The opinion of the court was delivered by: MISHLER
Memorandum of Decision and Order
The Grumman Corporation ("Grumman") filed a motion on September 28, 1981
under Section 16 of the Clayton Act, 15 U.S.C. § 26 (1981) ("Section 16"), to preliminarily enjoin The LTV Corporation and the affiliated defendants (hereinafter collectively referred to as "LTV") from proceeding with its September 24 tender offer to acquire Grumman. Grumman obtained the injunctive relief it had sought and thereafter successfully defended a vigorous challenge to that relief in the Court of Appeals.
Grumman now moves for, inter alia, "the cost of suit including a reasonable attorney's fee" also pursuant to Section 16.
Grumman's motion for a preliminary injunction was made returnable on October 6. The parties conducted discovery on an expedited basis prior to the hearing conducted by this court on October 6 and 7. One week later this court signed an order preliminarily enjoining LTV from proceeding in its efforts to acquire control of Grumman based in significant part upon Grumman's contention and proof that the proposed plan would violate § 7 of the Clayton Act, 15 U.S.C. § 18 (1976). Based upon extensive depositions, affidavits and exhibits offered by both sides in connection with the two-day hearing, we found that Grumman had proved a likelihood of success on the merits with respect to antitrust violations in three distinct markets. Grumman Corporation v. The LTV Corporation, 527 F. Supp. 86 (E.D.N.Y.1981). Thereafter, the Court of Appeals heard the appeal from our injunction on an expedited basis and affirmed our findings with respect to each market. Grumman Corporation v. The LTV Corporation, 665 F.2d 10 (2d Cir. 1981). Specifically, the Court found that a preliminary injunction was warranted since "Grumman (had) established at least the requisite probability of success in proving" that the successful consummation of LTV's tender offer might tend to substantially lessen competition in the market for carrier-based aircraft. Id. at 13 (emphasis added).
In opposition to the instant motion for costs and attorney's fees, LTV contends that Grumman's application must be rejected in total. The Section 16 attorney's fee provision is inapposite, LTV claims, because Grumman's antitrust suit was neither the "but for" cause of LTV's abandonment of the September 24 tender offer nor did Grumman obtain a final judgment on the merits.
The resolution of the instant motion requires our construction of the phrase "substantially prevails" in the context of the Section 16 attorney's fee provision:
In any action under (Section 16) in which the plaintiff substantially prevails, the court shall award the cost of suit, including a reasonable attorney's fee, to such plaintiff.
Having carefully read the statutory language in light of both the legislative history of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, P.L. 94-435,
and the provision for attorney's fees found in Section 4 of the Clayton Act, 15 U.S.C. § 15 ("Section 4") (permitting a damages suit for persons injured by antitrust violations), we find that Grumman is entitled to the "cost of suit" as well as "a reasonable attorney's fee." See Harnischfeger Corp. v. Paccar, Inc., 503 F. Supp. 102 (E.D.Wisc.1980) ("Harnischfeger"); F & M Schaefer Corp. v. C. Schmidt & Sons, Inc., 476 F. Supp. 203 (S.D.N.Y.1979) ("Schaefer").
Grumman failed to obtain a decision on the merits in winning preliminary relief. Nevertheless, we believe that Grumman "substantially prevailed" within the meaning of Section 16 since (1) it is beyond dispute that its Section 16 action against LTV was a substantial factor in defeating the takeover attempt, and (2) a decision following a trial on the merits is not a condition precedent to a Section 16 attorney's fee award since the phrase "substantially prevails" contemplates and is sensibly construed to accommodate something short of a final judgment on the merits.
The starting point in our analysis is, of course, the statutory language. The dictionary meaning of the phrase in question suggests that a plaintiff which is victorious "in substance or in the main" is a prevailing party for purposes of Section 16. See Webster's New Collegiate Dictionary (2d ed. 1959). Standing by itself, this language is hardly illuminating. With respect to the constructions urged by the parties, the phrase is reasonably subject to differing interpretations. Congress having failed to define "substantially prevailed," we are left to the task of discerning its intent. See e.g., Caminetti v. United States, 242 U.S. 470, 485, 37 S. Ct. 192, 194, 61 L. Ed. 442 (1917).
1. No Requirement of a Final Judgment
The courts which have examined the Section 16 attorney's fees provision have considered the interpretation of similar language used by Congress in different statutes. Under the Civil Rights Attorney's Fees Award Act of 1976, 42 U.S.C. § 1988 ("Section 1988"), which provides that "the court, in its discretion, may allow the prevailing party a reasonable attorney's fee ...", " "parties may be considered to have prevailed when they vindicate rights through a consent judgment or without formally obtaining relief.' " Maher v. Gagne, 448 U.S. 122, 129, 100 S. Ct. 2570, 2575, 65 L. Ed. 2d 653 (1980), quoting, S.Rep.No.94-1011, p. 5, (1976) U.S.Code Cong. & Admin.News, pp. 5908, 5912. LTV argues that reliance on cases interpreting Section 1988 of the Civil Rights Act are inapposite since the legislative history of the amendment expressly provided for attorney's fees even in the absence of formal and final relief. Its position essentially bids that we draw a negative inference from the Congressional silence in the legislative history underlying the amendment to Section 16. We attach little significance to Congressional silence in view of Congress' busy legislative schedule. Cf. Sands, Sutherland Statutory Construction, § 49.10 n.2 (4th ed. 1973). Rather, we believe it is more appropriate to presume that Congress intended identical language found within the Section 16 and Section 1988 attorney's fees provisions, which were enacted by the same Congress, would be identically construed. That presumption of course must be qualified in the instant case because the language utilized in the two statutes, although similar, is not identical.
By modifying the word "prevails" with the word "substantially," Congress appears to have expressed an intent to reward plaintiffs who "vindicate rights" through thwarting "threatened loss or damage by a violation of the antitrust laws" either through obtaining a final judgment or something which is its functional equivalent. This conclusion is corroborated by the negative inference which we draw from an examination of a host of statutes where Congress has expressly imposed the requirement of a final judgment as a condition precedent for plaintiff's recovery of attorney's fees. See, e.g., Commodity Futures Trading Commission Act of 1974 § 106, 7 U.S.C. § 18(f) (finally prevails) (fees are mandatory); Packers and Stockyards Act § 309, 7 U.S.C. § 210(f) (finally prevails) (fees are mandatory); Perishable Agricultural Commodities Act § 7, 7 U.S.C. § 499g(b) (finally prevails) (fees are mandatory); Marine Protection, Research, and Sanctuaries Act of 1972 § 105, 33 U.S.C. § 1415(g)(4) (final order) (fees are within the court's discretion); Deepwater Port Act of 1974 § 16(d), 33 U.S.C. § 1515(d) (final order) (fees are within court's discretion); Safe Drinking Water Act § 1449(d), 42 U.S.C. § 300j-8(d) (final order) (fees are within court's discretion); Railway Labor Act § 3, 45 U.S.C. § 153(p) (finally prevail) (fees are mandatory); Communications Act of 1934 § 407, 47 U.S.C. § 407 ...