The opinion of the court was delivered by: POLLAK
Currently pending before this court are plaintiff's petitions for attorney's fees for (1) the prosecution of this action and (2) a motion to hold defendant in contempt. Although in American practice the prevailing party does not normally recover attorney's fees, there are certain statutory and nonstatutory exceptions to this general rule.
1. Attorney's Fee Award Under 15 U.S.C. § 77k
The Securities Act of 1933, 15 U.S.C. § 77k, allows a prevailing party to obtain attorney's fees in certain limited situations.
The original claims in this case were brought for violations of 15 U.S.C. § 77q. Following entry of a default judgment, United States Magistrate William F. Hall, Jr. issued a Report and Recommendation on the question of damages on May 2, 1983. He found that there was no merit to the position of the defendants in this litigation and that plaintiff was, thus, entitled to an award of fees under § 77k. On May 24, 1983, this court adopted Magistrate Hall's Report and Recommendation in its entirety. Therefore, plaintiff may recover the reasonable costs and attorney's fees accrued in the prosecution of this action.
However, plaintiff's fee petition raises the question of what fees and costs should be awarded under 15 U.S.C. § 77k. Although this court's final judgment for plaintiff was entered on May 24, 1983, and the defendant's appeal was dismissed by the Court of Appeals for the Third Circuit in August 1983, plaintiff has submitted itemized time sheets for plaintiff's attorneys' efforts to execute on the judgment of this court during late 1983. The question which this court must now address is whether plaintiff may recover under 15 U.S.C. § 77k for attorney's fees related to the execution of a money judgment obtained for a violation of § 77q.
There are no reported cases under § 77k discussing the availability of attorney's fees for actions taken in the execution of a judgment. This is, most likely, due to the fact that fee petitions are normally submitted immediately after the final judgment has been filed in the action, at which time the costs of execution are normally only a minor portion of the attorney's fees of the plaintiff. However, in the present case, it was necessary for plaintiff to resubmit the fee petition twice due to defects in earlier versions of the petition. With each amendment, attorney's fees for the time from the submission of the last fee petition were added to the fee request. Therefore, the fee petition in this action now lists almost 45 hours of attorney time which were devoted to the execution of the judgment. Most of this time was spent in arranging the sale of a seat on the Philadelphia Stock Exchange owned by defendant.
The only cases which this court has discovered which relate to the right to attorney's fees for post-judgment work are easily distinguishable from the present action. For example, one court has allowed plaintiffs in civil rights actions to recover fees under 42 U.S.C. § 1988 for time spent in supervising compliance with a court injunction. Stenson v. Blum, 512 F. Supp. 680 (S.D.N.Y. 1981). However, 42 U.S.C. § 1988 was enacted to encourage private "attorneys general" to bring suits to curb civil rights violations. Thus, it is consistent with congressional policy to award fees for post-judgment activities which help to assure that those constitutional violations do not continue. It is not apparent that congressional policies of the same magnitude are vindicated by efforts to execute on a money judgment.
Thus, this court has found no cases similar to the present action in which fees have been awarded for time spent in the execution of a money judgment. This fact alone may not preclude such a fee award; but it suggests that the separate proceedings related to execution of a judgment should be treated differently from the original action for fee award purposes unless there are strong policy reasons supporting a fee award for the costs of execution.
Viewed in this light, routine inclusion in the calculation of attorney's fees awarded under 15 U.S.C. § 77k, of the time spent in the execution of the judgment would be inappropriate. This conclusion stems from the obviously limited nature of the attorney's fees provision in § 77k. Fees are only available when the court believes that the suit or the defense was "without merit." In fact, the court must make a specific finding that the suit or the defense was meritless or otherwise frivolous. The mere fact that the party seeking fees prevailed in the action does not warrant a fee award. See e.g., Aid Auto Stores, Inc. v. Cannon, 525 F.2d 468 (2d Cir. 1975); Klein v. Shields & Co., 470 F.2d 1344 (2d Cir. 1972).
Thus, the attorney's fee provision of § 77k is not designed primarily as incentive for private "attorneys general" to bring suit. It was intended to allow fee awards in a much narrower set of circumstances than such statutes as 42 U.S.C. § 1988. Section 77k is more clearly directed to deterrence of frivolous suits; to quick resolution of suits to which there are no valid defenses; and to ...