author: GILES, District Judge.

text:
    BLACK GRIEVANCE COMMITTEE, et al. v. PHILADELPHIA ELECTRIC COMPANY.
    Civ. A. No. 75-3156.
    United States District Court, E.D. Pennsylvania.
    Aug. 13, 1985.

      Herbert Newberg, Alice W. Ballard, Samuel & Ballard, Earl W. Trent, Philadelphia, Pa., for plaintiffs.
    Robert W. Maris, John F. Smith, III, Hope A. Comisky, and Alexandra D. Sandler, Dilworth, Paxson, Kalish & Levy, Philadelphia, Pa., for defendant.
   MEMORANDUM

GILES, District Judge.

On December 21, 1984, this court entered a Consent Decree which settled the parties’ merit contentions in the above-captioned case. The plaintiff class, and named plaintiffs, have now petitioned for counsel fees and costs as the “prevailing party” in this litigation which has spanned more than ten years. Philadelphia Electric Company (“PECO”) agrees that plaintiffs are prevailing parties and are entitled to some fee award. However, it contests the extent of the claimed lodestar of $537,499, and some of the expert witness expenses included in the costs claimed of over $20,000. Plaintiffs ask for an upward adjustment in the lodestar for delay in payment, contingency, quality of work, as well as what they perceive as exceptional success in the relief ultimately gained through the 1984 Consent Decree. PECO challenges any upward adjustment and contends that, after considering each of the possible adjustment factors, there should be a net downward adjustment.

Plaintiffs have filed a joint petition for counsel fees and costs. PECO’s chief objection to the claimed lodestar hours focuses on the time spent by the lead attorneys, Herbert Newberg, Esquire and Alice Ballard, Esquire, in pursuing matters which were not, from defendant’s viewpoint, reasonably related to this employment race discrimination litigation. It challenges as excessive the maximum hourly rates asserted by lead counsel as well as the rates claimed by Earl Trent, Esquire, who had contacts with the clients but who was rarely involved directly in pleadings or other matters which involved the court. There is no substantial challenge to the lodestar claim of Phillip Fuoco, Esquire whose time involvement was small in comparison with the claims of plaintiffs’ other attorneys.

This action was initiated by the Black Grievance Committee (“BGC”), a PECO employee organization whose membership is comprised principally of black persons, and seven named plaintiffs who were members of BGC. Jurisdiction over the claims of employment discrimination based upon race was first asserted under the Civil Rights Act of 1871, 42 U.S.C. § 1981. Later, there was added a claim under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e, et seq. This litigation came on the heels of a 1973 Consent Decree issued by the Honorable Louis C. Bechtle stemming from a Justice Department race discrimination lawsuit against PECO. United States v. Philadelphia Electric Company, 351 F.Supp. 1394 (E.D.Pa.1972). By reason of the 1973 Consent Decree, PECO agreed to affirmative action retention and promotion of minority applicants and employees.

The Justice Department was, and remains, responsible for monitoring compliance with that Consent Decree and is obligated to seek court intervention in the event of non-compliance. In the context of that federal agency failing to find non-compliance, this litigation was started. In many respects, the injunctive relief sought by the class duplicated that already gained through the existing 1973 Consent Decree goals and timetables to increase hiring of minorities. Nevertheless, this lawsuit sought across-the-board relief, monetary and injunctive, in all phases of employment activity. Actual damages were sought for all members of the class, present and former employees, beginning from January 1, 1968, together with punitive damages wherever appropriate. The putative class also included all disappointed employment applicants covering the same time period.

I. CALCULATION OF THE LODESTAR

A “lodestar” is determined by multiplying a reasonable number of hours expended during the litigation times a reasonable hourly rate. Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983).

A. MR. NEWBERG

1. Hourly Rate

Mr. Newberg claims hourly rates as follows:

9/75 to 8/78 — $135 per hour
9/78 to 8/80 — $150 per hour
9/80 to 1/81 — $175 per hour
1/82 to 12/83 — $200 per hour
1/84 to present — $225 per hour

Apparently, PECO does not contest his hourly rates for the period through 12/81, but does contend that he should be limited to an hourly rate of $175 thereafter, citing District Judge Huyett’s conclusion in 1982 as to Mr. Newberg’s hourly rate in another Title VII case, Kuhn v. Philadelphia Electric Company, C.A. No. 77-1107, Fee Order, January 20, 1982, and a civil rights action, Institutionalized Juveniles v. Secretary of Public Welfare, 568 F.Supp. 1020, 1034 (E.D.Pa.1983). Mr. Newberg has produced billings from some other non-contingent fee matters to evidence that he has charged some clients the rates claimed. However, there is no showing that these rates were, in fact, collected or that the maximum hourly rate charged there would be appropriate for the kind of work done in this case.

I accept the findings of Judge Huyett in Kuhn and Institutionalized Juveniles as to Mr. Newberg’s maximum hourly rate of $175 as of 1983. It would appear from the billing history thereafter in non-contingent fee matters that Mr. Newberg has attempted to realize an increase in his hourly rate on a yearly basis. It would also appear that the maximum level of skill and expertise is not required to perform all the services that a client might require in the representation. It cannot be said on this record that all the rates that have been asserted by Mr. Newberg are prevailing market rates. Further, Mr. Newberg had the assistance of three other co-counsel, and particularly, another lead counsel in performing the various legal tasks associated with this case. This fact runs counter to a claim of an advanced hourly rate which presumptively represents the ability to perform all legal facets of the representation independently.

Considering all of the above factors, I find that for the period January 1982 through December 1983, an hourly rate of $175 is appropriate and reasonable and for the period of January 1984 to the present an hourly rate of $190 is fair and reasonable. This is especially so, inasmuch as these rates will apply to all aspects of the work done by Mr. Newberg, including that which was routine and which arguably should not have been billed at a maximum hourly rate. Therefore, the hourly rates for Mr. Newberg’s non-fee petition work will be reflected as follows:

9/75—8/78 $135 per hour
9/78—8/80 $150 per hour
9/80—12/81 $175 per hour
1/82—12/83 $175 per hour
1/84—present $190 per hour

2. Hours

It has been agreed between the parties that Mr. Newberg’s original claim of hours total 1351.9, inclusive of 3.8 hours for fee petition work. My calculations, however, show a total of 1326.4 hours. From these hours, PECO claims deductions should be made for inadequately described legal work, work on unrelated Title VII and NLRB litigation and injunctive relief improvidently sought before this court.

(a) Inadequately Described Work

PECO seeks to exclude 115.5 hours for the period 1975 through approximately 1980 as being inadequately described by Mr. Newberg. Counsel for plaintiffs bear the burden of describing adequately the nature of the work performed. Richerson v. Jones, 506 F.Supp. 1259, 1264 (E.D.Pa. 1981). I have reviewed the entries for the period in question. There are many entries which certainly could be more definite. However, I am satisfied, given what is now known about the work by counsel, that the hours charged, which PECO challenges as inadequately described, are related to this multi-faceted case. Consequently, because I have no concern that improper hours are claimed, I find that these hours should be included in the lodestar.

(b) Chemical Spill

In March 1979, Mr. Newberg spent 8 hours in an unsuccessful attempt to have this court enjoin the directives of Henkel & McCoy, the employer of two contingent construction work-force employees, not to return to the PECO premises to work. For what were given as safety reasons, they had refused an order of a PECO supervisor to clean up a chemical powder spill. PECO had requested that their employer not send them back there to work. Neither man was a member of the class nor a named plaintiff. Mr. Newberg contends that he believed that the incident represented a prime example of retaliation and harassment against contingent workers, in general, who were seeking to enforce their civil rights. The petition for a temporary restraining order was denied. The incident was a labor relations problem that did not pertain to the merits of the issues before the court. They were not prevailing parties on this score. Accordingly, these 8 hours will be disallowed.

(c) Collectors

During the course of the litigation, plaintiffs sought a temporary restraining order on behalf of a group of collectors, employees who visit the homes of delinquent customers to collect amounts due. The collectors are authorized to cut the power lines if payment is not forthcoming. PECO had had a policy of sending out collectors in teams of two. Allegedly, after the collector workforce became predominantly black, the policy was changed such that on occasion a single collector could be sent out on the job. The plaintiffs considered this new policy to create a dangerous condition for the collectors, particularly since customers faced with a cessation of service could become hostile and threaten the collectors physically. Plaintiffs’ counsel assert that their work on this aspect of the case provided them with a cameo example of PECO assigning harsher working conditions in areas where black employees were concentrated. The petition for a temporary restraining order was denied. Any grievances were resolved through PECO’s personnel channels. Plaintiffs failed, therefore, to show that race was the motivation for the change in policy or that there was a need for injunctive relief. The policy under attack potentially affected white collectors and black collectors alike. Plaintiffs were not “prevailing parties” in this supplemental action. It did not later appear through any pretrial memorandum to have been a factual basis for the relief ultimately sought in the case. Accordingly, I find that the time devoted to this activity must be deducted from the claimed lodestar. The 26 hours spent by Mr. Newberg on this matter are disallowed.

(d) Final Pretrial Memorandum

PECO also seeks reduction of the claimed lodestar by the number of hours Newberg and Ballard expended on a pretrial memorandum in January 1981. This memorandum proved to be inadequate and prompted the need for a new submission. Plaintiffs’ lead counsel each spent 16 hours on its preparation, including attendance at a pretrial conference. Nevertheless, the memorandum lacked the specificity necessary to advise this court or the defendant, in a reasonable fashion, of the plaintiffs’ theories. It also failed to indicate which witnesses and documents would be used in the attempt to prove these theories. However, plaintiffs contend that this submission provided the basis for the second memorandum and, therefore, was not wasted. The time spent by counsel on the first memorandum was not reasonably related to the progress of the ease. The work duplicated the subsequent better directed efforts of counsel. The submission of an unsuitable final pretrial memorandum from plaintiffs at that point in time delayed the case, prompted a motion from PECO to dismiss the suit and an order of the court requiring another final pretrial memorandum. Accordingly, the 16 hours claimed by Mr. Newberg for his efforts on the first final pretrial memorandum will be disallowed.

(e) The NLRB Proceedings

The more substantial dispute concerns time charges related to plaintiffs’ counsels’ claims for time spent assisting the Philadelphia Regional Office of the National Labor Relations Board (“NLRB”) in the investigation and prosecution of unfair labor practice charges of the Black Grievance Committee (“BGC”). The BGC contended that the organization itself and its individual members, some of whom were white, had been discriminated against by the company. It contended the company’s favored treatment of the Independent Group Association (“IGA”) and concomitant refusal to recognize the BGC as an authorized representative of particular employees with individual grievances against PECO resulted in their suffering discriminatory treatment. Allegedly, the IGA was accorded this recognition. Through the NLRB process, plaintiffs’ counsel contend that they hoped to gain the same recognition for the BGC and thereby bring pressure on PECO to cease and desist the alleged discriminatory treatment of black workers and other members of the BGC.

Neither the BGC nor the IGA had been certified as the exclusive collective bargaining agent as a result of an NLRB conducted election or through an equivalent informal process. Relying on existing precedent, an administrative law judge (“AU”) ruled in favor of PECO on the complaint filed by the NLRB Regional Office. The AU held that no violation of § 8(a)(1) of the National Labor Relations Act (“NLRA”), 29 U.S.C. § 158(a)(1) (1982) occurs where an employer chooses to show partiality to one employee organization over another for purposes of dealing with terms and conditions of employment when neither organization purports to represent a majority of the employees in the workplace nor seeks status as the exclusive bargaining agent under § 9(a) of the NLRA. A three member panel of the NLRB adopted the AU’s findings and holding without opinion. 268 N.L.R.B. NO. 123 (1984). The NLRB complaint averred that the failure to accord the same status to the BGC as was given to the IGA was motivated by race. Race discrimination is not a per se violation of the NLRA. There was no determination whether there was a nexus between any alleged violation of employee rights protected under the NLRA and alleged race discrimination. The settlement of this case occurred before the Third Circuit reversed and remanded in Black Grievance Committee v. NLRB, 749 F.2d 1072 (3d Cir.1984). Although the NLRB proceeding was very much a part of the settlement discussions, as is evidenced by the proposed settlement agreement, it did not become part of the Consent Decree.

Plaintiffs attempt to justify the time spent on the NLRB matter as instrumental to the discovery process in their Title VII and § 1981 cases before this court and as essential leverage for effectuating settlement of the instant case. I disagree. Any discovery of factual issues or legal principal witnesses in the NLRB matter would have had to have been duplicated in this case. The thrust of the NLRB proceeding was not whether there was race discrimination but rather whether there was a violation of organizational rights of employees protected under the NLRA. The Regional Attorney of the NLRB was in charge of prosecuting the theories of the complaint, not plaintiff’s attorneys. An AU, and not this court, was in charge of deciding the relevancy of proferred evidence. Indeed, any determination of racial nexus in the NLRA context would have been of no controlling consequence or evidentiary value in the trial of the various race issues before this court. The NLRA proceeding was a separate proceeding from the one before this court. As important as counsels’ NLRA work must have been to the BGC to enhance its stature with PECO and its employees, it is not possible to give plaintiffs’ counsel credit for work that was not done in this case and which would have had to have been duplicated here had the case not settled. Moreover, this court is not in a position to judge whether plaintiffs’ counsels’ efforts in the NLRA proceedings were wasteful, knowledgeably pursued or duplicative of the efforts and expertise of the NLRB attorneys who were responsible under law to investigate, evaluate and press the complaint on behalf of PECO employees and the BGC. While counsel have an expertise in Title VII and § 1981 race discrimination matters, they do not hold themselves out as experts in the area of NLRA matters. For these reasons, the work by plaintiffs’ counsel on the NLRA matter is not compensable in this case.

Finally, the Third Circuit’s reversal did not establish a nexus between any violation of § 7 of the NLRA and alleged race discrimination. Black Grievance Committee, supra at 1077 n. 4. Thus, under Title VII, plaintiffs were not “prevailing parties.” Mr. Newberg spent 86.7 hours on this work. Ms. Ballard spent 268.9 hours on the matter. These hours will be subtracted from the lodestar.

(f) Newberg Associates

The work of the associates of Mr. New-berg will be compensated at $50.00 per hour which was the billing rate at the time their services were rendered. The hours number 169.5. Therefore, the lodestar for this work is $8,475.00 (169.5 X $50) and will be included in Mr. Newberg’s portion of the lodestar.

(g) Paralegal and Law Student Time

The plaintiffs have sought to include the time spent by paralegals and law students in the lodestar. This request is denied. Paralegals and law students work according to the directives of counsel. The assistance they provide allows counsel to spend their hours more productively on those aspects of the case requiring their skill and expertise. Consequently, counsels’ hourly rate reflects the value of making that non-lawyer time productive. Although there is precedent supporting plaintiff’s counsels’ position, this court prefers to follow Bogosian v. Gulf Oil Corporation, Nos. 71-1137, 71-2543, slip op. at 7, (E.D.Pa. April 1, 1985) where the court rejected including in the lodestar, the hours of paralegals and law students. Accordingly, that time will be treated as one of the costs incurred by plaintiffs, and excluded from the lodestar.

(h) Fee Petition Work

Plaintiffs’ counsels’ time spent preparing the fee petition will be compensated outside of the lodestar. The parties dispute whether this time should be calculated at the maximum hourly rate for the lawyer involved or at the minimum rate for any associate of the law office. PECO argues for $60 an hour. This court recognizes that work done on a fee petition does not require great legal skill. Richerson v. Jones, 506 F.Supp. 1259, 1265 (E.D.Pa. 1981), citing Fernandez v. Shapp, No. 74-2959, slip op. at 9 (E.D.Pa. May 29, 1980). In this case, I find that the preparation of this fee petition warrants compensation at the hourly rates reflecting an attorney’s mechanical application of established principles of law as opposed to rates which reflect some professed expertise in specialized litigation. I find that the appropriate rate is $75 per hour. The hours spent by Mr. Newberg on a motion for interim fees will be disallowed altogether. That motion was denied and this court finds that the time spent by Mr. Newberg on it was unnecessary.

(i) Kuhn Litigation

Mr. Newberg has erroneously charged in this ease 11.5 hours for time spent on the matter of Kuhn v. Philadelphia Electric Company. That time will be deducted,

(j) Summary of Deductions of Hours from Mr. Newberg’s Lodestar

(8/78-8/80) Chemical Spill 8 hours
(8/78-8/80) Collectors 26 hours
(8/78-8/80) Kuhn Litigation 11.5 hours
(9/80-12/81) Final Pretrial Memo 16 hours
(1/82-12/83) NLRB Proceedings 86.7 hours
(1/84-present) Fee Petition 3.8 hours

In addition, the charges for fee petition preparation and briefing and the paralegal and law student time will not be included in the lodestar.

(k) Summary of Newberg Lodestar
Billing Period Hours Claimed Hours Deducted Hours Allowed Rate
(4/75 - 8/78) 496.5 0 496.5 X 135 67.027.50
(8/78 - 8/80) 340.25 45.5 294.75 X 150 44.212.50
(9/80 - 12/81) 138.75 16 122.75 X 175 21,481.25
(1/82 - 12/83) 301.5 86.7 214.8 X 175 37,590.00
(1/84 - Present) 49.4 3.8 46.6 X 190 = 8.664.00
178,975.25
Newberg Associates 169.5 0 169.5 X 50 8.475.00
NEWBERG LODESTAR TOTAL: $187,450.25

B. MS. BALLARD

1. Hourly Rate

Ms. Ballard claims an hourly rate of $150 per hour for all work. PECO answers that the reasonable rate should be $90 per hour. In 1982 in Kuhn v. Philadelphia Electric Company, a class action sex discrimination against defendant, Judge Huyett determined that Ms. Ballard’s hourly rate for lodestar purposes was $90. I adopt that decision as the best historical evidence of her market rate through 1982. Currently, she claims an hourly billing rate of $150. However, there is insufficient evidence that she bills all non-contingent fee hours and is paid consistently at that rate for all hours billed. Considering that her determined market rate was $90 in 1982, the inquiry becomes what is a fair and reasonable expectation for hourly rates in each of the succeeding years. I find that the reasonable rate for 1983 was $100 per hour; for 1984 it was $115 per hour, and for 1985 it was $125 per hour. These rates represent an increase in the skill, expertise and responsibility of counsel in the trial of employment discrimination cases which was brought to bear in concluding the litigation.

2. Hours

Ms. Ballard claims in the petition, by my calculations, a total of 1029.1 hours:

Included in these hours are 9 hours for fee petition preparation done in 1985; 268.9 hours (10.6 hours in 1980, 22.2 hours in 1981, 218.2 hours in 1982, 15.9 hours in 1983 and 2 hours in 1984) devoted to NLRB matters; 16.8 hours (.4 hours in 1980 and 16.4 hours in 1981) towards the final pretrial memorandum; 35.4 hours towards Collectors’ Temporary Restraining Order (.7 hours in 1979 and 34.7 hours in 1980) and 9.5 hours (3.7 hours in 1979, 5.5 hours in 1980 and .3 hours in 1981) devoted to interviews of black female employees in the Kuhn v. Philadelphia Electric Company ease. These hours will be deducted from the lodestar. Except for the hours related to the fee petition preparation, the time deducted will be disallowed for the same reasons they were disallowed in the instance of Mr. Newberg. In addition, respecting the Kuhn hours, presumably this time has already been compensated by Judge Huyett in his fee award. Counsel does not show the contrary to be true. Even though the Kuhn female plaintiffs may have also discussed black employee concerns, the time expended cannot be doubly compensated by an additional award in this case.

Therefore, Ms. Ballard’s compensable hours are as follows:

Year Hours Claimed Hours Deducted Hours Allowed Rate
1979 67.1 4.4 62.7 X 90 5.643.00
1980 152.0 51.2 100.8 X 90 9.072.00
1981 237.6 38.9 198.7 X 90 17.883.00
1982 261.8 218.2 43.6 X 90 3.924.00
1983 216.8 15.9 200.9 X 100 20.090.00
1984 63.2 2 61.2 X 115 7.038.00
1985 30.6 9 21.6 X 125 2.700.00
BALLARD’S LODESTAR TOTAL $66,350.00

C. MR. FUOCO

Mr. Fuoco’s claimed hourly rates are not challenged by PECO. However, I do not find the asserted 1985 rate of $135 per hour justified or proven, particularly considering the allowed rate for Ms. Ballard’s work. Moreover, the two hours charged in 1985 pertain to time he spent preparing the fee petition. Therefore, the two hours charged in 1985 will be compensated at the rate of $75 per hour, the rate found reasonable by this court for time spent on fee petition preparation. Since his work in 1985 pertains to preparation of the fee petition, it will be excluded for purposes of lodestar computation. His lodestar is computed as follows:

1975 12.75 hours at $ 65 828.75
1976 93.5 hours at $ 75 7.012.50
1977 46.5 hours at $ 75 3.487.50
1978 9.5 hours at $ 85 807.50
FUOCO LODESTAR TOTAL $12,136.25

D. MR. TRENT

Mr. Trent claims an hourly rate of $100 per hour for the period 1979-80; $115 per hour 1981-82; and $125 per hour 1983-84. His involvement in the case and, therefore, his demonstration of expertise in the litigation of Title VII cases was not as extensive as that of Ms. Ballard. He has not proven that his billings and receipts for hours worked in non-contingent fee matters during these periods averaged the claimed rates. I find that a fair and reasonable hourly rate for him is $90 per hour for all work.

Total Hours x Hourly Rate = 185.50 x $90

TRENT LODESTAR TOTAL = $16,695.00

E. TOTAL LODESTAR

Newberg $187,450.25

Ballard 66,350.00

Fuoco 12,136.25

Trent 16,695.00

$282,631.50

Newberg letter 3/6/85 (1.8 X $190) 342.00

Ballard letter 4/25/85 (.40 X $125) 50.00

$283,023.50

II. ADJUSTMENTS TO THE LODESTAR

A. Delay in Payment

The lodestar having been determined, the next step will be to ascertain whether it should be adjusted upward for delay in payment. PECO concedes that it should, but argues for an adjustment not to exceed 25%. Plaintiffs argue for application of a “prevailing interest rate” concept. I reject the plaintiffs’ contention. No counsel fees became potentially payable until the Consent Decree was approved at which point plaintiffs could be deemed the prevailing party. Indeed, no fees become payable until this court rules on the fee petition. A reasonable upward adjustment is appropriate for the delay in payment. Twenty-five percent is reasonable.

B. Contingency

PECO contends that the contingency value of the case was such that an upward adjustment of plaintiffs’ lodestar is not appropriate. I disagree. Even though there was a resolution of certain discrimination claims through the Consent Decree in United States v. Philadelphia Electric Co., supra, there continued to be many complaints by black employees at PECO about adverse employment practices based on race. The volume of individual complaints suggested the existence of continuing systemic discrimination in areas addressed, and not addressed, by the 1973 Consent Decree. The search for the source of those complaints through the adversary process, especially in the face of the aforementioned Consent Decree, and the fact that the United States had sought no enforcement action for non-compliance makes this an appropriate case in which to make an upward adjustment based on the contingency factor. There was also considerable risk that the source of the complaints was not systemic race discrimination but a series of individual grievances stemming from employee (including plaintiffs or class members) misconduct, attitudes of fellow workers generated by community biases as opposed to company instilled or tolerated prejudices, or changes in economic circumstances. There was also a risk of discovering midstream that the power struggle for labor relations recognition by a predominantly black employee organization was a matter within the exclusive province of the NLRA and not a Title VII or § 1981 matter at all. These were some of the risks which existed at the time the case was commenced which could have dissuaded counsel from undertaking the representation. The plaintiffs have not prevailed in the sense of proving that there was discrimination. Nonetheless, they have prevailed in obtaining some affirmative action helpful to the class that was not initiated by the company on its own and which may not have been achieved but for the prosecution of this lawsuit. Balancing the risks undertaken in the context of what was not proven and the scope of the relief which was obtained, I find that an upward adjustment of .50 for the contingency factor is appropriate.

C. Quality of Work

Predictably, plaintiffs urge an upward adjustment of the lodestar while defendant urges a downward adjustment based on the quality of the plaintiffs’ counsels’ work during the course of this litigation. Due to the complexity of the necessary proof, generated in large part by the ambitious structuring of the across-the-board claims, I find that no downward adjustment is warranted for quality. Nor do I find that an upward adjustment is appropriate.

Plaintiffs sought the broadest possible relief and the broadest possible class in their efforts to remedy what they perceived to be “patterns and practices” of discrimination. This was so, despite a 1973 Consent Decree in United States v. Philadelphia Electric Co., supra, in which the defendant pledged to set and fulfill certain hiring and promotional goals for minorities in various categories of employment. While the efforts by plaintiffs’ counsel were laudable, and certainly well-intentioned, there was much wasted time and energy. For example, the NLRB involvement detracted from discovery that should have been pursued and developed in this case on the issue of race discrimination. That ancillary proceeding became overwhelmingly concerned with the unfair labor practice charges of a white employee who was not a member of the class. Considerable effort was made to expand the class to include all white employees in the contingent work force when, in fact, those persons had interests different from, and adverse to, the black employees in the group. In fact, these white employees hired another attorney, Santo Federico, Esquire, to make known their objections to the settlement proposal. These objections demonstrate that despite the great expenditure of time in consulting with the employees, plaintiffs’ counsel did not adequately determine the interests of this segment of the proposed subclass of all contingent workers.

Plaintiffs’ counsels’ performance in this case, in terms of complying with court schedules for completion of discovery and pretrial memorandum and, generally, readying this case for trial disposition, was not so superior as to warrant a quality adjustment above their hourly rates, as determined here, which reflect expected expertise. The case was pursued through a period when the controlling case law was in flux. Some theories of liability fell by the wayside because of decisions by appellate courts, including the Supreme Court of the United States. In all of this, counsel were looking for a key to discovery of systemic discrimination as opposed to individual discrimination. Test validation was represented as one such key. However, plaintiffs did not depose PECO’s testing or statistical experts. As of the time of trial, neither plaintiffs’ theories nor evidence on that score had been fully developed. Moreover, data discovered during the pending litigation showed that the statistical analysis on which plaintiffs may have been content to rest at one time was invalid.

Plaintiffs assert that because there was a settlement of value hammered out on the eve of trial, ten years after the complaint was filed, there should be an upward adjustment of the lodestar. While it is true that many months of trial were avoided by the settlement, that fact does not weigh on the side of quality work adjustment. The Consent Decree does not establish the existence of illegal discriminatory conduct, systemic or individual. A trial may have resulted in a verdict for PECO. The settlement avoided for the class and individual plaintiffs the risk of losing and of obtaining no additional affirmative action commitments from the company. The settlement terms, though of significance for the employees, generally, were not tantamount to a “win” given the contentions in the complaint. Accordingly, plaintiffs’ request for an upward adjustment is denied.

D. Hensley Analysis

In Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983), the Supreme Court held that under the Civil Rights Attorney’s Fee Award Act, 42 U.S.C. § 1988, the district court must consider, among other factors, the relationship between the extent of success and the amount of the attorney fee award. The Court stated that where “a plaintiff has achieved only partial or limited success, the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount.... [T]he most critical factor is the degree of success obtained.” Id. at 436, 103 S.Ct. at 1941. In this case, brought under § 1981 as well as Title VII, the Civil Rights Attorney’s Fee Award Act is applicable.

A Hensley analysis is appropriate to assess plaintiffs’ degree of success. Plaintiffs suggest that Hensley is inapposite because plaintiffs obtained the results sought. This position fails to acknowledge the numerous objections made to the proposed settlement by members of the class who complained that the relief sought by the lawsuit was not being provided. In the area of hiring, plaintiffs sought an order requiring hiring at a level to create a 3373% minority workforce company-wide. This was not achieved. Rather, the company agreed not to move for dissolution of the 1973 Consent Decree for a period of 3-5 years. In the areas of qualifications and testing, which were contended to be clearly discriminatory, plaintiffs failed to adduce evidence sufficient to make out a prima facie case of illegality. The Consent Decree provides for training classes for minorities interested in taking aptitude and trade qualifying tests. In the area of promotions, transfers, management selection and performance evaluations, plaintiffs had charged that the criteria being utilized by PECO were discriminatory. The plaintiffs obtained an agreement from PECO to establish a career counseling function to review career paths open to any employee and to encourage qualified employees to pursue their individual goals. Moreover, PECO agreed to develop a sensitivity training program for supervisors focusing on the problems, concerns and potentials of minority employees in the Management Training Program.

The contingent construction work force claim principally resulted in an acceleration of PECO’s existing commitment to persons listed for relief in the 1973 Consent Decree and a settlement fund of $60,000 for 10 named individuals and $60,000 for the remaining contingent workers. Plaintiffs had sought individual monetary awards for 54 named workers which they ultimately failed to obtain. They had also sought an order requiring PECO to rehire the entire group of workers, who are presently on the payroll of an independent contractor, and to give all such persons full back-pay, benefits and seniority rights as though they had continued in the employ of PECO. Plaintiffs settled for no equitable relief in this area beyond that which already existed in the 1973 Consent Decree.

With respect to the general back pay claim of the class, monetary relief had been sought reaching back to January 1, 1968. Front pay and punitive damages were sought as well. The class consisted of many hundreds of past and present employees as well as a group of alleged applicant discriminatees. The potential monetary claim, then, was many millions of dollars. The Consent Decree reflects an agreement that PECO create a total fund of $500,000 which included the $120,000 already discussed which was set aside for named individuals and the contingent work force and $300,000 for minorities employed at the company from 1969-83. Eighty-Thousand dollars was to be distributed to the class members in the Electric T & D department.

Through the Consent Decree the plaintiff class did gain a voice in addressing employee grievances and disputes. PECO agreed to create a nine-member Affirmative Action Committee chaired by the Manager of Personnel and Industrial Relations. The class was given one seat on the Committee. Although the formation of this Committee had not specifically been sought, it was an innovative step towards a monitoring alternative to close court supervision of the Consent Decree. Further, the Committee concept has an advantage of redressing grievances and resolving employee concerns before they might escalate into formal discrimination charges and lawsuits.

Plaintiffs did not obtain through settlement the extensive monetary or injunctive relief for individuals and class members as was originally envisioned. A comparative analysis of the plaintiffs’ demands and the final settlement in the Consent Decree would suggest that only about 25% of the objective relief was obtained. However, it is my belief that the value to the class of the affirmative action steps included are of immediate and long-range significance and benefit to the class and warrants an added factor of 50%. Accordingly, under a Hensley analysis, plaintiffs successfully achieved only 75% of the relief sought. Therefore, plaintiffs’ lodestar shall be adjusted downward by 25%.

Net Adjustments to Lodestar

Delay in Payment + .25

Contingency + .50

Quality of Work .00

Time & Expense Saved .00

Furthering the Civil Rights Law .00

Hensley Analysis ± .25

NET + .50

Adjusted Lodestar Fee Award

$283,023.50 increased by .50 = $424,535.25

I will not allocate the fee award between the attorneys because the disallowed time devoted by any one lawyer may cause a disproportionate allocation. For example, Ms. Ballard spent over 260 hours on NLRB work which was disallowed. Since the attorneys made a joint decision as to allocation of work, I will leave it to them in the first instance to make an allocation of the fee.

Costs

Attorneys Newberg and Ballard claim expert witness expenses relating to Drs. Brent Baxter and James Kirkpatrick, who reviewed test validation studies previously conducted by PECO, and Regan R. Rockhill, a certified public accountant, who testified at the settlement approval hearing on the costs to PECO of implementation of the proposed consent decree. I find that these expenses were reasonably related to the prosecution of the merits and the settlement of the case.

The costs of travel, postage, overtime typists, and telephone usage, will be excluded as expenses included in overhead contemplated by the hourly rates awarded and as other than extraordinary costs. Vecchione v. Wohlgemuth, 481 F.Supp. 776, 798-800 (E.D.Pa.1979). The costs of photocopying, programming and computer use will be allowed as reasonably necessary to the test validation review by plaintiffs and their experts. The costs of deposition transcripts will be allowed, except for the transcript of attorney Robert Orcutt, who was a collector.

Accordingly, for Ms. Ballard the total allowable costs are

Paralegals $18,328.00
Law Students 5,750.00
Expert Witnesses 5,716.71
Programmer 500.00
Computer Facility 1,507.42
Photocopying 173.30
Deposition Transcripts 756.00
$32,731.43

For Mr. Newberg the total allowable costs are

Expert Witnesses $ 7,497.59
Computer 500.00
Deposition Transcripts & Tapes 649.34
Court Reporter 723.60
Notary 2.50
Photocopying 1,625.97
$10,999.00

Fee Petition Preparation

I have found that the appropriate hourly rate is $75.00 for time spent preparing the fee petition and that the time expended on fee petition preparation was reasonable. However, the time expended on the motion for interim fees has been disallowed as unreasonable.

Mr. Newberg

Original Petition 45.1 x 75 3.382.50

Reply Brief re Fees 25.1 x 75 1.882.50

Letter 3/6/85 1.5 x 75 112.50

$5,377.50

Ms. Ballard

Original Petition 23.2 x 75 1,740.00

Reply Brief re Fees 3.3 x 75 247.50

Letter 4/25/85 2.1 x 75 157.50

$2,145.00

Mr. Fuoco

Original Petition 2 x 75 150.00

TOTAL $7,672.50

Joint Attorneys Fee $424,535.25

Ballard’s Costs 32,731.43

Newberg’s Costs 10,999.00

Ballard’s Fee Petition Preparation 2,145.00

Newberg’s Fee Petition Preparation 5,377.50

Fuoco’s Fee Petition Preparation 150.00

$475,938.18

Accordingly, PECO shall pay to plaintiffs’ counsel a joint attorneys’ fee of $424,535.25 together with costs of $32,731.43 and a fee petition preparation award of $2,145.00 payable to Ms. Ballard, costs of $10,999.00 and a fee petition preparation award of $5,377.50 payable to Mr. New-berg and a fee petition preparation award of $150.00 payable to Mr. Fuoco.

An appropriate order follows.


source: Caselaw Access Project

author: CHRISTIAN, Chief Judge.

license: Public Domain

text:
    Ivan ILLIS, Plaintiff, v. UNITED STEELWORKERS OF AMERICA, AFL/CIO-CLC and Hess Oil Virgin Islands Corp., Defendants.
    Civ. No. 84/184.
    District Court, Virgin Islands, D. St. Croix.
    Aug. 14, 1985.
    Barbara Twine, Legal Services of the Virgin Islands, St. Thomas, V.I., for plaintiff.
    John R. Coon, Christiansted, St. Croix, V.I., for United Steelworkers of America, AFL/CIO-CLC.
    Linda Shelby, Birch, de Jongh & Farrelly, St. Thomas, V.I., for Hess Oil Virgin Islands Corp.
   MEMORANDUM OPINION

CHRISTIAN, Chief Judge.

This is a typical Vaca/Hines action. See Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967); Hines v. Anchor Motor Freight, 424 U.S. 554, 96 S.Ct. 1048, 47 L.Ed.2d 231 (1976). Plaintiff Ivan lilis sues his former employer, Hess Oil Virgin Islands Corp. (“HOVIC”), for breach of collective bargaining agreement pursuant to § 301 of the Labor Management Relations Act. 29 U.S.C. § 185. Additionally, plaintiff sues the exclusive representative for the relevant bargaining unit, United Steelworkers of America, AFL-CIO-CLC (“Steelworkers”), for breach of duty of fair representation.

Before the Court is the motion of defendant HOVIC for dismissal of the complaint as to it for failure to state a claim upon which relief can be granted. In evaluating said motion we look beyond the pleadings to the affidavit of Ivan lilis and the collective bargaining agreement (“the Agreement”) between defendants HOVIC and Steelworkers. (The Agreement is attached to the complaint, as Exhibit A.) Accordingly, we treat the motion of defendant HOV-IC as one for summary judgment. Fed.R. Civ.P. 12(b). We deem the facts alleged in the complaint and recited in the lilis affidavit established for purposes of assessing said motion.

The material facts, thus established, are as follows:

(1) Plaintiff Ivan lilis was hired by defendant HOVIC in 1968 as an “A” Operator.

(2) Plaintiff served HOVIC in this job classification for some 15 years.

(3) On June 7, 1981 defendants HOVIC and Steelworkers entered into a collective bargaining agreement which remained in force throughout the period relevant to this action. During the said period, plaintiff lilis was a member of the bargaining unit covered by said agreement.

(4) On the advice of his physician plaintiff requested a temporary job change in early 1982.

(5) Said request resulted in plaintiffs transfer to “the lab” as a “C” Operator in April, 1982.

(6) In September, 1982 plaintiff was advised by his physician that he could return to work as an “A” operator.

(7) Plaintiff so advised his supervisors.

(8) Plaintiff was thereupon advised (a) that he would not be returned to his position as an “A” Operator and (b) that he had lost his 15 years seniority.

(9) On or before September 8, 1982 plaintiff requested that George Flores, shop steward for Steelworkers Local # 8526, assist him in filing a grievance concerning the denial of his request for return to “A” Operator status.

(10) Flores thereupon directed plaintiff to obtain a statement from his physician indicating that he was physically capable of returning to his “old job.”

(11) Plaintiff obtained such a statement on September 8, 1982 and delivered same to Flores.

(12) Plaintiff subsequently asked Flores “on numerous occasions if [his] grievance had been filed.”

(13) On each such occasion Flores “assured [plaintiff] the request had been filed and it would be resolved soon.”

(14) Neither Flores nor any other Steelworkers representative ever filed a grievance on behalf of plaintiff.

(15) In February of 1983 plaintiff was laid off by defendant due to his relative lack of seniority as a “C” Operator.

(16) The complaint against defendants HOVIC and Steelworkers was filed with this Court on June 20, 1984.

On these facts plaintiff prays “[t]hat this Court determine that Defendant Company discharged Plaintiff without just cause, in breach and violation of Plaintiff’s rights under the Collective Bargaining Agreement, and that Defendant Local Union breached its duty of fair representation owing to Plaintiff in the processing of the grievance filed on Plaintiff’s discharge.”

We find this prayer for relief puzzling. Plaintiff does not allege, in the body of his complaint, that he was dismissed without just cause. Rather, he alleges that he was laid off due to HOVIC’s wrongful failure to honor his seniority. Nor does plaintiff allege that any grievance was filed upon his discharge or even that he requested the filing of such a grievance. Rather, plaintiff alleges that he requested that a grievanee be filed concerning the refusal of HOVIC to reinstate him as an “A” Operator with accrued seniority. For purposes of evaluating the motion before us, we will ignore the discrepancy between plaintiffs allegations and his prayer for relief on the assumption that plaintiff could amend his complaint to allege facts sufficient to support his prayer for relief.

Accordingly, we view the complaint as alleging (1) that defendant HOVIC violated plaintiff’s rights under the collective bargaining agreement (a) by refusing to return plaintiff to “A” Operator status, with attendant seniority, in September, 1982, and (b) by laying off and/or discharging plaintiff in February, 1983, and (2) that defendant Steelworkers breached its duty to represent plaintiff fairly (a) by failing to grieve HOVIC’s refusal to return plaintiff to “A” Operator status, with attendant seniority, in September, 1982, and (b) by failing to grieve plaintiff’s layoff and/or discharge in February, 1983.

Defendant HOVIC contends that “while Plaintiff may have a meritorious action against the Steelworkers for failure to file a grievance on his behalf, Plaintiff has no cause of action against Hess Oil Virgin Islands Corp.” due to his admitted failure to exhaust contractual remedies. This contention is entirely without merit. An employee “may bring an action against his employer in the face of a defense based upon the failure to exhaust contractual remedies, provided the employee can prove that the union as bargaining agent breached its duty of fair representation in its handling of the employee’s grievance.” Vaca v. Sipes, 386 U.S. 171, 186, 87 S.Ct. 903, 914, 17 L.Ed.2d 842 (1967).

Under Vaca, plaintiff’s claims against the union for breach of duty of fair representation and against his former employer for breach of the collective bargaining agreement are “inextricably interdependent.” Metz v. Tootsie Roll Industries, Inc., 715 F.2d 299, 301 (7th Cir.1983). To prevail against either HOVIC or the Steelworkers, plaintiff must not only show that his rights under the collective bargaining agreement were violated by HOVIC’s actions but must also carry the burden of demonstrating a breach of duty by the union. Hines v. Anchor Motor Freight, 424 U.S. 554, 570-71, 96 S.Ct. 1048, 1059-60, 47 L.Ed.2d 231 (1976). Therefore, we must measure the sufficiency of plaintiff’s complaint against HOVIC in light of his allegations not only as to HOVIC but as to defendant Steelworker, as well.

So viewed, the complaint, if timely, plainly recites a cognizable claim against defendant HOVIC. The complaint clearly alleges that plaintiff’s failure to avail himself of the contractual dispute resolution mechanisms available under the collective bargaining agreement was the result of a breach by defendant union of its duty to represent plaintiff fairly. The question remains whether this claim was asserted within the applicable limitations period.

Some four months after plaintiff was laid off by defendant HOVIC, the Supreme Court of the United States held, in DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983), that the six month limitations period applicable under Subsection 10(b) of the National Labor Relations Act, 29 U.S.C. § 160(b), to actions based on unfair labor practices, governs both contractual claims under § 301 and claims for breach of duty of fair representation. Defendant HOVIC contends that this action is time barred under DelCostello and that the complaint should consequently be dismissed for failure to state a claim upon which relief can be granted. Plaintiff counters that the action is timely as the statute of limitations did not begin to run until April 10, 1984 when plaintiff first received “clear, unequivocal notice that Defendant Union would not provide Plaintiff any assistance in pressing his grievance.”

The general rule is that a statute of limitations begins to run immediately upon accrual of the cause of action it limits. The cause of action, of course, accrues the moment the right to commence an action based on said cause comes into existence. Plaintiff contends that his hybrid § 301/fair representation cause of action did not accrue until he received “clear, unequivocal notice” that defendant union did not intend to pursue his grievance. We find this contention unrealistic, contrary to the strong federal policy favoring “relatively rapid disposition of labor disputes,” United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 63, 101 S.Ct. 1559, 1564, 67 L.Ed.2d 732 (1981), and against the weight of authority.

While the Supreme Court in DelCostello did not address the question of when a hybrid § 301/fair representation cause of action accrues, the lower courts that have reached the question seem uniformly to have concluded that such a cause accrues “when the claimant discovers, or in the exercise of reasonable diligence should have discovered, the acts constituting the alleged violation.” DelCostello v. International Brotherhood of Teamsters, 588 F.Supp. 902, 908 (D.Md.1984) (on remand from Court of Appeals for the Fourth Circuit following Supreme Court decision cited above). See also Scott v. Local 863, International Brotherhood of Teamsters, 725 F.2d 226, 229 (3d Cir.1984) (remanding to district court for determination of “when the futility of further union appeals became apparent or should have become apparent” to plaintiffs); Benson v. General Motors Corp., 716 F.2d 862, 864 (11th Cir. 1983) (remanding to district court for determination of “when appellants knew of, or should have known of” the injury of which they complained); Metz v. Tootsie Roll Industries, 715 F.2d 299, 304 (7th Cir.1983) (holding that “[a]t some point prior to six months preceding the time the action was brought, the appellant, in the exercise of reasonable diligence, should have discovered the acts constituting the alleged violation)', Bey v. Williams, 590 F.Supp. 1150, 1153 (W.D.Pa 1984) (“the statute of limitations begins to run when it becomes apparent or should have become apparent that further internal union appeals would be futile”), citing Scott, 725 F.2d at 229; Blaszczyk v. Horace T. Potts Company, 591 F.Supp. 871, 878 (E.D.Pa.1984) (action time barred where “plaintiff either knew or should have known that his ease was not going to be taken to arbitration” more than six months before suit filed); Belie v. General Motors Corp., 588 F.Supp. 633, 635 (S.D.Ohio 1984) (“a hybrid § 301 action accrues when the Plaintiffs knew or reasonably should have known that a breach of the duty of fair representation had occurred, even if some possibility of non-judicial enforcement remained”); Bruch v. United Steelworkers of America, AFL-CIO, 583 F.Supp. 668, 670 (E.D.Pa.1984) (in willingness to process grievance cases, the limitations period begins to run “when the claimant discovers, or in the exercise of reasonable diligence should have discovered, the acts constituting the alleged violation”). But see Scott, 725 F.2d at 230-31 (Becker, J., concurring, expressing his fear that the precedent set by the majority “will, in a Vaca v. Sipes -type suit, enable a union defendant to assert the futility of exhausting its own internal remedies as a trigger for the running of the short (6 months) DelCostello statute of limitations and thereby unfairly trap unwary suitors” and recommending a rule under which “the DelCostello statute of limitations [would start] running only from the time that the employee has received from [the union] a clear, written statement telling him that further internal appeals are futile, and the time for judicial action has begun”).

The facts of this case compel the conclusion that at some point prior to six months preceding the filing of the complaint on June 20, 1984, plaintiff, in the exercise of reasonable diligence, should have discovered that defendant labor union was not pursuing his grievance. Review of the grievance/arbitration provisions of the collective bargaining agreement (the Agreement) in effect at the time of the acts and omissions complained of by plaintiff makes this abundantly clear.

Under the Agreement “[a]ny grievances or complaint that may arise' between the Company and the Union as to the meaning, application or the interpretation” of said agreement shall be settled “as promptly as possible” according to procedures set out in Article 24.

Under Step 1 of the grievance procedure a written grievance “shall be submitted by the Union representative to the employee’s ... immediate supervisor within one hundred and twenty (120) hours after the occurrence of the event about which the complaint is made.” The immediate supervisor is then required to “render a written decision to the shop steward within one hundred and twenty (120) hours after receipt of the complaint or grievance.”

If the Step 1 procedure fails to yield a “satisfactory settlement” of the dispute, “the Union representative may submit the grievance to the Department Manager ... within seventy-two (72) hours following the receipt of the answer in Step 1.” Within five days of receipt of the Step 2 grievance the Department Manager, the Department Shop Steward, the Chief Shop Steward and/or the Local Union President must meet to discuss the grievance. Pursuant to Section 24.9 an individual grievant has the right to be present at this and “all grievance and arbitration hearings.” The Step 2 answer must be provided within seventy-two (72) hours of this meeting.

If Step 2 fails to yield a satisfactory settlement, the Union representative and the Local Union President may submit the grievance to the Refinery Manager “within seventy-two (72) hours following the receipt of the answer in Step 2.” Within five (5) days of the receipt of the Step 3 grievance “a meeting between the parties will be held to discuss the grievance.” The Refinery Manager must answer the grievance within seventy-two (72) hours of this meeting.

If the grievance is not “satisfactory adjusted” under Step 3 “the complaining party shall submit a written request to the Refinery Manager within seventy-two (72) hours” for the grievance to be referred to arbitration. If the parties are unable to agree on an arbitrator within five days of receipt of the arbitration request, “representatives of the Company and the Union shall request the Federal Mediation and Concilation Service to furnish a panel of five (5) impartial arbitrators.” Within five days of receipt of this list of arbitrators representatives of the Company and the Union must select an arbitrator by alternately striking names from the list until only one remains.

Under Section 24.5 the arbitrator is to “exert every reasonable effort to render a final decision within thirty (30) days from the date the dispute or complaint is submitted____”

If the representatives of either party fail to comply with the strict time limits described above,

that party shall lose and forfeit all right, claim and/or interest it may have in any complaint, dispute or grievance in connection with which they have failed to observe or comply with any of the aforementioned time limits and such complaint, dispute and/or grievance shall be considered to have been settled in favor of the other party.

Plaintiffs claim against defendant labor union stems from the latter’s alleged failure to take action on behalf of plaintiff in response to defendant employer’s (1) failure to restore plaintiff’s seniority in early September, 1982 and (2) dismissal of plaintiff in February, 1983. We believe that agrievant exercising reasonable diligence would have discovered this fatal inactivity more than six months before this action was commenced in June, 1984, regardless of the alleged representations of union shop steward Flores that the grievance had been filed and would soon be resolved.

Under the grievance procedure outlined above, a meeting, at which the grievant has a right to be present, must be held within 18 days after occurrence of the event giving rise to the grievance unless, of course, the grievance is satisfactorily adjusted under Step 1. Plaintiff does not suggest that he was erroneously informed that his grievance(s) was (were) satisfactorily adjusted under Step 1. Therefore, when no meeting was held within 18 days after plaintiff was informed that his seniority would not be restored, he should have known that no grievance had been filed concerning his loss of seniority. The record reflects that plaintiff was so informed sometime in early September, 1982. He therefore should have known as early as late September, 1982 that no grievanee had been filed. Similarly, plaintiff should have been aware that no grievance had been filed concerning his lay-off no later than mid-March, 1983.

Had a grievance been filed concerning plaintiff’s loss of seniority, plaintiff would have had a right to attend a second grievance meeting, held under Step 3 of the grievance procedure, not more than 11 days after the Step 2 meeting. Thus, by early October, 1982 plaintiff surely should have known that no grievance had been filed to contest his loss of seniority.

If the lack of contractually mandated grievance meetings was not sufficient to alert plaintiff that no grievance had been filed on his behalf, he certainly should have known that no such grievance had been filed when he failed to receive the reply from the refinery manager, required under Step 3, within 32 days of the incident(s) giving rise to the grievance(s). Still plaintiff did nothing.

Under the Agreement, a written request for arbitration must be submitted to the refinery manager within 35 days of the occurrence of the event giving rise to the grievance. Plaintiff, in the exercise of reasonable diligence, could easily have learned that no such request was ever filed on his behalf. By mid-October, 1982 plaintiff knew, or at least should have known, that the union had failed to grieve his loss of seniority. Similarly, by early April, 1983 plaintiff should have been aware that no grievance had been filed concerning his lay-off.

No arbitration was held. Still plaintiff failed to investigate. Not until June 20, 1984, some 21 months after defendant HOVIC allegedly refused to restore plaintiff’s seniority, and some 16 months after plaintiff was laid off, did plaintiff file the instant action. At least 10 months of union inactivity preceded the six-month statutory period. At some point prior to December 20, 1983 plaintiff, laid off in February, 1983, should have realized that defendant union was taking no action on his behalf. Plaintiff simply “cannot be allowed to sit back and claim a lack of notice in light of circumstances such as these.” Metz, 715 F.2d at 304.

Accordingly, the motion of defendant HOVIC for summary judgment dismissing the complaint as to it will be granted.

      . In this Circuit it is settled that DelCostello is to be applied retroactively. Perez v. Dana Corporation, 718 F.2d 581 (3d Cir.1983).

      . See Metz, 715 F.2d at 304 (rejecting an actual notice test for accrual of § 301/fair representation claims, the court observed that if such a test were adopted "[ljack of notification would leave claims unresolved indefinitely and leave the procedure open to all of the vices which statutes of limitations were intended to avoid").

      . Pursuant to Section 5.6 of the Agreement the Company has a duty to supply every new employee with a copy of said agreement. Plaintiff had a duty to familiarize himself with terms of the collective bargaining agreement, including the grievance (arbitration provisions, and is charged with knowledge thereof. See, e.g. Miller v. General Motors Corp., 675 F.2d 146, 150 (7th Cir.1982) (plaintiff "had a duty to know his union appeal rights”); and Hull v. Local 414 of the International Brotherhood of Teamsters, 601 F.Supp. 869, 873 (N.D.Ill.1985) ("Plaintiff is required to familiarize himself with and to honor the terms and conditions of the collective bargaining agreement involved").

      . If, as plaintiff alleges, he was laid off in February, 1983 as a result of HOVIC's failure to restore his seniority in September, 1982, we would be justified in looking only to the date upon which plaintiff knew or should have known of defendant union’s failure to grieve his loss of seniority to determine when the applicable statute of limitations began to run. Plaintiff was injured, if at all, by the loss of seniority; the subsequent lay-off was merely a manifestation of this antecedent injury. See Benson v. General Motors Corporation, 716 F.2d 862, 864 (11th Cir.1983). However, even if we treat plaintiff’s lay-off as an injury in and of itself, the complaint herein is untimely.

      . When a grievance involves discharge, Step 2 of the grievance procedure is bypassed. The grievance meeting mandated under Step 2 would therefore not be held in such a case. Instead, the grievance meeting mandated under Step 3 would have to be held within 18 days of occurrence of the event giving rise to the grievance.

      . According to plaintiffs sworn account of the events surrounding his request for union assistance, plaintiff first contacted shop steward Flores after management had refused to return him to “A" Operator status with attendant seniority. Affidavit of Ivan lilis at ¶ 4. The physician's statement obtained by plaintiff at Flores’ urging is dated September 8, 1982. Affidavit of Ivan lilis at ¶ 5.

      . As Step 2 is bypassed when a grievance involves discharge, no second grievance meeting would have been required in connection with any grievance filed in regard to plaintiff's discharge.

      . It is inconceivable that when defendant was laid off in February, 1983 he continued to believe that defendant union was actively grieving the refusal of defendant HOVIC to restore his seniority. At the very least, the lay-off should have put plaintiff on notice of the need to investigate the status of his grievance. Cf. Blaszczyk, 591 F.Supp. at 879.

      . Defendant Steelworkers has not joined in the motion of defendant HOVIC. It did, however, affirmatively plead noncompliance with the statute of limitations in its answer. In the interest of judicial economy, we will discuss the complaint as to said defendant as well.


author: CLARKSON S. FISHER, Chief Judge.

text:
    Fay YEAGER, et al., individually, and on behalf of a class of all others similarly situated, Plaintiffs, v. HACKENSACK WATER COMPANY, etc., et al., Defendants.
    Civ. A. No. 85-3195.
    United States District Court, D. New Jersey.
    Aug. 14, 1985.

      Lebson & Prigoff by Michael L. Prigoff, Englewood, N.J., on behalf of the American Civil Liberties Union of New Jersey, Newark, N.J., for plaintiffs.
    Riker, Danzig, Scherer, Hyland & Perretti by Vincent J. Sharkey, Jr., James S. Rothschild, Jr., Edward K. DeHope, Morristown, N.J., for defendant Hackensack Water Co.
    Irwin I. Kimmelman, Atty. Gen. of N.J. by George P. Cook, Deputy Atty. Gen., Trenton, N.J., for State defendants.
   CLARKSON S. FISHER, Chief Judge.

This matter arises out of the drought emergency which has affected many New Jersey residents since early this year. Plaintiffs are residential customers of defendant Hackensack Water Company (Hackensack), living within the affected area. Defendants are Hackensack; Governor Thomas H. Kean; Commissioner of Environmental Protection Robert E. Hughey; Drought Coordinator Richard T. Dewling; and the State of New Jersey. Hackensack is a private water company engaged in supplying water to 60 municipalities under terms and conditions approved by the New Jersey Board of Public Utilities.

On April 17, 1985, Governor Kean issued Executive Order No. 97 and on May 16, 1985, issued Executive Order No. 102. Through these orders Governor Kean declared a drought emergency, invoked certain emergency powers and directed the Commissioner of Environmental Protection, the Water Emergency Task Force and the Drought Coordinator “to take whatever steps are necessary and proper to alleviate the water supply emergency and to effectuate this Order.” On May 17, 1985, Drought Coordinator Richard T. Dewling issued Administrative Order No. 6 which imposed mandatory water restrictions (50 gallons per resident per day) in a specified area and established procedures for administration of the state’s water rationing program.

Administrative Order No. 6 delegated the “primary monitoring and threshold enforcement function” to the individual water purveyors and to county arid municipal governments. Further, the order authorized “the adoption and issuance of ordinances, rules, regulations, rate schedules and amendments thereto, inspection, enforcement and collection actions, and all other such actions as may be necessary to implement, administer and enforce the Water Rationing Program.” As to residential customers, the order specifically directed that

[t]he number of permanent residents in each dwelling unit will determine the amount of water that each household will be allowed to use pursuant to the Plan. The individual water purveyors shall have the responsibility of determining the water allocation for each dwelling unit (household). This can be accomplished through the use of postcard census, bill analysis, spot checks, or other verification procedures.
The purveyor may require the names of individuals in each residential unit to verify the number. Each purveyor shall alter its meter reading schedules as needed in order to assure compliance.
Where the purveyor cannot obtain information regarding the number of residents, the purveyor should assume, for purposes of surcharge, a single occupant for that household, and assess an allotment of 50 gallons for the dwelling unit. Customers are required to provide purveyor personnel with access to read meters in order to properly establish water usage. Purveyors who have been unable to obtain access to read the meter shall provide immediate written notice to the customer requiring the customer either to read the meter and submit written certification of its accuracy to the purveyor within five (5) days or to contact the purveyor within five (5) days to make an appointment for purposes of meter reading. If there is no reply from the customer, or if the purveyor is thereafter denied entry to read the meter, or to verify the number of household residents, that customer will be subject to penalty provided by law under N.J.S.A. 58:1A-1 et seq. and N.J.S.A.App. A:9-33 et seq.
The purveyor is hereby authorized and directed to provide appropriate officials with the information needed to carry out these enforcement actions in an expeditious fashion.

Administrative Order No. 6 at 3-4 (emphasis added).

Pursuant to the state’s directive, Hackensack has sought to ascertain its customers’ social security numbers as well as the names of individual household members. To secure this information Hackensack prepared and sent a postcard mailer form to each of its residential customers. The explanation on the form provided in part

[w]e are required by the New Jersey State drought emergency task force to know by name how many permanent members there are in your household.
The attached postcard is designed to provide us with that information. The rationing program requires the head of each residential household which has its own water meter to answer all questions, provide the names of all household members and send the prépaid postcard back to us by return mail.
If there is no reply from the customer, or if we are denied access to read the meter or verify the number of household residents, you will be subject to penalty provided by law under N.J.S.A. 58:1A-1 et seq. and N.J.S.A.App. A:9-33 et seq.

Although the collection of social security numbers was not specifically authorized, the postcard mailer received by plaintiffs indicated that the failure to provide all requested information could result in civil or criminal sanction. In short, Hackensack was authorized by the state to take whatever action it deemed necessary, including the collection of its customers’ social security numbers, to enforce the state’s water rationing program. Sufficiently onerous punitive measures were threatened to insure compliance with Hackensack’s requests for information.

On June 25, 1985, plaintiffs filed a complaint alleging violations of their constitutionally and statutorily protected privacy rights. Specifically, plaintiffs claim that the information sought is protected by the Privacy Act of 1974, Pub.L. No. 93-579, section 7; the first, fourth, fifth, ninth and fourteenth amendments to the United States Constitution; and article I of the New Jersey Constitution. The following day the court issued an order to show cause, returnable July 10, 1985, why defendants should not be restrained and enjoined from collecting the information they seek. On July 10 the parties agreed to a hearing on the merits of this case pursuant to Fed.R.Civ.P. 65(a)(2).

Plaintiffs have asked the court for an injunction

(A) [ejnjoining and restraining defendants, their agents, servants and employees from further soliciting the social security numbers (“SSNs”) and names of household members from the plaintiffs and the class of residential customers of defendant, Hackensack Water Company;
(B) [ejnjoining and restraining defendants, their agents, servants and employees from disseminating by any means whatsoever, to any persons, the SSNs and the names of household members of plaintiffs and the class;
(C) [rjequiring defendants to secure and safeguard the information gathered to date concerning the SSNs and the names of household members of plaintiffs and the class until the further Order of this Court;
(D) [ejnjoining defendant State of New Jersey from enforcing the civil and criminal penalties of N.J.S.A. 58:1A-1 et.seq. and N.J.S.A.App. A:9-33 et seq. against members of the class for failure to divulge their SSNs and/or the names of members of their households residing with them;
(E) [rjequiring defendant, Hackensack Water Company to advise, within ten (10) days of the date hereof, those members of the class who have not returned their copy of the form attached as Exhibit B to the Verified Complaint that said residential customers need not disclose their SSNs nor the names of members of their households residing with them.

Memorandum of Law in Support of Plaintiffs’ Application for a Preliminary Injunction (Plaintiffs’ Mem.) at 1-2. Plaintiffs have not challenged the validity of the drought emergency or defendants’ authority to establish a water rationing plan pursuant to their respective “emergency powers.” Rather, plaintiffs’ action is directed against defendants’ alleged violations of the Privacy Act of 1974 and plaintiffs’ constitutionally protected privacy rights.

Section 7 of the Privacy Act of 1974 provides

(a) (1) It shall be unlawful for any Federal, State or local government agency to deny to any individual any right, benefit, or privilege provided by law because of such individual’s refusal to disclose his social security account number.
(2) the provisions of paragraph (1) of this subsection shall not apply with respect to—
(A) any disclosure which is required by Federal statute, or
(B) the disclosure of a social security number to any Federal, State, or local agency maintaining a system of records in existence and operating before January 1,1975, if such disclosure was required under statute or regulation adopted prior to such date to verify the identity of an individual.
(b) Any Federal, State, or local government agency which requests an individual to disclose his social security account number shall inform that individual whether that disclosure is mandatory or voluntary, by what statutory or other authority such number is solicited, and what uses will be made of it.

Although Hackensack is not a “Federal, State, or local government agency” as defined by the Act, plaintiffs argue that by virtue of the state’s executive and administrative orders Hackensack was deputized for the purpose of collecting the requested information. In certain situations, where there is a close nexus between the state and an action by a regulated entity, the action of the latter may be fairly treated as that of the state itself. Jackson v. Metropolitan Edison Co., 419 U.S. 345, 351, 95 S.Ct. 449, 453, 42 L.Ed.2d 477 (1974). This situation exists when a statutory scheme or executive directive compels, or at least provides the impetus for, the alleged proscribed activity. Jackson v. Metropolitan Edison Co., 483 F.2d 754, 757 (3d Cir.1973), aff’d, 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974). See also Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 92 S.Ct. 1965, 32 L.Ed.2d 627 (1972); State v. Droutman, 143 N.J.Super. 322, 363 A.2d 1304 (Law Div.1976). While these and other similar cases have found “state action” in the context of alleged constitutional violations by regulated entities, the same principle is applicable here. In order to determine the applicability of the Privacy Act to the actions of Hackensack, the central question is whether its solicitation of social security numbers was sufficiently fostered or encouraged by the state as to be imputed to the state.

Given the information presented, it is clear that the primary motivation for Hackensack’s attempt to obtain its customers’ social security numbers came from Administrative Order No. 6. Hackensack has argued that the normal collection of its charges would be facilitated if it possessed customers’ social security numbers. While this may be true, this is not the context within which the information was solicited. Hackensack’s customers were informed that the requested information was required by the state’s rationing program. On the basis of the state’s significant involvement in Hackensack’s actions, those actions will be imputed to the state. As an action of the state, the disclosure of social security numbers cannot be compelled without compliance with section 7(b) of the Privacy Act.

Section 7(b) of the Privacy Act has been construed to provide a private right of action for prospective relief to redress violations. See Greater Cleveland Welfare Rights Org. v. Bauer, 462 F.Supp. 1313, 1319-20 (N.D.Ohio 1978), and cases cited therein. “In the absence of a cause of action to enforce section 7(b) in the federal courts, said action would provide an empty right with no means of enforcement. Such would clearly frustrate the intent of Congress.” Greater Cleveland, 462 F.Supp. at 1319-20.

Having concluded that section 7(b) creates an implied right of action, the court must determine whether the relief sought by plaintiff is consistent with the purposes of the Privacy Act. Plaintiffs have requested that defendants be enjoined from further solicitation or dissemination of its customers’ social security numbers; that defendants be required to secure and safeguard the information already gathered; that the state be enjoined from enforcing the civil and criminal penalties of N.J.S.A. 58:1A-1 and N.J.S.A. App: A 9-33 against Hackensack’s customers for failure to divulge their social security numbers; and that Hackensack be required to advise its customers who have not responded that they need not disclose their social security numbers.

The Privacy Act was designed to discourage improper uses of social security numbers and to allow individuals the opportunity to make an intelligent decision regarding its disclosure. The proposed use to which Hackensack would put its customers social security numbers is not per se impermissible. Defendants erred, however, by failing to comply with the disclosure requirements of the Act. Accordingly, the relief sought should be tailored to enable plaintiffs and others to make an informed, knowing and educated decision. At the same time, the court believes that a significant amount of time and money would be wasted if it were to compel destruction of the information already gathered.

Therefore, the following relief— as to social security numbers only—is granted. Defendants must retroactively comply with the disclosure requirements of section 7(b) of the Privacy Act. Plaintiffs, and others from whom Hackensack has solicited social security numbers, must be informed of the voluntariness of the disclosure, the source of the authority for it, and the possible uses to which the disclosed number might be put. Until such time as this disclosure is accomplished, defendants are required to safeguard the information gathered and are enjoined from disseminating to anyone by any means the social security numbers provided without the disclosure required by section 7(b) of the Privacy Act. Furthermore, the S.tate of New Jersey is enjoined from enforcing any civil or criminal penalties against anyone for failing to provide their social security number without the benefit of proper disclosure.

Plaintiffs also have challenged Hackensack’s attempt to collect the names of the members of its customers’ households. Administrative Order No. 6 specifically authorized Hackensack to collect “the name of individuals in each residential unit____” Plaintiffs argue that the request for this information, under threat of prosecution, “seriously chill[s] plaintiffs’ associational rights and rights to be free from government interference under the First, Fourth, Fifth and Ninth amendments to the United States Constitution and under Article I of the New Jersey Constitution.” Plaintiffs’ Mem. at 9. Using the same rationale discussed above, the court can imply “state action” from Hackensack’s conduct sufficient to support plaintiffs’ constitutional claims. Jackson v. Metropolitan Edison Co., 419 U.S. at 351, 95 S.Ct. at 454.

In order to prevail on their right-to-privacy claim, plaintiffs must show that the names of household members are within the constitutionally protected right of privacy and that the state has failed to demonstrate a compelling interest sufficient to permit an infringement of plaintiffs’ rights. Roe v. Wade, 410 U.S. 113, 155, 93 S.Ct. 705, 727-28, 35 L.Ed.2d 147 (1973); Shapiro v. Thompson, 394 U.S. 618, 634, 89 S.Ct. 1322, 1331, 22 L.Ed.2d 600 (1969). Generally, the right of privacy involves “those personal rights that can be deemed fundamental or implicit in the concept of ordered liberty.” Roe, 410 U.S. at 152, 93 S.Ct. at 726; Palko v. Connecticut, 302 U.S. 319, 325, 58 S.Ct. 149, 152, 82 L.Ed. 288 (1937). Traditionally, the activities embraced by this definition relate to the intimate facets of an individual’s personal life (e.g., marriage, procreation, contraception, family relationships, child rearing or education). Paul v. Davis, 424 U.S. 693, 713, 96 S.Ct. 1155, 1157, 47 L.Ed.2d 405 (1976). Arguably, the information sought could provide details of familial relationships and other intimate living arrangements. Although the parameters of the right of privacy are not delineated by the Constitution, it appears that the right to be free from compelled disclosure of the names of household members is within the right of privacy which has been recognized by the courts.

Having determined that defendants’ conduct impinges upon a constitutionally protected right, the court must determine whether the actions are justified by a sufficiently compelling interest. Hackensack asserts that its request for the names of household members is necessary to satisfy its obligations to the state during the drought emergency (i.e., determining the water allocation for each household and assessing and collecting water surcharges). According to Hackensack, “[t]he names of all individuals in each residential unit are used by Hackensack to verify the number of water users. Without such verification, Hackensack will be unable to determine whether water rations are being exceeded. In addition, the requirement that names be disclosed should (a) reduce duplication, and (b) act as a deterrent to overstating of needs.” Memorandum of Law of Defendant Hackensack in Opposition to Application at 11.

Clearly, the state has a substantial interest in alleviating the water emergency affecting its residents and the means chosen are directed toward that end. Nonetheless, the Supreme Court has established that even a legitimate and substantial government purpose cannot be achieved by means which are unnecessarily broad and which tend to stifle fundamental personal liberties when the end might be more narrowly achieved. “The breadth of legislative abridgement must be viewed in the light of less drastic means for achieving the same purpose.” Shelton v. Tucker, 364 U.S. 479, 488, 81 S.Ct. 247, 252, 5 L.Ed.2d 231 (1960).

In the case presented, it is obvious that there exist less intrusive methods by which defendants might achieve their objectives. Contrary to their assertions, defendants have shown no evidence that individuals, if asked, would intentionally misrepresent the number of household members. Furthermore, individual residents’ names are not essential to the collection of surcharges. Any surcharges imposed would have to be assessed against water customers, not individual household members.

Given the state’s intrusion into a constitutionally protected aspect of plaintiffs’ individual rights and in light of the apparent availability of less intrusive means to accomplish its objectives, the state’s authorization of the collection of the names of individual household members as well as Hackensack’s actions pursuant thereto must be declared unconstitutional. Accordingly, defendants are enjoined from any further solicitation of the names of plaintiffs’ household members or of the household members of those similarly situated residential customers. Hackensack is to destroy all information gathered to date concerning the names of its customers’ household members.

In conclusion, defendants are directed to comply with the disclosure requirements of the Privacy Act in their attempt to collect social security numbers. Defendants are constrained in their use of the numbers already collected until retroactive compliance is achieved. As to the collection of the names of household members, defendants’ actions are declared unconstitutional. Defendants are restrained from any further attempts to gather this information and directed to destroy all such information previously collected. No costs.

      . The named plaintiffs who bring this action purport to represent a class of over 100,000 similarly situated customers of Hackensack. This group, however, has not been certified as a class pursuant to Fed.R.Civ.P. 23.

      . 5 U.S.C. § 552a, note.

      . 5 U.S.C. § 552(e).

      . The language of article I, par. 1, has been interpreted to provide a right of privacy similar in substance and scope to the federal right. Lehrhaupt v. Flynn, 140 N.J.Super. 250, 356 A.2d 35 (App.Div.1976), aff’d, 75 N.J. 459, 383 A.2d 428 (1978). Accordingly, this opinion focuses on federal interpretations.