Judge Rules BCFP Not On Hook for Weltman’s Attorney Fees

A federal judge has denied a request from Weltman Weinberg & Reis to have the Bureau of Consumer Financial Protection pay its full legal bill, ruling that the federal agency did not act in bad faith when it sued the law firm for allegedly misleading individuals by sending them collection letters on the firm’s letterhead.

The judge, Judge Donald Nugent, did award Weltman $10,845.65 to cover some of its costs instead of the $1.2 million Weltman requested to cover its legal fees. Weltman had been seeking attorney’s fees under the Equal Access to Justice Act, which waives a government’s sovereign immunity in certain situations. Weltman argued that the agency’s lawsuit violated the “bad faith” exception fo the law.

A copy of the ruling approving in part and denying in part the bill of costs can be accessed by clicking here. A copy of the ruling denying attorney’s fees can be accessed by clicking here.

“Although it may well be unjust that Weltman has suffered reputational harm and has had to expend significant resources defending itself from disproved charges in this action, the Bureau’s actions did not rise to a level that would permit the Court to award attorney fees, as claimed by Weltman, under the law that applies in this case,” wrote Judge Nugent.

The BCFP had filed a lawsuit against Weltman back in 2017, alleging the law firm misrepresented the level of attorney involvement in letters and calls made to individuals with unpaid debts. The BCFP filed the lawsuit in April 2017, alleging that Weltman was sending collection letters that made it appear as though they came from a lawyer and calling consumers and falsely misrepresenting that a lawyer was involved. A judge ruled in favor of Weltman in July, saying that the BCFP did not prove its case that attorneys were not meaningfully involved.

In breaking down the $1.2 million, Weltman said it was for:

• Weltman incurred attorney’s fees of $608,925 for 1,001.75 hours expended on tasks related to pre-summary judgment filings and the discovery process.
• Weltman incurred attorney’s fees of $152,718.75 for 300 hours expended briefing summary judgment, including legal research, drafting its Motion for Summary Judgment, reviewing the CFPB’s Opposition Brief, drafting a Reply in Support, reviewing the CFPB’s Motion for Partial Summary Judgment, drafting an Opposition Brief, and reviewing the CFPB’s Reply
• Weltman incurred attorney’s fees of $61,762.50 for 83.25 hours expended in developing settlement strategy, preparing for and attending the case management conference, preparing for and attending mediation, and engaging in settlement negotiations with the CFPB.
• Weltman incurred attorney’s fees of $384,075 for 575.50 hours expended preparing for and attending trial.