Petition — Maher v. Gagne

Supreme Court, U.S.

FILED

JUN 21 1979

SnOMAEL RODAK, JR. CLER

Ss

IN THE

Supreme Court of the United States

OCTOBER TERM, 1978

No. 78 - ] 8 8 8

EDWARD W. MAHER, COMMISSIONER OF

INCOME MAINTENANCE,

STATE OF CONNECTICUT,

Petitioner,

Vv.

VIRGINIA GAGNE, INDIVIDUALLY AND

ON BEHALF OF OTHERS SIMILARLY SITUATED,

Respondent

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

CARL R. AJELLO

Attorney General

30 Trinity Street

Hartford, Connecticut

EDMUND C. WALSH

; Assistant Attorney General

_ 90 Brainard Road

Hartford, Connecticut

Page

RSET EES ES Sa ee ee ee 2

Se eee tb adekeshemees 2

ESS Le, OES ee 2

EEE Ee ee 2

GOS i ve se bev aee sees 3

Reasons for granting the writ .................005. 6

1. The Decision Below Appears to Conflict With this

Court’s Decision in Edelman v. Jordan ......... 6

2. The Portion of The Decision Below Which Holds

That The Award of Attorney’s Fees Against The

State Was a Permissible ‘‘Ancillary Effect’? Of a

Decree Limited to Prospective Injunctive Relief is a

Misinterpretation of This Court’s Opinion In

I caus bn de bed eve cepes ee 13

ee oe ce vere ce ee agi ses 14

Appendix (Opinion, Judgement of the Court of Appeals

SE I ONES Sis ois cc se ces cicces App. | la

CITATIONS

Page

Cases:

Chapman v. Houston Welfare Rights Org., 47

U.S.0.., 4528 Ciba. 05, Tee iss Seah scenes 9

Edelman v. Jordan, 415 U.S. 651 (1974) ........... 6

Ex Parte Young, 209 U.S. 123 (1908) .............. 3

Fitzpatrick v. Bitzer, 427 U.S. 445 (1976) .......... 7

Hagans v. Lavine, 415 U.S. 528 (1974) ............ 11

Hutto v. Finney, 437 U.S. 678 (1978) ............. 7

Maher v. Roe, 432 U.S. 464 (1977) .............0.. 12

Rosado v. Wyman, 397 U.S. 397 (1970) aera anes 11

Miscellaneous:

Public Law 94-559, 90 Stat. 2641, The Civil Rights

Attorney’s Fees Awards Act of 1976, codified in 42

U.S. Code, Section 1988 ............ cp eRe whey 5

1977 U.S. Code Cong. & Adm. News, p. 6338 ..... 12

1977 U.S. Code Cong. & Adm. News, p. 6340-6342 12

H.R. Rep. No. 1558 94th Cong. 2d. Sess. (1976) .... 12

S. Rep. No. 1011, 94th Cong. 2d. Sess. (1976) ..... 12

IN THE

Supreme Court of the Anited States

OCTOBER TERM, 1978

No.

EDWARD W. MAHER, COMMISSIONER OF

INCOME MAINTENANCE,

STATE OF CONNECTICUT,

Petitioner,

v.

VIRGINIA GAGNE, INDIVIDUALLY AND

ON BEHALF OF OTHERS SIMILARLY SITUATED,

Respondent

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

The petitioner, Edward W. Maher, respectfully prays that

a writ of certiorari issue to review the judgment and opinion of

the United States Court.of Appeals for the Second Circuit

entered in this proceeding on March 9, 1979.

2

OPINION BELOW

The opinion of the Court of Appeals has not yet been

reported. A copy of the slip opinion appears in the Appendix

hereto. The opinion of the District Court for the District of

Connecticut is reported at 455 F. Supp. 1344.

JURISDICTION

The judgment of the Court of Appeals for the Second

Circuit was entered on March 9, 1979, and the petitioner was

granted an extension of time to June 22, 1979 in which to file

this petition. This petition for certiorari was filed within the

required time as extended. This Court’s jurisdiction is invoked

under 28 U.S.C. §1254(1).

QUESTIONS PRESENTED

1. Whether, in an action combining a constitutional

claim under 42 U.S.C. $1983 with a statutory claim under the

Social Security Act, which is subsequently settled by entry of a

consent decree, and the merits of the §1983 claim are never

determined, an award of attorney’s fees against the Connec-

ticut Commissioner of Income Maintenance, in his official

capacity, to be paid out of State funds, is authorized by the

Civil Rights Attorney’s Fees Awards Act of 1976.

2. Whether, as the Court of Appeals has alternatively

ruled, the award of the attorney's fees against the State of

Connecticut in this action was permissible as an ‘‘ancillary

effect’’ under Edelman v. Jordan, 415 U.S. 651 (1974), and

therefore not barred by the Eleventh Amendment.

STATUTES INVOLVED

United States Code, Title 42:

§602

(a) A State plan for aid and services to needy families

3

with children must. . . (7) except as may otherwise be provided

in clause (8), provide that the State agency shall, in determining

need, take into consideration any other income and resources

of any child or relative claiming aid to families with dependent

children, or any other individual (living in the same home as

such child and relative) whose needs the State determines

should be considered in determining the need of the child or

relative claiming such aid, as well as any expenses reasonably

attributable to the earning of any such income;

§ 1983

Every person who, under color of any statute, ordinance,

regulation, custom, or usage, of any State or Territory, sub-

jects or causes to be subjected, any citizen of the United States

or other person within the jurisdiction thereof to the depriva-

tion of any rights, privileges, or immunities secured by the

Constitution and laws, shall be liable to the party injured in an

action at law, suit in equity, or other proper proceeding for

redress.

$1988

In any action or proceeding to enforce a provision of

sections 1977, 1978, 1979, 1980, and 1981 of the Revised Sta-

tutes, title IX of Public Law 92-318, or in any civil action o1

proceeding, by or on behalf of the United States of America, to

enforce, or charging a violation of, a provision of the United

States Internal Revenue Code, or title VI of the Civil Rights

Act of 1964, the court, in its discretion, may allow the prevail-

ing party, other than the United States, a reasonable attorney’s

fees as part of the costs.

STATEMENT OF THE CASE

The plaintiff, a working recipient of public assistance

under Connecticut’s program of aid to Families with Depen-

dent Children (AFDC), brought an action in the United.States

4

District Court against the Commissioner of Social Services

(now called Commissioner of Income Maintenance) in which

she alleged that the petitioner’s policies and practices govern-

ing the exemption from income of work-related expenses were

in conflict with §402(a)(7) of the Social Security Act, 42 U.S.C.

§602(a)(7). She also claimed that the Department’s practices

and policies violated the due process and equal protection

clauses of the Fourteenth Amendment, and that this action was

authorized under 42 U.S.C. §1983.

The plaintiff's constitutional claims were listed by the

district court as:

*‘whether an impermissible distinction had been

created between those working welfare recipients

whose work-related expenses were fully considered

in the computation of AFDC awards and those

whose work-related expenses were not fully consi-

dered, in violation of the equal protection clause;

whether the defendant, by creating a table of stan-

dard allowances, which could not be challenged in

individual cases, set up an irrebuttable presumption

with respect to work-related expenses, in violation of

the due process clause; and whether the failure to

provide written notice of the opportunity for an

evidentiary hearing, if the welfare recipient disputed

the defendant’s calculation of work-related ex-

penses, violated the due process clause.’’ Appendix,

p. 9a.

While the case was pending, the Commissioner amended

his regulations to provide expressly for deduction of all reason-

able work-related expenses. Thereafter, plaintiff amended her

complaint alleging that the new policy as implemented still

resulted in routine disallowance of expenses in excess of the

standard allowances, and that the State had not adopted

reasonable procedures to notify AFDC recipients of their right

to work-related expenses. Appendix, p. 3a.

5

The parties subsequently negotiated a settlement of the

case, and a consent judgment, which provided, inter alia, that

the action would be certified as a class action, was entered by

the district court. Appendix, p. 21a.

Thereafter, the plaintiff's attorneys inoved for an award of

attorney’s fees against the petitioner, in his official capacity as

Commissioner of Social Services, pursuant to the Civil Rights

Attorney’s Fees Award Act of 1976 (Fees Act). The district

court subsequently awarded plaintiff's attorneys a fee of

$3,012.19 to be paid out of State funds (Appendix, p. 2a) and, on

appeal, the Court of Appeals affirmed the district court’s

award.

The petitioner argued before the Court of appeals, inter

alia, that the Fees Act is not applicable to a case such as this

one since none of the plaintiff's ‘‘civil rights’’ (as that term is

commonly understood) had been violated, R- , Brief of Ap-

pellant. pp. 16, 29; that under the language of the Fees Act an

award of attorney’s fees is authorized only if the plaintiff is

‘‘the prevailing party’’ on her constitutional claim, because the

Fees Act does not authorize fees for successful claims under

the Social Security Act, Appendix, p. 5a; and that Congress did

not intend to authorize an award of fees in a case where a

plaintiff combines a constitutional claim with a statutory claim

and the case is thereafter settled without a judicial determina-

tion on the merits of the constitutional claim. Jd.

The petitioner also argued that the plaintiff could not be

considered ‘‘the prevailing party’ under the Fees Act since she

was unsuccessful in an administrative fair hearing she had

requested to contest the State’s disallowance of the same

work-related expenses she was contesting in this action.

Appendix, p. 13a n. 7.

The petitioner further argued that, in any event, the

Eleventh Amendment was a bar to the award of fees against the

State because the power of Congress to abrogate a State's

:

6

sovereign immunity when acting pursuant to §5 of the Four-

teenth Amendment extends only to suits in which a party

prevails on a constitutional claim. Appendix, p. 12a.

The Court of appeals rejected these arguments and af-

firmed the district court’s award of attorney’s fees; and re-

manded on the plaintiff-appellee’s cross-appeal.

REASONS FOR GRANTING THE WRIT

1. THE DECISION BELOW APPEARS TO CON-

FLICT WITH THIS COURT’S DECISION IN EDELMAN V.

JORDAN.

In Edelman v. Jordan, 415 U.S.651 (1974) this court held

that retroactive welfare benefits awarded to plaintiffs by a

federal district court by reason of a wrongful denial of benefits

by Illinois officials prior to the entry of the court’s order deter-

mining the wrongfulness of their actions, violated the Eleventh

Amendment. The Court stated, therein, inter alia, that

‘*[T}]hough a §1983 action may be instituted by public aid reci-

pients . . . a federal court’s remedial power, consistent with the

Eleventh Amendment, is necessarily limited to prospective

injunctive relief . . . and may not include a retroactive award

which requires the payment of funds from the state treasury . . .

** 415 U.S., at 676-677.

The Court of appeals has held in this case that, ‘‘although

the Eleventh Amendment generally bars federal court awards

of compensatory relief to be paid from a State treasury... .

there are at least two exceptions . . . relevant here,”’ to wit:

1) that the award of attorneys’ fees in this case wasa

permitted ‘‘ancillary effect’’ of a proper prospective

decree and therefore not barred by the Eleventh

Amendment, Appendix, p. Ila; and

2) **. . . that it is within Congréss’ Fourteenth

Amendment power to authorize a fee award when a

7

party prevails [under the Fees Act] as long as the

pendent constitutional claim is a substantial one and

arises out of the same operative facts.”” Appendix, p.

12a.

Petitioner submits that neither the above “‘exceptions”’

supports the award of fees against the State in this action. First,

because the award of attorney’s fees against the State made by

the district court does not fit within this Court’s careful defini-

tion in Edelman of an ‘‘ancillary effect’’ since the award of fees

in this case is not ‘‘the necessary result of compliance with

decrees which by their terms were prospective in nature,’ 415

U.S. 668; and, secondly, if a party “‘prevails’’, under the Fees

Act, on a statutory claim (in this case the Social Security Act)

the Fees Act does not abrogate a State’s Eleventh Amendment

immunity because, in such a case, Congress is not acting (at

least in this case) under §5 to enforce a provision of the Four-

teenth Amendment.

Hutto Y. Finney distinguished. |

Subsequent to Edelman, this Court held in Fitzpatrick v.

Bitzer, 427 U.S. 445 (1976) that Congress has the power, when

acting pursuant to §5 of the Fourteenth Amendment, to enact

legislation authorizing federal courts to award attorney’s fees

against a State as a means of enforcing that Amendment's

substantive guarantees. In so doing, however, the Court dis-

tinguished that case from Edelman v. Jordan, supra, when it

stated that ‘‘[OJur analysis [in Fitzpatrick] begins where

Edelman ended, for in this Title VIi cas the ‘threshold fact of

congressional authorization,’ 415 U.S , at 672, to sue the State

as employer is clearly present.’’ 427 U.S., at 452.

More recently, in Hutto v. Finney, 437 U.S. 678 (1978), an

award of attorney's fees to. be paid from funds of the State of

Arkansas awarded by the Court of Appeals pursuant to the

Fees Act, supra, was upheld by this Court. However, in Hutto,

it was found that conditions in the Arkansas prison system

at ere

7 ation Aa apa er

8

constituted cruel and unusual punishment in violation of the

Eight and Fourteenth Amendments. The instant case is distin-

guishable from Hutto in that there was no finding of a depriva-

tion of any of plaintiff's constitutional rights.

Moreover, this Court itself, in Hutto, distinguished that

case from Edelman v. Jordan, supra, when it stated, inter alia:

‘*. . . [FJinally, the claims asserted in Employees and

in Edelman v. Jordan . . . were based on a statute

rooted in Congress Art. I power . . . Edelman v.

Jordan, supra, at 674 (underlying claim based on

Social Security Act provisions dealing with aid to

aged, blind, and disabled, 42 U.S.C. §§1381-1385). In

this case, as in Fitzpatrick v. Bitzer, 427 U.S. 445, the

claim is based upon a statute enacted to enforce the

Fourteenth Amendment... .”’

437 U.S., at 698 n. 31.

Edelman v. Jordan should be controlling in this case.

The factual situation in the present case is very similar to

Edelman (except that it is an award of attorney’s fees rather

than retroactive welfare benefits which is at issue) in that it is

an action brought by a recipient of public welfare benefits

under 42 U.S.C. §1983 in which a constitutional claim has been

combined with an underlying statutory claim based upon the

Social Security Act. In Edelman the underlying claim dealt

with aid to aged, blind, and disabled, 42 U.S.C. §§1381-1385,

whereas in this action the claim deals with aid to families with

dependent children (AFDC) 42 U.S.C. §601, et seq. It is sub-

mitted, therefore, that this case should be controlled by this

Court's decision in Edelman and not by the decision in Hutto v.

Finney, supra, since, in this case, as in Edelman, the plaintiff

was not seeking to enforce any of her ‘‘civil rights’’ under the

Fourteenth Amendment — she was merely challenging the

disallowance of certain work-related expenses under the

AFDC program.

9

The plaintiff s ‘‘civil rights’’ were not in issue in this case -

the Fees Act is not applicable.

In Edelman v. Jordan, supra, merely because the action

was brought under §1983 and an equal protection claim was

combined with the underlying statutory claim, there is no indi-

cation therein that the Court viewed the action as one involving

the enforcement of ‘‘civil rights.”

Just recently in Chapman v. Houston Welfare Rights Or-

ganization, 47 U.S.L.W. 4528, (May 15, 1979), this Court, in

discussing jurisdictional questions presented by that case, shed

further light upon ‘‘civil rights’’ actions brought under §1983

when it stated, inter alia:

‘* . . [SJection 1983, when properly invoked, satis-

fied the first requirement [that under 28 U.S.C.

§ 1343(3) a civil action must be authorized by law): it

ensures that the suit will not be dismissed because

not ‘authorized by law: But it cannot satisfy the

second, since by its terms, as well as its history, it

does not provide any rights at all.

‘*We reach a similar conclusion with respect to the

argument that §1983 is a statute ‘providing for the

protection of civil rights, including the right to vote:

Standing alone, §1983 clearly provides no protection

for civil rights since, as we have just concluded,

§1983 does not provide any substantive rights at all.

To be sure, it may be argued that §1983, does in some

sense ‘provid[e] for the protection of civil rights’

when it authorizes a cause of action based on the

deprivation of civil rights guaranteed by other Acts

of Congress. But in such cases, there is no question

as to jurisdiction, and no need to invoke §1983 to

meet the ‘civil rights’ requirement of §1343(4); the

Act of Congress which is the actual substantive basis

of the suit clearly suffices to meet the requisite test. It

10

is only when the underlying statute is not a civil rights

act that §1983 need be invoked by those in claimants’

position to support jurisdiction. And in such cases,

by hypothesis, §1983 does not provid[e] for the pro-

tection of civil rights.”’

47 U.S.L.W., at 4533 (emphasis added, footnote

omitted).

The Court went on to state, inter alia:

‘(T]he Social Security Act does not deal with the

concept of ‘equality’ or with the guarantee of ‘civil

rights,” as those terms are commonly understood .. .

**. .. the courts of appeals have consistently held that

the Social Security Act is not a statute providing for

‘civil rights’ . . . . [W]e endorse those holdings, and

find that a similar conclusion is warranted with re-

spect to §1343(4) as well. . ."” Chapman v. Houston

Welfare Rights Org., supra, 47 U.S.L.W. at 4534.

It is true, of course, that unlike the plaintiffs in Chapman,

supra, the plaintiff in this action did recite in her complaint,

separate constitutional claims. (Set forth supra, at p. 4). But

these *‘constitutional’’ claims are themselves based upon the

provisions of the Social Security Act, and, were it not for the

existence of §602(a)(7) of the Act, the recital of these ‘‘constitu-

tional’’ claims would be meaningless.

Constitutional claims are customarily made to avoid

jurisdictional problems.

It has become customary for a plaintiff in a case where the

underlying claim is based on the Social Security Act, to set

forth in the complaint at least one ‘‘equal protection” claim

and/or one ‘due process”’ claim, and to recite that the action is

brought under 42 U.S.C. §1983. The complaint then proceeds

to set forth the underlying Social Security Act ‘‘statutory’’

claim. Under tke liberal ‘‘substantiality’’ test of Hagans v.

Lavine, 415 U.S. 528, (1974), there is then little chance that the

complaint will be susceptible to a motion to dismiss for a lack of

federal court jurisdiction.

In Chapman, supra, Mr. Justice Stewart recently took

note of this practice in a dissenting opinion when he observed:

‘‘(Flinally, even a welfare recipient with a federal

statutory claim may sue in federal court if his lawyer

can link this claim to a substantial constitutional

contention. And under the standard of substantially

established by Hagans v. Lavine, 415 U.S. 528, such

a constitutional claim would not be hard to con-

struct.”’

47 U.S.L.W., at 4548.

In Edelman, supra, this Court stated, inter alia,:

“(I]t is of course true that Rosado v. Wyman, 397

U.S. 397 (1970), held that suits in federal court under

§1983 are proper to secure compliance with the pro-

visions of the Social Security Act on the part of

participating States. But it has not heretofore been

suggested that §1983 was intended to create a waiver

of a State’s Eleventh Amendment immunity merely

because an action could be brought under that sec-

tion against state officers, rather than against the

State itself... .”

415 U.S., at 676-677.

And, of course, this Court has held in Maher v. Roe, 432

U.S. 464 (1977), that there is no constitutional right to receive

public welfare benefits.

The legislative history: the House Report v. the Senate

Report.

The Court of Appeals pointed out that the House Report of

the legislative history of the Fees Act “‘directly addressed the

situation [present in this action where a] . . . plaintiff joins a

constitutional claim with a non-fee statutory claim’’ and pro-

vided therein that, in cases where the non-constitutional claim

is dispositive, **. . . attorney’s fees may be allowed even though

the court declines to enter judgment for the plaintiff on that

claim so long as the plaintiff prevails on the non-fee claim

arising out of a ‘common nucleus of operative fact.’ ”’

Appendix, p. 7a.

' The Senate Report, however, contains no such language,

and, it is to be noted, it was the Senate Bill which was passed in

lieu of the House Bill. 977 U.S. Code Cong. & Adm. News, p.

6338. Moreover, there is no indication in the Senate Report

that Congress intended to treat welfare benefits cases brought

under the Social Security Act as ‘‘civil rights’’ cases. The types

of cases specifically mentioned in the Senate Report include

cases involving racial discrimination, voting rights, public ac-

commodation, housing discrimination, and discrimination in a

private restaurant. There is no mention of cases brought to

enforce claims to public welfare benefits under the Social Sec-

urity Act.

Bvt even if the Court of Appeals was correct in finding that

Ceugress did intend, in the Fees Act, to award fees to the

**prevailing party”’ in a case of this kind, wherein the underly-

ing claim was based on the Social Security Act, the Fees Act

would be ineffectual to abrogate the State’s Eleventh Amend-

ment immunity because, in such a case, Congress is not acting

to enforce a provision of the Fourteenth Amendment. To the

extent that Congress may have had such an intention, it was not

a proper exercise of congressional authority under §5 of the

Fourteenth Amendment.

13

If the petitioner’s foregoing analysis is correct, and if this

case is controlled by the decision in Edelman v. Jordan, supra,

the District Court’s award of attorney’s fees to be paid out of

funds of the State of Connecticut, is barred by the Eleventh

Amendment. Certiorari should be granted to resolve this im-

portant constitutional question.

2. THE PORTION OF THE DECISION BELOW

WHICH HOLDS THAT THE AWARD OF ATTORNEY’S

FEES AGAINST THE STATE WAS A PERMISSIBLE

‘‘ANCILLARY EFFECT’ OF A DECREE LIMITED TO

PROSPECTIVE INJUNCTIVE RELIEF IS A MISIN-

TERPRETATION OF THIS COURT'S OPINION IN

EDELMAN V. JORDAN.

In Edelman, this Court explained that a court order limited

to prospective injunctive relief may nevertheless require state

officials to expend money from the state treasury in complying

with such a decree; ‘‘[bJut the fiscal consequences to state

treasuries in these cases were the necessary result of com-

pliance with decrees which by their terms were prospective in

nature .... [sJuch an ancillary effect on the state treasury is a

permissible and often an inevitable consequence of the princi-

ple announced in Ex parte Young, supra.‘* 415 U.S.., at 667-668

' (emphasis added).

It is submitted that the award of attorney’s fees entered by

the district court in the present action does not come within this

Court’s careful definition, supra, of an ‘‘ancillary effect.’’ The

Second Circuit has extended this Court’s ‘‘ancillary effect’’

doctrine to include a situation ‘‘when the award is incident toa

judgment granting prospective relief.”’ Appendix, p. 10a.

The Court of Appeals has noted in its opinion, Id., at n.4,

that the circuits are divided on this issue with the First and

Fourth in agreement with the Second; the Third and Sixth

Circuits contra. :

This conflict also justifies the grant of certiorari to review

the judgment below.

For these reasons, a writ of certiorari should issue to

review the judgment and opinion of the Court of Appeals for

the Second Circuit.

14

CONCLUSION

Respectfully submitted,

EDMUND C. WALSH

Assistant Attorney General

State of Connecticut

90 Brainard Road

Hartford, Connecticut 06114

Counsel for Petitioner

APPENDIX

UNITED STATES COURT OF APPEALS

For THE Seconp Circult

> a

Nos. 503, 701—August Term, 1978.

(Argued January 19, 1979 Decided March 9, 1979.)

Docket Nos. 78-7414, 78-7432

+>

VixGINiA GAGNE, individually,

and on behalf of all others similarly situated,

Plaintiff-Appellee-Cross-Appellant,

—against—

Evwarp W. Mauer, Commissioner of Social Services,

Defendant-Appellant.

>

Before:

WATERMAN, FEINBERG and VAN GRAAFRILAND,

Circuit Judges.

>

-

Appeal and cross-appeal from order of the United

States District Court for the District of Connecticut,

Chief Judge T. Emmet Clarie, awarding attorney's fees

under Civil Rights Attorney’s Fees Awards Act of 1976,

42 U.S.C. § 1988.

Affirmed in part, remanded in part.

>

2a

Epmunp C. Wassu, Assistant Attorney General,

Hartford, Connecticut (Carl R. Ajello,

Attorney General, Paul M. Shapiro, Assist-

ant Attorney General, Hartford, Connecti-

cut, of Counsel), for Defendant-Appellant.

Davin C. Suaw, Hartford, Connecticut (Legal

Aid Society of Hartford County, Inc., Joan

Pilver, Hartford, Connecticut, of Counsel),

for Plaintiff-Appellee-Cross-A ppellant.

~~

FeEINBERG, Circuit Judge:

This case raises interesting questions regarding applica-

tion of the Civil Rights Attorney’s Fees Awards Act of

1976 (Fees Act), which amended 42 U.S.C. § 1988. Defen-

dant Edward W. Maher, Commissioner of Social Services

of the State of Connecticut, appeals from an order of the

United States District Court for the District of Connect-

icut, 455 F. Supp. 1344 (1978), Chief Judge T. Emmet

Clarie, awarding attorneys’ fees of $3,012.19 to the Legal

Aid Society of Hartford County, Inc., the attorneys for

plaintiff Virginia Gagne, to be paid by appellant Commis-

sioner in his official capacity out of State funds.' The

state asserts that the award of attorneys’ fees in the cir-

cumstances of this case is not authorized by the Fees Act

and, in any event, is barred by the Eleventh Amendment.

Plaintiff cross-appeals, arguing that the award was too

low. For reasons given below, we affirm the judgment of

the district court on the State’s appeal, and remand for

further consideration on plaintiff's appeal.

1 For this reason and for convenience, we frequently refer here-

after to appellant as the State.

3a

Virginia Gagne, a working recipient of Aid to Families

with Dependent Children (AFDC), commenced the underly-

ing action that gave rise to the fee award in January

1975. On behalf of herself and others similarly situated,

plaintiff alleged that Connecticut’s policies and procedures

for determining work-related expenses used in computing

AFDC benefits violated the United States Constitution

and the Social Security Act.

In the original complaint, plaintiff sought a declaratory

judgment that Connecticut’s regulations regarding max-

imum work-related transportation and lunch allowances

contravened federal statutes and the United States Con-

stitution, an injunction requiring defendant to take into

account all reasonable work-related expenses in computing

AFDC benefits and an order requiring defendant to notify

affected class members of their right to reapply for

benefits. In May 1975, while discovery was taking place

in the action, defendant amended its regulations to pro-

vide expressly for deduction of all reasonable work-related

expenses. In September 1976, plaintiff filed an amended

complaint, alleging that the new policy as implemented

still resulted in routine disallowance of expenses in excess

of the standard allowances and that the State had not

adopted reasonable procedures to notify AFDC recipients

of their right to deduct work-related expenses. The parties

negotiated a settlement in early 1977, and the district

court entered a consent decree in March 1977. In this set-

tlement defendant agreed to allow AFDC recipients to

prove that they incurred work-related expenses in excess

of standard allowances, to double the standard allowance

for transportation expenses, to recompute the standard

allowances annually using cost of living data and to

4a

notify al) working recipients of their rights with respect

to the work-related exjonse deduction.

The district judge viewed the consent decree as a vic-

tory for plaintiff and held, over the objections of the

State, that she was entitled to a fee award under the

Fees Act. Finding that such an award against the State

would not violate the Eleventh Amendment, the judge

granted plaintiff's attorneys’ fees of $3,012.19.

II

Before us, the State continues to oppose the fee to

plaintiff's lawyers. We turn first to the question whether

Congress intended to authorize an award of attorneys’

fees in this situation. In Alyeska Pipeline Service Co. v.

Wilderness Society, 421 U.S. 240 (1975), the Supreme

Court held that only Congress can authorize an exception

to the usual American rule that attorneys’ fees are usual-

ly not recoverable by the winning party in litigation in

federal courts. Congress thereafter amended 42 U.S.C.

§ 1988 in the Fees Act, Pub. L. No. 94-559, 90 Stat.

2641 (1976), to permit a federal court to award attorneys’

fees to a prevailing party in suits brought to enforce cer-

tain civil rights acts, among them 42 U.S.C. § 1983. The

Fees Act provides in relevant part:

In any action or proceeding to enforce a provision of

sections 1981, 1982, 1983, 1985, and 1986 of this ti-

tle, title IX of Public Law 92-318, or in any civil ac-

tion or proceeding, by or on behalf of the United

States of America, to enforce, or charging a violation

of, a provision of the United States Internal Revenue

Code, or title VI of the Civil Rights Act of 1964, the

court, in its discretion, may allow the prevailing par-

Sa

ty, other than the United States, a reasonable at-

torney’s fee as part of the costs. (Emphasis supplied.)

We explained the purpose of this Act in Mid-Hudson

Legal Services, Inc. v. G & U, Inc., 578 F.2d 34, 36 &

n.2 (2d Cir. 1978):

In order to encourage compliance with certain civil

rights laws Congress has often authorized recovery of

attorneys’ fees by plaintiffs who, through their

private suits under such statutes, act as private at-

torneys general by enforcing federal policy. E.g., Ti-

tle VIII of the Civil Rights Act of 1968, 42 U.S.C.

§ 3612(c); the Equal Employment Amendments of

1972, 42 U.S.C § 2000e-16(b). In accordance with this

approach, prior to Alyeska many federal courts had

exercised their traditional equity powers to award at-

torneys’ fees under the Reconstruction Civil Rights

Acts.... The aim of §1988, therefore, was to

regain consistency in the application of fee shifting

under the civil rights acts.

See also S. Rep. No. 1011, 94th Cong., 2d Sess. (1976),

reprinted in [1976] U.S. Code, Cong. & Ad. News 5908

(Senate Report). ;

The State contends that under the language of the Act

quoted above, plaintiff is entitled to attorneys’ fees only

if she was the prevailing party on her constitutional

claims, since the Fees Act does not authorize fees for suc-

cessful claims under the Social Security Act. Appellant

argues that Congress did not intend to authorize fee

awards when plaintiff joins a constitutional claim with

such a statutory claim and then the entire case is settled

without a judicial determination that plaintiff had a

meritorious constitutional claim. The State further .argues

Sees eee

6a

that plaintiff cannot be viewed as the prevailing party on

any claim because she received very little of the relief re-

quested, most of the terms of the consent decree did not

change existing practices and any changes that were

brought about by the consent decree would have been

adopted by the State on its own initiative anyway.

Although the Fees Act and its legislative history do not

specifically state that attorneys’ fees are authorized in

this precise situation, the statements of Congressional in-

tent lead us to that conclusion. The Senate Report in-

dicates that attorneys’ fees should be awarded in a wide

variety of situations, including consent judgments, and

cites, among other authorities, Kopet v. Esquire Realty

Co., 523 F.2d 1005 (2d Cir. 1975).? In that case, 523

F.2d at 1008; and in Blau v. Rayette-Faberge, Inc., 389

F.2d 469 (2d Cir. 1968), we indicated in analogous situa-

tions that counsel fees could be awarded whenever plain-

tiffs efforts confer benefits on the class, including those

obtained through settlement. In addition, the House

Report on the Fees Act directly addressed the situation in

which plaintiff joins a constitutional claim with a non-fee

statutory claim:

To the extent a plaintiff joins a claim under one of

the statutes enumerated in |the Fecs Act] with a

2 .The Senate Report at 5, [1976] U.S. Code, Cong. & Ad. News

at 5912-13 states:

Moreover, for purposes of the award of counsel fees, parties

may be considered to have prevailed when they vindicate

rights through a consent judgment or without formally obtain-

ing relief. Kopet v. Esquire Realty Co., 523 %.2d 1005 (2d Cir.

1975), and cases cited therein; Parham v. Southwestern Bell

Telephone Co., 433 F.2d 421 (8th Cir. 1970); Richards v. Grif-

fith Rubber Mills, 300 F. Supp. 338 (D. Ore. 1969); Thomas v.

Honeybrook Mines, Inc., 428 F.2d 981 (3d Cir. 1970); Aspira

of New York, Inc. v. Board of Education of the City of New

York, 65 F.R.D. 541 (S.D.N_Y. 1975).

7a

claim that does not allow attorney fees, that plain-

tiff, if it prevails on the non-fee claim, is entitled to

a determination on the other claim for the purpose

of awarding counsel fees.... In some _ instances,

however, the claim with fees may involve a constitu-

tional guestion which the courts are reluctant to

resolve if the non-constitutional claim is dis-

positive.... In such cases, if the claim for which

fees may be awarded meets the “substantiality” test,

see Hagans v. Lavine, [415 U.S. 528 (1974)]; United

Mine Workers v. Gibbs, 383 U.S. 715 (1966), at-

torney’s fees may be allowed even though the court

declines to enter judgment for the plaintiff on that

claim so long as the plaintiff prevails on the non-fee

claim arising out of a “common nucleus of operative

fact.”

H.R. Rep. No. 1558, 94th Cong., 2d Sess. at 4 n.7 (1976)

(Citations omitted). See also Kimbrough v. Arkansas Ac-

tivities Association, 574 F.2d 423 (8th Cir. 1978).

Given the legislative intent to authorize award of attor-

neys fees to the prevailing party in settled cases and to

avoid unnecessary decision -of constitutional issues, we

think it clear that Congress intended the test set forth in

the House Report to govern the award of attorneys’ fees

in suits that are settled as well as in those that proceed

to a judgment on a “non-fee” claim. The State’s inter-

pretation of legislative intent would encourage plaintiffs

to try cases in which reasonable settlement offers have

been received, merely to ensure a fee award. Cf. Parker

v. Matthews, 411 F. Supp. 1059, 1062 (D. D.C. 1976),

aff'd sub nom. Parker v. Califano, 561 F.2d 320 (D.C. Cir.

1977). In view of the legislative history, we cannot attrib-

ute such an intent to Congress. Thus we conclude, that

8a

once it has been determined that plaintiff. obtained ben-

efits for ihe class in the settlement on some claim, plain-

tiff is “the prevailing party” within the meaning of the

statute. It does not matter which claim induced the con-

cessions or which claim would have been successful at

trial, as long as the constitutional claim is substantial and

arises from the same operative facts as the non-fee claim.

Applying these standards here, we find that the prereq-

uisites for an award of attorneys’ fees have been met.

Although the State argues that plaintiff did not prevail

on any grounds, the district court found otherwise:

The consent decree gave the plaintiff, as well as the

class she represented, virtually all the relief sought

in the complaint. Under the terms of the consent

decree the defendant agreed to: permit working

AFDC recipients to prove that they incur work-re-

lated expenses which are in excess of the standard

allowance established by the defendant; conduct an

annual review for the purpose of updating the stand-

ard allowances; publish heretofore unpublished stand-

ard allowances; double the standard transportation

allowance from $.06 to $.12 per mile; provide writ-

ten notice to working AFDC recipients of the precise

amount of work-related expenses which are to be

allowed as to each recipient; provide written notice

of the AFDC recipients’ right to an evidentiary hear-

ing in the event that the recipient disagrees with the

defendant’s calculation of work-related expenses; and

stay any reduction in AFDC benefits if the recipient

requests an evidentiary hearing within ten days of

receiving the aforesaid written notice.

455 F. Supp. at 1346. These findings are amply justified

by the record, which also demonstrates that the State

9a

changed its policies with grea! reluctance and only under

the pressure of the lawsuit. Whether the court could have

ordered the State to accept all the changes this lawsuit

prompted it to make is irrelevant. The consent decree was

the product of the litigation and plaintiff is entitled to

use it to justify an award.

The district court, after noting that federal constitu-

tional claims are “substantial” if they are sufficient to

confer jurisdiction under the test of Hagans v. Lavine,

415 U.S. 528 (1974), found that plaintiff had raised sev-

eral substantial constitutional claims that were properly

pendent to the statutory claims. 455 F. Supp. at 1348.

The court listed these constitutional claims as:

whether an impermissible distinction had been cre-

ated between those working welfare recipients whose

work-related expenses were fully considered in the

computation of AFDC awards and those whose work-

related expenses were not fully considered, in viola-

tion of the equal protection clause; whether the

defendant, by creating a table of standard, allow-

ances, which could not be challenged in individual

cases, set up an irrebuttable presumption with

respect to work-related expenses, in violation of the

due process clause; and whether the failure to pro-

vide written notice of the opportunity for an eviden-

tiary hearing, if the welfare recipient disputed the

defendant’s calculation of work-related expenses, vio-

lated the due process clause.

Id. We hold that the district court correctly found that

plaintiff's constitutional claims were “substantial” under

the relevant standard. Thus we conclude that on these

facts Congress intended to authorize an award of fees to

plaintiffs attorneys. .

i0a

Il

Appellant also argues that Congress did not have the

power to authorize a fee award against a State in these

circumstances. Although the Eleventh Amendment gen-

erally bars federal court awards of compensatory relief to

be paid from a State treasury, see, e.g., Edeiman v. Jor-

dan, 415 U.S. 651 (1974), there are at least two excep-

tions to the Eleventh Amendment’s general prohibition

relevant here.’ First, in interpreting the Eleventh Amend-

ment, the Supreme Court has held that only retroactive

monetary relief is prohibited, and that prospective relief

against a State does not violate the Amendment even

though it has a significant “ancillary effect on the state

treasury.” Edelman v. Jordan, supra, 415 U.S. at 667-68.

This court has held that an award of attorneys’ fees fits

within the “ancillary effect” doctrine when the award is

incident to a judgment granting prospective relief. Fitz-

patrick v, Bitzer, 519 F.2d 559, 571-72 (2d Cir. 1975), af-

firmed in part, reversed in part, 427 U.S. 445 (1976);

Class v. Norton, 505 F.2d 123, 126 (2d Cir. 1974); Jor-

dan v. Fusari, 496 F.2d 646, 651 (2d Cir. 1974).‘ In addi-

+ See generally, Note, Attorneys’ Fees and the Eleventh Amend-

ment, 88 Harv. L. Rev. 1875, 1888-1902 (1975).

4 The circuits are divided on this issue with the First and

Fourth Circuits in agreement with this Circuit. Compare Souza

v. Travisono, 512 F.2d 1137, 1139-40 (1st Cir.), vacated and re-

manded, 423 U.S. 809 (1975) (for disposition after remand, see

Souza v. Southworth, 564 F.2d 609 (1st Cir. 1977)), Boston

Chapter, NAACP, Inc. v. Beecher, 504 F.2d 1017, 1028-30 (1st

Cir. 1974), cert. denied, 421 U.S. 910 (1975) and Thonen v. Jen-

kins, 517 F.2d 3, 7-8 (4th Cir. 1975) with Skehan v. Board of

Trustees, 501 F.2d 31, 42 & n.7 (3d Cir. 1974), vacated and re-

manded, 421 U.S. 983 (1975), remanded, 538 F.2d 53 (1976) (en

bane), cert. denied, 429 U.S. 979 (1976) and Jordan v. Gilligan,

500 F.2d 701, 705-10 (6th Cir. 1974), cert. denied, 421 U.S. 991

(1975). See also Samuel v. University of Pittsburgh, 538 F.2d

991, 999 (3d Cir. 1976); Brandenburger v. Thompson, 494 F.2d

885, S88 (9th Cir. 1974). —

lla

tion, the Supreme Court in a pre-Edelman summary deci-

sion, affirmed a three-judge court award of attorneys’ fees

against a state. Sims v. Amos, 340 F. Supp. 691 (M.D.

Ala.), aff'd, 409 U.S. 942 (1972). In this circuit, summary

holdings of the Supreme Court are binding precedent, Doe

v. Hodgson, 500 F.2d 1206, 1207-08 (2d Cir. 1974), and

we do not interpret subsequent Supreme Court decisions

as overruling Sims v. Amos.* Thus, we adhere to our own

precedents, which we believe are consistent with Supreme

Court authority, and hold that the award of attorneys’

fees in this case was a permitted “ancillary effect” of a

proper prospective decree and therefore not barred by the

Eleventh Amendment.

5 Although some courts have ruled that the affirmance in Sims

v. Amos was implicitly overruled by Edelman v. Jordan, see Jor-

dan v. Gilligan, supra note 4, 500 F.2d at 706-08; Skehan v.

Board of Trustees, supra note 4, 501 F.2d at 42 & n.7; but see

Bond v. Stanton, 528 F.2d 688, 691-92 (7th Cir. 1976), re-

manded, 429 U.S. 973 (1977), fee award reinstated on basis of

Fees Act, 555 F.2d 172 (7th Cir. 1977), cert. denied, 46 U.S.L.W.

3803 (July 3, 1978), we think that recent Supreme Court actions

indicate at most that the Court still considers the question an

open one. In A/yeska Pipeline Service Co. v. Wilderness Society,

421 U.S. 240, 269 n.44 (1975), the Court stated that “an award

[of attorneys’ fees] against a state government would raise a

question with respect to its permissibility under the Eleventh

Amendment, a question on which the lower courts are divided,”

but the Court expressly declined to comment on the issue. The

Court included in its list of conflicting lower court decisions the

three-judge court ruling in Sims v. Amos, supra. In Fitzpatrick

v. Bitzer, 427 U.S. 445 (1976), affirming this court’s award of

attorneys’ fees, 519 F.2d at 571-72, the Court said it did not

have to reach the issue whether we had correctly applied the

“ancillary effect” doctrine, because the award in that case was

justified by Congress’ exercise of its power under the Fourteenth

‘Amendment, 427 U.S. at 456-57. Most recently, the Court held

in Hutto v. Finney, 46 -U.S.L.W. 4817, 4820 (June 23, 1978),

that an award of fees against a state defendant that had acted

in bad faith was a proper exercise of the district court’s power

to enforce its prospective judgment and thus was permitted

under the “ancillary effect” doctrine. Avie”

12a

Another exception to the Eleventh Amendment'’s protec-

tion of State treasuries is an award authorized by Con-

gress pursuant to section 5 of the Fourteenth Amend-

ment. See Fitzpatrick v. Bitzer, 427 U.S. 445 (1976). In

Hutto v. Finney, supra note 5, 46 U.S.L.W. at 4821, the

Supreme Court ruled that “Congress has plenary power to

set aside the States’ immunity from retroactive relief in

order to enforce the Fourteenth Amendment,” and that

“(wlhen it passed the [Fees] Act, Congress undoubtedly in-

tended to evercise that power and to authorize fee awards

payable by the States.”* The State contends, however,

that Congress’ power under the Fourteenth Amendment

to override state ‘sovereign immunity extends only to suits

in which a party prevails on a constitutional claim. On

this view, Congress cannot validly authorize a fee award

against a state in the absence of a judicial determination

that plaintiff had a meritorious constitutional claim. We

disagree. We think it is within Congress’ Fourteenth

Amendment power to authorize a fee award when a party

prevails on a statutory claim as long as th-; pendant con-

stitutional claim is a substantial one and arises out of the

same operative facts. Such a fee award furthers the Con-

gressional goal of encouraging suits to vindicate constitu-

tional rights without undermining the longstanding judi-

cial policy of avoiding unnecessary decision of important

constitutional issues. As we understand the Supreme

Court decisions, any appropriate means of implementing

the Fourteenth Amendment overrides the State’s Eleventh

Amendment rights, see, e.g., Fitzpatrick v. Bitzer, supra,

427 U.S. at 453, 456; Katzenbach v. Morgan, 384 U.S.

641, 648-50 (1966). We hold that the authorization of

attorneys’ fees to be awarded under the standards set

Hi See also Morrow v. Dillard, 580 F.2d 1284, 1296-1301 (5th

Cir. 1978); Gatex v. Collier, 559 F.2d 241 (5th Cir. 1977).

a

~_--

13a

forth above is an appropriate way to achieve the compet-

ing goals described above. See Lund v. Affleck, 587 F.2d

75, 76-77 (1st Cir. 1978); Bond v. Stanton, 555 F.2d 172,

174-75 (7th Cir. 1977), cert. denied, 46 U.S.L.W. 3803

(July 3, 1978); Southeast Legal Defense Group v. Adams,

436 F. Supp. 891, 893-95 (D. Ore. 1977).

In sum, we find that the Eleventh Amendment does

not bar the fee award here, that the district judge cor-

rectly interpreted the Fees Act and that t):e State’s argu-

ments in opposition to the award to plaintiffs attorneys

are without merit.’

IV

We turn now to the cross-appeal, in which plaintiff

argues that the district judge abused his discretion by

awarding attorneys’ fees that were much too low. The fee

affidavits stated that plaintiff's two attorneys worked

almost 250 hours on the case, of which 58 hours repre-

sented time spent on the fee application. If all these

hours had been compensated at the customary rate, plain-

tiffs lawyers would have received over $11,000. The dis-

trict judge, however, awarded them only $2912.19. He

first determined, on the basis of affidavits regarding cus-

7 The State also argues that plaintiff cannot be considered the

prevailing party because she unsuccessfully asserted her claim

that she was wrongfully deprived of work-related expense deduc-

tions in a state administrative hearing, and thus she is bound by

res judicata. However, the State did not make this argument in

the district court and it is precluded from raising this new issue

on appeal. See United States v. Friedland, 391 F.2d 378, 381-82

(2d Cir. 1968), 441 F.2d 855 (2d Cir.), cert. denied, 404 U.S.

867, 914 (1971). In addition, we conclude that this case is not a

proper one for application of res judicata, since the State has

not established that the identical issues raised in the federal

action were litigated in the state administrative proceeding. See

McNellis v. First Federal Savings & Loan Ass'n, 364 F.2d 251

257 & n.8 (2d Cir.). cert. denied, 385 U.S. 970 (1966). .

l4a

tomary rates, that a fee of $45.00 an hour was justified.

The judge then refused to award any fee for the 58 hours

spent on the fee application, disallowed fees for one-half

of the remaining time and further reduced the award by

30 percent on the ground that the program employing

plaintiffs counsel receives funding under Title XX of the

Social Security Act, 42 U.S.C. §1397 et seq. Plaintiff

argues that the district judge abused his discretion in

each instance.

The issue whether plaintiff's attorneys can recover fees

for services performed in connection with the fee applica-

tion is an important one, since the question is bound to

recur in applications based upon the Fees Act. Chief

Judge Clarie apparently felt compelled to disregard the

time so spent, since he observed:

Before applying this rate to the number of hours

claimed by Pilver and Shaw, it is necessary to sub-

tract the number of hours which were devoted to

seeking an award of attorneys’ fees, because those

hours were spent solely for the attorneys’ benefit and

did not benefit the plaintiffs. (Emphasis supplied.)

455 F. Supp. at 1349. The issue has arisen in at least

two circuit courts of appeals recently, and both have

ruled that such time is compensable. See Lund v. Affleck,

supra, 587 F.2d at 77; Prandini v. National Tea Co., 585

F.2d 47, 52-54 (38d Cir. 1978). There is apparently no con-

trolling authority in this circuit. In Torres v. Sachs, 538

F.2d 10 (2d Cir. 1976), which involved an analogous stat-

ute, a panel of this court affirmed an award of attorneys’

fees that included compensation for time spent on the fee

application. See Torres v. Sachs, 69 F.R.D. 343, 348 &

n.2 (S.D.N.Y. 1975). The panel did so, however, without

discussion of the issue.

enw aN wager

lSa

The question is thus technically open in this court, and

we believe there are strong reasons for adopting the ap-

proach of the First and Third Circuits. We agree with

Judge Garth’s statement in Prandini, supra, that:

If an attorney is required to expend time litigating

his fee claim, yet may not be compensated for that

time, the attorney’s effective rate for all the hours

expended on the case will be correspondingly de-

creased....Such a result would not comport with

the purpose behind most statutory fee authorizations,

viz, the encouragement of attorneys to represent in-

digent clients and to act as private attorneys general

in vindicating congressional policies.

585 F.2d at 53. In a decision upon which Lund v. Af-

fleck, supra, relied, the First Circuit pointed out that

[tlo hold otherwise would permit a deep pocket losing

party to dissipate the incentive provided by an award

through recalcitrance and automatic appeals.

Souza v. Southworth, 564 F.2d 609, 614 (1st Cir. 1977).

This observation seems particularly apt in this case,

where the State’s lawyers on this appeal have devoted the

substantial time required to produce over 60 pages of

briefs and to make the trip to this court from Hartford,

Connecticut, in order to overturn an award of some

$3,000. Moreover, the legislative history of the Fees Act

impliedly supports this view since the Senate Report cited

with approval® a district court decision which held that

denying attorneys’ fees for time spent in obtaining them

would “dilute the value of a fees award by forcing attor-

nevs into extensive, uncompensated litigation in order to

8 Senate Report at 6, [1976] U.S. Code, Cong. & Ad. News at

591%.

l6a

gain any fees.” Stanford Daily v. Zurcher, 64 F.R.D. 680,

683-84 (N.D. Cal. 1974), aff'd, 550 F.2d 464 (9th Cir.

1977), rev'd on other grounds, 436 U.S. 547 (1978).

Oddly enough, the State’s briefs in this court largely ig-

nore the issues raised by plaintiff's cross-appeal. The

State contents itself with a one-paragraph reference to

Lund v. Affleck, supra, and a quotation from King uv.

Greenblatt, 560 F.2d 1024, 1026 (1st Cir. 1977), cert.

denied, 46 U.S.L.W. 3803 (July 3, 1978), that “[wJhat

constitutes a reasonable attorney’s fee in a particular case

shall rest within the sound discretion of the district

court.” We have no quarrel with that estimable proposi-

tion, but the district judge here obviously thought he

could not exercise his discretion in evaluating the proper

fee for the 58 hours plaintiff's attorneys spent on the fee

application. That erroneous view was premised primarily

upon two cases where attorneys’ fees were based upon the

equitable common fund doctrine rather than upon the

statutory authorization we have here.’ Unlike those cases,

there is here no potential or actual conflict of interest be-

tween counsel seeking attorneys’ fees and the persons

they represent, since all payments will come from the

defendant and will not affect the clients’ recovery. See

Prandini v. National Tea Co., supra, 585 F.2d at 52-53."

We therefore hold that the district court erred in its

constricted view of its own discretion. The judge should

have evaluated the worth of the 58 hours excluded from

) The district judge cited City of Detroit v. Grinnell Corp., 560

F.2d 1093, 1102 (2d Cir. 1977), amended, 575 F.2d 1009 (2d Cir.

1978) and Lindy Bros. Builders, Inc. v. American Radiator &

Standard Sanitary Corp., 540 F.2d 102, 111 (3d Cir. 1976).

10 fPrandini also apparently overruled Commonwealth of Pennsyl-

vanic v. O'Neill, 431 F. Supp. 700, 705 (E.D. Pa. 1977), aff'd.

573 F.2d 1301 (3d Cir. 1978), the other case relied on by Chief

Judge Clarie.

17a

consideration, since time reasonably spent by plaintiff's

attorneys in establishing their fee would be compensable.

The exercise of discretion, however, gives the district

judge great leeway. If the fee claims are exorbitant or the

time devoted to presenting them is unnecessarily high,

the judge may refuse further compensation or grant it

sparingly. See Lund v. Affleck, supra, 587 F.2d at 77.

We leave these matters in the first instance to the dis-

trict court.

Plaintiff's remaining arguments on the cross-appeal re-

quire less extended discussion. We do not think it was er-

ror for the district court, “in exercising its discretion,” to

reduce the fee award “to reflect the public contribution of

federal funds to the plaintiff's attorneys.” 455 F. Supp. at

1349. The court reduced the fee award by 30 percent

after finding approximately 30 percent of the Legal Aid

Seciety’s funding during the years in which the lawsuit

was pending came from Connecticut’s program under Title

XX of the Social Security Act. Although such a reduction

is not mandatory and we do not suggest that it be rou-

tinely done, see Mid-Hudson Legal Services, Inc. v. G. & U,

Inc., 578 F.2d 34 (2d Cir. 1978), the issue is committed

to the sound discretion of the district court. Cf. EEOC uv.

Enterprise Association Steamfitters Local 638, 542 F.2d

579, 593 & n.13 (2d Cir. 1976), cert. denied, 430 U.S.

911 (1977). Plaintiff argues that the reduction here was

an abuse of discretion because under the funding program

it receives reimbursement for services to particular clients

but no application was submitted in connection with this

lawsuit."' We conclude that it was not an abuse of discre-

11 The Legal Aid Society states that it receives federal reim-

bursement of the cost of 75 percent of the services it performs

for eligible clients, and that it never applied for reimbursement

for services to Virginia Gagne and her class because it under-

took representation in this matter prior to enactment of Title

XX. .

18a

tion for the district court to tie the reduction in the fee

to the overall percentage of federal funding received by

the Legal Aid Society during the years of litigation rather

than the funding for the particular case.

Finally, we think that the district court did not commit

error in disallowing one-half of the hours worked because

“the issues involved in the case were relatively simple and

most attorneys would not have spent so many hours on

the case.” 455 F. Supp. at 1349. We recognize that our

cases require that “in increasing or decreasing an attor-

ney'’s compensation, the district judge should set forth as

specifically as possible the facts that support his conclu-

sion,” Lindy Brothers Builders, Inc. v. American Radiator

& Standard Sanitary Corp., 487 F.2d 161, 169 (2d Cir.

1973) quoted in City of Detroit v. Grinnell Corp., 495

F.2d 448, 473 (2d Cir. 1974). Nevertheless, under the cir-

cumstances we conclude that the court’s brief explanation

satisfies this requirement. We note that the district court

did compare the fee in this case with that awarded in at

east one other recent case. 455 F. Supp. at 1349.

In conclusion: On the State’s appeal, we affirm the

judgment of the district court. On the cross-appeal, we re-

mand for further consideration of the question whether

the fee award should be increased to compensate plain-

tiffs attorneys for their efforts in establishing their right

to a reasonable fee.

19a

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Ata stated Term of the United States Court of Appeals for

the Second Circuit, held at the United States Courthouse in the

City of New York, on the Ninth day of March, One thousand

nine hundred and seventy-nine.

Present:

HON. STERRY R. WATERMAN

HON. WILFRED FEINBERG

Hon. ELLSWORTH A. VAN GRAAFEILAND

Circuit Judges,

VIRGINIA GAGNE, Individually and on

behalf of all others similarly situated,

Plaintiff-Appellee

Cross-Appellant.

v. 78-7414

78-7432

EDWARD MAHER, Commissioner of So-

cial Services, Successor to Nicholas Norton,

individually and as Commissioner of Wel-

fare, State of Connecticut and Henry Boyle,

individually and as Acting Deputy Commis-

: sioner of Welfare, 7

Defendant-Appellant

Cross-Appellee.

Appeal from the United States District Court for the Dis-

trict of Connecticut.

This cause came on to be heard on the transcript of record

from the United States District Court for the District of Con-

necticut, and was argued by counsel. ‘

20a

ON CONSIDERATION WHEREOF, it is now hereby

ordered, adjudged, and decreed that the order of said District

Court be and it hereby is affirmed in pari and re:nanded in part

in accordance with the opinion of this court, with costs to be

taxed against the defendant-appellant cross-appellee Maher.

A. DANIEL FUSARO,

Clerk

By:

ARTHUR HELLER,

Deputy Clerk

A true copy,

A. DANIEL FUSARO,

Clerk

et

ee ee a EE

2la

UNITED STATES DISTRICT COURT

DISTRICT OF CONNECTICUT

VIRGINIA GAGNE, individually, and on

behalf of all others similarly situated,

Civil No. H75-1

Plaintiff

vs.

EDWARD MAHER, ET AL.

Defendants.

CONSENT DECREE

It is hereby ordered this Second day of March, 1977, that:

1. Judgment may enter in accordance with the provi-

sions of this agreement. Nothing in this Consent Decree is

intended to constitute an admission of fault by either party to

this action.

2. In determining the availability of income and re-

sources for working AFDC recipients, the defendants agree

that they shall take into consideration any expenses reasonably

attributable to the earning of income.

3. The defendants agree to publish the heretofore unpub-

lished current day care expense standards. Any other unpub-

lished standard allowance or allowances used by the Depart-

ment for work-related expenses shall be based upon an evalua-

tion of current prices available in the locality in which the

recipient requesting the allowance resides.

4. The defendants agree that any standard allowance or

allowances established by the Department, whether published

or unpublished, for specific items of expense which are reason-

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ably attributable to the earning of income, are not maximum

amounts allowed. Working AFDC recipients will be allowed to

prove that they incur expenses which are reasonably attributa-

ble to the earning of income which are in excess of, or different

from, the Department's standard allowance, and upon presen-

tation of such proof to the Department, such actually incurred —

expense will be allowed.

5. The defendants agree that all standard allowances

established by the Department for expenses which are reason-

ably attributable to the earning of income, by AFDC recipients

shall be reviewed annually to determine the currency of their

relationship to the cost of living. In the annual report, required

by §17-2 of the Connecticut General Statutes, in which the

Commissioner of Social Services is required to at least annu-

ally compute a redetermination and such revisions to all com-

ponents of the standards of need for the several programs

administered by the Department so as to reflect changes in

living costs using the current federal Regional Consumer Price

Index, a current computation for all work-related expense

standards will be separately included. Where such standards

are found to be not reasonably priced, the Commissioner shall

so inform the appropriate committee of the General Assembly.

6. The class of persons the plaintiff is seeking to repre-

sent shall be certified to include all AFDC recipients in the

State of Connecticut who have or claim to have expenses

which are reasonably attributable to the earning of income.

7. The defendant agrees that the work-related transpor-

tation allowance specified at Connecticut Department of Social

Services Policy Manual, Volume I, Chapter III at Index 332.31,

2b(2) and (3) shall be increased, from $.06 per mile to $.12 per

mile.

8. The defendant shall automatically increase the

aforesaid transportation allowance for all working AFDC

recipients who incur the work-related transportation expense

ee tO iy it Oi Past tt te

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listed in said Policy Manual in Index 332.31, 2b(2) and (3),

effective March |, 1977. It shall be implemented as follows:

(a) For all new applicants, after March |, 1977, the

$.12 per mile allowance will be granted im-

mediately.

(b) For currently employed AFDC recipients who

are now receiving the $.06 per mile allowance,

the increased allowance will be implemented at

the time of such recipient’s next scheduled or

unscheduled case review whichever occurs first,

but in no event later than June 1, 1977. A retroac-

tive adjustment to March 1, 1977, will be made

for such a recipient by issuing to him or her a

separate check in the amount of $.06 a mile or

such other greater amount per mile as the reci-

pient was found to be entitled for each mile of

travel, from March 1, 1977, to the date of such

case review.

9. The Department of Social Services shall mail the

Notice attached to this stipulation as exhibit ‘*A’’ to all AFDC

recipients no later than April 1, 1977, and this form will also be

mailed to each recipient who is working or is planning to

become employed before any and all scheduled face-to-face

interviews.

10. At each face-to-face interview, the interviewing

worker shall clearly advise each working welfare recipient,

that, in determining the availability of income and resources,

for purposes of computing the recipient’s award, income equal

to expenses reasonably attributable to the earnings of income

will not be included as income to such recipient and will be

disregarded by the Department. The interviewing worker will

further explain that, although the Department of Social Ser-

vices has adopted certain standard allowances, recipients may

claim expenses greater than or different from those standards if

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it can be demonstrated that such expenses are reasonably

attributable to the earning of income.

11. After each face-to-face interview, the notice at-

tached hereto as exhibit ‘*B’’ shall be completed and mailed to

the recipient. This notice shall be in addition to and not in lieu -

of any other notice heretofore required by law.

12. If the working AFDC recipient disagrees with the

kind and/or amount of work-related expense allowances al-

lowed, or the computation thereof, he or she may request a fair

hearing to challenge the Department's decision. Any decision

that would result in the suspension, reduction or discon-

tinuance of public assistance shall be stayed if any evidentiary

hearing is requested in writing by the recipient and returned to

the Department within ten days of the date of notice.

13. The Department shall modify its regulations and pol-

icy to the extent necessary to make them consistent with this

stipulation.

14. All notices required by this stipulation shall be

printed in both English and Spanish.

JOAN E. PILVER DEFENDANT, EDWARD W. MAHER

Counsel for Plaintiff Commissioner of

525 Main Street Social Services

Hartford, Connecticut 06103 State of Connecticut

Tel. (203) 566-6360

Davip C. SHAW EDMUND C. WALSH

Counsel for Plaintiff Counsel for Defendant

525 Main Street 90 Brainard Road

Hartford, Connecticut 06103 Hartford, Connecticut 06103

Tel. (203) 566-6360 Tel. (203) 566-7014

nt att

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PAUL M. SHAPIRO

Counsel for Defendant

90 Brainard Road

Hartford, Connecticut 06103

Tel. (203) 566- 7014

SO ORDERED:

T. EMMET CLARIE, CHIEF

United States District Judge