15-1887 In re McCray, Richardson, Santana, Wise, and Salaam Litigation

UNITED STATES COURT OF APPEALS 1 FOR THE SECOND CIRCUIT 2

- - - - - - 3 August Term, 2015 4 (Motion Submitted: February 9, 2016 Decided: August 3, 2016) 5 Docket No. 15-1887 6

_________________________________________________________ 7 IN RE: MCCRAY, RICHARDSON, SANTANA, WISE, AND SALAAM 8 LITIGATION 9 Stevens, Hinds & White, P.C., 10 Appellant , 11

- v. - 12 Fisher, Byrialsen & Kreizer, PLLC, 13 Appellee

. 14

_________________________________________________________ 15 Before: KEARSE, POOLER, and SACK, Circuit Judges

. 16 Motion by appellee Fisher, Byrialsen & Krei zer, PLLC ("FBK"), to dismiss for lack 17 of appellate jurisdiction the appeal of appellant Stevens, Hinds & White, P.C. ("SHW"), from orders 18 of the United States District Court for the SouthernDistrict of New York, Ronald L. Ellis, Magistrate 19 Judge , ruling on motions by SHW relating to its entitlement to attorneys' fees as former counsel to 20 certain plaintiffs in the action be low. FBK contends that because SHW did not consent, pursuant to 21 28 U.S.C. § 636(c), for all proceedings to be conducted before a magistrate judge, the magistrate 22judge's orders must be treated merely as recommenda tions to be reviewed by the district court, and 1 that appeal directly to this Court from the orders of the magistrate judge is unauthorized. Because 2 § 636(c)'s consent requirement applies to parties (and to persons who move to become parties, see 3 New York Chinese TV Programs, Inc. v. U.E. Enterprises, Inc. , 996 F.2d 21 (2d Cir. 1993)), and the 4 parties in this case had given the requisite consent, we conclude that the consent of SHW as counsel 5 or former counsel was not required. 6 Motion denied. 7 Gareth W. Stewart, New York, New York for Appellant

. 8 James R. DeVita, Doar Rieck Kaley & Mack, New York, New York for 9 Appellee

. 10

KEARSE, Circuit Judge : 11 Appellant Stevens, Hinds & White, P.C. ("SHW"), which from 2003 to 2009 served 12 as attorneys for plaintiffs Kharey Wise (aka Korey Wise) and other members of his family 13 (collectively "Wise") in a wrongful imprisonment action following his exoneration in a case that had 14 come to be known as the "Central Park Jogger" case, appeals from orders of the United States District 15 Court for the Southern District of New York, Ronald L. Ellis, Magistrate Judge , granting SHW 16 $231,212.50 in attorneys' fees plus $6,785 in expenses and denying motions to, inter alia , increase 17 those amounts and to award interest. Appellee Fish er, Byrialsen & Kreizer, PLLC, current attorneys 18 for Wise, has moved to dismiss the appeal, contending that because SHW did not consent pursuant 19 to 28 U.S.C. § 636(c) for all proceedings to be conducted before a magistrate judge, Judge Ellis's 20 orders must be treated as recommendations to be reviewed by the district court, and that appeal 21 directly to this Court from those orders is unauthorized. Because § 636(c)'s consent requirement 22
2applies to parties (and to persons who move to become parties, seeNew York Chinese TV Programs, 1 Inc. v. U.E. Enterprises, Inc. , 996 F.2d 21, 25 (2d Cir. 1993) ("Chinese TV ")), and the parties here 2 gave the requisite consent, we conclude that the consent of SHW as counsel or former counsel was 3 not required, and we deny the motion to dismiss. 4 Kharey Wise was one of five persons convicted of the 1989 assault and rape of a jogger 5 in New York City's Central Park. After spending years in prison, he and the other four were 6 exonerated after DNA testing confirmed that the crime had been committed by someone else. In 7 2003, Wise, represented by SHW, commenced an action pursuant to 42 U.S.C. §§ 1983 and 1985 8 against the City of New York (the "City") and numerous other defendants, alleging civil rights 9 violations in connection with Kharey Wise's wrongful conviction and imprisonment. In 2007, the 10 Wise action was consolidated with the similar actions brought by the other four exonerated 11 individuals and their families. 12 In 2009, Wise replaced SHW with a firm that was a predecessor to Fisher, Byrialsen 13 & Kreizer, PLLC (collectively "FBK") . SHW notified FBK of its intenti on to seek attorneys' fees and 14 costs in the event that Wise obtained a favorable judgment. 15 In September 2014, after pretrial proceedings in which claims of some plaintiff family 16 members had been dismissed for failure to prosecute , all of the remaining parties to the consolidated 17 action consented in writing pursuant to 28 U.S.C. § 636(c) "to have a United States magistrate judge 18 conduct all [further] proceedings in th[e] case includi ng trial, the entry of final judgment, and all post19 trial proceedings" (Parties' Consent To Proceed Before United States Magistrate Judge ("Consent") 20 at 2.) The Consent, "So-Ordered" by the districtjudge, stated that "Any appeal from a judgment 21 entered in this case will lie to the Court of Appeals for the Second Circuit as from any other judgment 22 of the district court pursuant to 28 U.S.C. § 636( c)(3) and Fed. R. Civ. P. 73(c)." (Consent at 1.) 23
3The parties immediately settled the litigation, entering into a Stipulation and Order of 1 Settlement and Dismissal that, inter alia , disposed of all remaining clai ms, stated that the City would 2 pay certain specified sums, and stated that the consolidated "action is hereby dismissed." On 3 September 5, 2014, the Stipulation and Order of Settlement and Dismissal was "So-Ordered" and 4 entered by the magistrate judge (the "So-Ordered Settlement"), and the case was marked "Terminated" 5 as of that date. 6 The So-Ordered Settlement provided that Kharey Wise, "in full satisfaction of all his 7 claims against" the defendants, "including . . . attorneys' fees," would receive $12,250,000, and that 8 he assigned his rights to attorneys' fees, expenses , and costs to FBK. SHW promptly filed a petition 9 with the magistrate judge seeking the reasonable valu e of the services it had provided to Wise in the 10 litigation. An escrow fund for fees was created. 11 The magistrate judge decided SHW's motion and denied a motion by SHW for 12 reconsideration (the "SHW Orders"); the details of those orders are not material to this motion to 13 dismiss. SHW has appealed both orders to this C ourt. FBK has moved to dismiss the appeal for lack 14 of appellate jurisdiction on the ground that the magi strate judge's SHW Orders are not final decisions 15 within the meaning of 28 U.S.C. § 1291 because SHW did not consent to have all proceedings 16 conducted before a magistrate judge. FBK argues thatin the absence of suchconsent, a magistrate 17 judge's orders are merely recommendations to be ruled on by a district judge . For the reasons that 18 follow, we reject FBK's premise that SHW's cons ent was required, and we deny the motion to dismiss. 19 Section 636(c) provides, in part, that when "specially designated to exercise [civil] 20 jurisdiction by the district court . . . he [or she] serves," a "United States magistrate judge . . . may" 21 (1) Upon the consent of the parties , . . . conduct any or all proceedings 22 in a jury or nonjury civil matter and order the entry of judgment in the case 23

. . . . 24

418 U.S.C. § 636(c)(1) (emphasis added); see alsoid . § 636(c)(3) ("The consent of the parties allows 1 a magistrate judge designated to exercise civil jurisdiction under paragraph (1) of this subsection to 2 direct the entry of a judgment of the district court in accordance with the Federal Rules of Civil 3 Procedure."). 4 "If a magistrate judge is designated to ex ercise civil jurisdiction under paragraph (1) 5 of [§ 636(c)]," and is available, the parties are to be so advised by the clerk of court when the action 6 is filed, and they may be so advised again thereafter by the district court judge or the magistrate judge, 7 but they must also be 8 advise[d] . . . that they are free to w ithhold consent without adverse substantive 9 consequences. Rules of court for the re ference of civil matters to magistrate 10 judges shall include procedures to protect the voluntariness of the parties' 11 consent. 12 Id . § 636(c)(2). Such consent may be express or implied, see , Roell v. Withrow , 538 U.S. 580, 585, 13 588 (2003); but unless there is such consent by all of the parties, "the Magistrate Judge lack[s] 14 authority to enter judgment," Yeldon v. Fisher , 710 F.3d 452, 453-54 (2d Cir. 2013). 15 We have held that the prerequisite that all of the "parties" in the action give their 16 consent in order for a magistrate judge to exercise civil jurisdiction is applicable to proposed 17 intervenors, i.e. , persons or entities who move to become parties. SeeChinese TV , 996 F.2d at 25 18 ("Without the consent of the 'intervenors', the magi strate judge's order [denying intervention] has the 19 effect only of a report and recommendation to the district judge, who upon the filing of objections 20 must review de novothe recommendation."). This is appropriate for one who timely moves to 21 become a party by intervention as of right to protect an interest in an action that may be impaired by 22 the outcome of the case and is not adequately protected by the current parties, seeFed. R. Civ. P. 23 24(a), or by permissive intervention to pursue "a clai m or defense that shares with the main action a 24 common question of law or fact," Fed. R. Civ. P. 24(b). 25 5But claims for attorneys' fees stand on a different footing. A request for reasonable 1 attorneys' fees pursuant to 42 U.S.C. § 1988 by the plaintiff prevailing on a § 1983 claim "raises legal 2 issues collateral to the main cause of action" and requires "an inquiry separate from the decision on 3 the merits." White v. New Hampshire Department of Employment Security , 455 U.S. 445, 451-52 4 (1982). And under New York law, which affords "the attorney who appears for a party" in an action 5 in any court "a lien upon his client's cause of action . . . and the proceeds thereof," N.Y. Judiciary Law 6 § 475 (McKinney 2005), the attorney merely has "a security interest in the favorable result of [that] 7 litigation," Chadbourne & Parke, LLP v. AB Recur Finans , 18 A.D.3d 222, 223, 794 N.Y.S.2d 349, 8 350 (1st Dep't 2005), which is distinct from the rights at issue in the client's action. In general, claims 9 for attorneys' fees are 10 not part of the merits of the action to which the fees pertain. Such an award 11 does not remedy the injury giving rise to the action . . . . 12 Budinich v. Becton Dickinson & Co. , 486 U.S. 196, 200 (1988). 13 Further, while the court is to determine the appropriate amount of attorneys' fees in a 14 civil rights action, see , e.g. , Hensley v. Eckerhart , 461 U.S. 424, 429 (1983), the fee is awarded to the 15 party, seeEvans v. Jeff D. , 475 U.S. 717, 730 (1986). Here, in the So-Ordered Settlement, Kharey 16 Wise was to receive $12,250,000 in satisfaction of his claims including attorneys' fees; and he 17 "assigned" to FBK "his rights" to attorneys' fees, which would come out of that $12,250,000. The 18 parties had just consented to have the magistrate judge conduct "all [further] proceedings." Thus, any 19 dispute as to the amount of fees that should be paidto attorneys who provided services to Wise in this 20 litigation was to be decided by the magistrate judge. 21 Nothing in § 636(c) or in Chinese TV --or in any other case of which we are aware-- 22 suggests that consent of attorneys in their own right is required for the magistrate judge to exercise 23 the civil jurisdiction allowed by § 636(c)(1). Indee d, there is no indication in the Consent here, signed 24
6by the attorneys for their respective clients, that c onsent of the attorneys in their own right--including 1 FBK--was required, requested, or given; and, consis tent with the lack of any such requirement, we 2 note that although the magistrate judge ordered disbursement of the remaining escrowed attorneys' 3 fees to FBK, there is no indication in the record th at FBK sought district court approval of that order 4 as if it were a mere recommendation. 5 As the parties permissibly consented to have the magistrate judge enter judgment and 6 to have "[a]ny appeal from a judgment entered in this case" be taken "to the Court of Appeals for the 7 Second Circuit as from any other judgment of the di strict court pursuant to 28 U.S.C. § 636(c)(3) and 8 Fed. R. Civ. P. 73(c)" (Consent at 1), FBK's moti on to dismiss this appeal for lack of appellate 9 jurisdiction is denied. 10

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