Case Name: Martin MILLER, on behalf of himself and all others similarly situated, Plaintiff-Appellant, v. MACKEY INTERNATIONAL, INC., et al., Defendants-Appellees
Court: United States Court of Appeals for the Fifth Circuit
Jurisdiction: United States
Decision Date: 1975-06-30
Citations: 515 F.2d 241
Docket Number: No. 74-2547
Parties: Martin MILLER, on behalf of himself and all others similarly situated, Plaintiff-Appellant, v. MACKEY INTERNATIONAL, INC., et al., Defendants-Appellees.
Judges: Before BELL, DYER and SIMPSON, Circuit Judges.
Reporter: Federal Reporter 2d Series
Volume: 515
Pages: 241–244

Head Matter:
Martin MILLER, on behalf of himself and all others similarly situated, Plaintiff-Appellant, v. MACKEY INTERNATIONAL, INC., et al., Defendants-Appellees.
No. 74-2547.
United States Court of Appeals, Fifth Circuit.
June 30, 1975.
Bruce E. Lazar, and Robert Palmer of Palmer & Lazar, Miami, Fla. and I. Stephen Rabin of Rabin & Silverman, New York City, for plaintiff-appellant.
Robert E. Venney, Gunn, Venney & Buhler, Miami, Fla., for defendants-ap-pellees.
Before BELL, DYER and SIMPSON, Circuit Judges.

Opinion:
PER CURIAM:
In a class action brought against Mackey for violation of the Securities Act of 1933 and the Securities Exchange Act of 1934, a settlement was eventually consummated for $50,000 cash and 250,-000 shares of common stock of Mackey having a market value of $1.50 per share or $375,000, for a total of $425,000. In their application for fees, counsel for the plaintiffs requested that the district court award them one-third of the recovery. The court, however, set their compensation at $20,500, and they appealed. We vacate and remand.
Counsel represented to the court below that they had expended $3,941.57 in costs and 1925 hours in the successful prosecution of this action. The district court found that the expenditure of 700 hours would have been ample time for the representation of the plaintiffs' class, and computed 675 hours out of court at $35.00 per hour, and 25 hours in court at $50.00 per hour.
The case originated in New York, was transferred to Florida, became a class action only after our reversal of the denial of a class action by the district court, was successfully prosecuted for three and one-half years and was finally settled after one day of trial for $425,-000. The award, after deduction of plaintiff's disbursements, amounted to a fee of $8.60 per hour on the basis of counsel's application and to a fee of $23.65 per hour on the basis of the court's calculations. The only evidence offered as to reasonable compensation was that the average hourly fees in non-contingent cases ranged between $60.00 and $75.00.
We are hard put to understand how the district court arrived at its figure of 700 hours as the maximum time which should have been spent by counsel in contrast to counsel's assertion that they expended 1925 hours, especially without a hearing on the subject. The district court should not have condemned counsel's conduct of the litigation and concluded that it "taints the entire petition of counsel" without affording them a hearing and adequate opportunity to attempt to support their application and dispel the doubts that the court expressed for the first time in its award.
While the court below made a passing reference to Johnson v. Georgia Highway Express, Inc., 5 Cir. 1974, 488 F.2d 714, there was scant explication of the court's application of the guidelines that we took pains to formulate. Rather the court took the mechanical hours-times-dollars approach, which reduces the award to an exercise in multiplication and which we have explicitly rejected. Weeks v. Southern Bell Telephone and Telegraph Co., 5 Cir. 1972, 467 F.2d 95; Electronics Capital Corp. v. Sheperd, 5 Cir. 1971, 439 F.2d 692. Moreover, the court apparently did not take into consideration, or at least made no mention of the fact, that this was a contingent fee case.
The award is vacated and the cause is remanded for further proceedings not inconsistent with this opinion.
Vacated and remanded.
. However, the court's multiplication was in error. 675 hours at $35.00 per hour and 25 hours at $50.00 per hour equals $24,875.00, not $20,500.00. Moreover, the court appears to have ignored the application for costs in the amount of $3,941.57.