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Thorncreek Apartments I, LLC v. Village of Park Forest

United States District Court, N.D. Illinois, Eastern Division

August 29, 2016

VILLAGE OF PARK FOREST, an Illinois municipal corporation, TOM MICK, in his individual capacity and as Village Manager, MAE BRANDON, in her individual capacity and as Village Trustee, BONITA DILLARD, in her individual capacity and as Village Trustee, GARY KOPYCINSKI, in his individual capacity and as Village Trustee, KENNETH W. KRAMER, in his individual capacity and as Village Trustee, ROBERT McCRAY, in his individual capacity and as Village Trustee, GEORGIA O'NEILL, in her individual capacity and as Village Trustee, LAWRENCE KERESTES, in his individual capacity and as Village Director of Community Development, JOHN A. OSTENBURG, in his individual capacity and as Mayor of the Village of Park Forest, and SHEILA McGANN, in her capacity as Village Clerk, Defendants.


          Gary Feinerman, Judge

         The history of these consolidated cases is set forth in the opinion resolving the parties' post-trial motions; the court assumes familiarity with that opinion and its naming and citation conventions. Doc. 435 (reported at 2015 WL 2444498 (N.D. Ill. May 20, 2015)) (this docket entry, like all others, is from 08 C 1225). In short, after a thirteen-day trial, a jury found in favor of Thorncreek on its 42 U.S.C. § 1983 class-of-one equal protection claims against the Village of Park Forest and Village Manager Tom Mick and on its 42 U.S.C. § 1985(3) conspiracy claims against Mick and Village Director of Community Development Lawrence Kerestes, but it found in favor of the Village, Mick, and Kerestes on Thorncreek's race discrimination claims, and in favor of every other defendant on all of Thorncreek's claims. Id. at *1. Thorncreek asked the jury for $20.5 million in compensatory damages: $2.5 million for Thorncreek I, $8 million for Thorncreek II, and $10 million for Thorncreek III. Doc. 405-6 at 27. The jury awarded Thorncreek I and Thorncreek III $1.00 each in nominal damages, Thorncreek II $2, 015, 000.00 in compensatory damages, and $5, 000.00 in punitive damages against Mick and $1, 000.00 in punitive damages against Kerestes. Ibid. On post-trial motions, the court vacated the judgment against Kerestes (including the $1, 000.00 punitive damages award) and awarded Thorncreek prejudgment interest, but otherwise left things unchanged. Id. at *3, 11. The court then denied the parties' dueling bills of costs. Docs. 445-446 (reported at 123 F.Supp.3d 1012 (N.D. Ill. 2015)).

         Now before the court are the parties' respective motions for attorney fees and nontaxable expenses under Federal Rule of Civil Procedure 54(d)(2) and 42 U.S.C. § 1988. Thorncreek seeks $1, 695, 120.43 in fees and nontaxable expenses from the Village of Park Forest and Tom Mick, the defendants against whom it won judgments. Doc. 471. Defendants, including Mick and the Village, seek $1, 070, 134.82 in fees and nontaxable expenses from Thorncreek. Doc. 470. For the following reasons, Defendants' motion is denied outright, and Thorncreek's motion is granted in part, with Thorncreek being awarded $430, 999.25 in fees and $44, 844.33 in nontaxable expenses.

         I. Defendants' Motion for Fees and Nontaxable Expenses

         The court begins with Defendants' motion. The Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988, provides that a district court, “in its discretion, may allow the prevailing party … a reasonable attorney's fee as part of the costs” in suits brought under certain federal civil rights statutes, including 42 U.S.C. §§ 1983, 1985, and 1986. 42 U.S.C. § 1988(b). The Act is asymmetrical; prevailing plaintiffs are entitled to fees except “under special circumstances, ” City of Riverside v. Rivera, 477 U.S. 561, 580 (1986) (plurality opinion), but prevailing defendants may recover fees “only if … the plaintiff's action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith.” Hughes v. Rowe, 449 U.S. 5, 14 (1980) (per curiam) (internal quotation marks omitted) (quoting Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978)); see also James v. City of Boise, 136 S.Ct. 685, 686 (2016) (per curiam) (reaffirming Hughes). “The fact that a plaintiff may ultimately lose his case is not in itself a sufficient justification for the assessment of fees”; indeed, even the fact that the plaintiff's allegations turned out to be “legally insufficient to require a trial” is not reason enough to award fees to the defendant. Hughes, 449 U.S. at 14, 16; see also Prof'l Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 60 n.5 (1993) (“[A] court must resist the understandable temptation to engage in post hoc reasoning by concluding that an ultimately unsuccessful action must have been unreasonable or without foundation.”) (internal quotation marks omitted); LaSalle Nat'l Bank of Chi. v. Cnty. of DuPage, 10 F.3d 1333, 1335, 1340 (7th Cir. 1993) (affirming the denial of the defendant's motion for fees after the district court had dismissed all claims on motions to dismiss and for summary judgment). If only some of a plaintiff's claims are frivolous, the defendant should recover fees, “but only for costs that the defendant would not have incurred but for the frivolous claims.” Fox v. Vice, 563 U.S. 826, 829 (2011).

         Although almost all of Thorncreek's claims failed and many failed as a matter of law, none were frivolous. The operative complaint listed claims under 42 U.S.C. §§ 1983, 1985, and 1986 for: (1) violations of Thorncreek's right to equal protection under the Fourteenth Amendment of the United States Constitution, Doc. 17 at ¶¶ 127-44; (2) violations of the Fourteenth Amendment's substantive and procedural due process guarantees, id. at ¶¶ 145-70; (3) takings of Thorncreek's property without just compensation, in violation of the Fifth Amendment of the United States Constitution (as incorporated by the Fourteenth) and article I, § 15, of the Illinois Constitution, id. at ¶¶ 171-83; (4) a conspiracy to deprive Thorncreek of its federal equal protection rights, id. at ¶¶ 184-91; (5) failures to prevent the conspiracy, id. at ¶¶ 192-99; (6) violations of Thorncreek's right to equal protection under article I, § 2, of the Illinois Constitution, id. at ¶¶ 200-03; (7) violations of the due process guarantees of article I, § 2, of the Illinois Constitution, id. at ¶¶ 204-07; (8) violations of the Illinois Civil Rights Act of 2003, id. at ¶¶ 208-12; and (9) impermissible land use restrictions, id. at ¶¶ 213-21. More specifically, it alleged that Defendants violated the state and federal equal protection clauses both by discriminating against Thorncreek on the basis of its tenants' race and by discriminating against Thorncreek as a class of one due to their alleged animus against Thorncreek's principal, David Clapper. Doc. 17. The complaint named all of the individual defendants in their official capacities and all of the individual defendants except McGann in their individual capacities; it purported to state every claim against all eleven named Defendants. Ibid.

         On summary judgment, the court dismissed the due process and takings claims as unripe, reasoning that because Thorncreek had not sought relief for the alleged deprivations in state court, it could not yet be determined whether Defendants had taken Thorncreek's property “without just compensation” or “without due process of law.” 970 F.Supp.2d 828, 845-46; see Williamson Cnty. Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172, 196-97 (1985) (holding that, because the plaintiff pursuing a takings claim had not shown that a state law procedure for seeking compensation was “unavailable or inadequate, ” the takings claim was “premature”); Forseth v. Vill. of Sussex, 199 F.3d 363, 369 (7th Cir. 2000) (applying Williamson County's ripeness doctrine to a substantive due process claim); River Park, Inc. v. City of Highland Park, 23 F.3d 164, 167 (7th Cir. 1994) (applying Williamson County's ripeness doctrine to a procedural due process claim). In defending those claims, Thorncreek argued that it had to bring them here before it could seek relief in state court because Rule 13(a) made them compulsory counterclaims in this suit. 970 F.Supp.2d at 847-48. That was incorrect. As the court explained, Rule 13(a) was promulgated under the authority of the Rules Enabling Act, which provides that federal rules “shall not … modify any substantive right.” 28 U.S.C. § 2072(b). If Rule 13(a) allowed plaintiffs to bring otherwise premature takings and due process claims, it would have the impermissible effect of modifying substantive rights. Still, the argument was not frivolous. It failed for a relatively subtle reason; after all, Rule 13 on its face could be read to require Thorncreek to bring the takings and due process claims in this suit. See LaSalle Nat'l Bank, 10 F.3d at 1340 (affirming the denial of the defendant's motion for fees where the district court had dismissed takings claims as unripe). Thus, Defendants are not entitled to fees for work they performed defending against the unripe claims.

         Defendants also argue that Thorncreek's claims against the six Village Trustees and John Ostenburg, the Village President, were frivolous. They point to the fact that Thorncreek did not call a single Trustee to testify during its case in chief. Doc. 470 at 9. They contend that Thorncreek named the Trustees out of malice, and they make sure to mention that one of the Trustees, Kenneth Kramer, is 87 years old. Id. at 10. But it was not unreasonable for Thorncreek to pursue claims against Ostenburg or the Trustees, because Thorncreek had evidence that they were complicit in the Village's alleged harassment of Thorncreek. Mick, whom the jury found liable on a class-of-one equal protection claim, told the Trustees in a 2008 email that Thorncreek was trying to sell its Area H complex. He wrote:

It is my hope that they are successful in their endeavor. Perhaps the Village's collective efforts (Troubled Building and Property Task Force, citing them, pursuing action in local court, denying their Business Office relocation into the G-Courts, cutting off change of occupancy inspections in the G-Courts due to no updating of electrical service to 100 AMP service, etc.) are beginning to have the desired effect we were seeking. That is, we hope to find as many ways as possible to help them see that their business practices are neither appreciated by the Village and the residents as a whole nor are we willing to stand idly by and let them continue to be a drain on our community.

Doc. 151-6 at 3-4. Thus, in the email, Mick recounts to Ostenburg and the Trustees their “collective efforts” against Thorncreek, and he repeatedly expresses his belief that he is acting on their behalf-forcing Thorncreek to sell is “the desired effect we were seeking”; “we hope to find as many ways as possible” to harass Thorncreek; Thorncreek's practices “are not appreciated by the Village and the residents as a whole.” Thorncreek's case certainly would have been stronger if Mick had sent a dozen emails like the one he sent in 2008, but the claims against Ostenburg and the Trustees, while reasonably rejected by the jury, were not frivolous. Defendants also argue that Thorncreek's equal protection claims were frivolous to the extent that they alleged race discrimination rather than class-of-one discrimination. Doc. 470 at 10. They first point out that the Village Trustees themselves were “racially diverse.” Ibid. The argument seems to be that African-American Trustees could not have discriminated against Thorncreek's African-American tenants on the basis of their race. Defendants adduce no evidence, though, that officials do not or could not discriminate against persons of the same race, and certainly no evidence that it would have been unreasonable for Thorncreek to believe that was happening in this case. See Castaneda v. Partida, 430 U.S. 482, 499 (1977) (“[I]t would be unwise to presume as a matter of law that human beings of one definable group will not discriminate against other members of their group.”); United States v. Rutledge, 648 F.3d 555, 561 (7th Cir. 2011) (“The Supreme Court has rejected any ‘conclusive presumption' that a member of a group will not discriminate against other members of a group.”).

         In fact, although the jury reasonably found it insufficient, Thorncreek had some evidence that the Village was discriminating against it because of its tenants' racial makeup. In 2005, when the Village began to focus on Thorncreek, 90 to 95 percent of Thorncreek's residents were African-American. 970 F.Supp.2d at 834. Kerestes, the Village's Building Commissioner, testified in a deposition that the Village was concerned that Thorncreek's racial makeup was “highly skewed” and that there were “too many blacks living in Thorncreek Apartments as opposed to the rest of the community, ” and that the Village preferred that there be “fewer black people” at Thorncreek. Ibid.; Doc. 150-7 at 39-40. Mick's assistant wrote a memorandum to Mick stating that Village “[s]taff met with management … from Thorn Creek Townhouses to offer suggestions … that will enable them to attract a more diverse resident base.” 970 F.Supp.2d at 835; Doc. 157-1 at 31. And at ¶ 2006 meeting, Kerestes stated that Thorncreek's operations had changed the racial makeup from “58% white, 39% black” to “90% black and 10% white.” 970 F.Supp.2d at 836; Doc. 157-1 at 72. Given this evidence, Thorncreek's race discrimination claims were not frivolous.

         Thorncreek's decision to pursue class-of-one equal protection claims may have played a part in defeating its race discrimination claims. The two theories were in tension, as the court warned in its summary judgment opinion, 970 F.Supp.2d at 843; the fact that the Village and its official were motivated by personal animus towards Clapper could have made the jury less likely to find that the Village was motivated by racial animus towards Thorncreek's tenants. But the fact that Thorncreek arguably made a strategic mistake by deciding to pursue both theories at trial does not justify awarding Defendants fees; in any event, Defendants do not argue as much. Defendants' motion for fees accordingly is denied.

         II. Thorncreek's Motion for Fees and Nontaxable Expenses

         Thorncreek's motion is more complicated to resolve. As discussed, unlike prevailing defendants, prevailing plaintiffs in civil rights cases are presumptively entitled to a “reasonable fee.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); see also Johnson v. Daley, 339 F.3d 582, 587 (7th Cir. 2003) (en banc) (“Section 1988 has been treated as asymmetric-that is, prevailing plaintiffs recover their legal expenses but prevailing defendants do not.”); Payne v. Milwaukee Cnty., 288 F.3d 1021, 1026 (7th Cir. 2002) (describing the “asymmetry” in § 1988 “between prevailing plaintiffs and prevailing defendants”). The first step in determining a reasonable fee is to calculate the “lodestar, ” which is the “number of hours reasonably expended on the litigation [multiplied] by a reasonable hourly rate.” Pickett v. Sheridan Health Care Ctr., 664 F.3d 632, 639 (7th Cir. 2011) (quoting Hensley, 461 U.S. at 433). The court then adjusts the lodestar to account for other considerations, including, most importantly, the “results obtained.” Hensley, 461 U.S. at 434; see also Montanez v. Simon, 755 F.3d 547, 556 (7th Cir. 2014) (affirming a district court's decision to slash the lodestar by 50 percent to account for the plaintiff's “limited success”).

         Defendants concede that each Thorncreek entity-including those awarded only nominal damages-is a prevailing party. Doc. 476 at 6. So the court proceeds to the lodestar calculation-first by addressing disputes about the number of hours reasonably spent on the litigation, and then, because Defendants do not dispute Thorncreek's proposed hourly rates, Doc. 471-1 at ¶ 1, by addressing proposed departures from the lodestar.

         A. Calculating the Lodestar

         Thorncreek asserts that its lawyers spent 4, 327.94 hours on its case. Doc. 471 at 14. Defendants argue that many of those hours were not reasonably expended on the litigation.

         Defendants first object to Thorncreek's request to be reimbursed for 24.2 hours of work performed by Jenner and Block, a law firm that briefly served as Thorncreek's local counsel. Doc. 476 at 12-13. The problem, Defendants contend, is that Jenner worked on two matters for Thorncreek-both this suit and Scott v. Thorncreek Apartments II, LLC, 2008 C 868 (N.D. Ill.), a putative class action brought against Thorncreek II by some of its residents-and Thorncreek's bill includes Jenner's work on both suits. Thorncreek responds that it seeks recovery only for work that Jenner's invoices clearly attribute to this suit. Doc. 482 at 18. But the court counts only 6.95 hours of clearly related work-that is, work memorialized by time entries identifying this suit by name, referring to Judge Norgle (to whom this suit was ...

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