The opinion of the court was delivered by: BRODERICK
VINCENT L. BRODERICK, U.S.D.J.
The F. & M. Schaefer Corporation and the F. & M. Schaefer Brewing Company (collectively "Schaefer" or "plaintiff") filed a motion under Section 1l of the Clayton Act, 15 U.S.C. Section 26, preliminarily to enjoin C. Schmidt & Sons ("Schmidt" or "defendant") and Citibank N.A. from consummating a Note Purchase Agreement. The terms of the Agreement provided for the sale to Schmidt of notes which are convertible into shares of Schaefer; upon conversion the holder would possess approximately 30% of the outstanding shares of Schaefer. Schaefer argued that the action of Schmidt was in violation of the antitrust laws, specifically Sections 1 and 2 of the Sherman Act, 15 U.S.C. Sections 1 and 2, and Section 7 of the Clayton Act, 15 U.S.C. Section 18.
An evidentiary hearing was held before me. In a memorandum order of December 4, 1978, I granted Schaefer's motion and enjoined Schmidt, pending a final trial, from any activities which would confer on Schmidt any degree of control over Schaefer, including the consummation of the Note Purchase Agreement. The memorandum order also enjoined Schmidt from acquiring or attempting to acquire any common stock or other securities of Schaefer, from obtaining or soliciting proxies to vote stock of Schaefer, and from voting or otherwise exercising any indicia of control over any stock or other securities of Schaefer. The Court of Appeals affirmed (597 F.2d 814 (2d Cir. 1979)).Thereafter Schmidt assigned its rights under the Note Purchase to Stroh Brewery Company, which produces and markets beer in another part of the country and is not competitive with Schaefer.
This action is now before me on plaintiff's motion for costs and an attorney's fee pursuant to Section 16 of the Clayton Act, 15 U.S.C. § 26 ("Section 16").
Section 16 was amended by the addition of a provision with respect to costs and an attorney's fee after, and in response to, the decision of the Supreme Court in Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975).
In Alyeska, the Supreme Court held that, with a few narrow exceptions, the federal courts have no power to award attorneys' fees in the absence of specific statutory authority.
Section 16 now provides in pertinent part:
In any action under this section in which the plaintiff substantially prevails, the court shall award the cost of the suit, including a reasonable attorney's fee, to such plaintiff.
The dispositive question is whether plaintiff has "substantially prevailed."
There is no indication in either the statute or the legislative history of the meaning of the phrase "substantially prevails."
Other statutes contain language similar to that contained in Section 16. Thus under the Freedom of Information Act, 5 U.S.C. Section 552a(g)(3)(B), "[the] court may assess... reasonable attorney fees... in any case... in which the complainant substantially prevailed." Under 42 U.S.C. Section 1988, in certain designated civil actions and proceedings "... the court, in its discretion, may allow the prevailing party... a reasonable attorney's fee as part of the costs."
Defendant argues that cases which have construed these other statutes are inapposite because the language of those statutes is permissive, while the language in Section 16 is mandatory -- if the court, in a Section 16 case, finds that the plaintiff substantially prevailed, the court has no discretion and must award an attorney's fee. I reject this argument. Whether the provision with respect to award of an attorney's fee is mandatory or permissive, the award or the possibility of an award, follows a determination that plaintiff substantially ...