IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 07-30377

In The Matter Of: BABCOCK & WILCOX COMPANY

Debtor

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CAPLIN & DRYSDALE CHARTERED

Appellant

v.

BABCOCK & WILCOX COMPANY; 

DIAMOND POWER INTERNATIONAL INC; 

U.S. TRUSTEE; UNSECURED CREDITORS’ COMMITTEE

Appellees

Appeal from the United States District Court 

for the Eastern District of Louisiana

Before HIGGINBOTHAM, BENAVIDES, and DENNIS, Circuit Judges.

PER CURIAM:

This appeal stems from a Chapter 11 bankruptcy filed in the Eastern

District of Louisiana. The sole issue on appeal is whether the bankruptcy judge

abused its discretion in awarding attorney’s fees at half the hourly rate for time

spent traveling but not working. Finding no abuse of discretion, we AFFIRM.

I. BACKGROUND

United States Court of Appeals

Fifth Circuit

F I L E D

May 1, 2008

Charles R. Fulbruge III

Clerk
No. 07-30377

2

During the Chapter 11 bankruptcy proceeding involving The Babcock &

Wilcox Company, the bankruptcy court approved the appointment of the law

firm of Caplin & Drysdale as national counsel for the Asbestos Claimants’

Committee pursuantto 11 U.S.C. § 1103(a). Ultimately, Caplin & Drysdale filed

a fee application seeking $5,642,218.75 in attorney’s fees and $745,303.35 in

expenses. The United States Trustee objected to paying the full hourly rate for

travel time not spent working. The bankruptcy court held a hearing in which

Elihu Inselbuch (Inselbuch), a partner of Caplin & Drysdale, testified. Inselbuch

testified that it was the practice of Caplin & Drysdale to billtraveltime “the way

we bill for any other time.” He also testified that, from 1969 to 1986, he was a

partner at the firm Gilbert, Siegel & Young, which had the same practice as

Caplin & Drysdale of billing the full rate for travel time. Inselbuch’s “general

understanding based upon conversations” he had with other lawyers in New

York was that “law firms create their billing rates on the assumption that they

will bill clients for travel time at full rates and be paid for them.” He stated that

if this was not the practice, firms would have to change their billing rates,

resulting in discrimination between the clients who require travel time and

those who do not. 

At the conclusion of the hearing, the bankruptcy judge denied “those

portions ofthe fee application that seek payment atthe full hourly rate for travel

time.” The court awarded attorney’s fees at 50% of the full hourly rate for travel

time not spent working. The disallowed portion of travel time compensation at

issue is $135,685.80. Caplin & Drysdale filed a motion to reconsider, which the

bankruptcy court denied. Caplin & Drysdale then filed an appeal of those orders

to the district court. The district court affirmed the bankruptcy court’s orders,

finding that Caplin & Drysdale had failed to carry its burden of demonstrating

thatthe customary compensation for nonproductive traveltime in the New York

and Washington, D.C. markets was for the full hourly rate. In re Babcock &
No. 07-30377

3

Wilcox Co., Slip Copy, 2007 WL 854304 (E.D.La. March 15, 2007). This appeal

followed.

II. STANDARD OF REVIEW

“We review the district court’s decision by applying the same standard of

review to the bankruptcy court’s conclusions of law and findings of fact that the

district court applied.” In re Cahill, 428 F.3d 536, 539 (5th Cir. 2005).

Accordingly, this Court reviews the bankruptcy court’s award of attorney’s fees

for abuse of discretion. A bankruptcy court abuses its discretion when it “(1)

applies an improper legal standard or follows improper procedures in calculating

the fee award or (2) rests its decision on findings of fact that are clearly

erroneous.” Id. (citing In re Evangeline Refining Co., 890 F.2d 1312, 1325 (5th

Cir. 1989)). This Court reviews the bankruptcy court’s findings of fact for clear

error and its legal conclusions de novo. Id. 

III. ATTORNEY’S FEES

The bankruptcy court awarded attorney’s fees pursuant to 11 U.S.C. § 330.

The statute provides that the court may award “reasonable compensation for

actual, necessary services, rendered by the . . . attorney.” § 330(a)(1)(A). The

statute also provides as follows:

In determining the amount of reasonable compensation to be

awarded, the court shall consider the nature, the extent, and the

value of such services, taking into account all relevant factors,

including–

(A) the time spent on such services;

(B) the rates charged for such services;

(C) whether the services were necessary to the administration

of, or beneficial at the time at which the service was rendered

toward completion of, a case under this title;
No. 07-30377

4

(D) whether the services were performed within a reasonable

amount oftime commensurate with the complexity, importance, and

nature of the problem, issue, or task addressed; and

(E) whether the compensation is reasonable based on the

customary compensation charged by comparably skilled

practitioners in cases other than cases under this title.

§ 330(a)(3). 

Prior to being amended in 1978, this statute “favored economy of the

estate over competitive compensation” to attorneys for the debtors. In re Busy

Beaver Bldg. Ctrs., Inc., 19 F.3d 833, 850 (3rd Cir. 1994). “Congress determined,

it appears, that on average the gain to the estate of employing able, experienced,

expert counsel would outweigh the expense to the estate of doing so, and that

unless the estate paid competitive sums it could not retain such counsel on a

regular basis.” Id.; accord In re Hillsborough Holdings, 127 F.3d 1398, 1403

(11th Cir. 1997) (citing 124 Cong. Rec. 33,994 (daily ed. Oct. 5, 1978) (statement

of Sen. DeConcini), reprinted in 1978 U.S.C.C.A.N. 6505, 6511).

In the case at bar, Caplin & Drysdale argues that the bankruptcy court

erred in awarding only half of the hourly rate because the evidence was

undisputed thatits usual custom and practice was to bill clients full hourly rates

for its non-working travel time. “The burden of proving the reasonableness of

compensation and reimbursement pursuant to 11 U.S.C. § 330 is on the fee

applicant.” In re WNS, Inc., 150 B.R. 663, 664 (Bankr. S.D. Tex. 1993). 

Here, the district court found that during the hearing Caplin & Drysdale

“did not even identify any other comparable firms, much less produce evidence

of what they billed for nonproductive travel time.” We agree that Caplin &

Drysdale did not make a sufficient showing with respect to how other

comparable firms billed non-working traveltime. Although Inselbuch did testify

that his previous law firm, Gilbert, Siegel & Young, had the same practice as

Caplin & Drysdale of billing the full rate for travel time, he left that firm in 1986
No. 07-30377

5

and provided no evidence with respect to that particular firm’s current practice.

Additionally, although Inselbuch testified as to his general understanding of

other firms’ billing practices, Caplin & Drysdale introduced no specific evidence

of other firms’ billing practice in this situation. It appears undisputed that the

other law firms involved in this bankruptcy were not objecting to the award of

50% of their hourly rate for non-working travel time. 

This Court has not addressed the issue of billing non-working travel time

pursuant to § 330. However, in the context of a Voting Rights Act case, we held

that the court did not abuse its discretion when it discounted the hourly rate

billed for travel time. Watkins v. Fordice, 7 F.3d 453, 459 (5th Cir. 1993). The

Voting Rights Act provides that the court has discretion to allow the prevailing

party “reasonable” attorney’s fees. 42 U.S.C.A. § 1973l(e). The statute in the

case at bar also looks to the reasonableness of the attorney’s fees. Moreover, the

lodestar method of calculating attorney’s fees applies in both cases. Thus,

although Watkins interprets a different statute, it is quite persuasive. This is

especially true given the instant statutory language is “whether the

compensation is reasonable based on the customary compensation charged by

comparably skilled practitioners in cases other than cases under this title.” §

330(a)(3)(E) (emphasis added). Further, numerous bankruptcy and district

courts have held that it is not an abuse of discretion to discount non-working

(and even working) travel time. See, e.g., In re McKeeman, 236 B.R. 667, 672-73

(8th Cir. B.A.P. 1999) (holding that decision not to allow full hourly rate for

travel time to out-of-state attorney representing debtor was not abuse of

discretion); In re Anderson Grain Corp., 222 B.R. 528, 532 (Bankr. N.D. Tex.

1998) (finding one-halfthe usual hourly rates for time actually spent working on

a matter while traveling more than adequate); In re Bennett Funding Group,

Inc., 213 B.R. 234, 251 (Bankr. N.D.N.Y. 1997) (explaining that“traveltime will

be compensable at one-half normal rates unless the Court is satisfied that work
No. 07-30377

1 We reject out of hand Caplin & Drysdale’s contention that, by proving other lawyers

in its own firm billed the full rate for non-working travel time, it satisfied the burden of

demonstrating what “comparably skilled practioners” would bill pursuant to § 330. Cf. In re

6

was performed during travel”); In re Unger & Assocs., Inc., 277 B.R. 694, 698

(Bankr. E.D. Tex. 2001) (explaining that the customary practice in the Eastern

District of Texas is to bill travel time at half of the hourly rate). Indeed, the

Northern District of Texas has fee guidelines which provide that “[t]ravel time

is compensable at one-half rates, but work actually done during travel is fully

compensable.” In re Teraforce Tech. Corp., 347 B.R. 838 (Bankr. N.D.Tex. 2006)

(quoting II.G of General Order 2000-7, Guidelines for Compensation and

Expense Reimbursement of Professionals).

On the other hand, there are bankruptcy cases to support an award of a

reasonable, full hourly rate for travel time that is necessary pursuant to § 330.

See, e.g., In re Cano, 122 B.R. 812 (Bankr. N.D. Ga. 1991); In re Zepecki, 224

B.R. 907, 911-12 (Bankr. E.D. Ark. 1998). In the context of a civil rights case,

the Seventh Circuit has opined that the presumption “should be that a

reasonable attorney’s fee includes reasonable travel time billed at the same

hourly rate as the lawyer’s normal working time.” Henry v. Webermeier, 738

F.2d 188, 194 (7th Cir. 1984). Judge Posner explained that “[w]hen a lawyer

travels for one client he incurs an opportunity cost that is equal to the fee he

would have charged that or another client if he had not been traveling.” Id. 

Accordingly, as courts have recognized,there is not a consensus regarding

the billing of travel time under § 330. In re Matter of Cano, 122 B.R. at 813

(collecting cases). “The only principle that is eminently clear from these cases

is that the courts have broad discretion in awarding fees.” Id. (citing In re

Temple Ret. Cmty., 97 B.R. 333, 336 (Bankr. W.D. Tex. 1989)). Here, Caplin &

Drysdale did not carry the burden of demonstrating that “comparably skilled

practioners” charged the full hourly rate for travel time. § 330(a)(3)(E).1
No. 07-30377

Geraci, 138 F.3d 314, 319 (7th Cir. 1998) (using the phrase “attorneys in the community”

interchangeably with the phrase “comparably skilled practioners” in the context of § 330).

7

Additionally, the instant statute expressly provides that the court may “award

compensation that is less than the amount of compensation that is requested.”

§ 330(a)(2). Finally, in its employment agreement, Caplin & Drysdale did not

specify that it would bill the full hourly rate for non-productive travel time. The

bankruptcy court did not abuse its discretion in disallowing half ofthe requested

fees. 

The district court’s judgment is AFFIRMED.