On June 20, 1985, the Securities and Exchange Commission (the "Commission") filed a complaint against Kaufman, among others, seeking a permanent injunction for alleged primary and secondary violations of the Securities and Exchange Act, to wit, sections 10(b), 13(a) and 13(b)(2), 15 U.S.C. §§ 78j(b), 78m(a), 78m(b)(2), and Rules 10b-5, 13b2-1, 12b-20, 13a-1 and 13a-13, 17 C.F.R. §§ 240.10b-5, 240.13b2-1, 240.12b-20, 240.13a-1 and 240.13a-13 promulgated thereunder. On October 15, 1990, the Commission agreed to a dismissal with prejudice of the case against Kaufman.
Kaufman served as Vice President and Controller of AM international from in or about June, 1979, until in or about October, 1979. See Joint Pre-Trial Order dated March 30, 1990 ("PTO"), P 16(B)(xi). After that he was AM international's Vice President of Operations until in or about April, 1981, at which time he left the company. Id.; Def. Mem. Fact at 2. From January 18, 1980, until April, 1981, he was simultaneously President and General Manager of AM Multigraphics, an unincorporated division of AM international. PTO, PP 13, 16(B)(xi). Since he left the company in April, 1981, Kaufman has been continuously unemployed. Def. Mem. Fact at 2.
Within thirty days following the resolution after trial of the case against Price Waterhouse, et al., (hereinafter referred to as "the main case"), Kaufman applied as a prevailing party under the EAJA for reimbursement of his costs, fees and expenses incurred over his five years of litigation. Kaufman has submitted a "Bill of Costs" itemizing that for which he seeks reimbursement. See Bill of Costs dated August 5, 1992. In a letter to the Court dated August 5, 1992, Kaufman refers to the Bill of Costs as a summary of his fees and expenses reflecting the "expenditure of time, labor and thought necessary for the preparation of [the] case." That Bill of Costs documents that he spent 4,515 hours preparing his defense and computes compensation at a $ 398.37 hourly rate (based on his 1980 hourly rate indexed for inflation) for a total of $ 1,798,640.50. Id. It also lists a total of $ 19,662.30 in "out-of-pocket expenses," indexed for inflation, related to travel, typing, and miscellaneous (i.e., expenses for mailing, telephone, supplies, local mileage, dictation equipment, passport, duplication, storage, shipping, and translation). Id.
Under the EAJA, a prevailing party in any civil action brought by any agency of the United States whose position in that litigation was not substantially justified shall recover his fees and other expenses and may recover his costs.
Kaufman seeks to recover all three, i.e., his costs, fees and expenses. In its papers submitted in opposition to Kaufman's application, the Commission did not contest Kaufman's allegation that their position was not substantially justified.
Although Kaufman expressly disclaimed any attempt to recover attorney fees in his August 5 letter to the Court, he does request compensation for hours spent preparing his case. The Second Circuit has indicated, however, that that form of compensation is not recoverable since non-lawyers who appear pro se may not recover attorney fees unless the litigation caused them to divert their time from income-producing activity. See Sommer v. Sullivan, 898 F.2d 895, 896 (2d Cir.), cert. denied, 498 U.S. 980, 112 L. Ed. 2d 520, 111 S. Ct. 508 (1990)(EAJA case); Kuzma v. United States Postal Service, 725 F.2d 16 (2d Cir.) (FOIA case), cert. denied, 469 U.S. 831, 83 L. Ed. 2d 62, 105 S. Ct. 119 (1984); Crooker v. United States Dep't of the Treasury, 634 F.2d 48, 49 (2d Cir. 1980) (FOIA case). Kaufman, a non-lawyer who was unemployed during the period he was a defendant in this litigation, suffered no loss of income as a result of this case.
Neither is Kaufman entitled to reimbursement for any costs. Costs are available under EAJA § 2412(d)(1)(A) only when not specifically precluded by another statute. See 28 U.S.C. § 2412(a)(1). Since section 27(a) of the Securities and Exchange Act expressly precludes recovery of costs against the Commission, Kaufman cannot recover costs. See 15 U.S.C. § 78aa; SEC v. Torr, 22 F. Supp. 602, 611 (S.D.N.Y. 1938). See also Fed. R. Civ. P. 54(d) (prevailing party entitled to costs "except when express provision is made . . . in a statute of the United States . . .; [moreover,] costs against the United States, its officers, and agencies shall be imposed only to the extent permitted by law").
However, the Court must decide whether expenses, as opposed to costs, may be taxed against the Commission notwithstanding section 27(a), an issue no court has yet addressed. The Court concludes that they may. While waivers of sovereign immunity must be strictly construed in favor of the United States, see Ardestani v. INS, 116 L. Ed. 2d 496, 112 S. Ct. 515, 520 (1991), section 27(a), is not a waiver of sovereign immunity, see SEC v. Independence Drilling Corp., 595 F.2d 1006, 1008 (5th Cir. 1979), and therefore need not be subject to that rule of construction. Instead, "costs" can be given their normal meaning as defined by the plain language of 28 U.S.C. § 1920, which is specifically referred to in 28 U.S.C. § 2412(a), i.e., fees of the clerk and marshal, fees of the court reporter for necessary stenographic transcripts, fees and disbursements for printing and witnesses, fees for necessary exemplification and copies of papers, docket fees, and compensation of court appointed experts, interpreters and special interpretation services under 28 U.S.C. § 1828.
Only those costs are specifically barred by § 27(a).
The Court concludes, therefore, that Kaufman, as a prevailing party, is entitled to reimbursement for certain of the "out-of-pocket expenses" listed in his Bill of Costs of a type which are normally billed to a client and which are not specifically barred by section 27(a) as costs under section 1920, to wit, expenses for travel, typing services, postage, telephone, transport and storage of records, and translation. See, e.g., Kuzma v. IRS, supra, 821 F.2d at 933-34; Film Office, S.A. v. MGM/UA Home Video, Inc., No. 91 Civ. 1132, 1992 U.S. Dist. LEXIS 11407, 1992 WL 196734, at *2 (S.D.N.Y. Aug. 3, 1992); Dow Chem. Pac. Ltd. v. Rascator Maritime S.A., 640 F. Supp. 882, 886 (S.D.N.Y. 1986). However, he may not recover expenses includable as costs under section 1920 such as his expenses for duplication and copying, nor may he recover for expenses not normally billed to a client such as, in this case, his expenses for mileage, stationery and supplies, dictation equipment and tapes, and passport.
For the reasons stated above, Kaufman's application for reimbursement of costs and expenses under the EAJA is granted in part and denied in part. The parties shall propose and submit appropriate judgments.
It is SO ORDERED.
Dated: New York, New York
October 20, 1993
John E. Sprizzo
United States District Judge