November 14, 2008
Fifth Circuit Addresses Split on Charging Full Rates for Travel Time under 11 USC 330
In In re Babcock & Wilson, 526 F.3d 824 (5th Cir. 2008), the court addressed whether the district court had erred in awarding a firm only 50% of its usual hourly rates for time its lawyers spent traveling, but not working, in a bankruptcy proceeding. The statute, 11 USC 330, gives broad discretion to district courts, the Fifth Circuit ultimately held, and so it affirmed the trial court's award of only 50% of the rate for time spent traveling. It suggests, in my view, that any firm seeking compensation for such time be sure to make the record clear that firms in the locality charge for travel time at full rates. Interesting split.
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Courts in the Fifth Circuit only award 50% for travel time under 42 USC 1988(b), as well. See, e.g., Baker v. Washington Mut. Finance Group, 2007 WL 571103 at *15 (S.D.Miss. 2007); Feinberg v. Hibernia, 966 F.Supp. 442, 448 (E.D.La. 1997).
The only explanation I've seen for this (which is of questionable persuasive force, and not from the Fifth Circuit) is that “an attorney's driving time, while necessary, is essentially unproductive and, therefore, compensable at a reduced hourly rate.” Smith v. Freeman, 921 F.2d 1120, 1122 (10th Cir. 1990).
Posted by: Matt C. | Nov 14, 2008 4:27:52 PM
Yeah, but it prevents the lawyer from working on another case, so... why the discount? Weird.
Posted by: David Hricik | Nov 15, 2008 4:20:29 AM