Court Opinion

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Date Created: 2015-10-13 22:00:01.398752+00
Date Added: 2024-06-11T09:18:52.803059
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Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

6-30-2004

Zucker v. Westinghouse Elec
Precedential or Non-Precedential: Precedential

Docket No. 02-3389

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Recommended Citation
"Zucker v. Westinghouse Elec" (2004). 2004 Decisions. Paper 529.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/529

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                     PRECEDENTIAL                  STEPAK; GERRY KRIM

   UNITED STATES COURT OF                                     v.
APPEALS FOR THE THIRD CIRCUIT
                                                 WESTINGHOUSE ELEC.; J. C.
                                                    MAROUS; P. E. LEGO;
              No. 02-3389                        WESTINGHOUSE FIN. SER.;
              __________                     WESTINGHOUSE CREDIT; WILLIAM
                                                A. POWE; THEODORE STERN;
    ALBERT ZUCKER; STANLEY                       WARREN H. HOLLINSHEAD;
    HERSHFANG; JACOB JOSEPH                     ROBERT E. FAUST; ROBERT F.
   MILLER; TOBY FEUER; SPRING                  PUGLIESE; SHEARSON LEHMAN
      CREEK CARDIO-MEDICAL                    BROS.; GOLDMAN SACHS & CO.;
      ASSOCIATES, INC. PROFIT                 LAZARD FRERES & CO.; LEHMAN
  SHARING PLAN AND TRUST, on                   BROS INTL; LAZARD BROS. CO.
 behalf of itself and all others similarly       LTD.; PRICE WATERHOUSE;
  situated; GLORIA BERTINATO, on
behalf of herself and all others similarly          (D.C. No. 91-cv-00354)
situated; JOSEPH H. LEVIT; GEORGE
      M.D. RICHARDS; MICHAEL
  CHRISTNER; JIM L. THOMPSON,                DANIEL MOGELL, in his capacity as a
 Trustee for Thompson Chemical Profit         shareholder, suing derivatively, and
 Sharing Plan; LOUISE M. JACOB, for                      individually
 Herself, as Trustee for Arnold M. Jacob
  Ten Year Trust and as Trustee of P.J.                       v.
      VanArtsdalen Ten Trust of P.J.
 VanArtsdalen Ten Trust; PATRICIA J.         BARBARA H. FRANKLIN; RICHARD
  VANARTSDALEN, as Custodian for              M. MORROW; HAYS T. WATKINS;
     Jennifer VanArtsdalen Custodial            DONALD F. HORNIG; JOHN B.
  Account; ARNOLD M. JACOB, and                 CARTER; JOHN C. MAROUS;
Patricia J. VanArtsdalen, as Trustees for     ROBERT W. CAMPBELL; RENE C.
 the Jennifer VanArtsdalen Irrevocable             MCPHERSON; FRANK C.
Trust, David J. VanArtsdalen Irrevocable           CARLUCCI; RICHARD R.
 Trust, Adam T. Jacob Irrevocable Trust          PIVIROTTO; PAUL E. LEGO;
  and Noah B. Jacob Irrevocable Trust;          WILLIAM A. POWE; GARY M.
 MICHAEL E. NOGAY; MARGARET                    CLARK; WILLIAM H. GRAY, III;
ALESSI; NATHAN KLEINHANDLER;                      PAULA STERN; DAVID T.
     MICHAEL SLAVIN; RONALD                   MCLAUGHLIN; LEO W. YOCHUM;
        GOLDSTEIN; RICHARD                    MICHAEL H. JORDAN; ROBERT E.
    SCHWARZSCHILD; THOMAS                         CAWTHORN; GEORGE H.
   MITCHEL; JOSEPH RASCHAK;                      CONRADES; DAVID K.P. LI;
  DONALD H. MCLENNAN; RUTH                    ROBERT D. WALTER; CBS CORP,
        f/k/a Westinghouse Elec.                 Leonard Fornella
                                                 Heintzman, Warren, Wise & Fornella,
        (D.C. No. 99-cv-00596)                   P.C.
                                                 Pittsburgh, PA 15219
  WILLIAM C. RAND, Stockholder
 Objector, owner of 100 shares of CBS                   Attorney for Appellee,
             Corporation,                               Westinghouse Electric
                          Appellant                     Corporation

                                                 Dennis J. Block
                                                 Cadwalader, Wickersham & Taft
   On Appeal from the United States              New York, NY 10038
District Court for the Western District of
               Pennsylvania                      Joseph A. Katarincic
         (D.C. No. 91-cv-00354)                  Thorp Reed & Armstrong, LLP
    District Judge: D. Brooks Smith              Pittsburgh, PA 15129

                                                        Attorneys for All Other Appellees
        Argued January 23, 2004
                                                 Howard J. Bashman (Argued)
  Before: SLOVITER, MCKEE, and                   Buchanan Ingersoll, P.C.
     CHERTOFF, Circuit Judges                    Fort Washington, PA 19034

         (Filed June 30, 2004)                          Attorney for Amicus

William Rand, Sr. (Argued)                              OPINION OF THE COURT
William C. Rand
Coudert Brothers
New York, NY 10036                               SLOVITER, Circuit Judge.

      Attorney for Appellant                             Under the common fund doctrine,
                                                 the court may award a shareholder-
Richard D. Greenfield                            objector attorney’s fees for successfully
Greenfield & Goodman                             pursuing a shareholder derivative suit that
Royal Oak, MD 21662                              confers a benefit upon the corporation.
                                                 The question that we confront in this case
      Attorney for Appellee,                     is whether a successful shareholder-
      Daniel Mogell                              objector who represented only himself as
                                                 a pro se attorney in such a suit is entitled to

                                             2
attorney’s fees.                                     1996).

                      I.                                     In 1998, insurers of the officers and
                                                     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
                       II.                             interest on its bonds. Vose ultimately
                                                       succeeded and saved the trust fund a
       We exercise de novo review of “the              significant amount of money. Trustees,
standards and procedures applied by the                105 U.S. at 529. Vose then petitioned for
District Court in determining attorneys’               “an allowance out of the fund for his
fees, as it is purely a legal question.”               expenses and services” because he had
Planned Parenthood v. Att’y Gen. of N.J.,              borne “the whole burden of this litigation”
297 F.3d 253, 265 (3d Cir. 2002).                      for more than a decade and had “advanced
However, we review the District Court’s                most of the expenses which were
findings of fact for clear error. Id. In this          necessary for the purpose of rendering [the
case, there are no disputed issues of fact.            litigation] effective and successful.” Id.
The District Court recognized that Rand                The courts below had approved the bulk of
had conferred a “definite benefit upon the             Vose’s requests, including the fees for his
corporation.” App. at 6. We agree. That,               solicitor and counsel, costs of court, and
however, is not the issue before us.                   copying. Critically, they also approved an
                                                       award for “personal services” and “private
        Rand argues that the District Court            expenses.” Id. at 537.
erred as a matter of law in holding that
attorney’s fees may not be awarded to an                       The Supreme Court approved of
attorney who represented himself in a                  compensating Vose for his attorney’s fees
shareholder derivative suit even where the             and court fees as a matter of “equity and
suit has benefitted the corporation. The               justice.” Id. at 536-37. Because Vose had
Supreme Court has issued two opinions                  “worked for [other bondholders] as well as
that guide our decision on this appeal:                for himself,” the Court found that it would
Trustees of the Internal Improvement Fund              have been “unjust” to give other
of Fla. v. Greenough, 105 U.S. 527 (1882),             bondholders an “unfair advantage” by not
and Kay v. Ehrler, 499 U.S. 432 (1991).                requiring them to contribute to “the
                                                       expenses which [Vose had] fairly
       A.         Trustees of the Internal             incurred” in the course of litigation that
                  Improvement Fund of Fla. v.          had benefitted all bondholders. Id. at 532.
                  Greenough                            The Supreme Court thus established the
                                                       “common fund” doctrine as a federal
       In   Trustees,        Francis   Vose,   a       common law doctrine that prevents the
                                                       unjust enrichment of non-litigant
                                                       beneficiaries at the litigant’s expense.
                                                       Accordingly, it affirmed the award for
of his efforts.

                                                   5
reimbursement for attorney’s fees and                    In short, Trustees emphasizes that a
costs to Vose, the litigant whose actions         person who draws a salary or other
resulted in the creation of the common            compensation from a trust or settlement
fund for the benefit of himself and others.       fund should not have a personal stake in
                                                  the fund and instead should objectively
       Critically for our purposes, the           seek to maximize the settlement fund to
Supreme Court denied Vose’s petition for          the benefit of the corporation or group.
“personal services” and “private expenses”        The Court’s refusal to award Vose a fee
because such an award would have been             for “personal services” illustrates its
without precedent in law or equity. Id. at        unwillingness to set up financial incentives
536-38. The Court found pivotal that              for objectors to pursue potentially
Vose “was a creditor, suing on behalf of          unnecessary litigation to obtain a salary (or
himself and other creditors, for his and          fees for “personal services”) that might
their own benefit and advantage.” Id. at          conflict with the best interest of the
537. In denying Vose’s request for                corporation or other shareholders. The
payment of “personal services” and                Court thus denied Vose’s request for fees
“priva te expenses,” the Court                    for “personal services” because such
distinguished the character of a trustee,         compensation might reward and encourage
who could properly receive a salary from          potentially useless litigation by others
the trust, from that of an interested             seeking lucrative “salaries.”
objector such as Vose, who could not reap
a salary:                                                As with Vose, Rand is not a trustee
                                                  of corporation nor is it his job description
       Where an allowance is made                 to objectively and selflessly protect it.
       to trustees for their personal             Rand is a doubly interested party: he has
       services, it is made with a                a shareholder’s interest in the corporation
       view to secure greater                     as well as an attorney’s interest in
       activity and diligence in the              obtaining attorney’s fees. Because the
       performance of the trust,                  conflict of interest as a lawyer and an
       and to induce persons of                   objector-shareholder might lead him to
       reliable character and                     take actions contrary to the best interest of
       business capacity to accept                the corporation, he is not entitled to a
       the office of trustee. These               “salary” of attorney’s fees under Trustees.
       considerations have no                     As the District Court properly noted,
       application to the case of a               awarding Rand attorney’s fees potentially
       creditor seeking his rights in             could “tempt” other lawyer-shareholders to
       a judicial proceeding.                     “advance garden variety objections
                                                  because of the prospect of an award of
Trustees, 105 U.S. at 537-38.                     attorney fees for their personal service.”
                                                  App. at 10; see also Trustees, 105 U.S. at

                                              6
537-38 (observing that an award for                 acknowledged that the traditional
personal services may be “too great a               American rule ordinarily prevents a
temptation to parties to intermeddle” in            prevailing litigant from recovering
affairs in which they had “only the interest        attorney’s fees from the loser but urged the
of creditors, and that perhaps only to a            court to consider whether their fee request
small amount”). We note that Rand did               fell within any of the equitable exceptions
not incur any financial liabilities for his         to the American rule. Id. at 245. After
work on this case. Failure to award Rand            determining that neither the bad faith nor
fees should not discourage other                    the common fund doctrines applied, the
shareholders from raising meritorious               Court of Appeals for the District of
objections in the future; it will only ensure       Columbia Circuit held that the plaintiffs
that they pursue objections with the                were entitled to one-half of their fee
assistance of third-party counsel.                  request for acting to “vindicate important
                                                    statutory rights” for all citizens under the
        We also find instructive the                “private attorney general” doctrine. Id. at
Supreme Court’s decision in Alyeska                 245-46 (internal quotation marks and
Pipeline Service Co. v. Wilderness                  citations omitted). The Supreme Court
Society, 421 U.S. 240 (1975). Although              reversed that decision, holding that
Alyeska did not address whether pro se              Congress may authorize new exceptions to
attorneys may recover fees under the                the American rule, but the courts are not
common fund doctrine, it underscored the            empowered to do so without statutory
limitations on the judiciary’s power to             authorization. Id. at 262 (“[I]t is apparent
award attorne y’s fees w ithout                     that the circumstances under which
congressional authorization. In Alyeska,            attorneys’ fees are to be awarded and the
an environmental group requested an                 range of discretion of the courts in making
award of attorney’s fees for their third-           those awards are matters for Congress to
party attorneys. 4       The plaintiffs             determine.”). Absent a congressional
                                                    directive that pro se attorneys should be
                                                    able to recover attorneys’ fees in derivative
   4                                                actions, we find no basis to create a new
        Plaintiffs had sought to enjoin the
                                                    equitable exception for attorneys who
Secretary of the Interior from issuing
                                                    represent themselves in shareholder
permits for the construction of the trans-
                                                    derivative actions.
Alaska oil pipeline. The district court
initially granted a preliminary injunction
against the issuance of permits, but
dissolved it following the Secretary of
the Interior’s announcement granting the            subsequently amended the Mineral
permits. Although pipeline construction             Leasing Act “to allow the granting of the
was later enjoined as a result of the               permits sought” by the defendant.
Mineral Leasing Act, Congress                       Alyeska, 421 U.S. at 242-44.

                                                7
       B.     Kay v. Ehrler                        would deprive the litigation of the
                                                   detached, reasoned judgment associated
        The distinction that the Supreme           with third-party counsel. See id. at 437-38
Court drew in Trustees – between the               (pro se attorneys deprived of independent
compensable work of an objective,                  judgment in “framing the theory of the
disinterested party and the non-                   case, evaluating alternative methods of
compensable work of an interested litigant         presenting the evidence, cross-examining
– was further developed in its opinion in          hostile witnesses, formulating legal
Kay v. Ehrler, 499 U.S. 432 (1991). Kay            arguments, and in making sure that reason,
had brought a civil rights action                  rather than emotion, dictates the proper
challenging a Kentucky statute that                ta c t ic a l r e s p o n s e t o u n f o r e se e n
precluded including his name on the                developments in the courtroom”). The
primary ballot. Id. at 433-34. After he            Court explained that unlike pro se
prevailed he sought attorney’s fees under          representation, traditional third-party
42 U.S.C. § 1988, which provides for an            compensable representation is objective,
award of attorney’s fees to successful civil       unclouded by the emotional hindrances
rights plaintiffs. Id. at 434. The Court of        borne of first-hand involvement in a case.
Appeals read the statute as assuming “the          Id. Moreover, the Court emphasized that
existence of ‘a paying relationship                the word “attorney” generally connotes
between an attorney and a client.’” Id. at         some form of an agency relationship, id. at
435 (quoting Kay v. Ehrler, 900 F.2d 967,          436 n.6; thus, Congress likely had
971 (6th Cir. 1990)). The Supreme Court            c o n t e m p l a te d “ a n a tt o r n e y- c l ie n t
affirmed. It noted that the circuits are in        relationship as the predicate for an award
agreement that a pro se litigant who is not        under § 1988.” Id. at 436.5
a lawyer is not entitled to attorney’s fees
but were in conflict as to “whether a
lawyer who represents himself should be                5
                                                          In Duncan v. Poythress, 777 F.2d
treated like . . . a client who has had the
                                                   1508 (11th Cir. 1985) (en banc), a case
benefit of the advice and advocacy of an
                                                   implicitly overruled by the Supreme
independent attorney.” Id. at 435. The
                                                   Court in Kay, the court addressed a
Court considered whether such an award
                                                   similar question to the one at bar. The
would run contrary to the statute’s purpose
                                                   Honorable Paul H. Roney, in dissent,
of creating incentives for plaintiffs to
                                                   focused upon the agency relationship,
obtain independent counsel who would
                                                   writing:
successfully prosecute meritorious claims.
Id. at 436-37.
                                                            This case turns on the
                                                            meaning of the word
       The Court noted that an attorney
                                                            “attorney.” Although the
who represents himself would be hindered
                                                            majority believes the “plain
by his inability to testify in the case and
                                                            language” of section 1988

                                               8
does not preclude an                      attorney in litigation
award of fees to a                        there must be two
lawyer representing                       people. Plaintiff
herself,” we have                         here appeared pro
simply been unable                        se. The term “pro
to find any                               se” is defined as an
definition which                          individual acting “in
permits a decision                        his own behalf, in
that a pro se lawyer                      person.” By
has an attorney. Set                      definition, the
forth in an                               person appearing “in
Appendix to this                          person” has no
opinion are the                           attorney, no agent
definitions found in                      appearing for him
over two dozen                            before the court.
dictionaries.                             The fact that such
Without exception                         plaintiff is admitted
they define the word                      to practice law and
“attorney” in terms                       available to be an
of someone who                            attorney for others,
acts for another,                         does not mean that
someone who is                            the plaintiff has an
employed as an                            attorney, any more
agent to represent                        than any other
another, someone                          principal who is
who acts at the                           qualified to be an
appointment of                            agent, has an agent
another. A basic                          when he deals for
principle of agency                       himself. In other
law is that “[t]here                      words, when applied
is no agency unless                       to one person in one
one is acting for and                     proceeding, the
in behalf of another,                     terms “pro se” and
since a man cannot                        “attorney” are
be the agent of                           mutually exclusive.
himself.” 2A C.J.S.
Agency § 27, at 592.        Id. at 1517-18 (Roney, J., joined by
For there to be an          Henderson, J., dissenting) (footnotes

                        9
                                                     Philadelphia Board of Education, 248 F.3d
        Foreshadowing Kay, we have long              129, 131 (3d Cir. 2001), we held that a
underscored the importance of reimbursing            pa r e nt- a tto r n e y wh o suc cessf ull y
a successful plaintiff for financial debts to        represented his child in an action under the
his or her attorney and providing that               Individuals with Disabilities Education
plaintiff with objective representation. In          Act, 20 U.S.C. § 2000 (IDEA), could not
Pitts v. Vaughn, 679 F.2d 311 (3d Cir.               be awarded attorney’s fees under the
1982), and Cunningham v. FBI, 664 F.2d               statutory fee-shifting provision. Because
383 (3d Cir. 1981), we denied the petitions          the “danger of inadequate representation is
of pro se non-lawyer litigants for                   as great when an emotionally charged
attorney’s fees under Section 1988 and the           parent represents his minor child as when
Freedom of Information Act (FOIA),                   the parent represents himself,” providing
respectively. Although both plaintiffs had           the parent-attorney with an award of
been skillful enough to prevail in their             attorney’s fees would encourage and
respective cases, we noted that the fee-             sanction potentially sub-par or deficient
shifting rationale was premised, in part,            representation, rather than requiring the
upon financial indebtedness to a third-              party to seek “independent, emotionally
party attorney, and, in part, upon the               detached counsel.” Id.; see also Doe v.
presence of an objective, detached third-            Bd. of Educ. of Balt. County, 165 F.3d 260
party attorney who is likely to prevent              (4th Cir. 1998) (denying parent-attorney’s
groundless or unnecessary litigation. See            petition for fees under IDEA for same
Pitts, 679 F.2d at 313; Cunningham, 664              reasons).
F.2d at 386-87.6
                                                            Similarly, after the Kay decision the
       More recently, we reiterated the              courts of appeals have denied attorney’s
importance of retaining rational,                    fees to pro se attorneys under a variety of
disinterested counsel in a case involving            fee-shifting statutes, including the Equal
an attorney who represented his own child.           Access to Justice Act (EAJA), FOIA, and
In Woodside v. School District of                    Title VII. See, e.g., Kooritzky v. Herman,
                                                     178 F.3d 1315, 1319 (D.C. Cir. 1999)
                                                     (denying attorney’s fees for pro se attorney
omitted) (emphases in original).                     under EAJA); Hawkins v. 1115 Legal
   6                                                 Serv. Care, 163 F.3d 684, 694-95 (2d Cir.
       Pitts and Cunningham also
                                                     1998) (denying attorney’s fees for pro se
focused upon the difficulty of valuating a
                                                     attorney for civil rights violations); Burka
non-lawyer’s pro se efforts. Pitts, 679
                                                     v. United States Dep’t of Health & Human
F.2d at 313; Cunningham, 664 F.2d at
                                                     Servs., 142 F.3d 1286, 1290 (D.C. Cir.
386. Because Rand’s pro se work as a
                                                     1998) (denying attorney’s fees for pro se
licensed attorney does not present similar
                                                     attorney allegedly representing an
problems here, we need not discuss
                                                     undisclosed client under FOIA); SEC v.
valuation issues.

                                                10
Price Waterhouse, 41 F.3d 805, 808 (2d                  rights suits.
Cir. 1994) (denying attorney’s fees for pro
se attorney under EAJA).                                       We note that other courts also have
                                                        rejected Rand’s claims for attorney’s fees
           Rand does not contend that Kay               for representing himself. In In re Texaco
was decided incorrectly. Rather, he argues              Shareholder Derivative Litigation, 123 F.
that Kay’s prohibition on compensating                  Supp. 2d 169 (S.D.N.Y. 2000), aff’d, 2002
pro se plaintiffs in civil rights cases should          WL 126225 (2d Cir. Jan. 29, 2002), Rand
not apply with equal force to attorneys                 sought attorney’s fees for having served as
who represent themselves in securities                  a successful pro se attorney-objector
cases.        Rand argues that unlike the               whose objection conferred a material
plaintiffs in emotionally-charged civil                 benefit upon the corporation. Although
rights cases who are without legal                      the district court denied his claim as
expertise and whose testimony could be                  untimely, it proceeded to address the
necessary to advance the litigation, the                merits of Rand’s claim. Id. at 171-74.
shareholder-attorney in the common fund                 That court applied the “logic of Kay and
actions such as the one at bar is                       its progeny” to deny Rand’s request for
dispassionate, skillful, and unlikely to be             attorney’s fees because he had not acted as
called to testify.            Rand’s attempted          “independent, objective counsel.” Id. at
distinction is unpersuasive. Because                    173. Moreover, the court noted that
attorney’s fees are awarded only to                     rewarding attorney-objectors might deter
prevailing plaintiffs, we can assume a                  other attorney-objectors, such as Rand,
relatively equal legal acumen. Moreover,                from retaining counsel based on the
we have no reason to assume that                        possibility of being able to “enrich
shareholders who risk losing or have                    [oneself] by recovering attorney’s fees.”
already lost considerable sums of money in              Id.
their stockholdings will be substantially
less emotionally involved in their suit than                    We agree with the District Court
civil rights plaintiffs. Lastly, and perhaps            that the logic of Kay, as well as Trustees,
most critically, the Supreme Court’s                    supports the District Court’s conclusion
opinion in Trustees – which involved the                that a rule barring attorney-objectors from
seemingly dispassionate issue of real estate            recovering attorney’s fees would blunt any
funds – focused on the need for detached,               temptation of attorneys to “advance garden
o b j e c ti v e c o u n s e l i n o r d e r t o        variety objections” in order to recover a
coun terbalance whatever pecuniary                      salary of fees. App. at 10. Denial of a fee
motives a party might have for bringing                 award to attorneys who represent
litigation. Rand has offered no support for             themselves will serve as a prophylactic to
his hypothesis that neutral third-party                 deter those attorneys, hopefully few, who
counsel is less desirable in the context of             may be guided by financial incentives to
shareholder derivative suits than in civil              pursue unnecessary litigation or to provide

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representation that is not sufficiently
guided by objective, rational decision-
making. And we decline to create such an
incentive today.

                   III.

        To be clear, we affirm the
continued vitality of the common fund
doctrine and its ethos of making-whole
litigants who pursued shareholder-objector
actions that have conferred a material
benefit upon a corporation.7 We merely
decline to endorse an interpretation of the
common fund doctrine that creates
untoward incentives for attorneys to
pursue unnecessary actions for pecuniary
gain or to pursue such actions without the
benefit of the reasoned and detached
judgment that attends the attorney-client
relationship. For the foregoing reasons,
we will affirm the judgment of the District
Court.

   7
        In his brief, Rand argues that he
“is entitled at a minimum to an award of
an incentive fee,” an award that some
courts have made to non-lawyers for
their service in conferring a benefit on
the class. We note that Rand effectively
waived the possibility of an incentive fee
during oral argument before us. We thus
express no opinion as to whether a pro se
attorney would be eligible to receive an
incentive fee.

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