Danny Kresky Enterprises Corp. v. Magid, s. 82-5722

• Decision Date: 02 September 1983
• Docket Number: Nos. 82-5722,82-5758,s. 82-5722
• Citation: 716 F.2d 215
• Parties: 1983-2 Trade Cases 65,592 DANNY KRESKY ENTERPRISES CORPORATION, Appellant and Cross-Appellee, v. Larry MAGID, Herbert Spivak, Joseph Spivak and Allen Spivak, individually and trading as Electric Factory Concerts, Appellees and Cross-Appellants.
• Court: U.S. Court of Appeals — Third Circuit

Page 215

716 F.2d 215

1983-2 Trade Cases 65,592

DANNY KRESKY ENTERPRISES CORPORATION, Appellant and Cross-Appellee, v. Larry MAGID, Herbert Spivak, Joseph Spivak and Allen Spivak,

individually and trading as Electric Factory

Concerts, Appellees and Cross-Appellants.

Nos. 82-5722, 82-5758.

United States Court of Appeals, Third Circuit.

Argued July 11, 1983.

Decided Sept. 2, 1983.

Steven M. Kramer (argued), Philadelphia, Pa., for appellant and cross-appellee, Danny Kresky Enterprises Corp.

Richard P. McElroy (argued), Stephen M. Orlofsky, Blank, Rome, Comisky & McCauley, Philadelphia, Pa., for appellees and cross-appellants, Larry Magid, Herbert Spivak, Joseph Spivak and Allen Spivak, individually and trading as Elec. Factory Concerts; H. Yale Gutnick, Strassburger, McKenna, Messer, Shilobod & Gutnick, Pittsburgh, Pa., of counsel.

Before SEITZ, Chief Judge, SLOVITER and VAN DUSEN, Circuit Judges.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

I.

This court has been inundated in recent years with requests to review the amount of counsel fees awarded by the district courts under the increasing number of statutes providing for such awards. The function of appellate courts in this regard is to establish the general legal principles which can then be applied by the district courts. Thus, the Supreme Court has recently enunciated some of the relevant principles in its opinion in Hensley v. Eckerhart, --- U.S. ----, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). This court had earlier established the principles to guide the district courts and counsel in this circuit in Lindy Brothers Builders, Inc. v. American Radiator and Standard Sanitary Corp. (Lindy I), 487 F.2d 161 (3d Cir.1973), and Lindy Brothers Builders, Inc. v. American Radiator and Standard Sanitary Corp. (Lindy II), 540 F.2d 102 (3d Cir.1976) (in banc). The framework established by these decisions, supplemented by other opinions dealing with more discrete questions under specific statutes, see, e.g., Inmates of Allegheny County Jail v. Pierce, 716 F.2d 177 (3d Cir.1983), and Hughes v. Repko, 578 F.2d 483 (3d Cir.1978), should be sufficient to guide most fee determinations by the district courts. The court has declined, and will continue to decline, the flood of invitations to interject itself into the minutiae underlying such judgments.

Nonetheless, we retain the obligation to review all judgments appealed, and when it is evident that "the end product falls outside of a rough 'zone of reasonableness,' or ... the explanation articulated is patently inadequate", see Hensley v. Eckerhart, 103 S.Ct. at 1951 n. 11 (Brennan, J., concurring and dissenting), we are required to reverse. This is such a case.

II. Attorney's Fees

A.

The antitrust suit out of which this request for fees and costs arose is discussed in the opinion filed today in Danny Kresky Enterprises Corp. v. Magid, 716 F.2d 206 (3d Cir.1983). Plaintiff was successful in receiving a jury verdict for damages in the amount of $5,500, trebled to $16,500, which we have today directed the district court to reinstate, and in being awarded a permanent injunction by the district court which we have today affirmed. ¹

B.

Plaintiff's application requested attorneys' fees in the amount of $106,992.27 ² representing approximately 677 hours. The hours for which plaintiff claimed compensation consisted of approximately 515 hours for Steven Kramer, principal trial counsel, and 162 hours for Michael Needle, an assistant. The court awarded fees in the amount of $28,249.25. The district court arrived at this figure by reducing the hours for which it compensated plaintiff, by reducing the rate requested, and by denying the requested augmentation.

We find the reduction in the number of hours and the rate requested to have been an abuse of discretion in the following respects:

1. The district court eliminated 46 of the 56.30 hours for Kramer and all 11 of the hours for Needle for travel time from Philadelphia, where plaintiff's counsel worked, to Pittsburgh, the trial site, for conferences and trial. The court stated:

The Court emphasizes that plaintiff was fully aware of the fact that this litigation would take place in Pittsburgh. Despite this, plaintiff chose to secure out-of-town counsel, knowing that capable attorneys were present in Pittsburgh, who could have handled this case. The Court does not believe that it is fair to impose these travel costs upon defendants; rather, the plaintiff should bear these costs.

Even if it were ever appropriate to deem unreasonable the travel time from the city of a party's chosen counsel to the place of trial on such a basis, this is not an appropriate case to fault plaintiff for selecting a counsel from outside the city of trial. Plaintiff's counsel was from the same state, not from across the country, and under Pennsylvania rules is free to practice throughout the state. The selection of Kramer as plaintiff's counsel to try this case was undoubtedly and reasonably influenced by Kramer's involvement in other antitrust litigation pending in Philadelphia against Electric Factory. Kramer was therefore thoroughly familiar with many important facts about the industry. Significantly, defendant Electric Factory also chose Philadelphia counsel for this case. Therefore, the selection of both counsel from the same city reduced the total costs and the number of hours which were expended in this litigation. For example, a large percentage of the depositions read at the trial in this case were taken in the Philadelphia action in which defendant's counsel here, Richard P. McElroy, also took part. See Tr. 3-4. Indeed, plaintiff's counsel did not include in the fee petition in this case most of the time expended in taking the depositions in the other case despite their use in this trial. On remand, therefore, the court should reinstate the travel time deducted.

2. The district court reduced the number of hours for trial preparation and trial time from 315.6 hours to 157.8 hours, stating:

The Court deems Kramer's request excessive. The Court has checked its own records and discovered that this trial lasted 12 days (including jury deliberations) and a total of 64 1/2 hours. On no one day did the Court exceed 6 hours of trial time, yet on many of those same days, plaintiff's counsel charged 15 to 18 hours. ¹⁶ Moreover, many of the time slips simply stated trial preparation, with no detail as to how the time was spent. In light of the actual trial time noted above and the Court's own assessment of a reasonable amount of trial time and trial preparation, the Court deems the requested hours unreasonable. A reasonable amount of time for trial preparation and trial time in this case is 157.80 hours.

16. The Court acknowledges that trial counsel often spends additional time outside of the courtroom on the day of trial, but a request for 15 to 18 hours, without an explanation or breakdown of the time, is, in the eyes of the Court, unreasonable.

It was arbitrary for the court to have assumed that expenditure of 15 to 18 hours per day by trial counsel is per se unreasonable. Certainly no lawyer could reasonably function at that level over an extended period of time. However, there were only six days in which 15 or more hours were expended, and these were spread over a period of four weeks: February 24--15 hours, February 26--18 hours, March 3--15 hours, March 4--15 hours, March 11--16.5 hours, March 12--16 hours. With the benefit of our own experience, this court is confident that there are situations in which counsel trying antitrust cases, or similar complex litigation, must expend hours such as these, particularly if, as in Kramer's case, one is operating without an assistant.

Also, the court should not have assumed that trial counsel could not reasonably spend more than 1 1/2 times the trial hours for trial preparation. See McDonald v. Johnson & Johnson, 546 F.Supp. 324 at 330 (D.Minn.1982), where Chief Judge Miles W. Lord, an experienced district court judge for 17 years, stated: "It has been this Court's experience that a good rule of thumb to apply in litigation is that three days of preparation are necessary for every one day in court."

On remand, the court should reconsider the reasonableness of the requested time for trial preparation. ³ In this connection, it should consider Chief Judge Seitz' remarks cautioning against "a niggardly award of attorneys' fees where a substantial benefit has been conferred." Merola v. Atlantic Richfield Co., 515 F.2d 165, 170 (3d Cir.1975). It may also want to take into account that defense counsel, whose client must pay these charges, did not challenge either the reasonableness or the accuracy of the hours listed.

3. The court reduced the hours Kramer spent in preparing the fee petition from 23.9 hours to 10 hours because it found the petition was "self laudatory" and the "hundreds of pages" was "unnecessary to the court's determination." We have examined the fee petition and find...