* District Judge of the Western District of Louisiana, sitting by designation.

** Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 07-10813

In The Matter Of: GADZOOKS INC 

Debtor 

WILLIAM KAYE, Liquidating Trustee of the Gadzooks

Liquidating Trust 

Appellee 

v. 

HUGHES & LUCE LLP 

Appellant 

Appeal from the United States District Court 

for the Northern District of Texas

USDC No. 3:06-CV-1900

Before GARZA and DENNIS, Circuit Judges, and MINALDI, District Judge.*

PER CURIAM:**

In this bankruptcy appeal, we are called to decide whether the bankruptcy

court employed the proper standard for calculating attorney’s fees. However,

because the district court remanded the issue to the bankruptcy court for

United States Court of Appeals

Fifth Circuit

F I L E D

September 9, 2008

Charles R. Fulbruge III

Clerk
No. 07-10813

2

significant further proceedings, we lack jurisdiction to consider this case.

Therefore, we DISMISS the appeal. 

Factual and Procedural History

Appellants Hughes & Luce LLP (“H&L”) served as counsel for the equity

security holder in the bankruptcy proceedings underlying this appeal. When

H&Lsought attorney’s fees, the bankruptcy court calculated these fees according

to a “reasonable benefit” test, finding that H&L could be compensated for work

that initially appeared beneficial but was proven non-beneficial in hindsight.

The bankruptcy trustee appealed this calculation of H&L’s fees to the district

court, arguing that the bankruptcy courts should have applied a “material

benefits” test, which would provide H&L fees only for services that actually

benefitted the estate. The district court agreed with the trustee, holding that a

“material benefits” test should have been applied; thus, the district court

remanded the issue to the bankruptcy court for recalculation of fees. On appeal,

H&L challenges the district court’s ruling.

Discussion

Our standard of review is the same as the district court’s, we review the

bankruptcy court’s findings of fact for clear error and its conclusions of law de

novo; however, before addressing the merits of this case, we must first examine

our appellate jurisdiction. See In re Pratt, 524 F.3d 580, 584 (5th Cir. 2008).

“Under 28 U.S.C. § 158(d), we have jurisdiction to hear appeals from all

‘final decisions, judgments, orders, and decrees.’ We have held that ‘[w]hen a

district court sitting as a court of appeals in bankruptcy remands a case to the

bankruptcy court for significant further proceedings, the remand order is not

final and therefore not appealable under § 158(d).’” Id. (citing In re Cortez, 457

F.3d 448, 453 (5th Cir.2006)) (internal quotation marks omitted). Thus, because

the district court remanded the issue of attorneys’ fees to the bankruptcy court,
No. 07-10813

3

our jurisdiction over this matter depends on whether that remand requires

“significant further proceedings.” Id.

We have articulated the test for “significant further proceedings”:

To determine what constitutes significant further proceedings,

we distinguish between “those remands requiring the bankruptcy

court to perform ‘judicial functions’ and those requiring mere

‘ministerialfunctions.’” Ifthe remand requires the bankruptcy court

to perform judicial functions, such as additional fact-finding, it is

not a final order and therefore it is not appealable to this court.

Remands that involve only ministerial proceedings, “such as the

entry of an order by the bankruptcy court in accordance with the

district court’s decision,” are considered final. In some instances, a

remand for the calculation of attorney’s fees may be considered a

ministerial function; however, “a remand requiring such a

calculation is notfinal if it necessitates further factual development

or other significant judicial activity involving the exercise of

considerable discretion, or is likely to generate a new appeal or

affect the issue thatthe disappointed party wants to raise on appeal

from the order of remand.”

Id. at 584-85 (internal citation omitted).

In the instant case, the district court called for significant further

proceedings in the bankruptcy court by “revers[ing] the fee award and

remand[ing] the action to the bankruptcy court for a reassessment of H&L’s fee

application.” Kaye v. Hughes & Luce, LLP, 2007 WL 2059724 at *1 (N.D. Tex.

July 13, 2007) (emphasis added). Further, the district court noted that “because

the bankruptcy court did not evaluate H & L’s fee application under the material

benefit standard, the Court finds that that court should reassess H & L’s fee

application in the first instance using that standard.” Id. at *12 n.5 (emphasis

added). Thus, the district court called for a complete re-adjudication of the

attorney’s fees issue, and such a proceeding, which will likely require further
No. 07-10813

4

factual development and is likely to generate a new appeal or affect the issue

that the disappointed party wants to raise on appeal, will require the

bankruptcy court to perform a judicial function. 

In Pratt, we considered a scenario similar to the one at issue here and

found a remand for reconsideration of attorney’s fees to require a “judicial

function” of the bankruptcy court and thus to constitute “significant further

proceedings.” See Pratt, 524 F.3d at 585. Just as in Pratt, in this case we lack

jurisdiction to consider this appeal; accordingly, we DISMISS the appeal.