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Albany, N.Y.—Lawyers who prevail in a civil rights case but win only nominal damages are generally not entitled to attorney fees, New York’s highest court ruled last week in a groundbreaking opinion. For the first time, the court embraced the so-called “ Farrar standard,” finding that attorneys who win token awards in civil rights actions have “prevailed” for fee purposes, but that fee awards are “rarely…appropriate unless the litigation served a significant public purpose.” In McGrath v. Toys “R” Us, 141, the judges agreed on the applicability of Farrar v. Hobby, 506 U.S. 103 (1992), to the New York City Civil Rights Law. But two dissenting judges argued that the first public accommodation case vindicating the rights of transsexuals did not achieve any new meaningful public goal. They contended that the basic principle—anti-discrimination—was established earlier. McGrath came to Albany via the 2d U.S. Circuit Court of Appeals, which certified a series of questions to the New York Court of Appeals concerning the Farrar standard. The case involves three pre-operative transsexuals who complained that they were harassed by Toys “R” Us employees in a Brooklyn store. The plaintiffs filed a federal lawsuit alleging gender and sexual orientation bias under the New York City Human Rights Law, which includes an attorney fee provision for the prevailing party. A jury found for the plaintiffs, but awarded each only $1 in damages. Toys “R” Us conceded that the plaintiffs had technically prevailed, but cited Farrar in arguing that attorney fees were not warranted. Charles P. Sifton, chief judge of the Eastern District of New York, awarded $191,551 in attorney fees. He described the case as “the first…in which the rights of transsexuals were asserted and vindicated.” Sifton said that providing reasonable attorney fees would “encourage” meritorious civil rights claims that otherwise would be abandoned because of “financial imperatives surrounding the hiring of competent counsel.” The decision was appealed to the 2d Circuit, which sought guidance on whether New York would adopt the Farrar standard and, if so, whether in a case such as this attorney fees should be granted despite the award of nominal damages. The majority suggested that fees in this case would be appropriate. While attorney fees are generally not appropriate when there is an award of only nominal damages, they can be in select cases. Here, she said, McGrath is the first public accommodation case that went to verdict under the city’s Human Rights Law and marks the first judgment for transsexuals. The dissenters said the case precedent—that discrimination based on gender or sexual orientation is unacceptable—was established before McGrath.

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