Anytime an Appeals Court opinion includes the phrase “ridiculous facts” and questions the conduct of the plaintiff’s attorneys, you know the ruling is going to be a fun read and the Fifth Circuit’s affirmation of a lower court’s ruling denying the plaintiff an award of reasonable attorney’s fees in a Fair Debt Collection Practices Act case does not disappoint.
A copy of the ruling in Davis v. Credit Bureau of the South (CBOTS) can be accessed by clicking here.
The plaintiff filed a lawsuit after receiving a collection letter and placing a call to the defendant, alleging that the defendant violated Section 1692e(16) the FDCPA because it engaged in debt collection activities while using the term “credit bureau” in its name, even though it had ceased to be a consumer reporting agency years ago. The plaintiff was awarded summary judgment and a statutory award of $1,000. The plaintiff then filed for $130,410 in attorney’s fees. That’s where the real fun begins.
A “stunned” magistrate judge rejected the attorney’s fee award because the number of hours allegedly worked on the case — 300 — and the hourly rate — $450 — was “excessive by orders of magnitude.” A District Court judge upheld the denial of attorney’s fees, which the plaintiff appealed to the Fifth Circuit.
The Appeals Court saw no reason to overturn the lower court. The pleadings filed by the plaintiff’s attorneys, “including the brief on appeal, are replete with grammatical errors, formatting issues, and improper citations, and is certainly not the caliber of work warranting such an extraordinary hourly rate.”
Further hampering the plaintiff’s case were allegations that the plaintiff and her attorneys “colluded in establishing the cause of action and created the appearance that CBOTS, a Louisiana entity, engaged in debt collection activities in Texas.”
In her deposition, Davis admits that she called CBOTS and requested that CBOTS mail the water bill to her parents’ address in Hallsville, Texas. Davis also testified that she retained Jonathan Raburn in April 2015, a date prior to CBOTS’ alleged FDCPA violations, and worked for the Raburn Law Firm in the summer of 2015. At the pretrial hearing, McCarty also admitted that CBOTS mailed the water bill to Davis’ parents’ house in Texas per Davis’ request. This provoked conduct (mailing of the August 18, 2015 “collection letter” to Texas address) is one of only two incidents wherein Davis alleged that CBOTS violated the FDCPA.
Additionally, Davis admits that the phone call she made from Shreveport to CBOTS on September 22, 2015, which was one of at least three calls wherein she asked the same questions, was recorded using the Raburn Law Firm’s recorder, and was apparently made in the presence of her attorney, Jonathan Raburn. Raburn’s involvement in the recorded phone call—conduct at the center of this case—arguably made him a fact witness, potentially disqualifying him from representing Davis.
It just keeps getting worse for the plaintiffs.
In the complaint, Davis’ counsel misrepresented that Davis was a citizen of Harrison County, Texas, despite the overwhelming evidence that Davis was a citizen of Louisiana: she had a Louisiana driver’s license, her vehicle was registered in Louisiana, she was registered to vote in Louisiana, she filed her state and federal income tax returns in Louisiana, and she lived and worked in Louisiana.12 Counsel maintained this inaccurate representation in the answers to interrogatories and deposition of Davis. At the pretrial conference, the magistrate judge questioned McCarty about the truth of the representation made in the complaint, finding the only indication that Davis was a citizen of Texas was that her parents lived in Texas, which was insufficient to establish citizenship. McCarty conceded to the court that he knew that Davis could only be a citizen in one state, averring that he made a “mischoice of words” and offering to amend the complaint. Despite this admission and his lack of success below, counsel attempts to convince this court that Davis had “dual residency.”
So, despite the FDCPA including a provision for the awarding of reasonable attorney’s fees, the Appeals Court sided with the other courts that have ruled in this case and upheld the denial of attorney’s fees.
Although complete denial of otherwise generally mandatory attorney’s fees is a rare and drastic sanction, the outrageous facts in this case suggest that the district court did not abuse its discretion in determining that Davis was not entitled to attorney’s fees, or that the reasonable attorney’s fee was $0. The district court calculated a reasonable hourly rate to be, at most, $225 (half of the $450 demanded), which can further be reduced based on the poor draftsmanship that permeates the pleadings. The district court cited valid, precedentially-supported reasons for reducing the number of hours and amount of the fee award claimed by Davis’ attorneys. Moreover, given the district court’s desire to “disincentivize the conduct of Plaintiff’s counsel,” coupled with an additional, punitive reduction (or outright denial) for McCarty and Raburn’s exorbitant fee request, it was not an abuse of discretion for the district court to deny Davis’ motion for attorney’s fees.