates at $165/hr. Thus a lawyer with three years 
experience should be billed at a rate between $125-130.)

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instance, the Court, in its discretion, should apportion the 
defendants' respective portions of this whole award in a just and 
appropriate manner.

Alternatively, the court can apportion fees and expenses 
between the defendants based on their comparative responsibility 
for the conduct necessitating the litigation. See Schrader. 631 
F.Supp at 1431.

CONCLUSION
For the reasons expressed herein, the Plaintiffs' 

application for attorney's fees, costs and expenses should be 
granted in its entirety.

fully

sgal Services of New Jersey 
New Street 

New Brunswick, New Jersey 08901 
By: Melville D. Miller, Jr.

J. Harris David

NAACP Legal Defense and Educational 
Fund, Inc.

By: Julius L. Chambers,
John C. Boger and Jon C. Dubin 

99 Hudson Street, 16th Floor 
New York, NY 10013

Puerto Rican Legal Defense and 
Education Fund

By: Ruben Franco and Arthur Baer 
99 Hudson Street, 14th Floor 
New York, New York 10013
Margaret Welch 
7 South Street 
Newark, New Jersey 07102
Attorneys for Plaintiffs

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