Opinion
86 Civ. 2792(CSH)
June 12, 2001
KORNSTEIN VEISZ WEXLER, New York, NY, Attorneys for Plaintiff Local 1199, Drug, Hospital and Health Care Employees Union, RWDSU, AFL-CIO
William B. Pollard III, Esq., Of Counsel
GARETH W. STEWART, ESQ., New York, NY, Attorney for Defendants
MEMORANDUM OPINION AND ORDER
The remaining issues in this case relate to the proper final accounting to be made between the parties, as a consequence of the prior opinions of this Court and the Court of Appeals. This Opinion resolves those issues.
I. PROCEDURAL BACKGROUND
While familiarity with all prior opinions is assumed, it is useful to summarize them to set the procedural background for the present disputes.
The defendants are former officers of plaintiff Local 1199, Drug, Hospital and Health Care Employees Union, RWDSU AFL-CIO (the "Union"). Extensive litigation of a number of disputes between individual plaintiffs (successor Union officers) and the plaintiff Union on one side, and the defendants on the other, resulted in judgments favorable to defendants with respect to the plaintiffs' claims against them and defendants' counterclaims against plaintiffs.
In those circumstances, defendants as vindicated former Union officers claimed that they were entitled to recover their attorney's fees and legal expenses from the Union. Defendants relied in part upon Section 501(a) of the Labor Management Reporting and Disclosure Act of 1959 ("LMRDA"), 29 U.S.C. § 501 (a), as well as upon the bad faith exception to the American Rule in respect of attorney's fees, and upon New York State statutory provisions. This Court ruled that § 501(a) entitled defendants to reimbursement by the Union, did not reach the other asserted bases for recovery, and entered judgment for defendants for attorney's fees and legal expenses in the amount of $387,235.45.Doyle v. Turner, 886 F. Supp. 399 (S.D.N.Y. 1995) ("Doyle I"). Judgment was entered on July 17, 1995.
The Court of Appeals reversed, holding that LMRDA § 501(a) permitted but did not compel Union reimbursement, and remanded the case to this Court for further consideration of alternative bases for recovery.Doyle v. Kamenkowitz 114 F.3d 371 (2d Cir. 1997) ("Doyle II"). The Court of Appeals decided Doyle II on June 2, 1997. The mandate issued on June 23, 1997.
On remand this Court held that defendants had no viable claim for reimbursement by the Union of their attorney's fees and legal expenses, and dismissed the claim. Doyle v. Turner, 90 F. Supp.2d 311 (S.D.N.Y. 2000) ("Doyle III"). The Court of Appeals affirmed sub nom. Hughley v. Local 1199. Drug. Hospital and Health Care Employees Union. RWDSU. 231 F.3d 889 (2d Cir. 2000) (per curiam) ("Doyle IV").
When the case reached the Court of Appeals for the second time, Betty Hughley had replaced Angela Doyle as the lead plaintiff; hence the altered caption. But I will refer to the opinion as Doyle IV for the sake of symmetry.
While the parties were waging their attorney's fee battle before this Court and the Court of Appeals, they were also contesting the amount the plaintiffs owed defendants on defendants' counterclaims before District Judge Stein, to whom that aspect of the litigation had been reassigned. Eventually the parties settled those disputes, as evidenced by a Stipulated Order of Dismissal ("SOD") which Judge Stein endorsed "So Ordered" on July 11, 1996. The SOD provided at ¶ 1 that "[P]laintiffs shall pay to defendants the sum of $750,000 in nine equal monthly installments of $83,333.33 commencing on August 10, 1996." ¶ 2 provided that nothing in the SOD should be construed to affect the parties' rights, obligations or liabilities under this Court's ruling in Doyle I. Thus the SOD left the parties free to continue litigating the attorney's fee and legal expense issues, with the eventual result previously described.
II. FACTUAL BACKGROUND
Against this procedural background, the following events transpired.
Defendants, armed with this Court's fee-and-expense judgment dated July 17, 1995 in the amount of $382,235.45, sought execution from the United States Marshal. (Plaintiffs, while appealing the judgment, had not posted a supersedeas bond). Counsel for defendants say that on July 11, 1996, acting pursuant to a writ of execution, the Marshal delivered to counsel a check for $407,813.00, representing the principal amount of this Court's judgment and interest accrued since its entry. Stewart letter to Pollard dated March 13, 2000 at 2. Counsel for plaintiffs say that this amount was taken by levy from the Union's bank account "on or about June 27, 1996." Pollard letter to Court dated January 12, 2001 at 2. It is common ground that Mr. Stewart, counsel for defendants, did not retain any of this amount on account of his fees or defendants' legal expenses, instead distributing the funds directly to the defendants.
Such references are to Gareth W. Stewart, Esq., lead counsel for defendants, and William B. Pollard III, Esq., lead counsel for plaintiffs including the Union.
In the meantime, plaintiffs made to defendants the first three monthly payments of $83,333.33 each called for by the SOD endorsed by Judge Stein. The fourth payment was due on November 10, 1996. Plaintiffs' appeal from Doyle I was argued in the Court of Appeals on November 1, 1996. During oral argument counsel for the Union asked the appellate panel (Feinberg, Walker and Jacobs, Ct. JJ) to expedite its decision because plaintiffs were concerned that if they made the November 10, 1996 payment to defendants and this Court's award of attorney's fees was subsequently reversed, a balance in the Union's favor might result which it would be difficult to collect. The Court of Appeals responded with an order filed on November 5, 1996 which stayed
the Union's obligation to make payments under the SOD "pending resolution of this appeal and any further decision by the district court on the issue of attorney's fees."
In their present submissions the parties spend considerable energy debating whether the Union specifically requested the Court of Appeals to issue the stay order described in text, or whether the Court did so sua sponte, the suggestion having originated with Circuit Judge Feinberg during a colloquy, to which counsel for the Union acceded. In the view I take of the case, this is not a material issue.
Consequently six monthly SOD installments remain unpaid by plaintiffs to defendants. Those installments total $499,999.98 without any addition for interest.
III. THE ACCOUNTING BETWEEN THE PARTIES A. Interest
1. Interest Claimed by Defendants
Defendants assert a claim for interest on the unpaid $499,999.98 total under the SOD. Initially they prepared a schedule calculating the interest on each $83,333.33 payment based upon the monthly payment dates, using rates of interest derived from 28 U.S.C. § 1961, which provides that "[i]nterest shall be allowed on any money judgment in a civil case recovered in a district court," with a rate keyed to "the weekly average 1-year constant maturity Treasury Zeld... for the calendar week preceding the date of the judgment." § 1961(a). Calculated in that manner, defendants arrived at a total of $601,863.63 in principal and interest as of March 31, 2000. Stewart letter to Pollard dated March 13, 2000 at 2.
Counsel for the Union responded that § 1961 does not apply to amounts owing under a
While the individual plaintiffs and the Union remain parties plaintiff to the litigation, the accounting issues with which this Opinion is concerned principally exist between the defendants and the Union. Accordingly the remaining Parts of the Opinion will refer to "the Union," rather than to "plaintiffs."
stipulation of settlement or consent judgment. That contention is correct. See Audiovisual Publishers. Inc. v. Cenco Inc., 964 F. Supp. 861, 880 n. 24 (S.D.N.Y. 1997) (Conner, J.) ("Mandatory postjudgment interest under Section 1961 is not applicable here because the Consent Judgment does not constitute an award of money by the court after litigation of a lawsuit."). In Isaiah v. City of New York No. 96 Civ. 1323 (BSJ), 1999 WL 38846 (S.D.N.Y., Jan. 29, 1999), Judge Jones was confronted with a situation procedurally identical to that at bar: a stipulation of settlement "so ordered" by the district court. Judge Jones rejected the plaintiffs subsequent request for interest on the settlement amount, reasoning that "an amount of money paid according to the terms of a court approved settlement agreement is not considered to have been "recovered in a district court' after adjudication," and accordingly the provisions of § 1961 "are irrelevant in the present case." 1999 WL 38846 at *1.
In their reply papers, defendants accept that "the 28 U.S.C. rate does not apply to payments under the July 1996 Agreement" (by which defendants mean the SOD). Stewart letter to Court dated July 19, 2001 at 4. Nothing daunted, defendants characterize the SOD as a contract and apply to the unpaid installments a 9% rate of interest derived from the N.Y. CPLR. See Indu Craft. Inc. v. Bank of Baroda, 87 F.3d 614, 618-19 (2d Cir. 1996). This higher rate of interest results in a total claim on the unpaid SOD installments of $707,366.63, with interest calculated "to January 31, 2001." Id. Defendants' characterization of the SOD as a contract finds support in the cases. See Bankof New York v. Amoco 35 F.3d 643, 661 (2d Cir. 1994) ("Under the law of New York, a settlement agreement m writing between parties represented by counsel is binding and, essentially, a contract. As such, it is subject to the rules governing the construction of contracts.") (citations and internal quotation marks omitted). While in Amoco the Second Circuit construed New York law, federal law is to the same effect. See e.g., Red Ball Interior Demolition Corp. v. Palmadessa 173 F.3d 481, 484 (2d Cir. 1999) (civil RICO action with supplemental state law claims) ("Settlement agreements are contracts and must therefore be construed according to general principles of contract law.") (citations omitted); Goldman v. Commissioner. 39 F.3d 403, 405 (2d Cir. 1994) (action seeking review of disallowance of income tax deduction) ("As the settlement agreement constituted a contract, general principles of contract law must govern its interpretation.") (citations omitted).
Plaintiffs' claim for interest on the levied Union funds is also based on the N.Y. CPLR 9% rate. See Part III.A.2., infra. The pertinent provisions are found in Article 50 of the CPLR. § 5004 provides: "Interest shall be at the rate of nine percent per annum, unless otherwise provided by statute."
Moreover, Amoco is instructive on the entitlement of defendants at bar to interest on the unpaid SOD monthly installments. In Amoco, a bank brought a conversion action against a refiner, alleging wrongful conversion to turn over platinum upon the bank's demand pursuant to holding certificates. During the litigation the parties "entered into a partial settlement" which "was filed with the district court," 35 F.3d at 649. The settlement agreement limited "any recovery of damages" by the bank in the underlying action "to an amount not to exceed" $550,000. Id. at 661. After a bench trial the district court gave judgment for the bank for $550,000, and also awarded prejudgment interest from the date of the agreement. On appeal, Amoco argued that the bank could not recover damages, including prejudgment interest, in excess of $550,000. The Second Circuit affirmed the award of prejudgment interest.
After stating generally that the settlement agreement would be subjected to "the rules governing the construction of contracts," the Second Circuit concluded that applying the test of"the reasonable expectations of the ordinary business person," the settlement agreement's "use of the word "damages' was not intended to include prejudgment interest." 35 F.3d at 662. The court reasoned that "[i]n the absence of a clear intent to include prejudgment interest from the date of the stipulation in the amount of stipulated damages, courts should not interpret the settlement agreement so as to create incentives for the defendant to delay while enjoying the free use of the plaintiffs money."Id.
In the case at bar, the Union has enjoyed the free use of those amounts of defendants' money comprised of the six unpaid monthly SOD installments; and the question is whether that enjoyment is consistent with "the reasonable expectations of the ordinary business person," assumed for this analysis to be a party to the contract that the SOD constitutes. I think that the answer must be "no."
To be sure, Amoco involved postjudgment interest, which defendants at bar are not in a position to claim, since the SOD does not constitute a judgment of the District Court. Isaiah, 1999 WL 38846. But that does not affect defendants' right to prejudgment interest on a contract claim. See Adams v. Lindblad Travel. Inc., 730 F.2d 89, 93 (2d Cir. 1984) ("Under the law of New York, therefore, prejudgment interest is normally recoverable as a matter of right in an action at law for breach of contract."). More to the point, the rationale of Amoco is fully applicable to the case at bar. The ordinary business person would reasonably expect the SOD installments to be paid promptly: they were, after all, designated as monthly installments. Six of the nine installments remain unpaid to this day; and, while it may be unfair to ascribe the stay of payment imposed by the Court of Appeals in Doyle II to plaintiffs' "incentive to delay while enjoying the free use" of defendants' money, the stay was entered for plaintiffs' benefit and its economic consequences are the same. The case is unusual, and I am not aware of another squarely on point, but I think that the ordinary business person would reasonably expect this contract to impose upon plaintiffs an obligation to pay interest in the particular circumstances presented.
The Union, responding to defendants' contract theory, says that "[t]o the extent that defendants seek to convert the settlement agreement into a judgment based upon the alleged breach of the agreement by Local 1199, Local 1199, of course, has the right to defend, including asserting the Second Circuit's stay order as a complete defense to any delay in payment." Pollard letter to Court dated February 12, 2001 at 2. This approach is problematic for a number of reasons.
First, no conversion by defendants is necessary to imbue the settlement agreement with the characteristics of a contract; the agreement's contractual nature arises by operation of law.
Second, defendants need not convert the agreement into a "judgment" to claim interest on the unpaid installments; the agreement is a contract and prejudgment interest for its breach is recoverable as a matter of right.
Third, since the Union procured the stay order, or at the very least acquiesced in its provisions for its own economic benefit, the Union is not entitled to plead that the stay rendered its performance under the SOD impossible. That general proposition is stated in 6 Corbin on Contracts (West 1962) at 346, 350:
Whatever be the meaning given to the term impossibility, whether it be objective or subjective, and even though it be used to include various degrees of difficulty and expense, the supervening situation that is so described does not excuse a promisor from his contractual duty if he himself wilfully brought it about, or if he could have foreseen and avoided it by the exercise of reasonable diligence and efficiency. . . . In all the cases holding that the promisor was discharged from duty by impossibility of performance or frustration of purpose, it has been assumed that the promisor was not himself the responsible cause of the impossibility or frustration.
In the case at bar, the Union cannot fairly be taxed with lack of due diligence or inefficiency in seeking or gladly receiving from the Court of Appeals a stay of the Union's contractual duty to pay the SOD installments to defendants. Indeed, one may accept that the Union acted prudently in obtaining that measure of protection. But that the Union was "the responsible cause" of the stay order's bar to its performance cannot reasonably be questioned; the Court of Appeals issued the stay solely because during oral argument at Doyle II counsel for the Union called its economic concerns to the attention of the panel.
In these circumstances, I conclude that defendants are entitled to prejudgment interest at the rate of 9% per annum on the installment payments that the Union has not paid under the SOD. Since defendants' entitlement to interest is derived from principles of contract law, it must be calculated on a simple interest basis rather than on a compound basis. See Marfia v. T.C. Ziraat Bankasi, 147 F.3d 83, 90 (2d Cir. 1998).
2. Interest Claimed by the Union
The Union asserts its own claim for interest. Specifically, the Union contends that "defendants owe Local 1199 the amount taken to satisfy the judgment [for attorney's fees and expenses] plus interest." Pollard letter to Court dated January 12, 2001 at 2. The Union cites a number of Supreme Court decisions for that proposition, including Atlantic Coast Line R. Co. v. Florida, 295 U.S. 301 (1935), where the Court said at 309: "Decisions of this Court have given recognition to the rule as one of general application that what has been lost to a litigant under the compulsion of a judgment shall be restored thereafter, in the event of a reversal, by the litigants opposed to him, the beneficiaries of the error." In Baltimore O. R. Co. v. United States, 279 U.S. 781, 784 (1929), where certain railroads paid charges under a federal agency's erroneous decree that the Court subsequently reversed, the Court held:
When the erroneous decree was reversed and the invalid order was set aside, the law raised an obligation against each of the west side roads to make restitution of the payments made by the east side roads in compliance with the order. And thereupon each of the east side roads became entitled to have the amounts so paid by it together with interest thereon from the dates of such payments at the rate established by the law of the state in which such sums were paid.
In the case at bar, I must perforce accept that the Marshal removed by levy $407,813 from the Union's bank account pursuant to an erroneous order of this Court, since the Court of Appeals subsequently reversed it. The cases cited by the Union would lead one to expect that it would be demanding interest on that amount, from the date of the levy to the date of the reversal of the decree which authorized it. But the Union does not calculate its interest claim on that basis, presumably because even on its accounting, the Union owes defendants a modest balance. Rather, the Union focuses on June 23, 1997, the date of the Court of Appeals' mandate in Doyle II, and argues that only on that date "was Local 1199 entitled to set off the amount of the fee judgment against money that it owed the defendants under the [SOD]." Pollard letter to the Court dated January 12, 2001 at 2. On that approach, the Union calculates an interest claim of $36,300.94, based upon the New York 9% rate for the period from June 27, 1996 (date of the levy) to June 23, 1997 (date of theDoyle II mandate).
See Pollard letter to the Court dated January 12, 2001 at 5: "When all is said and done, Local 1199 owes the defendants $54,871.47 ($499,999.98 minus $445,128.51)."
The defendants' response to the Union's interest claim correctly recognizes that the Union "is discretionally entitled to restitution." Stewart letter to Court dated January 19, 2001 at 4. In Atlantic Coast Line, a Supreme Court case cited by the Union, Justice Cardozo observed that the rule
of "restoration" or restitution quoted supra, "even though general in its application, is not without exceptions," and went on to say:
Restitution is not of a mere right. It is ex gratia, resting in the exercise of a sound discretion; and the court will not order it where the justice of the case does not call for it nor where the process is set aside for a mere slip. In such cases the simple but comprehensive question is whether the circumstances are such that equitably the defendant should restore to the plaintiff what he has received.295 U.S. at 310 (citations and internal quotation marks omitted). In point of fact, the Court applied equitable principles to deny restitution in Atlantic Coast Line. 295 U.S. at 317-18.
Applying equitable principles to the case at bar, I find nothing to be said in favor of the Union's approach to the issue. A claim for restitution must be founded upon property that "has been lost to a litigant under the compulsion of a judgment," Atlantic Coast Line, 295 U.S. at 309. It is fanciful, if not surreal, for the Union to suggest that it lost anything of value as the result of a delay in its entitlement to set off the amount of the fees judgment against the money it owed defendants under the SOD during a period when, as the result of the Court of Appeals' stay order, the Union was not making any payments to defendants.
Even if the Union's interest claim was conceptually sound, its timing is flawed. The Court of Appeals' decision in Doyle II did not hold unequivocally that defendants had no viable claim for attorney's fees and expenses. Doyle II reversed this Court's ruling that § 501(a) of the LMRDA supported such a claim, but remanded the case for this Court "to determine whether the defendant officers may be awarded attorney's fees (and have preserved the right to seek such fees) on other grounds or rationales," 114 F.3d at 379. Thus the Doyle II mandate did not establish the Union's entitlement to set off the fee judgment against the SOD indebtedness; on remand the defendants vigorously pressed other bases for recovery, and the Union just as vigorously resisted them. The Union's unequivocal right to set off did not materialize until March 3, 2000, the date of entry of this Court's decision in Doyle III which the Court of Appeals affirmed in Doyle IV.
The basic objection to the Union's calculation, however, is that the concept finds no support in principles of equity.
But what of the $407,813 the Marshal removed from the Union's bank account in execution of this Court's subsequently reversed judgment? That property deprivation looks more like the sort involved in the cited Supreme Court cases; and, while the Union does not press a claim for interest on that amount from the date of the levy, as a Chancellor in Equity I am not entirely constrained by the claims of the parties.
Quite apart from the balance the Union concedes it owes to defendants, equity would not entitle the Union to interest on the levied amount from the date of the levy because the Union could easily have prevented the Marshal's levy by posting a supersedeas bond on its appeal from Doyle I. Rule 62(d), Fed.R.Civ.P., provides that "[w]hen an appeal is taken the appellant by giving a supersedeas bond may obtain a stay" of proceedings to enforce a judgment. "An appealing party is entitled to a stay of enforcement as a matter of right under Rule 62(d) if a supersedeas bond is filed with the court." 12 Moore's Federal Practice (3d ed. 1997) at 62-9. The record does not reveal why the Union did not preserve its bank account from execution by the simple (and far less costly) expedient of a surety company bond. Whatever the reason may be, equity would not favor regarding so preventable a deprivation of funds as having been suffered "under the compulsion of a judgment."
But I do conclude that, having allowed the defendants an interest allowance for the reasons stated in Part III.A. 1., the Union is equitably entitled to an interest allowance in the balancing of the accounts between the parties. Equity requires that both parties receive an appropriate interest allowance or that neither does. This Court's opinion and order in Doyle III, entered on March 10, 2000, established that defendants were not entitled to the judgment for attorney's fees upon which they obtained the Marshal's levy. At that moment the Union became judicially entitled to a credit for the amount levied upon, without the occasion or need for a supersedeas bond. It is equitable, in striking the balance between the parties, to allow the Union credit on the amount of $407,813 from March 10, 2000 to the date of the judgment to be entered herein, at the New York state rate of 9% per annum, non-compounded.
I reject defendants' contention that the rate of interest should be calculated pursuant to 28 U.S.C. § 1961 (a). I am not awarding the Union postjudgment interest; the case is governed by the equitable principles of restitution articulated by the Supreme Court in the cited cases, where interest is determined by "the rate established by the law of the state in which the sums were paid." Baltimore O. R. Co., 279 U.S. at 786.
B. Costs
1. Costs Claimed by Defendants
Defendants include as an item in their favor in the equation the amount of $22,701 for "reimbursed costs." That amount represents legal costs in addition to attorney's fees incurred by defendants in their successful defense of the plaintiffs' claims against them. Stewart letter to Pollard dated March 13, 2000 at 3. The amount does not include costs incurred by defendants in making their motion for reimbursement of fees and costs by the Union, which as noted in Part I initially succeeded but was eventually rejected by this Court and the Court of Appeals. Counsel for the Union say without contradiction that this amount of $22,701 comprises "mostly the typical legal disbursements associated in working past normal hours, named "travel and miscellaneous disbursements in connection with overtime professional services' in Mr. Stewart's declaration." Pollard letter to Court dated February 12, 2001 at 2.
As the Union correctly asserts, legal expenses of this nature fall outside the relatively restrictive boundaries 28 U.S.C. § 1920 places upon "taxable costs." But such expenses may be recoverable if the party seeking to recover them can bring itself within a fee-shifting statute or some other legal or equitable principle entitling the party to reimbursement. The civil rights statutes provide an illustration. 42 U.S.C. § 1988 (b) permits the district court to allow the prevailing party "a reasonable attorney's fee as part of the costs." It is generally held in such cases that expenses beyond what § 1920 would allow are recoverable. See e.g., Harris v. Marhoefer, 24 F.3d 16, 24-25 (9th Cir. 1994) ("Under § 1988, Harris may recover as part of attorney's fees those out-of-pocket expenses that would normally be charged to a fee paying client. Thus reasonable expenses, though greater than taxable costs, may be proper.") (citations and internal quotation marks omitted). Courts in this circuit routinely award these more broadly defined legal expenses in civil rights cases. See e.g., Blisset v. Casey, 969 F. Supp. 118, 134 (N.D.N.Y. 1997) (allowing attorney's expenses for lodging, food, gas and tolls), affd., 147 F.2d 218 (2d Cir. 1998).
In the case at bar, I allowed defendants $22,701 for expenses of this general nature because I regarded Section 501 of the Labor Management Reporting and Disclosure Act of 1959 ("LMRDA"), 29 U.S.C. § 501, as a fee-shifting statute entitling vindicated labor union officers to compel the union to reimburse their legal fees and expenses. 886 F. Supp. 399. That view of mine did not survive appellate review. 114 F.3d 371. On remand I concluded that defendants could not derive from any of the state or federal statutory or common law theories upon which they relied "a viable ground for reimbursement of their attorney's fees." 90 F. Supp.2d at 335. The Court of Appeals affirmed. 231 F.3d 889.
I think that this decisional history precludes defendants' present claim for legal "costs" of this general nature. It is true, as defendants' counsel stress, that the Court of Appeals vacated "the district court's order awarding attorney's fees to the defendant officers in this case," 114 F.3d at 379, without specifically mentioning "costs." However, the rationale of the fee-shifting statute cases allowing the recovery of expenses beyond the § 1920 restrictions is that these expenses should be regarded as part of the successful attorney's fee. Thus the Ninth Circuit in Harris, 24 F.3d at 19, was careful to say that "out-of-pocket expenses that would normally be charged to a fee paying client" may be recovered "as part of the award of attorney's fees" (emphasis added). Indeed, that is the only possible rationale, given the Supreme Court's opinion in West Virginia University Hospitals. Inc. v. Casey, 499 U.S. 83 (1991), holding that fees for services rendered by experts in civil rights litigation may not be shifted to the losing party as part of"a reasonable attorney's fee" under § 1988. Justice Scalia, writing for the majority, dealt with Justice Stevens' dissent at 499 U.S. 87 n. 3:
Justice Stevens suggests that the expert fees requested here might be part of the "costs" allowed by § 1988 even if they are not part of the "attorney's fee." We are aware of no authority to support the counterintuitive assertion that "[t]he term "costs' has a different and broader meaning in fee-shifting cases than it has in the cost statutes that apply to ordinary litigation," post, at 104.
It follows that the defendants at bar can recover legal expenses of this nature only if the expenses can be regarded as a part of attorney's fees for which defendants have shown a right of reimbursement from the Union. But that is precisely what, at the end of the day, the defendants have failed to show; and their claim for expenses of this nature fails as well.
This conclusion makes it unnecessary for me to consider other disputes between the parties, namely, whether defendants should be regarded as "prevailing parties" and whether defendants' claim for these expenses is precluded by the provision in the SOD that "[t]his action (including any counterclaims) is dismissed with prejudice and without costs" (emphasis added).
These disputes would be meaningful if defendants were seeking costs pursuant to Rule 54(d), Fed.R.Civ.P., which provides that "costs other than attorneys' fees shall be allowed as of course to the prevailing party unless the court otherwise directs." See Cosgrove v. Sears. Roebuck Co., 191 F.3d 98, 101 (2d Cir. 1999) ("Fed.R.Civ.P. 54(d) grants costs to a prevailing party as a matter of course in the absence of a countervailing statute or rule, unless the trial judge directs otherwise."). However, Rule 54(d) costs are "taxed by the clerk," who follows the strictures of 28 U.S.C. § 1920. But the defendants at bar have not asked the Clerk to tax a bill of costs; their claim is for that broader category of legal expenses which, for the reasons stated in text, they are not entitled to recover.
2. Costs Claimed by the Union
This Court's docket sheets recite that on August 21, 1997, following the Court of Appeals' decision in Doyle II, the clerk of that court taxed a bill of costs in the Union's favor in the amount of $1,014.57. On December 6, 2000, following the Court of Appeals' decision in Doyle IV, the clerk taxed a bill of costs in the Union's favor in the amount of $798.34. These appellate costs total $1,812.91. It does not appear that defendants have paid them. If they have not, the Union is entitled to a credit in this amount in the accounting between the parties.
IV. SANCTIONS
Lastly, the defendants claim that the Union's failure to make timely payment of the installments under the SOD should subject the Union to monetary sanctions.
Defendants rely upon ¶ 3 of the SOD, which provides: "If plaintiffs fail to make any of the payments set forth in paragraph 1 above, the Court shall impose monetary sanctions."
As previously discussed, the Union did not pay the monthly installments called for by ¶ n 1 of the SOD because the Court of Appeals issued a stay order in the context of Doyle II. Defendants made a motion in the Court of Appeals "for monetary sanctions to be imposed on appellant [the Union], as agreed to in writing by appellant," a reference to the SOD. The Doyle II panel of Circuit Judges denied that motion in an order filed on September 2, 1997. I regard that denial as binding upon me, under res judicata or as the law of the case. Alternatively, assuming that I am free to consider the matter, in the circumstances I find no substance to defendants' claim that the Union's non-payment of the installments is sanctionable under the SOD or otherwise.
V. CONCLUSION
On or before July 6, 2001, counsel for the parties are directed to settle a judgment consistent with this Opinion on seven (7) days' notice.
It is SO ORDERED.