Litton Systems, Inc. v. American Tel. and Tel. Co.

• Decision Date: 09 July 1985
• Docket Number: No. 76 Civ. 2512 (WCC).,76 Civ. 2512 (WCC).
• Citation: 613 F. Supp. 824
• Parties: LITTON SYSTEMS, INC., et al., Plaintiffs, v. AMERICAN TELEPHONE AND TELEGRAPH COMPANY, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

613 F. Supp. 824

LITTON SYSTEMS, INC., et al., Plaintiffs, v. AMERICAN TELEPHONE AND TELEGRAPH COMPANY, et al., Defendants.

No. 76 Civ. 2512 (WCC).

United States District Court, S.D. New York.

July 9, 1985.

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Curtis, Mallet-Prevost, Colt & Mosle, New York City, Howrey & Simon, Washington, D.C., for plaintiffs; Peter E. Flemming, Jr., New York City, William Simon, John Bodner, Jr., Francis A. O'Brien, Michael K. Brown, Washington, D.C., Theodore F. Craver, Larry L. Yetter, Litton Industries, Inc., Beverly Hills, Cal., of counsel.

Dewey, Ballantine, Bushby, Palmer & Wood, New York City, for defendants; Harvey Kurzweil, Raymond Brenner, David J. Ritchie, Peter H. Jacoby, New York City, of counsel.

OPINION AND ORDER

WILLIAM C. CONNER, District Judge:

In 1976, plaintiffs Litton Systems, Inc., et al. ("Litton") brought suit against defendants American Telephone and Telegraph Company, et al. ("AT & T") for violations of the federal antitrust laws. After years of pretrial proceedings and a five-month jury trial, I entered judgment in favor of Litton in the amount of $276,774,729. The Court of Appeals for the Second Circuit unanimously affirmed that judgment, Litton Systems, Inc. v. American Telephone and Telegraph Co., 700 F.2d 785 (2d Cir.1983), and the United States Supreme Court denied AT & T's petition for a writ of certiorari. ___ U.S. ___, 104 S.Ct. 984, 79 L.Ed.2d 220 (1984).

Litton now moves, pursuant to Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15, 26, for an award of costs and attorney's fees for its successful defense of the judgment on appeal.¹ It calculates its costs at $288,646.85 and its attorney's fees at $1,496,564. It requests that I multiply this lodestar amount by a factor of 1.5 to 2.5.

I stress that Litton seeks only costs and fees incurred on appeal. In an Opinion and Order issued after the trial, I sanctioned Litton for its attorneys' willful failure to make pretrial discovery, and decided that the appropriate punishment for that behavior was denial of all costs and attorney's fees to which Litton would otherwise have been entitled. Litton Systems, Inc. v. American Telephone and Telegraph Co., 91 F.R.D. 574 (S.D.N.Y.1981), aff'd, 700 F.2d 785 (2d Cir.1983), cert. denied, ___ U.S. ___, 104 S.Ct. 984, 79 L.Ed.2d 220 (1984). Accordingly, Litton does not seek costs or attorney's fees for the pretrial or trial phases of the litigation.²

AT & T contends that Litton's motion should be denied in its entirety for the following reasons: (1) it construes my earlier Opinion depriving Litton of its costs and attorney's fees as applying to all costs and fees incurred in connection with the litigation, including appeals; (2) it urges that even if my earlier Opinion did not extend to costs and attorney's fees incurred on appeal, I should deny Litton those costs and fees as an additional sanction for its attorneys' misconduct; (3) it contends that Litton waived its right to apply for costs and attorney's fees by executing a Satisfaction of Judgment that did not reserve that right; and (4) it argues that Litton's time records are not sufficiently specific to determine whether the time spent was on issues on which Litton prevailed, or on issues on which Litton did not. AT & T also raises a number of objections to specific portions of Litton's application. I will address each of these contentions in the order presented above.³

First, with respect to AT & T's contention that my earlier Opinion depriving Litton of its costs and attorney's fees operates to bar its present application for costs and fees incurred on appeal, I must say that I did not intend my Opinion to be so read. Indeed, as Litton has pointed out, at the time I issued my Opinion, I was in no position to consider Litton's appellate fees: I did not know what would happen on appeal, what Litton's appellate fees would be, or whether Litton would be successful and entitled to such fees.

Moreover, I have reviewed my earlier Opinion and find little in it suggesting that the sanction I imposed there would apply to costs and fees incurred on appeal. I have also reviewed the Court of Appeals' opinion affirming my decision, and despite AT & T's urging, I see nothing in it to indicate that the court read my decision any differently than I intended. Therefore, I conclude that my earlier Opinion does not bar Litton's instant application.

I also disagree with AT & T's second argument, that I should deny Litton's application for appellate costs and fees as an additional punishment for its counsel's misconduct. While I do not wish to suggest that the passage of time has made that misconduct any less reprehensible, I am satisfied that Litton's counsel have been sufficiently punished for their misdeeds. As AT & T itself has pointed out, Litton and its counsel sustained considerable adverse publicity when I issued my decision, and, of course, they suffered a substantial pecuniary loss as well. Moreover, I am not persuaded by AT & T's argument that by permitting Litton to recover its appellate costs and fees I would create "the impression that flagrant, dishonest conduct becomes acceptable if the party adjudged guilty wins an appellate affirmance on its substantive claim." Def. Mem. in Opp. at 9. I fully trust that the seriousness of the misconduct in this case and the Court's willingness to punish such misconduct has not been and will not be lost on Litton's counsel or on the bar generally.

Accordingly, I turn to AT & T's third contention, that Litton waived its right to seek its appellate costs and attorney's fees by executing a Satisfaction of Judgment that did not expressly reserve that right. Litton executed the Satisfaction in question on January 26, 1984, ten days after the Supreme Court denied AT & T's petition for a writ of certiorari. At the time, Litton's appeal of my decision denying its motion to amend the judgment to provide for a higher rate of interest was pending before the Court of Appeals.⁴ Accordingly, Litton expressly reserved in the Satisfaction its right to any additional interest the Court of Appeals might award, and its right to seek further review in the Supreme Court if necessary. The executed Satisfaction reads in relevant part as follows:

WHEREAS, defendants have paid to plaintiffs the sum of $340,993,305.92 (three hundred forty million, nine hundred ninety-three thousand, three hundred five dollars and ninety-two cents), representing the amount of said Amended Judgment and interest thereon at the rate of 9 (nine) per cent to the date hereof; and

WHEREAS, it is hereby certified that there are no outstanding writs of execution to enforce said Amended Judgment; now,

THEREFORE, satisfaction of said Amended Judgment, except for any additional interest thereon that may be allowed upon a final determination of plaintiffs' pending appeal (including review, if any, by writ of certiorari in the United States Supreme Court), is hereby acknowledged, and the Clerk of the Court is hereby authorized to make an entry of such satisfaction on the docket of said Amended Judgment, and to cancel and discharge the same to that extent.

Attachment H to Simon Aff. As may be seen, Litton did not reserve in the Satisfaction a right to make this motion for its appellate costs and attorney's fees.

However, in addition to the Satisfaction of Judgment, Litton executed a "receipt" when the judgment was paid. AT & T drafted a proposed receipt which William Simon, lead counsel for Litton, received on January 25, 1984, the day before he executed the Satisfaction of Judgment on Litton's behalf. Simon Aff. at ¶ 5. The proposed receipt read in relevant part:

The undersigned acknowledge receipt, on behalf of themselves and the other plaintiffs in the aforementioned action, of the above-described checks payable in the aggregate dollar amount of $340,993,305.92 in full payment of judgment in the aforementioned action, including all interest and costs, except to the extent of any interest which may be ordered to be paid to plaintiffs as a result of a final determination of plaintiffs' pending appeal from the district court's denial of their motion to amend the Judgment, as further specified in the Satisfaction of Judgment.

Attachment D to Simon Aff. (emphasis added).

Upon receiving the proposed receipt, Simon telephoned AT & T's Assistant General Counsel, Raymond Brenner, and advised him that he could not sign the proposed receipt because Litton intended to make this application for appellate costs and attorney's fees. Simon Aff. at ¶ 6. Simon apparently read the language of the proposed receipt concerning costs as waiving Litton's right to make such an application. Therefore, he advised Brenner that he would sign the receipt only if the word "awarded" were inserted before "costs" so that it was clear that Litton was discharging only costs that had already been awarded, and not prejudicing its proposed motion for appellate costs and attorney's fees. Id. AT & T agreed to Simon's request and made the change in the wording of the receipt. However, no corresponding change was made in the Satisfaction of Judgment.

AT & T does not deny that Simon advised its counsel before the Satisfaction was executed that Litton intended to make this motion for its appellate costs and attorney's fees, or that AT & T's counsel agreed to the change in the wording of the receipt. See Brenner Aff. at ¶ 3. It contends, however, that the receipt was intended only as an internal accounting document and that only the Satisfaction of Judgment represents a full integration of the agreement between the parties. Therefore, it argues that I should not consider Simon's description of the events surrounding the modification of the wording of the receipt or the modification's effect on Litton's right to make this application.

In taking this position, AT & T attempts to capitalize on what was obviously an oversight by Litton's counsel...