Opinion ID: 608128
Heading Depth: 2
Heading Rank: 1

Heading: Bryant's Request for Attorneys' Fees Under Section 11(e)

Text: 27 Section 11(e) of the Securities Act of 1933 allows the district court to award attorneys' fees if it believes the suit or the defense to have been without merit. 15 U.S.C. § 77k(e). The 'without merit' standard ... encompasses claims and defenses that ... border on the frivolous. Western Federal Corp. v. Erickson, 739 F.2d 1439, 1444 (9th Cir.1984) (emphasis added). In its ruling on the defendants' requests for attorneys' fees, the district court stated that, with respect to some of the claims against Mr. Bryant, McGuiness, [and] Central Bank, that they were--bordered on frivolous. The district court did not award Bryant attorneys' fees under Section 11(e), however, stating that [w]ith respect to Section 11(e), the standard announced by the 9th Circuit is ... frivolous and brought in bad faith.... I didn't think that these claims fall within that category. As Bryant correctly points out, the district court applied an incorrect legal standard to his request for attorneys' fees; the court apparently believed that it had the discretion to award fees only if the claims against Bryant were frivolous, when in fact it could award fees for those that merely bordered on the frivolous. In light of this error, we remand for a determination of which claims bordered on the frivolous, and we direct the district court to consider awarding Bryant the attorneys' fees he incurred in defending against those claims. 7 28