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The New York Court of Appeals has an opportunity to adopt — or categorically reject — the Farrar standard on attorney fees in a case slated for oral argument Tuesday afternoon. McGrath v. Toys “R” Us Inc., 141, comes to Albany via Foley Square where a federal appellate court asked for guidance on whether New York will embrace a rule that says lawyers who win only nominal damages for their clients in fee-generating civil rights cases should generally not be entitled to attorney fees. The case in Albany resulted from a question certified by the 2nd U.S. Circuit Court of Appeals. It is rooted in a human rights matter involving three pre-operative transsexuals who complained they were harassed by Toys “R” Us employees while shopping at a store in Brooklyn. The retailer is based in New Jersey, and the suit, predicated on New York City’s Human Rights Law, ended up in federal court. The plaintiffs alleged they were subjected to derogatory remarks and ultimately denied the privileges of public accommodation because of their sexual orientation and gender. After a 10-day trial, a jury concluded that the retailer had engaged in illegal discrimination. But it awarded only nominal damages of $1 for each plaintiff. Eastern District Chief Judge Charles P. Sifton awarded $191,551 in attorney fees. He described the case as “the first … in which the rights of transsexuals were asserted and vindicated.” Judge Sifton said that providing reasonable attorney fees would “encourage the bringing of meritorious civil rights claims which might otherwise be abandoned because of financial imperatives surrounding the hiring of competent counsel.” On appeal, the 2nd Circuit asked New York’s top court for direction on whether it has adopted the standard set forth by the U.S. Supreme Court in Farrar v. Hobby, 506 US 103 (1992). In Farrar, the Court said that to qualify as a prevailing party, and therefore become eligible for attorney fees, “a civil rights plaintiff must obtain at least some relief on the merits of his claim.” But it is unclear whether New York has adopted that standard. The 2nd Circuit asks whether New York adheres to Farrar and, if not, whether it has another standard. It also asks whether New York would recognize a public interest exception along the lines of that implied by Sifton. H. Nicholas Goodman of Quirk & Bakalor in Manhattan, for Toys “R” Us, and Thomas D. Shanahan of Shanahan Associates in Manhattan, for the plaintiffs, will argue Tuesday afternoon.

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