CHA notes that plaintiffs were unsuccessful in their attempt
to have a receiver appointed by the court. In addition, CHA
contends that although plaintiffs succeeded in defending Judge
Austin's order appointing a Master, the hearings before the
Master were fruitless because no order from the court
resulted. Further, the Master had rejected plaintiffs'
suggestion that a receiver be appointed. Finally, CHA submits
that the only matter in which plaintiffs could arguably be
considered as prevailing is the 1979 agreed order modifying
the 1969 judgment to accept the CHA's housing plan. However,
CHA argues that plaintiffs' action was not a material factor
in bringing about CHA's decision to propose the housing plan
and, therefore, they are not entitled to fees on the matter.
CHA's contentions must be rejected, however, because they
are based on the continued mischaracterization of this case as
many separate matters, including independent supplemental
proceedings. Viewed as a whole, there is no question that
plaintiffs have prevailed in this case. When that is the
situation, a court's discretion is very narrow, because' fees
are to be awarded "almost as a matter of course." Dawson v.
Pastrick, 600 F.2d 70, 79 (7th Cir. 1979). Furthermore, the
court must "allow compensation for hours expended on
unsuccessful research on litigation, unless the positions
asserted are frivolous or in bad faith." Sherkow v. State of
Wisconsin, 630 F.2d 498, 504 (7th Cir. 1980), quoting
Northcross v. Board of Educ., 611 F.2d 624, 635-36 (6th Cir.
1979), cert. denied, 447 U.S. 911, 100 S.Ct. 2999, 64 L.Ed.2d
862 (1980). There is no suggestion from CHA that plaintiffs'
actions were frivolous or brought in bad faith; they clearly
Indeed, even under the material factor test CHA relies on,
the plaintiffs' claim for fees would survive. In Morrison v.
Ayoob, 627 F.2d 669 (3d Cir. 1980), cert. denied,
449 U.S. 1102, 101 S.Ct. 898, 66 L.Ed.2d 828 (1981), the court
recognized that several factors in addition to a specific civil
rights lawsuit may bring about compliance with the law by
defendants. Thus, the court reasoned that the plaintiffs'
action must be a material factor. Here, plaintiffs' pursuit of
the proceedings before the Master, the 1979 order and the
motion to appoint a receiver undoubtedly contributed in a
substantial way to CHA starting to provide housing in
compliance with the court's orders. Moreover, those pursuits
were unquestionably a material factor in bringing about changes
in defendants' conduct, especially since the motion for
appointment of a receiver was denied without prejudice to
renew. That motion was a substantial factor in compelling the
CHA to show demonstrable progress. Therefore, plaintiffs' must
be considered the prevailing party in the case as a whole.
In CHA's final contention, it briefly argues that
plaintiffs' hourly rate is excessive. First, CHA submits that
current market rates should not be used because plaintiffs had
no right to fees until 1976 and then they waited five years to
request them. Second, CHA submits that the hourly rate is
excessive for the proceedings since 1974 because a
disproportionate amount of time was spent for the results
achieved. HUD also argues that the hourly rate should be
reduced, but for a different reason. HUD maintains that
because Mr. Polikoff is a salaried attorney for a
not-for-profit, public interest organization and the fees are
to be paid directly to the Illinois Division of the American
Civil Liberties Union (ACLU) and the Business and Professional
People for the Public Interest (BPI), the fee award should
reflect only reimbursement to BPI and ACLU for the expenses
they incurred, including salary, overhead and other costs. HUD
relies on two cases for this argument: Page v. Preisser,
468 F. Supp. 399 (S.D.Iowa 1979); Alsager v. District Court of Polk
City, Iowa, 447 F. Supp. 572 (S.D.Iowa 1977).
The resolution of these issues need not be lengthy. Other
than HUD's two cases, apparently every other court has
rejected the contention that when a salaried attorney of a
not-for-profit organization provides the legal services,
private attorney rates should not be used. See, e. g., Copeland
641 F.2d 880, 896-900 (D.C. Cir. 1980); Oldham v. Ehrlich,
617 F.2d 163, 168-69 (8th Cir. 1980); Palmigiano v. Garrahy,
616 F.2d 598, 602 & n.6 (1st Cir.), cert. denied, 449 U.S. 839, 101
S.Ct. 115, 66 L.Ed.2d 45 (1980); Dietrich v. Miller,
494 F. Supp. 42, 44 (N.D.Ill. 1980) (Bua, J.); Custom v. Quern,
482 F. Supp. 1000 (N.D.Ill. 1980) (Marshall, J.); Lackey v.
Bowling, 476 F. Supp. 1111, 1116-17 (N.D.Ill. 1979) (Grady, J.).
This court is convinced the majority of courts are correct.
CHA's objection to using current hourly market rates is also
an issue that has often been rejected. Hernandez v. Finley, No.
74 C 3473, slip op. at 4 (N.D.Ill. Feb. 20, 1981); Custom v.
Quern, 482 F. Supp. 1000 (N.D.Ill. 1980); see Copeland v.
Marshall, 641 F.2d 880, 893 & n.23 (D.C. Cir. 1980). These
decisions are based on a valid consideration: throughout the
litigation use of the money has been deprived. In an
inflationary era, that is a significant loss which should be
compensated in part by use of current rates. Thus, the
prejudice, if any, resulting from an award of fees now "has
inured to the plaintiffs' attorneys who have provided years of
service without compensation in hand." Northcross v. Board of
Educ., 611 F.2d 624, 635 (6th Cir. 1979), cert. denied,
447 U.S. 911, 100 S.Ct. 2999, 64 L.Ed.2d 862 (1980). Current market
rates, therefore, shall be used.
Only the final calculation of the award remains. An area of
discretion is reserved for the court in determining the
reasonable dollar amount. Plaintiffs have only submitted a
range of reasonable fees and the factors enunciated in
Muscare v. Quinn, 614 F.2d 577 (7th Cir. 1980), may require an
adjustment to the lodestar figure. As plaintiffs suggest, the
Muscare factors do militate towards an upward adjustment. HUD,
on the other hand, submits the court cannot ignore the
financial reality of the CHA.
The financial limitations of a party cannot justify denial
of a reasonable fee. Entertainment Concepts, Inc. III v.
Maciejewski, 631 F.2d 497, 507 (7th Cir. 1980); Witherspoon v.
Sielaff, 507 F. Supp. 667, 670 (N.D.Ill. 1981). Yet because
plaintiffs have submitted even their lowest figure as a
reasonable rate, awarding that amount in recognition of CHA's
limitations does not deny plaintiffs a reasonable fee.
Unquestionably, $375,375 is a substantial amount of money that
might otherwise be used to provide the relief on plaintiffs'
substantive claims. However, because the plaintiffs are
prevailing parties the court has virtually no discretion to
deny an award. Additionally, the simple fact is, without the
services of Mr. Polikoff and the other attorneys (for whom no
fees were sought) the plaintiffs may never have obtained the
housing that only now is beginning to materialize, fifteen
years after the complaint was filed.
Accordingly, plaintiffs' motion for an award of attorneys'
fees is granted in the amount of $375,375. Payment shall be
made directly to the Illinois Division of the American Civil
Liberties Union and Business and Professional People for the