Opinion ID: 3014026
Heading Depth: 1
Heading Rank: 1

Heading: In 1998, insurers of the officers and

Text: directors of Westinghouse agreed to pay Because we have published a prior damages to the class action plaintiffs on opinion on another issue in this case in the condition that the plaintiffs in the Zucker v. Westinghouse Electric Corp., derivative suit terminate that litigation.2 265 F.3d 171 (3d Cir. 2001), we repeat Zucker, 265 F.3d at 173. In 1999, the only those details that are relevant to the parties in the derivative suit reached a issue before our court. Shareholders of settlement agreement, stipulating, inter Westinghouse/CBS1 filed a derivative suit alia, that the plaintiffs’ attorneys in the and a related class action suit following the derivative suit could submit to the court an announcement of Westinghouse that it application for attorney’s fees and would suffer multi-million dollar losses expenses of $750,000 , wh ich because of several loans it made. Id. at Westinghouse agreed to pay. Id. at 174. 173. In the derivative suit they alleged that the officers and directors of The District Court approved the Westinghouse grossly and recklessly settlement for both the derivative suit and mismanaged the corporation. Id. In the the class action suit. Id. Plaintiffs’ c l a s s a c t io n th ey a l l eg e d t h at counsel then requested attorney’s fees and Westinghouse had violated Sections 10(b) expenses of $750,000. However, Rand, a and 20 of the Securities Exchange Act of holder of 100 shares of Westinghouse 1934, as amended (the Exchange Act), 15 stock and an attorney acting pro se, U.S.C. §§ 78j(b), 78t (1988), and Rule objected to the award on the ground that 10b-5 promulgated thereunder, 17 C.F.R. the settlement had not conferred a benefit § 240.10b-5 (1992), as well as Sections 11, upon Westinghouse. The District Court 12(2), and 15 of the Securities Act of nonetheless awarded to plaintiffs’ counsel 1933, as amended (the Securities Act), 15 fees and expenses in the amount of U.S.C. §§ 77k(a), 77l (2), 77o (1988). The $582,443. class action plaintiffs also alleged a claim for negligent misrepresentation under Rand, acting as a pro se attorney, principles of Pennsylvania common law. filed an appeal to this court, contesting the In re Westinghouse Sec. Litig., 832 F. fees award. We reversed the District Supp. 948, 961 (W.D. Pa. 1993), aff’d in Court’s judgment on the ground that the part, rev’d in part, 90 F.3d 696 (3d Cir. 2 Several of the insurance policies 1 CBS Corporation is the successor covered claims in both cases and the to Westinghouse Electric Corporation. insurers were not willing to pay for the We refer to it hereafter as Westinghouse. settlements in both cases. 3 derivative litigation did not confer a conferred a definite benefit benefit on Westinghouse and therefore upon the corporation by plaintiffs’ counsel was not entitled to any successfully challenging the fee award. Id. at 175-78. We remanded award of attorneys’ fee [sic] the case to the District Court with to plaintiff’s counsel in the instructions to deny the application of the underlying derivative action. plaintiffs’ attorneys for fees and expenses. Rand represented himself, Id. at 178. however. As a result, he did not incur any attorney fees Following our remand order, Rand for which he is personally petitioned the District Court for an award responsible. Thus, an award of $250,000 as attorney’s fees for his of attorney’s fees would not successful appeal. In support, Rand com pens ate him for asserted that the $250,000 request e x p e n s e s i n c u r re d in represented one-third of the $750,000 that initially objecting and plaintiffs’ counsel might have received but subsequently prosecuting for Rand’s successful intervention. He the appeal. cited several class action cases in which the attorneys for the shareholder-objector App. at 6. The Court thus denied Rand’s received attorney’s fees, ranging from 21% motion for attorney’s fees and costs and to 53% of the fund. In the alternative, declined to endorse the stipulation for Rand appended a lodestar calculation of $95,000 for attorney’s fees. However, it $67,100 for attorney’s fees (based on an approved the portion of the stipulation $250 hourly rate) and $673 in expenses. awarding Rand $673 for expenses. Rand also submitted to the District Court a stipulation in which Rand and Rand timely appealed, seeking Westinghouse stated that Westinghouse reversal of the District Court’s order and benefitted economically from Rand’s an award of $95,000 for attorney’s fees. appeal and agreed to pay Rand $95,000 for Appellees, Westinghouse and the directors attorney’s fees and expenses. and officers thereof, take no position on this appeal, except to acknowledge that The District Court concluded that they entered into the stipulation described Rand was not entitled to recover attorney’s above. Amicus Curiae Howard Bashman 3 fees based on his pro se representation. The Court stated, inter alia, 3 In the posture of this case, there At first blush, it appears that was no party who took the position that Rand should be entitled to the District Court order should be counsel fees. As a pro se affirmed. We asked Howard Bashman, attorney objector Rand Esq., to do so and are most appreciative 4 urges that although Rand successfully bondholder of the Florida Railroad raised a shareholder objection, a pro se Company, sued the trustees of several attorney should not be able to recover fees. realty companies to prevent them from wasting a land trust fund and failing to pay