5th Circuit: Caplin & Drysdale Can't Bill for Travel Time at Normal Hourly Rate

From today's National Law Journal:  5th Circuit Says Firm Can't Charge Full Hourly Rate for Travel Time, by Leigh Jones

A tax law firm seeking more than $6.3 million in fees and costs for its services in an asbestos case cannot charge a full hourly rate for travel time not spent working, the 5th U.S. Circuit Court of Appeals has ruled.  [In re Babcock & Wilcox Co., No. 07-30377 (5/1/08).]

The three-judge panel found that Caplin & Drysdale was not entitled to $271,370 its sought for travel time as national counsel for the asbestos claimants' committee in the bankruptcy of The Babcock & Wilcox Co., a boiler and generator maker. In affirming a lower court decision that slashed by half the requested fees for travel time not spent working, the appeals court noted that Caplin & Drysdale was unable to show that charging a full hourly rate for such time was customary among law firms. The Court of Appeals decision, issued May 1, affirmed a decision by the U.S. District Court for the Eastern District, which itself had affirmed the bankruptcy court's decision to reduce the amount in question by 50%.

Although the opinion does not specify the hourly rate charged by Caplin & Drysdale's lawyers for travel, the 2006 billing rate for Elihu Inselbuch, the Caplin & Drysdale partner who testified before the Bankruptcy Court on the firm's billing practices, was $875 per hour.  The effect of the Fifth Circuit's decision thus is to reduce Mr. Inselbuch's billing for travel time to $437.50 per hour.