Albert Zucker v. Westinghouse Elec.

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

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f/k/a Westinghouse Elec.
(D.C. No. 99-cv-00596)
WILLIAM C. RAND, Stockholder
Objector, owner of 100 shares of CBS
Corporation,
Appellant
On Appeal from the United States
District Court for the Western District of
Pennsylvania
(D.C. No. 91-cv-00354)
District Judge: D. Brooks Smith
Argued January 23, 2004
Before: SLOVITER, MCKEE, and
CHERTOFF, Circuit Judges
(Filed June 30, 2004)
William Rand, Sr. (Argued)
William C. Rand
Coudert Brothers
New York, NY 10036
Attorney for Appellant
Richard D. Greenfield
Greenfield & Goodman
Royal Oak, MD 21662
Attorney for Appellee,
Daniel Mogell
Leonard Fornella
Heintzman, Warren, Wise & Fornella,
P.C.
Pittsburgh, PA 15219
Attorney for Appellee,
Westinghouse Electric
Corporation
Dennis J. Block
Cadwalader, Wickersham & Taft
New York, NY 10038
Joseph A. Katarincic
Thorp Reed & Armstrong, LLP
Pittsburgh, PA 15129
Attorneys for All Other Appellees
Howard J. Bashman (Argued)
Buchanan Ingersoll, P.C.
Fort Washington, PA 19034
Attorney for Amicus
OPINION OF THE COURT
SLOVITER, Circuit Judge.
Under the common fund doctrine,
the court may award a shareholder-
objector attorney’s fees for successfully
pursuing a shareholder derivative suit that
confers a benefit upon the corporation.
The question that we confront in this case
is whether a successful shareholder-
objector who represented only himself as
a pro se attorney in such a suit is entitled to

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attorney’s fees.
I.
Because we have published a prior
opinion on another issue in this case in
Zucker v. Westinghouse Electric Corp.,
265 F.3d 171 (3d Cir. 2001), we repeat
only those details that are relevant to the
issue before our court. Shareholders of
Westinghouse/CBS1 filed a derivative suit
and a related class action suit following the
announcement of Westinghouse that it
would suffer multi-million dollar losses
because of several loans it made. Id. at
173. In the derivative suit they alleged
that the officers and directors of
Westinghouse grossly and recklessly
mismanaged the corporation. Id. In the
c l a s s a c t io n th ey a l l eg e d t h at
Westinghouse had violated Sections 10(b)
and 20 of the Securities Exchange Act of
1934, as amended (the Exchange Act), 15
U.S.C. §§ 78j(b), 78t (1988), and Rule
10b-5 promulgated thereunder, 17 C.F.R.
§ 240.10b-5 (1992), as well as Sections 11,
12(2), and 15 of the Securities Act of
1933, as amended (the Securities Act), 15
U.S.C. §§ 77k(a), 77l (2), 77o (1988). The
class action plaintiffs also alleged a claim
for negligent misrepresentation under
principles of Pennsylvania common law.
In re Westinghouse Sec. Litig., 832 F.
Supp. 948, 961 (W.D. Pa. 1993), aff’d in
part, rev’d in part, 90 F.3d 696 (3d Cir.
1996).
In 1998, insurers of the officers and
directors of Westinghouse agreed to pay
damages to the class action plaintiffs on
the condition that the plaintiffs in the
derivative suit terminate that litigation.2
Zucker, 265 F.3d at 173. In 1999, the
parties in the derivative suit reached a
settlement agreement, stipulating, inter
alia, that the plaintiffs’ attorneys in the
derivative suit could submit to the court an
application for attorney’s fees and
e x p e n s e s o f $ 7 5 0 , 0 0 0 , w h i c h
Westinghouse agreed to pay. Id. at 174.
The District Court approved the
settlement for both the derivative suit and
the class action suit. Id. Plaintiffs’
counsel then requested attorney’s fees and
expenses of $750,000. However, Rand, a
holder of 100 shares of Westinghouse
stock and an attorney acting pro se,
objected to the award on the ground that
the settlement had not conferred a benefit
upon Westinghouse. The District Court
nonetheless awarded to plaintiffs’ counsel
fees and expenses in the amount of
$582,443.
Rand, acting as a pro se attorney,
filed an appeal to this court, contesting the
fees award. We reversed the District
Court’s judgment on the ground that the
1 CBS Corporation is the successor
to Westinghouse Electric Corporation.
We refer to it hereafter as Westinghouse.
2 Several of the insurance policies
covered claims in both cases and the
insurers were not willing to pay for the
settlements in both cases.

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derivative litigation did not confer a
benefit on Westinghouse and therefore
plaintiffs’ counsel was not entitled to any
fee award. Id. at 175-78. We remanded
the case to the District Court with
instructions to deny the application of the
plaintiffs’ attorneys for fees and expenses.
Id. at 178.
Following our remand order, Rand
petitioned the District Court for an award
of $250,000 as attorney’s fees for his
successful appeal. In support, Rand
asserted that the $250,000 request
represented one-third of the $750,000 that
plaintiffs’ counsel might have received but
for Rand’s successful intervention. He
cited several class action cases in which
the attorneys for the shareholder-objector
received attorney’s fees, ranging from 21%
to 53% of the fund. In the alternative,
Rand appended a lodestar calculation of
$67,100 for attorney’s fees (based on an
$250 hourly rate) and $673 in expenses.
Rand also submitted to the District Court
a stipulation in which Rand and
Westinghouse stated that Westinghouse
benefitted economically from Rand’s
appeal and agreed to pay Rand $95,000 for
attorney’s fees and expenses.
The District Court concluded that
Rand was not entitled to recover attorney’s
fees based on his pro se representation.
The Court stated, inter alia,
At first blush, it appears that
Rand should be entitled to
counsel fees. As a pro se
attorney objector Rand
conferred a definite benefit
upon the corporation by
successfully challenging the
award of attorneys’ fee [sic]
to plaintiff’s counsel in the
underlying derivative action.
Rand represented himself,
however. As a result, he did
not incur any attorney fees
for which he is personally
responsible. Thus, an award
of attorney’s fees would not
c o m p e n s a t e h i m f o r
e x p e n se s i n c u r re d in
initially objecting and
subsequently prosecuting
the appeal.
App. at 6. The Court thus denied Rand’s
motion for attorney’s fees and costs and
declined to endorse the stipulation for
$95,000 for attorney’s fees. However, it
approved the portion of the stipulation
awarding Rand $673 for expenses.
Rand timely appealed, seeking
reversal of the District Court’s order and
an award of $95,000 for attorney’s fees.
Appellees, Westinghouse and the directors
and officers thereof, take no position on
this appeal, except to acknowledge that
they entered into the stipulation described
above. Amicus Curiae Howard Bashman3
3 In the posture of this case, there
was no party who took the position that
the District Court order should be
affirmed. We asked Howard Bashman,
Esq., to do so and are most appreciative

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

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

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

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

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

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

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