The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge.
Plaintiff Liberty Mutual Insurance Company ("Liberty
Mutual") seeks attorneys' fees in this case, which arises
under the Packers and Stockyards Act, as amended and
supplemented, 7 U.S.C. § 181 et seq. The facts of the case are
set forth in this Court's Opinion and Order of February 12,
1991. Liberty Mutual Ins. Co. v. Bankers Trust Co. et al.,
758 F. Supp. 890 (S.D.N.Y. 1991). The Court granted Liberty Mutual's
motion for prejudgment interest in an opinion and Order of
March 28, 1991. Liberty Mutual Ins. Co. v. Bankers Trust Co. et
al., 761 F. Supp. 9 (S.D.N.Y. 1991). Liberty Mutual also moved
for an award of attorneys' fees and the Court reserved decision
on the motion pending additional submissions by the parties.
For the reasons stated below, the motion for attorneys' fees
Liberty Mutual argues that Pennsylvania Agricultural
Cooperative Marketing Assn. v. Ezra Martin Co., 495 F. Supp. 565,
570-71 (M.D.Pa. 1980), which was cited in this Court's
opinion of March 28, 1991 as precedent for awarding prejudgment
interest, should also be read as allowing an award of
attorneys' fees. In Ezra Martin, supra, the court held that the
Packers and Stockyards Act requirement that unpaid cash sellers
receive "full payment" allowed an award which included the
"principal amount (purchase price), prejudgment interest on
that amount from the date following the delivery and acceptance
of the livestock, and costs incurred by the suppliers in
seeking to enforce their rights." 495 F. Supp. at 570. The court
relied on the following language from Section 206 of the
Packers and Stockyards Act, at 7 U.S.C. § 196(b): "`All
livestock purchased by a packer in cash sales, and all
inventories of, or receivables or proceeds from meat, meat food
products, or livestock products derived therefrom, shall be
held by such packer in trust for the benefit of all unpaid cash
sellers of such livestock until full payment has been received
by such unpaid sellers . . .' 7 U.S.C. § 196(b) (emphasis
added)." 495 F. Supp. at 570. No language can be found in Ezra
Martin, however, supporting an award of attorneys' fees in this
case. Indeed, counsel for the prevailing party in Ezra
Martin did not even include the "costs of litigation" in its
proposed stipulation, nor did it object to the court's omission
thereof, so the court deemed any such claims waived. 495
F. Supp. at 571. See also, 28 U.S.C. § 1920 (West 1991).
Liberty Mutual also seeks to apply the language in
Alyeska Pipeline Service Co. v. Wilderness Society,
421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975), to its
motion. In Alyeska, the Supreme Court listed the Packers and
Stockyards Act in a footnote as one of the federal statutes
which allows for a recovery of attorneys' fees. 421 U.S. at
260, n. 33, 95 S.Ct. at 1623, n. 33. However, the note referred
to 7 U.S.C. § 210(f) as the provision under which attorneys'
fees were allowed. Id. By its terms, 7 U.S.C. § 210(f) applies
to those actions brought under the Packers and Stockyards Act
to enforce an award of damages by the Secretary of
Agriculture.*fn1 The present action is not a suit to enforce
an award of damages by the Secretary of Agriculture and the
Secretary of Agriculture did not issue such an award of damages
to plaintiff or its assignors against Bankers Trust or Rotches,
Inc.*fn2 Accordingly, 7 U.S.C. § 210(f) is not authority for
any award of attorneys' fees in this action.
7 U.S.C. § 196, the section providing for the statutory trust
for unpaid cash sellers, contains no express authorization for
an award of attorneys' fees to a successful litigant in Liberty
Mutual's position, nor has any court so interpreted that
provision of the Packers and Stockyards Act.*fn3 The
legislative history of 7 U.S.C. § 196 is silent as to any
Congressional intent to award attorneys' fees in an action to
determine creditors' respective rights under the statutory
trust provision. In view of Congress' earlier express inclusion
of attorneys' fees in 7 U.S.C. § 210(f), the right to such fees
should not be implied under 7 U.S.C. § 196. Cf., e.g., Federal
Trade Commission v. Simplicity Pattern Co., 360 U.S. 55, 67, 79
S.Ct. 1005, 1012-13, 3 L.Ed.2d 1079 (1959), reh'g denied,
361 U.S. 855, 80 S.Ct. 41, 4 L.Ed.2d 93 (1959).
Since the general rule is that, with few exceptions, each
litigant in federal court should pay its own attorneys' fees
and that any statutory authorization for awarding a party
attorneys' fees must be express, see Alyeska, supra, 421 U.S.
at 245, 247, 257 et seq., 95 S.Ct. at 1615, 1616, 1621 et seq.,
the Court finds no justification for an award of attorneys'
fees in the present case in the Packers and Stockyards Act
Liberty Mutual also argues that, consistent with the
provisions of 7 U.S.C. § 209, it is entitled to pursue its
common law rights to collect attorneys' fees because it was
successful in an action "preserving or recovering a fund for
the benefit of others in addition to [it]self." Alyeska, supra,
421 U.S. at 257, 95 S.Ct. at 1621,*fn4 and particularly under
the "common fund doctrine," Boeing v. Van Gemert, 444 U.S. 472,
481, 100 S.Ct. 745, 750-51, 62 L.Ed.2d 676 (1980).
The common fund doctrine does not apply to the present case.
The common fund doctrine is based on the notion that those who
benefit from a lawsuit without contributing to its costs may
be taxed with a share of the expense of a successful lawsuit
by allowing the actual litigant to recover costs and
attorneys' fees from the common fund. Boeing, supra, 444 U.S.
at 478, 100 S.Ct. at 749.*fn5 It is a means of dividing the
costs of suit among successful litigants. Recovery of
attorneys' fees under such a theory would be based on the cash
sellers' assignments to Liberty Mutual. The cash sellers'
claims lay against A & B as trustee and not against Bankers
Trust. The failure to pay cash sellers to date was due to the
action of A & B as trustee in subordinating trust assets to
Bankers Trust's security interest through the Inter-Creditor
Agreement. A & B itself has no assets due to its bankruptcy.
Accordingly, the cash sellers' claims under common law could
not be collected against A & B. No proceedings were completed
against Rotches, Inc. and Bankers Trust by the bankrupt's
estate, so that no determination has been made of what accounts
receivable were valid and outstanding and were assets of the
trust. There is no showing that A & B would have had any funds
available to pay attorneys' fees.
With respect to the historic equity power to allow a trustee
of a fund to recover its costs, including attorneys' fees, as
stated in Alyeska, that also raises a difficult issue. Without
citing any other authority for its position, Liberty Mutual
states it has previously demonstrated that Rotches, Inc. owed A
& B the principal sum of $1,728,135.22. However, the Court's
prior opinion only held that "A & B's accounts receivable from
Rotches, Inc. can be recovered by Liberty Mutual in this action
to the extent that Liberty Mutual can establish that they are
valid claims of the statutory trust for funds required to make
payments under the statutory trust to the Sellers and not
claims asserted on behalf of A & B in a non-trustee capacity."
758 Supp. at 895. See also id., n. 6 ("the Court interprets the
Inter-Creditor Agreement as not subordinating to Bankers Trust
A & B's security interest in Rotches Inc.'s assets sufficient
to pay accounts receivable which A & B
held or would hold in trust for sellers of livestock under
7 U.S.C. § 196(b)").
Liberty Mutual suggests it has reached agreement with
Bankers Trust as to the amount Liberty Mutual may recover as
statutory trust assets, exclusive of interest and costs, as
$827,067.73 and states "If counsel fees are not added to the
principal and interest, the livestock suppliers will not
receive the `full payment' to which they are entitled as
beneficiaries of the statutory trust." Plaintiff's Memorandum
of Law in Support of Application for Attorneys' Fees, at 11 n.
4. The Court finds that Liberty Mutual has not made an
adequate record to establish that those due and payable
accounts receivable from Rotches, Inc. which were trust assets
exceed the principal and interest due the cash sellers or that
it has established that it has a right to deduct attorneys'
fees from trust funds due the beneficiaries. Furthermore,
since under this common law theory upon which Liberty Mutual
would recover, it is suing on behalf of A & B, as trustee, the
Court's finding that A & B violated its obligations as trustee
under the Packers and Stockyards Act must be considered.
Liberty Mutual, supra, 758 F. Supp. at 895. Under these
circumstances, there is an inadequate basis on which to
determine that any award of attorneys' fees can be paid.
Accordingly, Liberty Mutual's motion for attorneys' fees is
denied. The parties are ordered to appear for a conference at
9 a.m. on July 9, 1991, in Courtroom 302, United ...