Noel v. City of New York
- Laura Swain
- 1:15-cv-05236
- U.S. District Court · Southern District of New York
- 3
In Noel v. City of New York, Judge Swain denied approval of an assignment transferring settlement-enforcement rights to ADC because it violated New York’s professional-conduct rule.
Shauna Noel and Emmanuella Senat, ADC, and the City of New York were affected by the denial of the request to approve the assignment and change the case caption.
What happened
In Shauna Noel and Emmanuella Senat v. City of New York, the plaintiffs asked the court to approve an agreement assigning their remaining rights under the settlement resolving the case to Anti-Discrimination Center, Inc., and to change the case caption. The agreement provided that each plaintiff would receive $30,000.
The assigned rights included the ability to interpret and enforce the settlement and to respond to efforts by the City to change it. The City took no position. The court focused on New York Rule of Professional Conduct 1.8(i), which generally bars a lawyer from acquiring an ownership interest in the subject of litigation, subject to two listed exceptions. The plaintiffs argued that the rule applied only while representation was ongoing and did not cover this assignment to a not-for-profit organization.
Judge Laura Taylor Swain rejected that argument and denied the plaintiffs’ request. She concluded that the agreement violated Rule 1.8(i) because it would give the plaintiffs’ attorneys an interest in the right to enforce the settlement, and stated that the order resolved docket entry 1005.
The detailed version
- Noel v. City of New York · No. 1:15-cv-05236
- Laura Swain
- Oct. 15, 2025
Background
The plaintiffs informed the court that they had signed an agreement assigning their remaining rights under the stipulation and order resolving the case to Anti-Discrimination Center, Inc. (ADC). The agreement purported to transfer the plaintiffs’ rights to interpret and enforce the stipulation and order, and to evaluate and defend against any effort by the City to modify it. In exchange, each plaintiff was to receive $30,000. The plaintiffs asked the court to approve the agreement and modify the case caption. The City took no position.
The court had directed supplemental briefing on whether ADC would have standing—the legal ability to pursue the assigned rights—and whether the transaction complied with New York Rule of Professional Conduct 1.8(i). The court resolved the request based on Rule 1.8(i).
Rule and analysis
Rule 1.8(i) generally prohibits a lawyer from acquiring a proprietary interest, meaning an ownership or financial interest, in the cause of action or subject of litigation that the lawyer is conducting for a client. The rule lists two exceptions: a lien authorized by law to secure fees or expenses, and a reasonable contingent fee in a civil matter when permitted by the applicable rules or law.
The court held that neither exception applied to the agreement’s assignment of the plaintiffs’ rights in the stipulation and order to ADC. The plaintiffs argued that Rule 1.8(i) was intended to apply only to ongoing representation and not to a transaction ending the representation through an assignment to a not-for-profit organization. The court rejected that interpretation. It reasoned that the assignment would give ADC the role of plaintiff in the case and an interest that was closely connected to the subject of the litigation. The opinion also noted that the plaintiffs did not dispute that ADC would acquire a financial interest through the agreement, because the stipulation and order allowed a plaintiff who successfully enforced an obligation after the City’s breach to recover reasonable costs and attorneys’ fees.
Disposition
The court concluded that the agreement violated Rule 1.8(i). It denied the plaintiffs’ request to approve the agreement and modify the caption. The order states that it resolves docket entry number 1005.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.