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December 1, 2000


The opinion of the court was delivered by: Brieant, District Judge.


By motion filed on October 30, 2000, heard and fully submitted on December 1, 2000, which motion was not invited by this Court or the Court of Appeals, Objector William C. Rand, who has appeared pro se in this Court and in the Court of Appeals, but happens to be an attorney, moves for an award of attorney's fees and expenses incurred in the course of his pro se Objection in both Courts to the fee application of counsel for Plaintiffs in this shareholder derivative litigation involving Texaco, Inc. ("Texaco").

By letter submitted November 30, 2000, counsel for Elizabeth McLaughlin, who also objected to the fee application of counsel for Plaintiffs, supports the proposed fee award. Glendora, appearing pro se, also having objected in the district court to the fee application of counsel for Plaintiffs, objected to any fee award to Mr. Rand, as did the Plaintiffs. Texaco has not opposed the application.

Familiarity of the reader with all prior proceedings is assumed, but some background must be stated to place this application in context. See In re Texaco, Inc. Shareholder Litigation, 20 F. Supp.2d 577 (S.D.N.Y. 1998), reversed sub nom Kaplan v. Rand, 192 F.3d 60 (2d Cir. 1999). See also Roberts v. Texaco, Inc., 979 F. Supp. 185 (S.D.N.Y. 1997), hereinafter the "Roberts litigation." In March 1994, the Roberts litigation was commenced against Texaco as a class action in behalf of salaried African-American employees of the company, who claimed that Texaco had engaged in conduct which had a disparate impact upon their rights in promotions, compensation, training and job assignments, and the terms and conditions of their employment. The case was based initially on statistical analysis supported by anecdotes. On two occasions the Equal Opportunity Employment Commission ("EEOC") declined to investigate the matter or appear in the case, but issued a Right to Sue letter and an amended Right to Sue letter.

While the Roberts litigation was in pretrial discovery, a disgruntled Texaco employee, Richard A. Lundwall, made a clandestine audio tape of himself and other Texaco management employees discussing possible obstruction of Justice in connection with pretrial discovery. These recorded conversations evidenced an attitude of racial bias and disrespect on the part of the participants toward the plaintiff class in Roberts. Two of the participants were tried before a jury in this Court and acquitted on June 8, 1998, on federal charges of Obstruction of Justice.

The audio tape, which was of poor quality, was delivered to counsel for the Roberts class and thereafter made public. This was an immediate public relations disaster for Texaco.*fn1 Publication of the tape resulted in intervention in the matter by the EEOC, which had twice before declined to take action in support of the claims of the Roberts class.

As a direct result of the disclosure of the audio tape, Texaco and the Roberts plaintiffs entered into a settlement agreement very favorable for the class in which a common fund of $115 million was created to pay the monetary claims of all individual class members and the costs of the suit. Also, the class members received an 11.34% pay increase and structural arrangements were made for improvement of the personnel practices of the company, including establishment of a five-year Task Force on Equality and Fairness.

These derivative cases followed almost immediately upon the announcement of Roberts settlement. These actions were brought in good faith against present and past directors of Texaco and former employees, including Mr. Lundwall.

After the derivative action had been pending for some time the Defendants moved to dismiss on the ground that the claims were barred by an exculpatory provision in Texaco's certificate of incorporation permitted by the laws of Delaware, and because of a failure to make a pre-litigation demand upon the Board of Directors or plead adequate facts demonstrating that such a demand would be futile. It soon became clear that those Defendants who were financially responsible and protected by directors' and officers' insurance had not themselves done anything wrong, and that those who had engaged in wrongdoing had no money and were not covered by insurance. The derivative cases were settled without payment under an agreement to adopt certain corporate policies in the future and with the understanding that a legal fee would be fixed by the Court, not in excess of $1.4 million, to be paid solely by Texaco's insurance carrier. This was the settlement which was held to be of no value as a result of the pro se appeal initiated by Mr. Rand in Kaplan v. Rand, supra, which reversed the award of legal fees of $1 Million and disbursements to the attorneys for the derivative action Plaintiffs.

Three days after Mr. Rand appealed, Glendora also filed a pro se appeal. A panel of our Court of Appeals denied leave to file and dismissed Glendora's appeal.*fn2 The Court of Appeals in Kaplan v. Rand, supra, held:

The application [of Glendora] was denied on the ground that the movant was a layperson and not entitled to appear pro se to pursue a stockholders' derivative suit. See Pridgen v. Andresen, 113 F.3d 391, 393 (2d Cir. 1997). As an alternative reason for denial of the motion, the motions panel noted that only parties may appeal from an order or judgment citing, Marino and Felzen. We may disregard the alternative reason because it is dictum, because such an order is without precedential authority, and because we are entitled to revisit the decision of a motions panel.

As noted earlier the Court of Appeals in its extensive opinion in Kaplan was silent with respect to authorizing the award of any legal fees to Mr. Rand for his services, either in the District Court or in the Court of Appeals. The mandate of the Court of Appeals in Kaplan was filed in the District Court on November 16, 1999. On the same date, a Bill of Costs was taxed by William C. Rand against Plaintiffs in the amount of $1,630.00, which has been paid. This Court complied with the mandate of the Court of Appeals, and filed an Amended Judgment on November 17, 1999 (Doc. 106), which denied the award of attorney's fees and expenses allowed by the original Judgment entered on October 16, 1998 and was silent as to fees for Mr. Rand. It was not until October 30, 2000, almost one year later, that this motion for attorney's fees and expenses against Texaco, Inc. or its insurer was filed by Mr. Rand.

This application is clearly time barred by Rule 54(d)(2)(B) of the Federal Rules of Civil Procedure which provides in relevant part that, "Unless otherwise provided by statute or order of the Court, the motion [for attorney's fees] must be filed and served no later than 14 days after entry of judgment. . . ." Weyant v. Okst, 198 F.3d 311, 314 (2d Cir. 1999); Arroyo Lopez v. Nuttall, 25 F. Supp.2d 407, 410 (S.D.N.Y. 1998) (Chin, J.); Straight v. Bermuda Star Line, Inc., 1996 WL 312112 (S.D.N.Y.) (Griesa, J.). It is only a final judgment that starts the 14 day filing period. Weyant, 198 F.3d at 314.

The issue of timeliness was raised by this Court at the hearing on this application. Mr. Rand argued that rule 54(d)(2)(B) applied only to statutory fee shifting cases, and that his application was equitable in nature. Nothing in the explicit provisions of Rule 54 supports this claimed distinction, and there is respected authority to the contrary. See 10 Moore's Federal Practice (3d Ed.) ยง 54.150 ("Under Rule 54(d)(2), the proper method for ...

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