author: NORMA HOLLOWAY JOHNSON, District Judge.

text:
    Stephen BERG, et al., Plaintiffs, v. FIRST AMERICAN BANKSHARES, INC., et al., Defendants.
    Civ. A. No. 83-3887.
    United States District Court, District of Columbia.
    Oct. 19, 1984.

      Sara E. Lister, Patterson, Belknap, Webb & Tyler, Washington, D.C., David J. Eiseman, Golenbock, Eiseman, Assor & Bell, New York City, for plaintiffs.
    Paul C. Warnke, J. Griffin Lesher, Robert P. Reznick, Kathy E. Manning, Washington, D.C., for defendants.
   MEMORANDUM OPINION

NORMA HOLLOWAY JOHNSON, District Judge.

This case and a related class claim (Kas v. Financial General Bankshares, Inc., C.A. 82-1996) arise out of a private merger involving Financial General Bankshares, Inc. (Financial General), a Virginia corporation, pursuant to which all publicly held shares of stock in the corporation, including those of the plaintiffs in both suits, were cancelled and converted into a right to receive a specified amount of cash. As a result of this merger, the entire interest in .Financial General was acquired by FGB Holding Corporation (FGB), another Virginia corporation. Since the merger, the new company has been known as First American Bankshares, Inc. Plaintiffs brought this action for money damages against the defendants alleging a violation of federal securities laws, common law fraud, and breach of fiduciary duties in connection with the merger which was approved on August 11, 1982, by over two-thirds of the relevant shareholders of Class A common stock held by plaintiffs.

Plaintiffs are forty-six separately named individuals, each of whom was an owner of Class A common shares of Financial General. Plaintiffs claim that the defendants engaged in a fraudulent scheme to acquire the Class A common shares by misleading and deceiving two thirds of the Class A shareholders through a proxy-information statement to vote in favor of the proposed plan of merger by which the Class A shareholders would receive $28.00 per Class A share. Plaintiffs purport to have been holders of approximately 12% of such shares prior to the merger. As damages, plaintiffs seek the $5.80 per share difference between the $28.00 paid for the Class A shares pursuant to the merger and the $33.80 paid for the common shares when control of the company was acquired through a previous tender offer in March and April 1982, the legality of which plaintiffs do not challenge in this lawsuit.

The basis of plaintiffs’ claim, as set forth in the original complaint filed August 11, 1983, is, in essence, that plaintiffs were not paid enough for their Class A stock. Plaintiffs allege that the manner and method by which their shares were cancelled and converted violated federal securities laws, and also constituted a fraud upon plaintiffs in violation of the common law of Virginia and a breach of common law fiduciary duties. The gravamen of plaintiffs’ complaint is that defendants issued a false and misleading proxy statement which contained material omissions and misstatements in violation of Sections 10(b), 14(a), and 13(e) of the Securities and Exchange Act, 15 U.S.C. 78(j), et seq. (1982).

The complaint in this case was originally filed in the United States District Court for the Southern District of New York. 576 F.Supp. 1239. On December 28, 1983, plaintiffs filed an amended complaint which added a sixth cause of action against four of the named defendants. In the added count, plaintiffs assert that the acquiring group, the defendants Adham, al Fulaij, Darwaish, and Credit and Commerce American Investment, B.V., violated the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961, et seq: (1982). In this regard, the complaint alleges that these defendants were an “enterprise” within the meaning of the RICO statute and participated in a pattern of racketeering activity involving fraud in connection with the sale or purchase of securities. Following the amendment of the complaint, the case was transferred to this court pursuant to 28 U.S.C. § 1404(a). The case is presently before this Court on a motion by defendant Kamal I. Adham to dismiss the sixth count of the complaint; i.e., the RICO count. For the reasons appearing hereafter, the motion to dismiss will be granted.

Defendant Kamal I. Adham moves this Court, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, for entry of an order dismissing the sixth cause of action of the amended complaint alleging violation of the federal RICO statute. In a motion to dismiss pursuant to Rule 12(b)(6), the moving party bears a heavy burden of persuasion. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). It is well established that a complaint should not be dismissed “unless it appears beyond doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Id.

In support of the motion to dismiss, defendant Adham contends that the amended complaint fails to allege predicate racketeering acts upon which a RICO claim can be based; that plaintiffs have not alleged an injury cognizable under RICO; that the complaint fails to allege the conduct of an enterprise’s affairs through a pattern of racketeering activity; that the complaint fails to state securities law convictions or criminal offenses as the necessary predicate acts constituting a pattern of racketeering activity under RICO; and that the addition of Count VI in the amended complaint is no more than an attempt to derive windfall treble damages under the guise of RICO.

Plaintiffs’ amended complaint alleges violation of § 1962(c) of RICO. That provision provides as follows:

It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.

18 U.S.C. § 1961 defines the conduct which falls within the scope of RICO. “Racketeering activity” includes the commission of an act (1) “chargeable” as one or more stated state law felonies, or (2) “indictable” under one or more stated provisions of federal law. 18 U.S.C. § 1961(1). Among the federal crimes which can serve as the so-called “predicate offenses” for purposes of RICO are those involving fraud in the sale of securities which are punishable under federal law. Id. at 1961(1)(D). Under § 1961(5), a

“pattern of racketeering activity” requires at least two acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within ten years (excluding any period of imprisonment) after the commission of a prior act of racketeering activity.

18 U.S.C. § 1964(c) sets forth a private cause of action and provides for treble damages. That section provides:

Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including reasonable attorney’s fees.

It appears, therefore, that under this statutory scheme, there are four express elements of a private RICO damage action to consider in deciding whether a RICO claim has been stated. Those elements are: (1) “fraud in the sale of securities”, (2) a “pattern of racketeering activity”, (3) an injury in “business or property by reason of a violation of § 1962”, and (4) an “offense ... punishable under any law of the United States.”

Defendant contends that the plaintiffs have failed to satisfy any of the independent burdens imposed upon them by the statute and that, therefore, count six of the amended complaint must be dismissed.

The Court first turns its attention to the issue of whether the amended complaint alleges a predicate racketeering act upon which civil liability under RICO can be based. Plaintiffs have alleged securities law violations as the acts necessary to maintain the RICO claim and have invoked § 1961(1)(D) which provides that offenses involving fraud in the sale of securities which are punishable under federal law will serve as predicate offenses. Defendants contend that the technical reporting and disclosure violations alleged to have been committed by defendants in this case do not constitute fraud in the sale of securities as that phrase is used in RICO because the statute was drafted to reach only those offenses most often associated with organized crime. In recent years there has been mounting controversy in the federal courts over the proper limits upon the use of RICO in cases far removed from the context which Congress had in mind when it enacted the statute. RICO was passed as part of the Organized Crime Control Act of 1970, Pub.L. 91-452, 84 Stat. 941. Its primary purpose was to create new tools to help “cope with the infiltration of legitimate businesses” by organized crime. United States v. Turkette, 452 U.S. 576, 589, 101 S.Ct. 2524, 2531, 69 L.Ed.2d 246 (1981). Congress desired to attack the problem of organized crime, not the problems of corporate control and risk arbitrage. Dan River, Inc. v. Icahn, 701 F.2d 278, 291 (4th Cir.1983). RICO is primarily a criminal statute aimed specifically at curtailing the infiltration of business enterprises by organized crime. In various hearings, reports, and floor debates in the years leading up to the passage of the Organized Crime Control Act, securities fraud had been linked to organized crime only in the context of stock thefts, stock counterfeiting, and large scale market manipulations. Bridges, Private RICO Litigation Based Upon Fraud in The Sale of Securities, 18 Ga.L.Rev. 43 (1983).

In fashioning legislation with that purpose in mind, Congress created a broad statute, the scope of which extends far beyond activities relating to organized crime. The plain language of the statute provides that “any person” can be found liable under the civil provision of RICO. 18 U.S.C. § 1964. Although it is undisputed that RICO was originally enacted to address the problem of organized crime in this country, there is no language in the statute requiring that a defendant’s activity relate to or connect with organized crime. Moreover, the clear and overwhelming majority of courts which have addressed this question have rejected any attempt to add an “organized crime” requirement onto the statutory terms of 18 U.S.C. § 1964(c). It is certain conduct, not a certain status, that is prohibited. United States v. Forsythe, 560 F.2d 1127, 1136 (3rd Cir.1977). This Court, therefore, joins the growing number of courts that reject claims suggesting that civil RICO suits must have a nexus with organized crime. See e.g. Moss v. Morgan Stanley, Inc., 719 F.2d 5 (2d Cir.1983); Schact v. Brown, 711 F.2d 1343, 1353 (7th Cir.1983), cert. denied, — U.S. --, 104 S.Ct. 508, 78 L.Ed.2d 698 (1983); Bennett v. Berg, 685 F.2d 1053, 1063 (8th Cir.1982), aff'd en banc, 710 F.2d 1361 (8th Cir.1983), cert. denied sub nom Prudential Ins. Co. v. Bennett, — U.S. -, 104 S.Ct. 527, 78 L.Ed.2d 710 (1983); Kimmel v. Peterson, 565 F.Supp. 476, 490-93 (E.D.Pa.1983); Bankers Trust v. Feldesman, 566 F.Supp. 1235, 1239-40 (S.D.N.Y. 1983).

The Court next turns to the second element of a RICO claim, the existence of a “pattern of racketeering activity.” Plaintiff alleges that in the instant case, the predicate offenses giving rise to the existence of a “pattern of .racketeering activity” consist of two separate but related securities frauds within a ten year period. The first violation was in connection with the initial purchase of shares in late 1977 and early 1978, and the second violation was in connection with the merger in 1982. Defendant contends that plaintiffs’ RICO claim stems from one act, the publication of an allegedly misleading proxy statement, and that this one isolated act is insufficient to satisfy the statute which under § 1961(5) “requires at least two acts of racketeering activity.”

The plain words of the statute require a “pattern of racketeering activity” which “requires at least two acts of racketeering activity.” The word “pattern” includes a requirement that the racketeering acts must have been connected with each other by some common scheme, plan, or motive so as to constitute a pattern and not simply a series of disconnected acts. United States v. Stofsky, 409 F.Supp. 609, 614 (S.D.N.Y.1973). This Court finds that the acts alleged by plaintiff, which occurred in connection with the 1977-78 purchase and in connection with the 1982 merger, may be sufficient to constitute a pattern of racketeering activity as required for standing under the RICO statute.

The Court next turns to the third element in a private RICO securities claim, an injury in business or property by reason of a § 1962 violation. Section 1964 makes clear that a private party is entitled to threefold damages for an injury incurred as a direct and proximate result of RICO violations as defined in § 1962. In the instant case, plaintiffs contend that as a proximate result of defendants’ RICO violations, the plaintiffs’ shares were can-celled at a price lower than that which the defendants would have otherwise had to pay, thus causing plaintiffs’ injury. Defendant argues that in order to have standing to bring this action for treble damages under RICO, a plaintiff must show more than simply an injury resulting from the allegedly misleading proxy statement. Defendant contends that plaintiffs lack standing under § 1964(c) because plaintiffs have only alleged injury stemming solely from the underlying predicate acts, and that, therefore, the sixth cause of action must be dismissed. Defendant has characterized the alleged “something more” required for standing as a “racketeering enterprise injury.” Defendant alleges that the language of § 1962(c) limits civil recovery to persons suffering a “racketeering enterprise injury” and does not create a cause of action for those suffering injury only from the underlying predicate acts. Defendant asserts that plaintiffs’ injuries have resulted solely from the allegedly misleading proxy statement.

This Court finds that the few courts that have referred to the “racketeering enterprise injury” standing requirement have not presented a clear definition of exactly what it is, and analysis of this issue in the opinions written to date are not uniformly persuasive. A “racketeering enterprise injury” is a slippery concept whose definition has eluded even those courts professing to recognize it. Alexander Grant and Company v. Tiffany Industries, Inc., et al., 742 F.2d 408 (8th Cir.1984). The courts requiring a racketeering enterprise injury rely upon the theory that Congress could not have intended to provide treble damage causes of actions to persons whose only injury stems directly from the predicate acts alone, and that it is simply incomprehensible that a plaintiff suing under the securities laws would receive one-third the damages of a plaintiff suing under RICO for the same injury. In Slattery v. Costello, 586 F.Supp. 162 (D.D.C.1984), Judge Sirica of this court discussed the various cases construing the term racketeering enterprise injury and concluded that he was unable to provide a satisfactory definition of the term “racketeering enterprise injury.” Moreover, in Charing Cross, Inc., et al. v. The Riggs National Bank, C.A. 82-1116 (D.D.C., October 7, 1983), this Court declined to impose the nebulous requirement of a separate racketeering enterprise injury and instead followed the reasonable position of the Eighth Circuit that it is not the role of the courts to arbitrarily limit RICO:

Insofar as the door of the federal courthouse is similarly opened by RICO in a civil context, we are cautioned by the Supreme Court that broad Congressional action should not be restricted by the courts in the name of federalism. It is beyond our authority to restrict the reach of the statute.

Bennett v. Berg, 685 F.2d 1053, 1064 (8th Cir.1982), cert. denied, — U.S. -, 104 S.Ct. 527, 78 L.Ed.2d 710 (1983).

Finally, the Court turns its attention to the fourth element of a private RICO damage action, the requirement that the defendant commit an “offense ... punishable under any law of the United States.” As previously stated, section 1961 defines the conduct which falls within the scope of RICO and defines racketeering activity to include the commission of an act (1) “chargeable” as one or more state law felonies, or (2) “indictable” under one or more stated provisions of federal law. In a securities case, more than a simple securities law violation must be alleged. In Trane Co. v. O’Connor Securities, 718 F.2d 26, 29 (2d Cir.1983), the court observed that section 1961 “obviously refers to criminal punishment.” Actionable fraud in the sale of securities must rise to the level of a statutory crime. The criminal liability sections of the securities acts require that the defendant act willfully which at the very least would seem to demand more than the minimum level of scienter that suffices for a claim under rule 10b5. The court in Trane, however, left “to another day” the question of whether a prior criminal conviction is a prerequisite to a civil RICO action. That issue was decided recently in Sedima, S.P.R.L. v. Imrex Company, Inc., 741 F.2d 482 (2d Cir.1984) where the court held that to bring a private civil RICO action, there must be a “violation”, that is, criminal convictions on the underlying predicate offenses. The court in Sedima was of the view that Congress intended to refer to injuries caused by the “unlawful” pattern of racketeering. Id. at 503. However, the court found that the language of the statute provided no indication as to whether the racketeering activity itself must already have been proven criminal. The court specifically addressed the issue of securities fraud as the predicate offenses to a RICO claim:

A person who is charged in a civil case with securities fraud (for example, by way of willful misrepresentations in a proxy statement), proof of which is by a preponderance of the evidence, can surely not be said to have committed “an offense,” conviction of which requires proof beyond a reasonable doubt, with all of the traditional constitutional and other safeguards. Criminal violation of the securities laws occurs only with the requisite criminal scienter. Is one to be held liable under a lesser standard of proof in a private right of civil action and, not incidentally, thereby stigmatized as a “racketeer”? It is hard to believe that in adopting civil RICO Congress intended to permit proof of “willful” violations by only a preponderance of the evidence. Otherwise, two misstatements in a proxy solicitation could subject any director in any national corporation to “racketeering” charges and the threat of treble damages and attorneys’ fees.

Id. at 499. In holding that the structure of RICO as a whole leads one to the narrower interpretation requiring criminal convictions, the court found that the Act was designed to provide new penalties and remedies to combat conduct which explicitly has already been found criminal. Id. at 500. The Sedima court distinguished RICO from the antitrust laws where it is possible to bring a civil action even in the absence of criminal conduct:

RICO liability simply does not exist without criminal conduct, though of course, in a criminal RICO case, the proof of the predicate act convictions may be made under the same indictment, in the same trial and coordinately with the proof of the RICO offenses(s). But in a civil context, there is no way to know whether the conduct in question is “already criminal”, a problem compounded by the fact that ordinarily there is a lower burden of proof in civil actions. We conclude that had Congress considered this problem, it would have explicitly required previously established convictions in the context of section 1964(c).

Id. at 501.

This Court is persuaded by the sound reasoning of the Second Circuit in Sedima and follows that court in holding that there is a requirement of prior criminal conviction for the predicate acts forming the pattern of racketeering activity for all civil RICO claims. The history of the statute reveals that the objectives of the treble damage provisions of section 1964(c) would not be served if RICO could be used as an alternative and cumulative remedy for private plaintiffs alleging securities frauds for which there have been no convictions. The broad construction given RICO in criminal prosecutions is simply inconsistent with the narrower construction which must be applied in the context of a civil case. There being no criminal convictions for the predicate securities law violation offenses alleged in the instant case, plaintiffs’ RICO count will not survive the defendant’s motion to dismiss. Therefore, plaintiffs’ civil RICO claim must be dismissed for failure to state a claim under that statute.

For the foregoing reasons, count six of plaintiffs’ complaint must be dismissed. An Order consistent with this Memorandum Opinion will be issued this date.

         The Securities and Exchange Act of 1934 makes only "willful” violations criminally punishable. Section 32(a), 15 U.S.C. § 78ff (1982).


source: Caselaw Access Project

author: RALPH M. FREEMAN, District Judge.

license: Public Domain

text:
    Juanita CURRY, Plaintiff, v. UNITED STATES POST OFFICE, Defendant.
    Civ. No. 84-1088.
    United States District Court, E.D. Michigan, S.D.
    Oct. 25, 1984.

      Alice Jennings, Detroit, Mich., for plaintiff.
    Ellen Christensen, Asst. U.S. Atty., Detroit, Mich., for defendant.
   MEMORANDUM OPINION

RALPH M. FREEMAN, District Judge.

This matter is before the court on defendant’s motion for summary judgment. Plaintiff’s complaint, filed March 9, 1984, alleges race, sex, and handicap discrimination in her discharge from employment. Plaintiff also alleges that defendant failed to give plaintiff vocational rehabilitation training as required by section 504 of the 1973 Rehabilitation Act, 29 U.S.C. § 794. The complaint purports to state claims under section 717 of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-16; the Reconstruction Civil Rights Act, 42 U.S.C. § 1981; sections 501, 504, and 505 of the 1973 Rehabilitation Act, 29 U.S.C. §§ 791, 794, and 794a; and section 7513 of the U.S. Civil Service Reform Act, 5 U.S.C. § 7513.

Defendant has made two arguments in support of its motion for summary judgment. First, defendant claims that this court lacks jurisdiction over plaintiff’s handicap discrimination and vocational rehabilitation claims because she failed to exhaust the administrative remedies required under 29 U.S.C. § 794a. Second, defendant claims that there is no genuine issue of material fact concerning plaintiff’s claim that defendant denied her vocational rehabilitation training because plaintiff did, in fact, receive the vocational rehabilitation training to which she was entitled. Defendant has supported its motion with affidavits from Celestine Green, Manager of the Equal Employment Opportunity Branch, United States Postal Service, Central Region, and Bernice Adams, Supervisor, Injury Compensation, Detroit Management Sectional Center. Defendant’s motion does not address plaintiff’s allegations of race and sex discrimination.

Plaintiff’s response to defendant’s motion does not dispute the matters raised by defendant. Plaintiff responds only by moving for leave to file an amended complaint. Plaintiff’s proposed amended complaint sets forth only one claim: race discrimination in employment in violation of 42 U.S.C. § 1981.

The facts, as adduced from the pleadings and affidavits on file, are as follows. Plaintiff received a career appointment as a multiple position letter sorting machine clerk at the Detroit General Mail Facility on March 27, 1976. Plaintiff was injured on the job on December 9, 1976, when a stool on which she was sitting collapsed. Plaintiff received continuation of her pay for her injury and, eventually, commencing January 27,1977, disability payments related to her injury. Plaintiff continued to receive disability payments until November 4, 1982, when her benefits were terminated because the Department of Labor determined that plaintiff was no longer disabled.

Plaintiff applied for restoration to duty by letter dated January 24, 1983. Defendant denied plaintiff restoration to her job because she had been discharged while she was on disability status. On November 8, 1977, plaintiff was removed (discharged) from her employment because she had committed the crime of welfare fraud.

During the period when plaintiff was off work receiving disability payments, January 27, 1977, through November 4, 1982, plaintiff participated in a vocational rehabilitation program established by the Department of Labor. The Postal Service paid part of the cost of plaintiff's participation in the program. The vocational rehabilitation failed as a result of plaintiff’s failure to cooperate with the rehabilitation counselor.

After the Postal Service denied plaintiff’s request for restoration, plaintiff appealed the decision to the Merit Systems Protection Board. In a decision dated July 21, 1983, the Merit Systems Protection Board dismissed plaintiff's appeal. Plaintiff did not seek judicial review of the board’s decision within thirty days as provided in 5 U.S.C. § 7703(b)(1) (as modified by 28 U.S.C. § 1295(a)(9)).

29 U.S.C. § 794a provides that a handicap discrimination action under the 1973 Rehabilitation Act shall be governed by the remedies and procedures set forth in section 717 of Title VII, 42 U.S.C. § 2000e-16, including the requirement of exhaustion of administrative remedies contained in section 706 of Title VII, 42 U.S.C. § 2000e-5. Exhaustion of such administrative remedies is a jurisdictional prerequisite to the commencement of a civil action, pursuant to Title VII, in federal court. Brown v. General Services Administration, 425 U.S. 820, 832-33, 96 S.Ct. 1961, 1967-68, 48 L.Ed.2d 402 (1976); Quillen v. United States Postal Service, 564 F.Supp. 314, 317 (E.D.Mich.1983) (Freeman, J.).

It is undisputed that plaintiff did not file an administrative complaint with the Equal Employment Opportunity Commission. (Green Affidavit, p. 5). This court, therefore, lacks subject matter jurisdiction over any claims by plaintiff brought under the 1973 Rehabilitation Act. The court likewise lacks subject matter jurisdiction over any claims of racial discrimination brought by plaintiff under section 717 of Title VII. Plaintiff’s response indicates that she does not dispute this conclusion.

As to plaintiff’s claim that she was denied vocational rehabilitation training, the affidavit of Bernice Adams indicates that there is no genuine issue as to whether plaintiff actually received the rehabilitation training to which she was entitled. Plaintiff does not argue that there is a factual question on this issue. It appears that summary judgment for defendant is appropriate on any claim by plaintiff that defendant denied her such training.

Both plaintiffs original complaint and proposed amended complaint state a claim for racial discrimination in employment under 42 U.S.C. § 1981. Plaintiff claims that defendant refused to restore her to duty, not because of her felony convictions, but because of her race. Plaintiff contends that the offense of which she was convicted had no nexus to her job performance and that white employees who were convicted of felonies were not terminated. As noted above, defendant’s motion does not address plaintiff’s claim under section 1981.

42 U.S.C. § 1981 provides a cause of action for, inter alia, racial discrimination in making contracts. Unlike Title VII, section 1981 does not require exhaustion of administrative remedies. See Johnson v. Railway Express Agency, 421 U.S. 454, 459-60, 95 S.Ct. 1716, 1719-20, 44 L.Ed.2d 295 (1975). Plaintiff's failure to pursue her administrative remedies will not bar a claim under section 1981.

This court must liberally grant leave to file an amended complaint. Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962); Fed.R.Civ.P. 15(a). Leave to file an amended complaint is especially appropriate where a plaintiff, now represented by counsel, originally filed her complaint without the assistance of counsel. Defendant has not moved for summary judgment on plaintiff’s section 1981 claim and cannot be prejudiced by the filing of an amended complaint which states plaintiff’s section 1981 claim in a clearer and more concise manner. Defendant shall not be precluded from challenging the amended complaint.

In conclusion, the court will grant defendant’s 'motion for summary judgment as to plaintiff’s claims of handicap discrimination under the 1973 Rehabilitation Act, denial of vocational rehabilitation training as required by the 1973 Rehabilitation Act, and racial discrimination under Title VII. The court will grant plaintiff’s motion for leave to file an amended complaint which alleges a claim under 42 U.S.C. § 1981. An appropriate order will be submitted.

      . Plaintiff's original complaint was filed in pro- ' pria persona. Plaintiff's counsel claims she has reviewed the facts and seeks to amend the complaint to conform with the law.

      . On June 27, 1977, plaintiff pleaded guilty to a multiple count indictment involving welfare fraud. The crux of the charges was that plaintiff had applied for welfare without revealing that she was receiving disability payments from the Postal Service. Plaintiff used the mails in perpetrating the crime of welfare fraud.


author: TENNEY, District Judge.

text:
    WILLIAMSBURG FAIR HOUSING COMMITTEE, et al., Plaintiffs, v. ROSS-RODNEY HOUSING CORP. and Kraus Management, Inc., Defendants. UNITED JEWISH ORGANIZATIONS OF WILLIAMSBURG, INC., et al., Third-Party Plaintiffs, v. KENT VILLAGE HOUSING CO., INC., et al., Third-Party Defendants.
    No. 76 Civ. 2125 (CHT).
    United States District Court, S.D. New York.
    Oct. 26, 1984.

      Puerto Rican Legal Defense and Education Fund, Inc., Community Action for Legal Services, Inc., and Teitelbaum & Hiller, P.C., New York City, for plaintiffs; Cesar A. Perales, Hector W. Soto, Kenneth Kimerling; Dale Johnson; Herbert Teitelbaum, Peter Paden, New York City, of counsel.
    Paskus, Gordon & Hyman, New York City, for Ross-Rodney Housing Corp. and Kraus Management, Inc.; Philip H. Schaeffer, Craig R. Michel, New York City, of counsel.
   OPINION

TENNEY, District Judge.

Pending before this Court is plaintiffs’ motion for attorneys’ fees under the Civil Rights Attorney’s Fees Awards Act of 1976, 42 U.S.C. § 1988 (1982) (“§ 1988”). The underlying case is a class action that challenged the constitutionality of certain rental practices in five housing developments in the Williamsburg area of Brooklyn, New York. The suit resulted in a Consent Decree, developed by the parties in conjunction with various community groups, which provided a comprehensive plan for preventing and remedying the civil rights violations found by this Court.

The defendants in the instant motion are Kraus Management, Inc. and Ross-Rodney Housing Corp., the manager and owner, respectively, of the Bedford Gardens housing development (“Bedford Gardens defendants”). Plaintiffs request payment of attorneys’ fees for services rendered by five attorneys over a period of four-and-a-half years, 1976 to 1981, totalling 2,758.50 hours. The attorneys for plaintiffs are the Puerto Rican Legal Defense and Education Fund, Community Action for Legal Services, and Teitelbaum & Hiller, P.C.

Plaintiffs seek a total award of $465,-126.33. They request that the award be based on hourly rates ranging from $50 to $125, and that a multiplier of 2.5 be employed. Plaintiffs also seek compensation for the time spent on this application for attorneys’ fees, as well as costs and disbursements.

Based on the reasoning set forth below, the Bedford Gardens defendants are ordered to pay a total of $216,880.70. This award has several components. First, the fees incurred from 1976 to 1981 were determined by multiplying a reasonable hourly rate by the number of hours reasonably expended in litigation against the Bedford Gardens defendants, which produced a basic fee of $187,507.50. Next, that amount was increased by a multiplier of 1.25 because of the contingent nature of the case; the adjusted figure is $171,884.37. Finally, the compensation awarded for the time spent on this application for attorneys’ fees, $37,732.50, was added to that figure, together with $7,263.83 for out-of-pocket costs, resulting in a total award of $216,-880.70. In addition, interest is to be paid on that sum, calculated from August 23, 1983, the date that this Court entered judgment granting plaintiffs’ request for attorneys’ fees.

BACKGROUND

In 1976 the plaintiffs sued New York City Housing Authority (“NYCHA”) and its chairman who were responsible for four housing developments in the Williamsburg area. Plaintiffs subsequently added the Bedford Gardens defendants. After the case was commenced, the United Jewish Organization of Williamsburg (“UJO”) intervened as a defendant, together with individuals seeking to protect the interests of all white families that had existing leases at Bedford Gardens. The UJO and one individual also began a third-party action against the owner and manager of a sixth housing development in the area, the Roberto Clemente Plaza (“Clemente”) and against certain federal and local authorities involved in Clemente’s operation.

The testimony and evidence in the case showed that rental quotas based on race and ethnic origin had been developed and instituted at each of the housing developments named in the suit. The Bedford Gardens defendants maintained a quota of 75% white families, 20% hispanic and 5% black families. Clemente’s quota was the opposite of the quota at Bedford Gardens. At Clemente 75% of the apartments were to be rented to non-white families and 25% to white families. The plaintiffs in the original action sought to protect the existing leases of non-white families at Clemente and therefore actively participated in the third-party action concerning Clemente. In 1978, all parties, except the Bedford Gardens defendants, subscribed to a Consent Decree.

Shortly before the Consent Decree was approved, the plaintiffs settled with NY-CHA and its chairman and two of the third-party defendants. In that settlement, plaintiffs received attorneys’ fees of $59,-687.00 together with costs of $7,527.26.

The plaintiffs’ claims were strenuously contested by the Bedford Gardens defendants, who refused to negotiate with the other parties and would not accept the terms of the Consent Decree. After a hearing and a careful review of the evidence, the Court issued an injunction ordering the Bedford Gardens defendants to act pursuant to the terms of the Consent Decree. 493 F.Supp. 1225 (S.D.N.Y.1980). The Bedford Gardens defendants appealed that injunction; the court of appeals held that the injunction would remain in effect unless the defendants agreed to subscribe to the Consent Decree. Summary Order, No. 80-6161 (2d Cir. Jan. 22, 1981). In January 1981, the Bedford Gardens defendants finally subscribed to the Decree and the litigation was thus resolved.

DISCUSSION

Plaintiffs now move against the Bedford Gardens defendants for payment of their attorneys’ fees pursuant to § 1988 which provides that federal courts may award attorneys’ fees to prevailing parties in civil rights cases. Although the Bed-ford Gardens defendants concede that the plaintiffs are entitled to attorneys’ fees as the prevailing party under § 1988, they object to the number of hours claimed, the hourly rates requested and the proposed upward adjustment. The Bedford Gardens defendants argue that they should not bear sole responsibility for the fees incurred; they contend that responsibility should be allocated among all defendants and third-party defendants and, further, that no attorneys’ fees should be awarded for the time spent on the 1980 appeal. In sum, although the Bedford Gardens defendants concede that an award of attorneys’ fees is warranted, they disagree with the plaintiffs concerning the appropriate amount of the award; the plaintiffs contend that the Court should award more than $450,000.00, while the defendánts contend that the award should be less than $20,000.00.

The Lodestar Figure

Because plaintiffs are the prevailing parties under § 1988, they are entitled to an award of reasonable attorneys’ fees. The legislative history indicates that reasonable fees are those “which are adequate to attract competent counsel, but which do not produce windfalls to attorneys.” S.Rep. No. 1011, 94th Cong., 2d Sess. 6, reprinted in 1976 U.S.Code Cong. & Ad. News 5908, 5913 (“Senate Report”). Such fees are normally based on the number of hours that counsel reasonably expended on the case, multiplied by a reasonable hourly rate. Blum v. Stenson, — U.S. -, 104 S.Ct. 1541, 1544, 79 L.Ed.2d 891 (1984) (citing Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983)). The resulting amount is commonly known as the “lodestar” figure. See City of Detroit v. Grinnell Corp., 560 F.2d 1093, 1098 (2d Cir.1977).

Because there were multiple parties in the underlying action, it is necessary for the Court to address the question of the proper allocation of responsibility for fees incurred by plaintiffs. After addressing this issue, the Court will consider what constitutes a reasonable hourly rate in the instant matter, and whether the number of hours claimed by plaintiffs’ attorneys is reasonable.

A) Allocating Responsibility for Attorneys’ Fees

Plaintiffs seek attorneys’ fees for services rendered from 1976 to 1981, amounting to 2,780.50 hours. From 1978 to 1981, the Bedford Gardens defendants were the only defendants involved in the litigation, since all the other parties had subscribed-to the Consent Decree in 1978. As the sole defendants, the Bedford Gardens defendants are responsible for all attorneys’ fees arising out of the litigation after 1978.

From 1976 to 1978, however, there were numerous parties involved in the litigation. Nevertheless, plaintiffs argue that the Bed-ford Gardens defendants were the “primary defendants,” and therefore should pay the entire 1976-1978 lodestar figure requested, amounting to $153,987.50, or at least pay the “lion’s share.” The Court finds that this argument is not persuasive and that an equitable apportionment of the responsibility for the 1976-1978 fees is necessary. The Court has made a careful and lengthy examination of the record in this case, and after much deliberation finds that the Bedford Gardens defendants should pay 40% of the attorneys’ fees incurred from 1976 to 1978.

Where there are multiple defendants, each defendant must bear the prevailing plaintiff’s fees for time spent on matters clearly related to the claims made against that defendant. See Arkansas Community Org. v. Arkansas State Bd., 468 F.Supp. 1254, 1258-59 (E.D.Ark.1979); accord Ingram v. Madison Square Garden Center, Inc., 482 F.Supp. 918, 928 (S.D.N.Y.1979).

In the instant case, the legal and factual issues raised by the plaintiffs’ claims against the various defendants and third-party defendants were so interrelated that it is impossible to isolate the number of hours spent litigating against any one party. Thus, much of the time expended by the plaintiffs’ attorneys on claims relating to the parties other than the Bedford Gardens defendants had a direct impact on the claims made against the Bedford Gardens defendants. The 1976 hearings concerning the rental policies at Clemente, for example, produced evidence concerning the rental practices throughout the Williamsburg community, as well as evidence showing that the quotas developed at Clemente had been developed to counterbalance the quotas developed at Bedford Gardens. In addition, the Consent Decree, which provided the ultimate remedy in the plaintiffs’ suit against the Bedford Gardens defendants, would not have been developed without the long, intense negotiations undertaken by the plaintiffs’ attorneys with the other parties.

Because the issues were so interrelated, plaintiffs suggest that responsibility for attorneys’ fees be allocated based on “the principal purpose of the suit and the primary and controlling matter in dispute.” See Plaintiffs’ Reply Memo, at 8. The Court agrees that an examination of the basic issues involved in the litigation is the best procedure.

The Bedford Gardens defendants contend that there were two fundamental disputes — one involving the Bedford Gardens housing development and the other involving the Clemente apartments. See Defendants’ Supplemental Memo In Opposition at 12. Analyzing the case in this manner would result in holding the Bedford Gardens defendants responsible for one-half of the plaintiffs’ attorneys’ fees.

Such allocation, however, would ignore the claims made against NYCHA concerning the four other housing developments in the area. In light of such claims, the case could be characterized as involving three, rather than two, primary disputes. Without more, such characterization would lead to holding the Bedford Gardens defendants liable for only one-third of the fees incurred.

Based on a review of the record, however, the Court finds that the Bedford Gardens defendants should bear responsibility for 40% of the fees incurred, rather than one-half or one-third. Because of the claims made against NYCHA, it would be inequitable to require that the Bedford Gardens defendants pay 50% of the fees involved. It would also be inequitable to divide responsibility in three equal parts since the claims made concerning Bedford Gardens and Clemente were more time-consuming and, in some ways, more central to the principal purpose of the litigation than were the claims made against NYCHA.

More specifically, requiring that the Bed-ford Gardens defendants pay 40% of the fees incurred is equitable in light of the role they played during the litigation and their conduct with respect to settlement. First, although there were six housing developments involved, only Bedford Gardens and Clemente were not fullyoccupied when the suit was commenced. Because of this, the claims concerning Bedford Gardens and Clemente presented issues that were of particular importance to the plaintiffs’ actual goal of remedying the discriminatory rental practices at the named housing developments. The plaintiffs concentrated much of their litigation efforts on these two housing developments because they were not fully tenanted. Second, while all other parties were striving to end the litigation by means of negotiation and compromise, the Bedford Gardens defendants staunchly resisted any settlement. They refused to participate in discussions pertaining to the Consent Decree, they proposed an alternative consent decree which was unacceptable to the other parties, and they opposed court approval of the Consent Decree even so far as it affected the parties who had agreed to the Decree. This opposition on the part of the Bedford Gardens defendants added to the complexity of the case and increased the number of hours required to end the litigation. The Court thus finds that the Bedford Gardens defendants should pay 40% of the attorneys’ fees incurred from 1976 to 1978, and all fees incurred after 1978.

B) Reasonable Hourly Rates

The plaintiffs’ request for attorneys’ fees should be considered in light of the factors set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir.1974). See Blum, 104 S.Ct. at 1546-57 (citing Senate Report at 5913 adopting the Johnson factor); Hensley, 103 S.Ct. at 1937-38. Factors which must be considered include counsels’ skill, background and reputation, the nature and result of the litigation, and the hourly rate ordinarily charged by attorneys of similar ability and experience in the same locale.

In the case at bar, plaintiffs’ attorneys invested time on this litigation from 1976 to 1981 and now request compensation at hourly rates ranging from $50 to $125 as set forth in the following chart:

Period No. of Hours Hourly-Rate Subtotal Total
H. Teitelbaum (1968 graduate) 1976-77 416.50 $125 $ 52,062.50
P. Bienstock 1976-77 812.50 75 $60,937.50
(1973 graduate) 1978-79 437.75 100 43,775.00 104,712.50
I. Bezoza 1976-77 546.50 75 40,987.50
(1972 graduate) 1978-81 72.50 100 7,250.00 48,237.50
H. Soto (1977 graduate) 1980 50.00 75 3,750.00
H. Fernandez 1978 422.75 50 21,137.50
(1977 graduate) $229,900.00

Defendants argue that the fees requested are so high that, contrary to legislative intent, they provide a windfall for plaintiffs’ attorneys. See Senate Report at 5913. Defendants therefore request a general reduction of 40% of all hourly rates proposed by plaintiffs. See Affidavit in Opposition, of Philip H. Schaeffer, sworn to February 8, 1982 (“Schaeffer Aff.”), at 22.

Defendants’ argument must fail to the extent that it is based on the concept that attorneys working for publicly subsidized, non-profit law firms should be paid only moderate fees rather than the prevailing market rate. Id. This argument was specifically rejected by the Supreme Court in its recent decision, Blum v. Stenson, 104 S.Ct. at 1547 (“The statute and legislative history establish that ‘reasonable fees’ under § 1988 are to be calculated according to the prevailing market rates in the relevant community, regardless of whether plaintiff is represented by private or nonprofit counsel.”).

Furthermore, the defendants’ argument that the requested fees are otherwise excessive must also be rejected. The fees requested are reasonable in light of the experience, background and competence of the plaintiffs’ attorneys and their expertise in the area of civil rights litigation. See resumes filed with plaintiffs’ Notice of Motion, dated November 30, 1981, Exhs. D-H. The quality of representation was high, the case was complex both legally and factually, and the results achieved were commendable.

An examination of awards made in comparable cases shows that the fees requested here are in accord with the prevailing market rates for the relevant period of time. See, e.g., Population Service Int’l v. Carey, 476 F.Supp. 4, 10 (S.D.N.Y. 1979) ($60 to $120 per hour based on 1975 market rates); Kane v. Martin Paint Stores, Inc., 439 F.Supp. 1054, 1056-57 (S.D.N.Y.1977) ($65; to $100 per hour), aff'd mem., 578 F.2d 1368 (2d Cir.1978); Frankenstein v. McCrory Corp., 425 F.Supp. 762, 766 (S.D.N.Y.1977) ($75 to $140 per hour); Burger v. CPC Int’l, Inc., 76 F.R.D. 183, 189 (S.D.N.Y.1977) ($125 per hour). The hourly rates charged by the attorneys for the Bedford Gardens defendants also support a finding that the fees requested herein are reasonable. The Bedford Gardens defendants paid their attorneys hourly fees that ranged up to $175. See New York City Comptroller’s report at 35, Attachment B to Affidavit of Kenneth Kimerling, sworn to July 20, 1983 (“Kimerling Aff.”).

The Court finds that the hourly rates requested by the plaintiffs are fair and reasonable.

C) Number of Hours Reasonably Expended

Plaintiffs’ attorneys seek compensation for 2,758.50 hours expended on the underlying litigation. See Affidavit of Hector W. Soto, sworn to November 30, 1981 (“Soto Aff.”), 11 5.

The defendants argue, first, that the number of hours claimed is excessive, and second, that the time charges submitted are unconfirmable, uncorroborated and inconsistent, and should be reduced accordingly. Based on the documentation and affidavits submitted in this case, however, the Court is convinced that the hours claimed are reasonable, were necessary for litigating this matter, and were indeed spent in the manner indicated.

. First, the Court finds that the number of hours claimed is proportionate to the magnitude and complexity of this action. The case entailed four-and-a-half years of litigation and involved complex legal and factual issues. There is no evidence that the case was not litigated in a forthright and efficient manner. The Bedford Gardens defendants vehemently resisted the plaintiffs’ efforts to reach a harmonious settlement, thereby increasing the number of hours needed to resolve the litigation. As already recited, plaintiffs’ attorneys engaged in extensive negotiations which resulted in a plan for remedying the existing discriminatory rental practices and mechanisms for ensuring continued compliance with that plan.

Second, the Court is satisfied that the plaintiffs’ attorneys accurately recorded their hours and submitted their claims in good faith. Their records are specific enough to support the hours claimed. There is no reason to believe that the affidavits submitted supporting the attorneys’ documentation of hours were not truthful. Reports providing minute-by-minute details or a lengthy evaluation of an attorney’s day are not required. Records that clearly indicate the amount of time spent and the subject matter involved, such as those provided in this case, are all that are necessary to support an award of fees. See Hensley, 108 S.Ct. at 1939 n. 12; accord Lindy Bros. Builders, Inc. v. American Radiator & Standard Sanitary Corp., 540 F.2d 102, 116-17 (3d Cir.1976) (en banc).

The Bedford Gardens defendants make three other arguments in favor of reducing the number of compensable hours. These arguments are treated below.

1. Lack of Contemporaneous Time Records

Defendants contend that there should be no award for any hours claimed which are not supported by contemporaneous time records. This argument pertains to hours claimed by Hector Soto and Ira Bezoza, who have no contemporaneous records for the work they did on this case from 1978 to 1981. Both have reconstructed their hours and submitted affidavits attesting to the number of hours claimed. See Soto Aff. ¶[ 4, Exhs. B-C. The defendants argue that the hours submitted by these attorneys “should simply be excised from the claim.” Schaeffer Aff. at 20. The Court will not, however, adopt the defendants’ reasoning.

Although contemporaneous records are obviously the most accurate method of computing time spent on a case, such records, per se, were not mandated in this circuit until after 1983. See New York State Ass’n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1147 (2d Cir.1983) [hereinafter cited as Willowbrook ]. Recognizing that it would be unfair to require contemporaneous time records on a retroactive basis, the court of appeals held that such records would be a prerequisite for recovery of attorneys’ fees only for time expended after June 25, 1983. Id. at 1147. No automatic reduction in hours, therefore, is required in the case at bar. See Birmingham v. Sogen-Swiss Int’l Corp. Retirement Plan, 718 F.2d 515, 523-24 (2d Cir.1983); accord Lindy Bros., 540 F.2d at 109 (“ ‘Although mere estimates of time are not acceptable, an allowance of attorneys’ fees may be based on a reconstruction, provided that the time records are substantially reconstructed and are reasonably accurate.’ ” Id. (quoting Lindy Bros., 382 F.Supp. 999, 1011 (E.D.Pa. 1974))).

The Court is convinced that both attorneys reconstructed their hours in a reasonable and accurate manner. Mr. Bezoza submitted an affidavit stating that in order to reconstruct his hours he reviewed the case files and pleadings, consulted with co-counsel concerning his participation at meetings, depositions and court hearings, and examined his co-counsel’s time records. See Affidavit of Ira S. Bezoza, sworn to August 8, 1983, ¶ 9. Moreover, he examined briefs and memos to determine the time he spent researching and writing, and looked at specific events which took place, such as oral argument of the appeal, and the pre-argument conference. He also evaluated the amount of time he spent reviewing the record on appeal, which consisted of almost 3000 pages. See Affidavit of Ira S. Bezoza, sworn to October 6, 1981, ¶¶ 4-9, Exh. B to Soto Aff.

Mr. Soto also submitted an affidavit setting forth the hours he devoted to this case and the steps he took to reconstruct his time. His reconstruction was based on the amount of research he had done, the work he had produced and his work habits, together with his recollection of the amount of time that he had invested in the case. The request for compensation for 50 hours of his time appears reasonable, particularly in light of his statement that he believes he actually spent a total of 69 to 115 hours on the case. See Affidavit of Hector W. Soto, sworn to November 30, 1981, ¶¶ 5-7, Exh. C to Soto Aff.

After examining the affidavits submitted, the Court is satisfied that the reconstructions were done carefully and accurately. The time claimed on the basis of reconstructed records is therefore compensable.

2. Multiple Attorneys

The defendants protest that the hours submitted are unreasonable because of excessive duplication of services by plaintiffs’ attorneys. See Schaeffer Aff. at 19. They argue that it was unreasonable for two or three attorneys to simultaneously represent the plaintiffs at activities such as depositions, meetings or hearings. While the defendants characterize the representation by multiple attorneys as being “wasted effort,” id., they have failed to show that such representation was not in fact reasonable.

If two or more attorneys have duplicated each other’s work, then the number of hours submitted should be reduced, since some of the work was unnecessary and the time claimed would therefore be unreasonable. The use of multiple attorneys, however, is not unreasonable per se. See Willowbrook, 711 F.2d at 1146 (citing Seigal v. Merrick, 619 F.2d 160, 164 (2d Cir.1980)); accord Craik v. Minnesota State Univ. Bd., 738 F.2d 348, 350 (8th Cir.1984) (per curiam). Indeed, division of responsibility may make it necessary for more than one attorney to attend activities such as depositions and hearings. Multiple attorneys may be essential for planning strategy, eliciting testimony or evaluating facts or law. See Ross v. Saltmarsh, 521 F.Supp. 753, 762 (S.D.N.Y.1981), aff'd mem., 688 F.2d 816 (2d Cir.1982); Johnson v. University College, 706 F.2d 1205, 1208 (11th Cir.), cert. denied, — U.S. -, 104 S.Ct. 489, 78 L.Ed.2d 684 (1983).

The case at bar involved numerous parties, was legally and factually complex, and was actively litigated over a long period of time. Plaintiffs make the plausible argument that when more than one attorney was present, each attorney made a distinct contribution by his presence or participation. See Plaintiffs’ Reply Memo., at 15.

Although the defendants object to the plaintiffs’ use of multiple attorneys, the defendants themselves were represented by more than one attorney at various times. See Plaintiffs’ Reply Memo, at 16. The defendants’ use of multiple attorneys may have, in itself, contributed to the plaintiffs’ need for representation by more than one attorney. See Seigal, 619 F.2d at 164 (The court was reluctant “to deprive a lawyer of the aid of even one associate in conferences or court appearances when ... he was often confronted with a bevy of hostile lawyers for the multiple parties on the other side____”).

The Court concludes that the use of more than one attorney was justified in this case. Thus, there will be no reduction of hours for unreasonable duplication of services.

3. Costs of the 1981 Appeal

In 1980, this Court found that the Bed-ford Gardens defendants had violated the plaintiffs’ civil rights and therefore ordered the Bedford Gardens defendants to comply with the terms of the Consent Decree. 493 F.Supp. 1225. The Bedford Gardens defendants appealed that decision without success, and now argue that the plaintiffs’ attorneys should not be compensated for the time spent on that appeal. See Schaeffer Aff. at 19. The Court disagrees.

In its summary opinion, the court of appeals ordered that each party "bear its own costs” for the appeal. Defendants interpret this language to mean that attorneys’ fees should not be awarded for the time plaintiffs’ attorneys spent defending the appeal. See Schaeffer Aff. at 19-20. The defendants’ interpretation of the term “costs” is far too broad and must be rejected.

Courts have consistently distinguished between attorneys’ fees and routine out-of-pocket costs. See Gates v. Collier, 616 F.2d 1268, 1279 n. 17 (5th Cir.1980) (citing cases); Northcross v. Board of Educ., 611 F.2d 624, 639 (6th Cir.1979), cert. denied, 447 U.S. 911, 100 S.Ct. 2999, 64 L.Ed.2d 862 (1980). See generally 6 J. Moore, W. Taggart & J. Wicker, Moore’s Federal Practice ¶¶ 54.70[1], 54.77[2] (2d ed. 1983).

Title 28 U.S.C.,§ 1920 (1982) sets forth those items which may properly be taxed as costs by United States courts, listing items such as filing fees, court reporter fees, marshals’ fees, and disbursements for printing and witnesses. Based on this statutory definition, the Supreme Court has held that “the term ‘costs’ does not include attorney's fees____” Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 720, 87 S.Ct. 1404, 1408, 18 L.Ed.2d 475 (1967). Thus, in the case at bar, the term “costs” will be given its ordinary interpretation, and the plaintiffs’ attorneys will be compensated for the time spent on the appeal.

D) Summary of the Lodestar Analysis

The Court finds that the hours submitted by the plaintiffs’ attorneys and the hourly rates requested for services rendered are reasonable. The fees incurred are to be paid in accordance with the foregoing discussion of allocation. The Court finds that the Bedford Gardens defendants, as the sole defendants during the post-1978 period, are responsible for all attorneys’ fees incurred during that period, or $75,912.50. As one of several defendants during the initial litigation, they are responsible for only 40% of the fees owed from 1976 to 1978, or $61,595.00. The resulting lodestar figure is $137,507.50.

Upward Adjustment

The plaintiffs request that the lodestar figure be increased by applying a multiplier of 2.5. In Blum v. Stenson, the Supreme Court stated that an upward adjustment of an award may be warranted if the lodestar figure does not provide a reasonable fee. Id., 104 S.Ct. at 1548 & n. 14 (citing Hensley, 103 S.Ct. at 1940). In the case at bar, the Court finds that an upward adjustment is compelled by the risk of nonpayment which existed because of the contingent nature of the case. See Blum, 104 S.Ct. at 1550 (Brennan, J., concurring) (“[T]he risk of not prevailing, and therefore the risk of not recovering any attorney’s fees, is a proper basis on which a district court may award an upward adjustment to an otherwise compensatory fee.”) This Court concludes that the lodestar figure should be increased by applying a multiplier of 1.25.

Successful enforcement of civil rights depends on the willingness of capable attorneys to accept cases based on contingent fees. It is unlikely that skilled attorneys will accept such cases if the fees available upon prevailing are strictly limited to an hourly market rate. See Yates v. Mobile County Personnel Bd., 719 F.2d 1530, 1534 (11th Cir.1983); accord Vulcan Soc’y v. Fire Dep’t of White Plains, 533 F.Supp. 1054, 1065 (S.D.N.Y.1982); Desimone v. Industrial Bio-Test Labs., Inc., 83 F.R.D. 615, 622 (S.D.N.Y.1979). The prevailing market rate is generally based on what an attorney in private practice charges his clients. That rate reflects the expectation that he will be paid for the hours he devotes to the case, regardless of whether or not his client wins. The prevailing market rate, therefore, is essentially based on an assumption of guaranteed payment. By the same token, when an attorney in private practice anticipates that he will be paid only if his client prevails, he ordinarily adjusts his rates upward to counterbalance the risk involved. Such upward adjustment “is neither less nor more appropriate in civil rights litigation than in personal injury cases. The standard of compensation must enable counsel to accept apparently just causes without awaiting sure winners.” Jones v. Diamond, 636 F.2d 1364, 1382 (5th Cir.) (en banc), cert. dismissed sub nom. Ledbetter v. Jones, 453 U.S. 950, 102 S.Ct. 27, 69 L.Ed.2d 1033 (1981).

Fees awarded under § 1988, where payment is not guaranteed, may therefore be inappropriately low if the award is based on market rates. An upward adjustment is warranted in such cases. See Blum, 104 S.Ct., at 1550-51 (Brennan, J. concurring); Craik v. Minnesota State Univ. Bd., 738 F.2d at 350; accord Northcross, 611 F.2d at 638 (“Perhaps the most significant factor in these cases which at times renders the routine hourly fee unreasonably low is the fact that the award is contingent upon success.”); Blatt v. Dean Witter Reynolds Inter-Capital, Inc., 566 F.Supp. 1294, 1298 (S.D.N.Y.1983) (The hourly rate awarded “recognizes the firm’s expertise but not the risk of loss factor____”); Desimone, 83 F.R.D. at 622 (“Once the lawyer’s time has been valued, the figure obtained must be increased to reflect the risk of nonpayment inherent in contingent fee arrangements ____”).

In the case at bar, there was a significant possibility that the plaintiffs would not prevail. The issues raised were complex and the suit involved numerous parties with widely diverse interests to be protected. The case dealt with an unsettled area of the law, and both the law and facts were strongly contested. When the case was commenced, it was unclear that a satisfactory remedy could, in fact, be developed and implemented. Thus, an upward adjustment in this case is necessary in order to compensate the plaintiffs’ attorneys for the risk of nonpayment that existed.

Another factor in this case which supports an increase of the lodestar figure is the long delay between the rendering of services and the receipt of payment. The case was commenced in 1976, the Consent Decree was approved in 1978, and the litigation against the Bedford Gardens defendants ended in 1981. It is now 1984. Because inflation and the loss of interest effectively dilute the fees granted in this case, requiring that the defendants pay only the lodestar figure, without more, would undercompensate the plaintiffs’ attorneys. See Willowbrook, 711 F.2d at 1152; accord University College, 706 F.2d at 1210 (“Such delay obviously dilutes the eventual award and may convert an otherwise reasonable fee into an unreasonably low one.”); Copeland v. Marshall, 641 F.2d 880, 893 (D.C.Cir.1980) (en banc) (“[PJayment today for services rendered long in the past deprives the eventual recipient of the value of the use of the money in the meantime, which use, particularly in an inflationary era, is valuable.”); Clarke v. Amerada Hess Corp., 500 F.Supp. 1067, 1076 (S.D.N.Y.1980) (Such delay should be “left to the Court’s consideration of a ‘risk factor’ to be applied after calculating the value of [the attorneys’] time at rates prevailing when the services were rendered.”) (emphasis in original).

Based on the contingent nature of this case and the long delay in payment, the Court finds that an upward adjustment of 1.25 is appropriate. Although this is a more modest increase than that requested by the plaintiffs, it is consistent with increases granted in similar cases. See, e.g., Craik, 738 F.2d at 350 (1.25 increase granted); Yates, 719 F.2d at 1534 (1.35 increase granted); Vulcan Soc’y, 533 F.Supp. at 1065 (1.50 increase granted); Desimone, 83 F.R.D. at 623 (1.20 increase granted). Increasing the lodestar figure of $137,507.50 by a multiplier of 1.25 results in an award of $171,884.37 against the Bedford Gardens defendants for the litigation which took place from 1976 to 1981.

Compensation for Time Spent on the Instant Motion

Plaintiffs’ attorneys also request compensation for the hours spent on the instant application for an award of attorneys’ fees under § 1988. Plaintiffs’ attorneys are entitled to the compensation requested. See Gagne v. Maher, 594 F.2d 336, 343-44 (2d Cir.1979), aff'd, 448 U.S. 122, 100 S.Ct. 2570, 65 L.Ed.2d 653 (1980).

No. of Hours Hourly Rate Lodestar Amount
H. Teitelbaum (1968 graduate) 5.25 $150 $ 787.50
K. Kimerling (1969 graduate) 39.50 150 5,925.00
P. Murray (1973 graduate) 22.00 135 2,970.00
P. Paden (1975 graduate) 5.50 135 742.50
H. Soto (1977 graduate) 248.25 110 27,307.50
Total $37,732,50

Where a prevailing party is entitled to attorneys’ fees under § 1988, litigation is necessary to show that the fees requested are reasonable. Failure to compensate for time spent on that litigation would effectively lower the overall value of the award granted. Such a result would conflict with the congressional policy of encouraging competent attorneys to represent clients in civil rights cases.

The plaintiffs’ attorneys are seeking fees for services rendered in connection with the instant motion from 1981 to date. The following chart sets out the hourly rates and the number of hours claimed for services rendered on this motion. The Court finds that the rates requested and hours submitted are reasonable.

An examination of similar cases, in which awards have been based on post-1980 market rates, supports the conclusion that the above hourly rates are reasonable. See, e.g., Tikalsky v. City of Chicago, 585 F.Supp. 813, 816 (N.D.Ill.1984) (awarding $150 per hour); New York State Teamsters Conference Pension and Retirement Fund v. Hoh, 561 F.Supp. 687, 689-90 (N.D.N.Y.1983) (awarding $75-$175 per hour); Tasby v. Wright, 550 F.Supp. 262, 280-82 (N.D.Tex.1982) (awarding $60-$175 per hour); National Lawyers Guild v. At torney General, 94 F.R.D. 616, 621-22 (S.D.N.Y.1982) (awarding $90-$130 per hour).

The rates set forth in the above table are .also reasonable in light of the attorneys’ background and experience. All of the attorneys involved have extensive litigation experience and impressive academic records. See Affidavit of Kenneth Kimerling, sworn to October 14,1983 (“Kimerling Aff.”), at 2.

The defendants argue that the plaintiffs’ request for compensation for 320.5 hours spent on this fee application is excessive. However, the Court finds that the total number of hours expended on this part of the litigation is reasonable and compensable. The motion was complicated by the 1978 Willowbrook decision, 711 F.2d 1136, and required additional briefs concerning an appropriate hourly rate to be awarded. It was further complicated by the bankruptcy of the defendant Ross-Rodney; the plaintiffs’ attorneys had to spend time researching and addressing issues resulting from that event. See Kimerling Aff. at Exh. A. Moreover, the defendants’ strenuous opposition to this motion for fees has substantially escalated the number of hours required by plaintiffs’ attorneys in order to substantiate and defend the fees requested.

Attorneys’ fees in the amount of $37,-732.00 are awarded to plaintiffs’ attorneys for the services rendered in connection with this application for fees.

Costs

In addition to attorneys’ fees, the plaintiffs are seeking compensation for out-of-pocket costs totalling $7,263.83. . In a civil rights case such as this § 1988 entitles the prevailing party to recover all reasonable expenses. See Henry v. Webermeier, 738 F.2d 188, 192 (7th Cir.1984) (“[T]he case law [applying § 1988] overwhelmingly supports the proposition that ‘attorney’s fee’ includes out-of-pocket expenses____”); Jones v. Diamond, 636 F.2d at 1382; Northcross, 611 F.2d at 639.

In order to insure that certain basic rights would be protected by means of judicial redress, Congress enacted § 1988 requiring that the costs of litigation be paid by the losing party. Out-of-pocket expenses and disbursements, which attorneys in private practice would ordinarily bill to their clients, must be included in the amount paid by the losing party, or § 1988 will fall short of its intended purpose. See Henry, 738 F.2d at 192.

The costs incurred by the plaintiffs are reasonable and were necessary for the successful litigation of this case. The plaintiffs may recover $7,263.83 from the Bed-ford Gardens defendants for costs.

Interest

This Court entered an order on August 23, 1983 granting plaintiffs’ request for attorneys’ fees and costs. See Order filed August 23, 1983, 76 Civ. 2125 (CHT). Under Title 28 U.S.C. § 1961 (1982) (“§ 1961”), the plaintiffs are entitled to interest on the award of attorneys’ fees, calculated from the date of the 1983 order. See Spain v. Mountanos, 690 F.2d 742, 747-48 (9th Cir.1982) (applying § 1961 to an award of attorneys’ fees); Gates, 616 F.2d at 1279-80 (“[T]he awarding of interest is entirely consistent with the purpose of the Act: to ensure effective enforcement of the civil rights laws.” Id. at 1275); Preston v. Thompson, 565 F.Supp. 294, 297 (N.D.Ill.1983) (“Every reported case to address the issue has held that interest is available on an award of attorney’s fees under § 1988.” (citations omitted)).

If a dollar amount had been set by this Court when the order was entered in 1983, the plaintiffs’ attorneys would have been entitled to immediate payment. Since the amount of the award was not set forth at that time, the defendants' have enjoyed the use of that money and the plaintiffs’ attorneys have not.

Interest on the entire award is hereby granted, pursuant to § 1961, to be calculated from August 23, 1983. See City of Detroit v. Grinnell, 575 F.2d 1009, 1010 (2d Cir.1977).

SUMMARY

The following chart provides a list of fees and expenses owed by the Bedford Gardens defendants:

Attorneys’ fees incurred 1976-78 (40% of lodestar) $ 61,595.00
Attorneys’ fees incurred 1978-81 +75,912,50
Total Lodestar $137,507.50
Upward Adjustment (1.25) x 1.25
Adjusted Fees $171,884.37
Compensation for this motion, 1981-1984 37,732.50
Costs 7,263.83
Total $216,880.70

The total amount of the award to be paid by the Bedford Gardens defendants is $216,880.70, together with interest at 9% from August 23, 1983 to the date of judgment. Submit judgment within 10 days.

So ordered.

      . The plaintiff class was defined as non-white individuals who had been or were eligible for low and middle income public housing and federal government subsidies and who were denied apartments or subsidies in any of the relevant housing developments as a result of the discriminatory rental practices of the several named defendants. See Order filed February 14, 1978, 76 Civ. 2125 (CHT).

      . The evolution of the litigation from which this motion arises has been set forth in detail in the previous decisions of this Court. See 493 F.Supp. 1225, 1227-29 (S.D.N.Y.1980); 450 F.Supp. 602, 603-05 (S.D.N.Y.1978).

      . Section 1988 provides in relevant part:
      In any action or proceeding to enforce a provision of sections 1981, 1982, 1983, 1985, and 1986 of this title ..., the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs.

      . Plaintiffs’ success was substantial and they are, therefore, clearly prevailing parties under § 1988. See Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 1938, 76 L.Ed.2d 40 (1983). A formal judgment is not required for a party to prevail; it is the substance, not the form, of the final remedy that must be examined. Eliminating racial and ethnic disparities by means of a consent decree suffices. See Maher v. Gagne, 448 U.S. 122, 129, 100 S.Ct. 2570, 2574, 65 L.Ed.2d 653 (1980).
      This Court found that the Bedford Gardens defendants had violated the plaintiffs’ civil rights by establishing a rigid and pervasive racial and ethnic quota which was used as a basis for renting apartments at Bedford Gardens and by giving whites preferential treatment. 493 F.Supp. 1225, 1251 (S.D.N.Y.1980). The court of appeals affirmed this Court’s finding that the Bedford Gardens defendants had violated the plaintiffs’ civil rights, and held that the permanent injunction ordering compliance with the Decree would continue in full force and effect against the Bedford Gardens defendants unless-they subscribed to the Consent Decree within a reasonable time. Summary Order, No. 80-6161 (2d Cir. Jan. 22, 1981).

      . The defendants argue that the $125 per hour rate requested by Herbert Teitelbaum (“Teitelbaum”) is too high in light of prior fees granted to him. See Vulcan Soc’y v. Fire Dep’t of White Plains, 533 F.Supp. 1054, 1059 (S.D.N.Y. 1982) (awarding Teitelbaum $110 per hour); Torres v. Sachs, 69 F.R.D. 343, 346 (S.D.N.Y. 1975) (awarding him $75 per hour). In the instant case, $125 per hour is a reasonable fee in light of the complexity of the case and Teitelbaum’s background in this area of litigation. That rate is also reasonable in relation to the other fees awarded in this case and in light of the recent case, Blum v. Stenson, 104 S.Ct. 1541, in which the Supreme Court approved an hourly rate of $105 for an attorney with only three years’ experience. Id. at 1544 n. 4. Teitelbaum had seven to eight years of experience at the time of this suit.

      . The reasonableness of an hourly rate may be determined by examining awards made in comparable cases. See Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 719 (5th Cir.1974).

      . Awards made in this circuit must be based on the hourly rates which prevailed at the time of the litigation, rather than the rates prevailing when the award is made. See New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1152-53 (2d Cir.1983).

      . See supra note 4.

      . There is no indication, whatsoever that the court of appeals used the term "costs” in a sense broader than its customary definition. Moreover, in a civil rights case such as this, where § 1988 applies, it is doubtful that the court of appeals would deny attorneys’ fees to a prevailing party in a single conclusory sentence. Although § 1988 provides that a court may deny an award of attorneys’ fees based on "special circumstances,” no such special circumstances exist in this situation.

      . It should be noted that Paskus, Gordon & Hyman, Esqs., attorneys for the Bedford Gardens defendants, billed $204,611 for services rendered in this suit from 1976 to 1980. See N.Y.C. Comptroller’s Report at 36, Attachment B to Kimerling Aff. An additional $7,600 was paid to Kraus & Kraus, Esqs. for services rendered in this case from 1976 to 1978. Id. at 40.

      . The Supreme Court made it clear in Blum that factors such as the complexity of the litigation, the novelty of the issues, the results obtained and the quality of representation do not provide an independent basis for enhancing the lodestar amount. Blum, 104 S.Ct. at 1548-50. Such factors should instead be reflected in the hourly rate used to establish the basic lodestar figure. The majority opinion in Blum did not address the question of whether the contingent nature of a case may require enhancing the lodestar figure in order to adequately compensate counsel. See id. at 1550 n. 17.
      Proceeding in light of the Blum decision, the 8th circuit recently granted an upward adjustment of the lodestar figure to compensate for the contingent nature of the case. See Craik v. Minnesota State Univ. Bd., 738 F.2d 348 (8th Cir.1984) (per curiam); see also Society for Good Will to Retarded Children v. Cuomo, 103 F.R.D. 168 (E.D.N.Y.1984) (awarding a multiplier of 1.25). But see Laffey v. Northwest Airlines, Inc., 746 F.2d 4 (D.C.Cir.1984) (reversing a lower court decision granting an upward adjustment).

        . No multiplier will be applied to the fees awarded for the time spent on the instant motion for attorneys’ fees. Only the fees awarded for the 1976-81 litigátion will be increased. “Courts have disfavored the application of multipliers to the fees incurred in attorney-fee applications.” Vulcan Soc’y, 533 F.Supp. at 1066 (citing cases). Once it has been established that the plaintiffs are the prevailing parties, compensation is guaranteed and the contingency risk factor ceases to exist. Thus, an award based on prevailing market rates provides adequate compensation for time expended on a motion for attorneys’ fees. See Northcross, 611 F.2d at 638.

      . Hourly rates of $110, $135, and $150 will be awarded for services rendered by Hector Soto, Patricia Murray and Kenneth Kimerling, respectively, even though lower hourly rates were requested by the plaintiffs. These three attorneys were employed by non-profit organizations at the time services were rendered, and the rates proposed by the plaintiffs were based on the 1983 Willowbrook decision, 711 F.2d at 1150-52, which set a maximum rate awardable to attorneys employed by non-profit organizations. See Kimerling Aff. at 3. Since this type of limitation on fees for attorneys employed by non- ' profit organizations was specifically rejected in Blum, 104 S.Ct. at 1545-47, the hourly rates awarded herein have been modified from those requested in order to reflect prevailing market rates. See Tikalsky, 585 F.Supp. at 816 (The court awarded higher hourly rates than plaintiffs requested.).

      . Section 1961 provides in relevant part:
      Interest shall be allowed on any money judgment in a civil case recovered in a district court ... [and] shall be calculated from the date of the entry of judgment____


author: BRATTON, Chief Judge.

text:
    Phyllis PEPPER, Plaintiff, v. Mary ALEXANDER, et al., Defendants.
    Civ. No. 83-1892 HB.
    United States District Court, D. New Mexico.
    Nov. 1, 1984.

      Robert Crollett, Dennis T. Sanchez, Taos, N.M., for plaintiff.
    John B. Pound, Montgomery & Andrews, Santa Fe, N.M., for defendants.
   MEMORANDUM OPINION AND ORDER

BRATTON, Chief Judge.

This matter comes before the court on plaintiff’s motion for partial summary judgment, plaintiff’s motion to strike and defendants’ motion for summary judgment. The court has considered the motions and having been apprised of the applicable authorities concludes that plaintiff’s motions should be denied and defendants’ motion for summary judgment should be granted.

Plaintiff brings this suit under 42 U.S.C. §§ 1983 and 1985 and the New Mexico Tort Claims Act for damages. She alleges that defendants, who are employees for the New Mexico Department of Human Services, violated her civil rights by wrongfully acting so as to permanently separate her from her children and terminate her parental rights. She also alleges that defendants intentionally caused her emotional distress. Defendants deny that they acted wrongfully and in addition claim that they are immune from suit.

The uncontested facts are as follows. The Department of Human Services began investigating Mrs. Pepper’s household in 1977. In 1979 that investigation resulted in the Department placing Mrs. Pepper’s four children in foster homes. A consent judgment was entered by the New Mexico District Court on April 12, 1979 which awarded temporary custody to the Department. At that time the Department and Mrs. Pepper entered into some agreements, the goal of which was to lead to an eventual reunion of Mrs. Pepper with her children.

Mrs. Pepper’s parental rights were terminated by a state court judgment rendered on December 22, 1980 and entered on January 26, 1981. That judgment was reversed by the New Mexico Court of Appeals on September 24, 1981. The Court of Appeals ordered the return of the children to Mrs. Pepper.

Defendants base their motion for summary judgment on four grounds. First, defendants claim that the Statute of Limitations has run on all causes of action. Second, defendants claim that there is no genuine issue of material facts relating to the applicability of qualified immunity in this case and that therefore they are entitled to judgment as a matter of law. Third, defendants claim that they are entitled to absolute immunity with regard to their role in initiating and taking part in the termination proceeding. Finally, defendants claim that § 1985 is an inappropriate basis for relief in this case.

Section 1983 Claims

To maintain a cause of action under § 1983 a plaintiff must prove 1) that he has been deprived of a right, privilege, or immunity secured by the Constitution and laws of the United States; 2) that the defendants subjected plaintiff to this deprivation, or caused him to be so subjected; and 3) that the defendants acted under color of state law. Jones v. Hopper, 410 F.2d 1323 (10th Cir.1969). Plaintiff does not state with particularity what constitutional right or privilege she has been denied. Examination of her complaint however reveals two possible deprivations.

Plaintiff does have a constitutional right not to be deprived of her children’s custody or her parental rights without due process of law. Ellis v. Hamilton, 669 F.2d 510 (7th Cir.1982). Plaintiff also has a due process right which protects her from malicious prosecution.

Plaintiff’s parental rights were not unconstitutionally terminated. Plaintiff was afforded due process. A hearing in state court was held in which plaintiff was given the opportunity to protect her rights before her parental rights were permanently terminated. In addition she was afforded an appeal from the unfavorable decision. Plaintiff does not contend that she was not given a fair hearing. This- process was sufficient to protect Mrs. Pepper’s parental rights.

Mrs. Pepper also contends that she was deprived of the custody of her children before the termination hearing. Mrs. Pepper gave up temporary custody of her children voluntarily. She does not allege that the consent judgment deprived her of her constitutional rights. Rather she alleges that defendants acted in bad faith in thwarting her attempts to be reunited with her children. Defendants’ actions culminated in filing the termination proceeding.

Plaintiff’s cause of action for this constitutional deprivation is barred by the statute of limitations. The statute of limitations for § 1983 actions is three years. Garcia v. Wilson, 731 F.2d 640 (10th Cir. 1984). This time period has run since plaintiff’s cause of action accrued when she received notice of her injury. At the very latest plaintiff knew that defendants did not intend to assist her in getting her children back by the time that defendants filed the application for termination of parental rights on September 26, 1980.

All of the alleged activities of defendants which deprived Mrs. Pepper of her children occurred more than three years previous to this suit. Mrs. Pepper’s injury, being deprived of her children, occurred more than three years previous to this suit. Finally, Mrs. Pepper had notice of defendants’ intentions more than three years previous to this suit.

Mrs. Pepper may also be alleging a deprivation of due process due to defendants’ malicious prosecution in filing the application for termination in bad faith. This possible cause of action is barred due to defendants’ absolute immunity.

Absolute immunity is available to prosecutors in § 1983 actions for their activities as prosecutors. Imbler v. Pachtman, 424 U.S. 409, 96 S.Ct. 984, 47 L.Ed.2d 128 (1976). This immunity has been extended to other officials of state and federal agencies who act in a prosecutorial capacity. Butz v. Economou, 438 U.S. 478, 98 S.Ct. 2894, 57 L.Ed.2d 895 (1978). The Supreme Court gave as its reason for extending immunity to agency officials that “there is a serious danger that the decision to authorize proceedings will provoke a retaliatory response.” Id. at 515, 98 S.Ct. at 2915.

Whelehan v. County of Monroe, 558 F.Supp. 1093 (W.D.N.Y.1983) extended absolute immunity to social workers in determining when to bring termination proceedings. In doing so the court refused to follow Doe v. County of Suffolk, 494 F.Supp. 179 (E.D.N.Y.1980).

Assuming that the plaintiff does wish to pursue this issue, defendants are immune from damage liability for their decision to apply for termination of parental rights and for their participation in that proceeding. Whelehan correctly states that the decision to bring termination proceedings is a discretionary one which should be made without the fear of a retaliatory response.

The great importance of the child-protective function served by these defendants is beyond question. If these defendants ... were forced to execute their duties with one eye constantly regarding the possibility of incurring liability for their conduct, the detriment to society and the judicial system would be at least as great as if they were prosecutors of the kind specifically protected by Imbler.

Id. at 1098. Furthermore, plaintiff’s rights are adequately protected by the proceeding itself. A court proceeding insures that an impartial trier of fact will determine whether the prosecution is justified. The plaintiff will also have the opportunity to challenge the legality of the proceeding at that time.

Plaintiff states no other Constitutional or federal law deprivation. Plaintiff contends that defendants acted in bad faith by not assisting her to alter her home life so that she could be reunited with her children. Plaintiff does not point to a federal right to such assistance. Plaintiff must show a deprivation of a federal right in order to have a § 1983 cause of action.

Furthermore, defendants do not have a state statutory duty to assist Mrs. Pepper under N.M.Stat.Ann. § 40-7-4B(3). This section does not give plaintiff a right to assistance in adjusting her condition. This statute merely states the burden of proof which the state must bear if the state seeks a termination of parental rights. Assisting the parent is a prerequisite to termination of that parent’s parental rights.

Section 1985 Claims

Under § 1985(3) plaintiff must allege 1) the existence of a conspiracy, 2) intended to deny the plaintiff equal privileges and immunities under the law, 3) deprivation of a federally protected right, 4) an overt act in furtherance of the objective of the conspiracy, and 5) some racial or otherwise class-based invidiously discriminatory animus behind the conspirators’ actions. Griffin v. Breckenridge, 403 U.S. 88, 91 S.Ct. 1790, 29 L.Ed.2d 338 (1971). Plaintiff does not allege any class-based discriminatory purpose behind defendants’ actions. Plaintiff does not even allege membership in a discrete class. A conspiracy motivated by economic animus is not sufficient to state a cause of action under § 1985(3). United Brotherhood of Carpenters and Joiners of America, Local 610 v. Scott, 463 U.S. 825, 103 S.Ct. 3352, 77 L.Ed.2d 1049 (1983).

State Tort Claims

The statute of limitations under the New Mexico Tort Claims Act is two years from the occurrence resulting in injury. N.M.Stat.Ann. § 41-4-15. The statutory period has clearly run in this case even if plaintiff’s contention is accepted that her cause of action accrued with the Court of Appeals’ decision. This case was filed on December 22,1983. All action in the termination proceedings were completed more than two years previous to the filing of this action with the Court of Appeals’ decision on September 24, 1981. Thus summary judgment should be granted as to plaintiff’s claims brought under the Tort Claims Act.

Because defendant is entitled to summary judgment, plaintiff’s motions should be denied.

Now therefore, IT IS BY THE COURT ORDERED that defendants’ motion for summary judgment is granted and plaintiff’s motion for summary judgment and motion to strike are denied. This action is therefore dismissed.

      . It is unclear whether plaintiff is alleging that defendants' actions in initiating termination proceedings are a basis for her complaint. The Pre-Trial Order states as a contested issue of fact: whether defendants in bad faith sought the termination of plaintiffs parental rights in state court. However, in plaintiffs reply memorandum she states that she is not litigating defendants' decision to initiate the termination proceeding. She assures the court that the only actions of the defendants which form the basis for her complaint are defendants’ actions in failing to assist her in reuniting with her children.