UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
NO. 90-3815
R. M. PEREZ & ASSOCIATES, INC.,
Plaintiff,
versus
JAMES WELCH, ET AL.,
Defendants.
********************************************
VICTORIA A. CARLETON JOLLEY, Plaintiff-Appellant, versus
PAINE WEBBER JACKSON & CURTIS, INC., ET AL., Defendants-Appellees.
HENRY FRY, Plaintiff-Appellant versus
PAINE WEBBER JACKSON & CURTIS, INC., ET AL., Defendants-Appellees. *******************************************
HUEY CLEMONS, Plaintiff-Appellant, versus
PAINE, WEBBER JACKSON & CURTIS, INC., ET AL., Defendants-Appellees.
*********************************************
VALERIE W. MILLS, Plaintiff-Appellant, versus
PAINE WEBBER, JACKSON & CURTIS, INC., ET AL., Defendants-Appellees. ******************************************
CHARLES S. PENDLETON, Plaintiff-Appellant, versus
PAINE WEBBER JACKSON & CURTIS, INC., ET AL., Defendants-Appellees.
EUGENE J. YOUNG, Plaintiff-Appellant, versus
PAINE WEBBER JACKSON & CURTIS, INC., ET AL., Defendants-Appellees. ********************************************
STANLEY J. GARDEMAL, Plaintiff-Appellant,
PAINE WEBBER JACKSON & CURTIS, INC., ET AL., Defendants-Appellees. ******************************************
GILBERT DISOTELL, Plaintiff-Appellant,
PAINE WEBBER JACKSON & CURTIS, INC., ET AL., Defendants-Appellees.
NO. 91-3119
VICTORIA A. CARLETON JOLLEY, ET AL.,
Plaintiffs-Appellants,
PAINE WEBBER JACKSON & CURTIS, INC. and JAMES WELCH,
Defendants-Appellees,
2 NO. 91-3191
Plaintiffs-Appellees Cross-Appellants,
PAINE WEBBER JACKSON & CURTIS, INC.,
Defendant-Appellant Cross-Apellee.
Appeals from the United States District Court for the Eastern District of Louisiana
Before THORNBERRY, KING, and DEMOSS, Circuit Judges.
THORNBERRY, Circuit Judge:
This is an appeal from the final disposition of several
consolidated securities fraud cases. The cases against Welch and
Paine Webber have been percolating in the federal court system for
seven years; only a few isolated issues are presented here for
review. We affirm on all issues except the district court's award
of attorneys' fees.
I. Background
The plaintiffs are eight customers of James Welch, a former
Paine Webber stockbroker. The eight plaintiffs--Huey Clemons,
Gilbert Disotell, Henry Fry, Stanley Gardeman, Victoria Carleton
Jolley, Valerie Mills, Charles Pendleton, and Eugene Young--sued
James Welch and Paine Webber for violations of RICO and federal and
state securities laws. After the plaintiffs filed suit, Paine
3 Webber moved to compel arbitration of the claims against it. Welch
did not seek arbitration of the claims against him. The court
referred Paine Webber's motion to a magistrate, who recommended
that the motion be denied. The district court disregarded the
magistrate's recommendation and granted Paine Webber's motion to
compel arbitration as to seven of the eight plaintiffs, leaving one
suit by Plaintiff Mills pending in the district court against Paine
Webber in addition to the eight against Welch. The plaintiffs
appealed this ruling to a prior panel of the Fifth Circuit, which
found that it lacked jurisdiction to hear the appeal. Jolley v.
Paine Webbber Jackson & Curtis, 864 F.2d 402 (5th Cir.), opinion
supplemented, 867 F.2d 891 (5th Cir. 1989). In this appeal,
however, we will consider the district court's ruling on Paine
Webber's motion to compel arbitration.
All claims against Welch and Mills' claims against Paine
Webber were tried to a jury in the summer of 1988. The jury found
in favor of the plaintiffs on the securities claims, but rejected
the plaintiffs' RICO claims. The district court entered the jury's
award of damages in the amount of $274,610.88, and the Fifth
Circuit affirmed. Jolley v. Paine Webber Jackson & Curtis, 904
F.2d 988 (5th Cir. 1990), cert. denied, 111 S. Ct. 762 (1991). The
district court subsequently awarded attorneys' fees to the
plaintiffs: $193,149.50 for all plaintiffs against Welch and Paine
Webber jointly, and $57,264.12 against Welch only. The district
court later reduced the fee award against Paine Webber and Welch
jointly from $193,149.50 to $168,639.37. The district court also
4 denied an award of costs for the plaintiffs because they failed to
submit a detail of costs along with their application for fees and
costs. In this appeal, the parties challenge the district court's
rulings on fees and costs.
The plaintiffs also appeal the disposition of the claims that
were sent to arbitration. The arbitrators awarded $146,425.61 in
damages for the plaintiffs. The arbitrators also denied fees
because they found that both parties had a legitimate claim to
fees, and their fee awards were offsetting. Paine Webber moved to
confirm the arbitrators' award; the plaintiffs sought to vacate or
modify the award. The district court granted Paine Webber's
motion, confirming the arbitrators' award in its entirety. The
plaintiffs challenge the district court's confirmation of the
award, and both sides seek attorneys' fees in connection with the
arbitration proceedings.
II. The Arbitration Proceedings
A. Paine Webber's Motion to Compel Arbitration
The plaintiffs contend that the district court erred by
rejecting the magistrate's Report and Recommendation and compelling
seven of the eight plaintiffs to submit their claims against Paine
Webber to arbitration. The magistrate that conducted an
evidentiary hearing on the issue of arbitrability recommended that
none of the eight plaintiffs' claims against Paine Webber were
subject to arbitration. Regarding one plaintiff, Mills, the
magistrate found that Paine Webber failed to introduce any
documents proving that she had agreed to arbitrate any claims and
5 that she was therefore entitled to pursue her claims against Paine
Webber in front of a jury. The magistrate also found, as a matter
of law, that three plaintiffs had established a prima facie case of
fraud in the factum, rendering their arbitration agreements void.
Furthermore, the magistrate found that the unauthorized
transactions that all eight plaintiffs complained of could not have
been within the scope of the agreements and therefore, that none of
the eight plaintiffs' claims were subject to arbitration.
The district court partially rejected the Magistrate's Report
and Recommendation, finding that seven of the eight plaintiffs were
required to submit their claims against Paine Webber to
arbitration, while the remaining plaintiff, Mills, was entitled to
assert her claims in district court. The district court's
interpretation of the documents containing the arbitration
agreements is a question of law subject to de novo review. Webb v.
Carter Constr. Co. v. Louisiana Central Bank, 922 F.2d 1197, 1199
(5th Cir. 1991). After a thorough review of the record, we find
that the district court did not err in compelling seven of the
eight plaintiffs to submit their claims against Paine Webber to
arbitration.
Courts perform a two-step inquiry to determine whether parties
should be compelled to arbitrate a dispute. First, the court must
determine whether the parties agreed to arbitrate the dispute.
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 105 S.Ct. 3346,
3353 (1985). Once the court finds that the parties agreed to
arbitrate, it must consider whether any federal statute or policy
6 renders the claims nonarbitrable. Id. at 3355. We first consider
whether, by signing the various documents containing arbitration
agreements, the plaintiffs agreed to arbitrate the claims that they
assert against Paine Webber.
Seven of the eight plaintiffs agree that each signed at least
one document (a Client Agreement, Customer Agreement, or Option
Agreement) containing an arbitration clause. Some plaintiffs
contend, however, that their respective signatures were obtained by
fraud, and all assert that the transactions complained of are
outside the scope of the arbitration agreement. Those plaintiffs
alleging fraud insist that the fraud constitutes fraud in the
factum rather than fraud in the inducement. They argue that the
distinction between fraud in the factum and fraud in the inducement
is determinative of whether they can be compelled to arbitrate.
We disagree that the type of fraud alleged is determinative of
arbitrability. Under Prima Paint Corp. v. Flood and Conklin Mfg.
Co., 388 U.S. 395, 404, 87 S.Ct. 1801, 1806 (1967), and its
progeny, the central issue in a case like this is whether the
plaintiffs' claim of fraud relates to the making of the arbitration
agreement itself or to the contract as a whole. See C.B.S. Emp.
Fed. Cr. Union v. Donaldson, Et Al., 912 F.2d 1563 (6th Cir. 1990);
Bhatia v. Johnson, 818 F.2d 418 (5th Cir. 1987) ("We must determine
whether Bhatia's complaint is directed at the entire contract or
only the arbitration clause."). If the fraud relates to the
arbitration clause itself, the court should adjudicate the fraud
claim. If it relates to the entire agreement, then the Federal
7 Arbitration Act requires that the fraud claim be decided by an
arbitrator. C.B.S. Emp. Fed. Cr. Union v. Donaldson, Et Al., 912
F.2d 1563, 1566 (6th Cir. 1990).
We find that the fraud alleged by the plaintiffs relates to
the Agreements as a whole and not to the arbitration clauses
themselves. Only three of the plaintiffs put forth evidence
regarding the circumstances surrounding the signing of the various
agreements. Victoria Carlton Jolley testified that she signed the
documents before reading them because she trusted Welch and he was
in a hurry to get back to his office. She testified that he never
mentioned margin, options, or arbitration. Plaintiff Stanley
Gardemal testified that he signed the documents because Welch
caught him at a weak moment. Welch had called him repeatedly to
say that if Gardemal signed the agreements, Welch could transfer
some money he had made on a transaction into Gardemal's account.
Gardemal agreed to sign the papers but thought that they pertained
only to the transaction that had already been completed. Gardemal
stated that he never knew he was agreeing to an arbitration clause.
Plaintiff Gilbert Disotell testified that although he signed the
option agreement, he did not know about any risks involved in
signing the agreement and that Welch did not tell him that the
agreement contained an arbitration clause. He signed the agreement
because he trusted Welch.
The testimony of the plaintiffs clearly indicates that the
fraud they complain of goes to the Client Agreements and Option
Agreements in their entirety and not to the arbitration clauses
8 themselves. The plaintiffs' allegations that they did not read or
understand the documents and that Welch did not explain the
documents to them does not allege fraud in the making of the
arbitration agreements, but goes to the formation of the entire
contracts. Therefore, the allegations are arbitrable.
Each of the plaintiffs also argue that their claims against
Paine Webber are outside the scope of the arbitration clauses. The
clauses are found in paragraph 14 of the Customer Agreement,
paragraph 15 of the Client Agreement or paragraph 18 of the Option
Agreement. The Customer Agreement and the Client Agreement contain
identical arbitration clauses providing that "[a]ny controversy
between us arising out of or relating to this contract or the
breach thereof, shall be settled by arbitration, . . . ." The
Option Agreement contains a slightly different arbitration clause
that states, "[a]ny controversy arising out of the handling of any
of the transactions referred to in this Agreement shall be settled
by arbitration . . . ." This court has found unauthorized trading
claims under § 10(b) of the 1934 Act and RICO claims to be within
the scope of similar arbitration agreements. See Mayaja v. Bodkin,
803 F.2d 157, 161 (5th Cir. 1986). Therefore, we find the
plaintiffs' claims to be within the scope of the arbitration
agreements at issue here.
Finally, plaintiff Henry Fry argues that although he signed
the Client Agreement, he did not sign it until after the
transactions he complains of had taken place, and therefore, his
claims are not subject to arbitration. This argument ignores the
9 language of the Agreement that provides: "In consideration of your
. . . continuing an account or accounts in my name or for me for
the purchase or sale of property, I agree with you . . . [that] all
my relations and dealings with [you] are subject to this agreement
. . . ." Fry's argument that his claims are outside the scope of
the agreement is without merit. See Shotto v. Laub, 632 F.Supp.
516, 522 (D.Md. 1986) ("[W]hether plaintiffs signed the agreements
before or after opening their accounts, or even before the claim
arose, does not change the fact that they signed written agreements
to arbitrate claims arising out of their account.").
B. Review of the Arbitrators' Award
The plaintiffs challenge the arbitrators' application of
collateral estoppel and respondeat superior to the issues presented
in the arbitration proceedings. Acknowledging the limited nature
of judicial review of arbitration awards, the plaintiffs contend
that the arbitrators "manifestly disregarded" both of these legal
doctrines in reaching its decision. We find that the plaintiffs
have failed to show the extreme deficiency in the arbitrators'
decisionmaking process necessary for a federal court to overturn
the arbitrators' award.
The "manifest disregard" doctrine originated in the Supreme
Court's decision in Wilko v. Swan, 74 S.Ct. 182 (1953). The
Supreme Court there stated that "interpretations of the law" by
arbitrators were not subject "to judicial review for error in
interpretation." Id. at 187-88. A legal error would present
grounds for vacating an arbitrator's award only when the
10 arbitrator's failure to decide in accordance with the law was
clearly apparent, constituting "manifest disregard" as opposed to
mere misinterpretation. Id. at 187. A leading circuit court
decision applying the manifest disregard doctrine, Merrill Lynch,
Pierce, Fenner & Smith v. Bobker, 808 F.2d 930 (2d Cir. 1986),
explained the doctrine as follows:
"Manifest disregard of the law" by arbitrators is a judicially-created ground for vacating their arbitration award, which was introduced by the Supreme Court in Wilko v. Swan. It is not to be found in the federal arbitration law. 9 U.S.C. § 10. Although the bounds of this ground have never been defined, it clearly means more than error or misunderstanding with respect to the law. The error must have been obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator. Moreover, the term "disregard" implies that the arbitrator appreciates the existence of a clearly governing legal principle but decides to ignore or pay no attention to it. To adopt a less strict standard of judicial review would be to undermine our well established deference to arbitration as a favored method of settling disputes when agreed to by the parties. Judicial inquiry under the "manifest disregard" standard is therefore extremely limited. The governing law alleged to have been ignored by the arbitrators must be well defined, explicit, and clearly applicable. We are not at liberty to set aside an arbitration panel's award because of an arguable difference regarding the meaning or applicability of laws urged upon it.
Bobker, 808 F.2d at 933-34 (citations omitted). Applying this
standard of review, we agree with the district court that the
arbitrators did not manifestly disregard the doctrines of
collateral estoppel or respondeat superior.
The plaintiffs argued before the arbitrators that collateral
estoppel barred reconsideration of the fact issues regarding
Welch's fraud and the amount of the plaintiffs' damages, which were
determined by the jury in the federal district court proceedings.
11 The plaintiffs' related respondeat superior argument sought to have
liability imposed upon Paine Webber for the amount of the district
court judgments against Welch. Both sides briefed these issues
extensively prior to the arbitration hearing. The arbitrators
found that Paine Webber was vicariously liable for Welch's culpable
acts; however, they rejected the plaintiffs' argument that
collateral estoppel barred reconsideration of the plaintiffs'
claims against Welch. The arbitrators' findings of culpability by
Welch were much more favorable to Welch and Paine Webber than the
jury's findings in the district court. Thus, Paine Webber was held
vicariously liable for Welch's acts, but the arbitrators' damage
award was much lower than the jury's award in the district court.
The plaintiffs argued in the district court that the
arbitrators manifestly disregarded the law of collateral estoppel.
The district court found not only that the arbitrator had not
manifestly disregarded the law, but also that the arbitrators'
interpretation of collateral estoppel doctrine was correct.
Because we feel that such an inquiry is beyond the scope of the
courts' review, we do not address the latter findings of the
district court. We uphold the district court's affirmance of the
arbitrators' award, however, because the application of collateral
estoppel to Paine Webber, who was a non-party to the district court
proceedings as to the seven plaintiffs present in the arbitration
proceedings, is by no means the type of well-settled legal
principle that the arbitrators could be said to have "disregarded".
See Freeman v. Lester Coggins Trucking, Inc., 771 F.2d 860 (5th
12 Cir. 1985); Hardy v. Johns-Manville Sales Corp., 681 F.2d 334, 339
(5th Cir. 1982). The application of collateral estoppel is largely
within the discretion of the tribunal considering the issue.
Parklane Hosiery Co. v. Shore, 99 S.Ct. 645, 652 (1979). Because
the plaintiffs have not sustained their burden of showing that the
arbitrators willfully ignored a clearly governing legal principle,
the district court was correct in confirming the arbitrators'
award. See Jenkins v. Prudential-Bache Securities, Inc., 847 F.2d
631, 634 (10th Cir. 1988).1
C. The Award of Offsetting Fees
Both sides sought attorneys' fees in the arbitration
proceedings. The arbitrators found merit in both sides' arguments
for fees, and without determining the appropriate amount of fees to
which each side was entitled, found that the fees were offsetting.
The arbitrators therefore awarded no fees to either party. The
plaintiffs appeal the district court's confirmance of the
arbitrators' decision regarding fees.
We agree with the arbitration panel that the plaintiffs were
entitled to attorneys' fees for violations of Louisiana Securities
Law. La. R. S. 51:714A (1987). With regard to the defendant's
claim for attorneys' fees, the arbitration panel found merit in the
defendant's argument that the plaintiffs litigated the issue of the
1 Plaintiffs' complaint about the application of vicarious liability does not stand once the collateral estoppel issue is decided. The arbitrators held Paine Webber vicariously liable for Welch's culpable acts; they just found fewer culpable acts and a smaller amount of damages than the jury found in the district court proceedings.
13 arbitrability of the agreements without a reasonable basis, and the
panel recognized an award of attorneys' fees for the defendants for
defending against this issue. Again, we cannot agree with the
plaintiffs that the arbitrators "manifestly disregarded" the law
with regard to this issue. See Washington Hospital Center v.
Service Employees International Union, Local 722, AFL-CIO, 746 F.2d
1503, 1509-13 (5th Cir. 1984).
Likewise, we cannot agree with the plaintiffs that the
arbitrators erred in finding that the parties' entitlement to
attorneys' fees offset.2 A determination of the amount of
attorneys' fees is a finding of fact. See Stelly v. Commissioner,
761 F.2d 1113, 1116 (5th Cir.), cert. denied, 471 U.S. 851 (1988);
Seamon v. Vaughn, 921 F.2d 1217, 1218 (11th Cir. 1991). This court
must accept findings of fact made by the arbitration panel.
International Union of Elec., Radio & Mach. Workers, Local 1013 v.
Ingram Mfg. Co., 715 F.2d 886, 890 (5th Cir. 1983), cert. denied,
466 U.S. 928 (1984); Todd Shipyards Corp. v. Cunard Line, Ltd., 943
F.2d 1056, 1058 (9th Cir. 1991); The Lattimer-Stevens Co. v. United
Steel Workers of America, 913 F.2d 1166, 1168 (6th Cir. 1990)
(citing International Brotherhood of Elec. Workers, Local 429 v.
Toshiba American, Inc., 879 F.2d 208 (6th Cir. 1989).
2 The plaintiffs contend that they were denied attorneys' fees contrary to the requirements of the Louisiana statute. This is incorrect. The offsetting award suggests that they were awarded fees equal to those awarded to the defendants. The plantiffs' contention may therefore be characterized more properly as a quarrel with the amount of fees granted.
14 Moreover, as a matter of general principles, arbitrators may
render an award without disclosing their rationale for doing so,
"and when they do, courts will not inquire into the basis of the
award unless they believe that the arbitrators rendered it in
'manifest disregard' of the law or unless the facts of the case
fail to support it." Koch Oil, S.A. v. Transocean Gulf Oil Co.,
751 F.2d 551, 554 (2d Cir. 1985); cf. Delaware Dep't of Health and
Social Services v. United States Dep't of Education, 772 F.2d 1123,
1138 (3d Cir. 1985) ("[I]f an award of attorneys' fees was legally
permissible, on any basis, for the services performed . . . we
could not find arbitrary or capricious action or an abuse of
discretion."). Indeed, the arbitrators recognized that the
plaintiffs were entitled to attorneys' fees pursuant to Louisiana
Revised Statute 51:714A. The plaintiffs have not shown that the
amount awarded to them was rendered in manifest disregard of the
Louisiana statute or other law, or that it lacked a factual basis.
Accordingly, we affirm the district court's confirmation of the
arbitrators' fee award.
III. Costs and Fees in the District Court Proceedings
Subsequent to the jury trial in the district court, the
district judge entered an order awarding attorneys' fees for all
eight plaintiffs in the total amount of $250,413.62 for reasonable
expenses incurred in the district court proceedings. Of that
amount, Paine Webber and Welch were jointly liable for $193,149.50,
and Welch was individually liable for $57,264.12. After further
briefing, the district court reduced the amount of joint liability
15 to $168,639.37. The plaintiffs appeal the district court's award,
claiming that the district court improperly applied the Johnson
factors when it reduced the plaintiffs' requested fee award. Paine
Webber also appeals the district court's determination of fees,
contending that the fee award should be proportionate to damages
recovered. Paine Webber further contends that the fee award should
be apportioned among the plaintiffs, and because Paine Webber
defended only against Plaintiff Mills, Paine Webber claims it
should be liable only for fees attributable to the prosecution of
Mills's claims. We review the district court's determination of
attorneys' fees for abuse of discretion; we review any factfindings
supporting its award only for clear error. See Von Clark v.
Butler, 916 F.2d 255, 258 (5th Cir. 1990).
The district court, in a 37-page opinion followed by 4
appendices totalling an additional 40 pages, analyzed the
plaintiffs' fee request under the factors recognized by the
Louisiana Supreme Court in Leenerts Farms, Inc. v. Rogers, 421
So.2d 216, 219 (La. 1982) and the Fifth Circuit in Johnson v.
Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). The
district court reduced the number of hours reasonably billed for
some of the time devoted to litigating the arbitrability of the
plaintiffs' state law claims. After reviewing the record on this
issue, we cannot say that the district court clearly erred in its
finding that the plaintiffs were unreasonable in their continued
litigation of this issue. Furthermore, the district court did not
clearly err in its finding that certain identified billing entries
16 were overly vague. We find no abuse of discretion in the district
court's determination of the "lodestar" (reasonable hours expended
multiplied by a reasonable hourly rate).
The plaintiffs also object to the district court's reduction
of the lodestar based on the plaintiffs' limited success and on a
comparison of awards in similar cases. We take note that "[t]here
is a 'strong presumption' that the lodestar figure . . . represents
a 'reasonable' attorney's fee," D'Emanuele v. Montgomery Ward &
Co., Inc., 904 F.2d 1379, 1384 (9th Cir. 1990), and that "upward
adjustments of the lodestar are appropriate only in certain 'rare'
and 'exceptional' cases." Alberti v. Klevenhagen, 896 F.2d 927,
930 (5th Cir. 1990). The district court reduced the lodestar for
Paine Webber by 60%, and the lodestar for Welch by 45%, the
difference explained by the differing number of plaintiffs pursuing
claims against the two defendants. However, the district court
failed to take into consideration the substantial number of hours
reasonably devoted to issues concerning only Paine Webber, such as
arbitrability and vicarious liability. Furthermore, the magnitude
of the reduction for limited success overstates the limited nature
of the plaintiffs' recovery. The plaintiffs prevailed on the
securities claims; the issues they lost on were peripheral to the
securities claims. Finally, we note that a number of issues
presented by the plaintiffs as a justification for an upward
adjustment of the lodestar were rejected by the district court
without appropriate factual support. We find that the district
17 court abused its discretion in reducing the plaintiffs' lodestar.
See Cobb v. Miller, 818 F.2d 1227, 1235 (5th Cir. 1987).
Paine Webber also appeals the district court's decision on
attorneys' fees by, first, claiming that a rule of proportionality
prevents the district court from awarding fees so far in excess of
damages recovered.3 Paine Webber bases this argument on the
Supreme Court's decision in City of Riverside v. Rivera, 106 S.Ct.
2686 (1986). However, we rejected this interpretation of Rivera in
our 1987 opinion in Cobb v. Miller, 818 F.2d 1227, 1234 (5th Cir.
1987). Furthermore, we agree with other circuits addressing the
issue that Rivera provides no support for a rule of proportionality
in cases outside of the civil rights context. See Northeast
Women's Center v. McMonagle, 889 F.2d 466, 472-73 (3d Cir. 1989).
Paine Webber also argues that the district court should have
apportioned the fee award between it and Welch based on a pro rata
division of the fees among the plaintiffs. Under this theory,
Paine Webber would be liable for only one-eighth of all of the fees
awarded because only one of the eight plaintiffs pursued claims
against Paine Webber. The district court rejected this argument
based on our decision in Abell v. Potomac Insurance Co., 858 F.2d
1104 (5th Cir. 1988). We agree with the district court that Abell
is applicable, and we find Paine Webber's arguments to the contrary
unpersuasive.
3 Paine Webber makes the comparison between the damages recovered against it by Mrs. Mills, approximately $23,000, and the fees assessed against Paine Webber, which were $168,639.37.
18 Based on the foregoing, we find that the district court abused
its discretion by reducing the plaintiffs' lodestar by the
percentages noted above. We therefore vacate the district court's
judgments regarding attorneys' fees and remand with instructions to
enter an award of attorneys' fees for the full amount of the
lodestar as determined by the district court in its Minute Entry
dated February 22, 1991.
As a final matter, the plaintiffs contest the district court's
refusal to reconsider its decision denying costs. The district
court initially denied costs to the plaintiffs when they failed to
submit documentation of their costs after they were notified that
their application omitted any substantiation of costs. Upon a
motion to reconsider this decision, the district court found that
the plaintiffs had failed to show good cause for their failure to
document their claim for costs, and refused to allow plaintiffs to
supplement their application with the appropriate accounting of
costs. We cannot assess error in the district court's refusal to
reconsider the issue of costs. See Nelson v. James, 722 F.2d 207,
208 (5th Cir. 1984); Copper Liquor, Inc. v. Adolph Coors Co., 684
F.2d 1087 (5th Cir. 1982).
For all of the foregoing reasons, we remand to the district
court for the entry of judgment for attorneys' fees in the district
court proceedings based on the lodestar calculation.
AFFIRMED in part; REMANDED in part.