Judge Lowers Attorney’s Fees by 30% in FDCPA Settlement

A Magistrate Court judge in New York has awarded the attorneys representing a plaintiff in a Fair Debt Collection Practices Act $11,297 in fees, after the plaintiff accepted an offer of judgment in the amount of $1,050 over a $59 debt that was owed to the original creditor.

A copy of the ruling in the case of Hancock v. I.C. System can be accessed by clicking here.

The plaintiff had been seeking more than $16,000 in attorney’s fees, but that was adjusted downward by nearly 30% by Judge Robert W. Lehrburger of the District Court for the Southern District of New York.

The plaintiff received a collection letter from the defendant, seeking to collect $59 that was owed to a cable provider for unreturned equipment. The plaintiff filed a class-action suit, alleging that she owed less than $59 and that the letter allegedly violated the FDCPA because it failed to inform her of the consequences of disputing a debt. During discovery, it was revealed that the plaintiff had documentation showing that the equipment had been returned before the account was placed with the defendant for collection. While the plaintiff could have notified the defendant or the creditor of the documentation when she received the collection letter, she chose not to do so.

The defendant made an offer of judgment in the amount of $1,050, which was accepted, and attorney’s fees. The plaintiff submitted a required for $16,004.32, while the defendant countered with $4,370.99. Since neither side could reach an agreement, the matter was put before Judge Lehrburger.

After lowering the hourly rate for the two attorneys who represented the plaintiffs by about $100 per hour, Judge Lehrburger looked at the hours submitted by the attorneys. The defendant proposed cutting the number of hours by 50% because the case was a “stock FDCPA case” that used “generic, cut and paste requests,” according to the defendant. But the 50% “cut too deep,” Judge Lehrburger wrote.

“Even if the case had not been filed as a class action, many of the same tasks would have to have been performed – drafting and filing the complaint; issuing and responding to discovery requests; corresponding with the client, opposing counsel, and the Court; and considering the offer of judgment,” he said. “And to the extent that counsel employed boilerplate requests and other material, as ICS argues, the time devoted to class-oriented discovery and pleadings would be far less than if the work were otherwise sui generis or highly customized.”

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