The opinion of the court was delivered by: Shadur, District Judge.
Commodity Futures Trading Commission ("CFTC") initially sued
Rosenthal & Company and a number of individual defendants,
charging their sale of so-called "London commodity options"
violated the anti-fraud provisions of the Commodities Exchange
Act (such sales have since been rendered wholly illegal by the
Futures Trading Act of 1978, 7 U.S.C. § 6c). This Court's January
26, 1982 order dismissed the action (then more than five years
old) without prejudice. Now some of the individual defendants
(Leonard Pomerantz, Larry Spatz, Don Braverman, John Dexter and
Perry Cracraft) seek attorneys' fees under the newly enacted
Equal Access to Justice Act, 28 U.S.C. § 2412 (the "Act"). For
the reasons stated in this memorandum opinion, this Court defers
ruling on defendants' motion because it is premature, retaining
jurisdiction solely for purposes of a future ruling.
Under the Act only "prevailing parties" are entitled to fees.
Congress clearly intended to give that term the same meaning it
has developed under other attorneys' fee statutes. See, 1980
U.S.Code Cong. & Ad.News 4953, 4990. That fleshing-out process
has been most extensive under 42 U.S.C. § 1988, for purposes of
which "prevailing parties" have been defined as those who have
prevailed on the merits of the underlying action. As Hanrahan v.
Hampton, 446 U.S. 754, 758, 100 S.Ct. 1987, 1989, 64 L.Ed.2d 670
(1980) put it:
For only in that event has there been a determination
of the "substantial rights of the parties," which
Congress determined was a necessary foundation for
departing from the usual rule in this country that
each party is to bear the expense of his own
Thus the question for this Court is whether its dismissal of the
action without prejudice was a victory on the merits for
This lawsuit had long since become primarily an adjunct of the
parallel administrative proceeding (for an extended period both
before and after it was first assigned to this Court's calendar
in June 1980, this action was stayed while the Administrative Law
Judge's decision was in the works). Its sole reason for possible
existence once the ALJ ruled was to afford CFTC the possibility
of added equitable relief if it were successful in reversing the
This Court dismissed the case because it saw no reason to
continue it as a kind of empty receptacle waiting for content
that might possibly be poured into it after a final
administrative determination — one that promised to be long in
coming.*fn1 Dismissal was ordered without prejudice, however, so
CFTC could refile suit should it ultimately prevail in the
administrative proceeding (and its likely judicial aftermath) and
should it desire added relief not obtainable there.
Defendants are thus not "prevailing parties" within the meaning
of the Act. They may become such in the future, but that
determination must necessarily await the final nonreviewable
decision in the other ongoing proceedings.
This Court finds defendants' motion for fees under the Act
premature. Because the issues have been briefed extensively, and
because any relief to which defendants may ultimately be entitled
would appear to come most appropriately in this action, this
Court will retain jurisdiction of the issue until the
administrative proceeding has reached a final and non-reviewable
conclusion. At that time the Court will look to the prevailing
party in that proceeding to apprise the ...