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holding that an hourly rate of $115 for a law clerk was reasonable and appropriate
Summary of this case from Cassagne v. Law Offices of WeltmanOpinion
Civil Action No. 05-3473.
June 8, 2006
ORDER
AND NOW, this 8th day of June, 2006, upon consideration of plaintiff's motion for award of damages and fees (docket entry #21), defendant's response thereto, and plaintiff's motion for leave to file reply (docket entry #23), which attaches the proposed reply as an exhibit, and the Court finding that:
(a) On April 28, 2006, we granted summary judgment in favor of Aliya Nelson, holding that Select Financial Services, Inc. violated Sections 1692e and 1692e(10) of the Fair Debt Collection Practices Act ("FDCPA") when it used the phrase "verifies the validity of this debt" in an October 5, 2004 letter to Nelson,see Nelson v. Select Fin. Servs., Inc., ___ F. Supp. 2d ___, 2006 WL 1159931 (E.D. Pa. Apr. 28, 2006);
(b) We ordered the parties to submit supplemental briefs addressing damages and attorney's fees, see Order of Apr. 28, 2006 ¶¶ 2-3, which they have done, but before addressing those submissions, we review the relevant portions of the FDCPA;
(c) Congress enacted the FDCPA in light of "abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. . . . [that] contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy," 15 U.S.C. § 1692(a);
(d) The statute is designed "to eliminate abusive debt collection practices by debt collectors . . . and to promote consistent State action to protect consumers against debt collection abuses," 15 U.S.C. § 1692(e);
(e) The FDCPA provides for actual and statutory damages, as well as reasonable attorney's fees:
Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable to such person in an amount equal to the sum of —
(1) any actual damage sustained by such person as a result of such failure; (2)(A) in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000;. . . .
(3) in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney's fee as determined by the court. . . .15 U.S.C. § 1692k(a);
(f) The FDCPA also protects debt collectors who have made abona fide error:
A debt collector may not be held liable in any action brought under this subchapter if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.15 U.S.C. § 1692k(c);
(g) Notably, "attorney's fees should not be construed as a special or discretionary remedy; rather, the Act mandates an award of attorney's fees as a means of fulfilling Congress's intent that the Act should be enforced by debtors acting as private attorneys general," Graziano v. Harrison, 950 F.2d 107, 113 (3d Cir. 1991) (emphasis added);
(h) We turn now to Nelson's motion, which seeks statutory damages, legal fees, and costs, but not actual damages;
(i) Select first argues that Nelson is not entitled to actual damages, see Def.'s Br. in Supp. of Denial of Damages Legal Fees and Costs ("Def.'s Br.) at unnumbered page 2, an unnecessary argument since Nelson does not claim them, see Pl.'s Br. in Supp. of Mot. for Damages and Fees ("Pl.'s Mot.") 4 ("this was not a case of actual damages — and none were claimed");
(j) Accordingly, we shall not grant actual damages;
(k) Select next contends that Nelson should not receive statutory damages because "the single violation is hyper-technical," did not inflict actual damage, and does not satisfy the standard in § 1692k(b)(1), Def.'s Br. at unnumbered page 3;
(l) In determining damages to be awarded pursuant to § 1692k(a)(2)(A), we must consider, "among other relevant factors . . . the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, and the extent to which such noncompliance was intentional," 15 U.S.C. § 1692k(b)(1);
(m) First, this record lacks evidence about the frequency and persistence of Select's noncompliance;
As Nelson notes, the letter containing the language that violates the FDCPA appears to be a form letter. Though the format and language of the letter strongly suggest that Select used it for other debtors, Nelson has not submitted any evidence on this issue, so we shall not make such an assumption. Cf. Withers v. Eveland, 988 F.Supp. 942, 948 (E.D. Va. 1997) (inferring from deposition of defendant's vice-president that defendant sent collection letter violative of FDCPA to many debtors).
(n) Next, the parties disagree as to what the record shows about the nature and intent of the violation, with Nelson contending that a sophisticated debt collector such as Select knew or shown have known it was using misleading language, and Select asserting that Nelson has provided no evidence that its conduct was intentional;
(o) What is clear is that Select, a professional debt collector, has not asserted that it accidentally or mistakenly used the deceptive language, but instead, at the summary judgment stage, steadfastly defended its language as being in compliance with the FDCPA;
(p) Now, after we held that Select conveyed a false message to Nelson in violation of a federal statute, Select describes the violation as "hyper-technical;"
(q) Select's dismissive characterization — which alone confirms that what it did here was no accident but part of its contempt for the law that governs its business — underscores the continuing need for citizens like Nelson to step forward, as Congress intended, and act as private attorneys general to challenge debt collectors who use deceptive collection methods;
(r) We also find relevant that Select needlessly delayed this case and wasted the Court's scarce time and resources, as well as Nelson's, by failing to timely respond to the complaint, thereby allowing the case to enter default and then requiring us to resolve its motion to set aside the entry of default;
The parties offer different versions of the events leading to default. Nelson contends that Select represented the case was settled, but then withdrew the offer and failed to timely respond to the complaint after being given extra time to do so. Pl.'s Br. Lorenz Certification ¶ 16. Select states that the parties were actively negotiating settlement when Nelson filed for entry of default, despite knowing that Select's decision-maker was ill. Def.'s Br. at unnumbered 1. Regardless of where the truth lies, the relevant fact is that Select failed to meet its obligation to file a timely answer, even after we extended the deadline. Select could have requested more time from us, but chose not to. It cannot now blame others for its own failure to meet deadlines.
(s) On these facts, we find that a statutory damages award of $1,000 is just;
(t) Turning now to the request for attorney's fees, Nelson seeks $24,693.80 in fees and costs for: preparing, filing, and serving the complaint; preparing and serving discovery; telephone calls and letters to defendant's counsel; preparing entry of default documents under Fed.R.Civ.P. 55; drafting an opposition to defendant's motion to vacate default; drafting a motion and brief for judgment on the pleadings; drafting a brief in response to our Order requiring supplemental briefing; preparing the instant motion and brief, which include time sheets and certifications as exhibits, and the reply to Select's brief,see Pl.'s Br. 6;
(u) Nelson has, as required, thoroughly documented her fee request by appending to her motion her attorneys' detailed time sheets and their certifications, as well as the certification of an attorney not involved in this case, see Hensley v. Eckerhart, 461 U.S. 424, 433 (1983) ("The party seeking an award of fees should submit evidence supporting the hours worked and rates claimed.");
Nelson breaks down the fees and costs as follows:
Hours Rate Amount
Cary L. Flitter 12.9 $ 430.00 $ 5,547.00 Theodore Lorenz 62.4 $ 295.00 $18,408.00 Joan Raughley .5 $ 115.00 $ 57.50 Robin Pomerantz 2.6 $ 115.00 $ 299.00 Law Clerk .5 $ 115.00 $ 57.50 Photocopying $ 13.80 Complaint filing fee $ 250.00 Metro Filing Serv., Inc. $ 61.00 _____________ TOTAL $24,693.80See Pl.'s Br. 9, Lorenz Certification ¶¶ 12-14, Ex. A Timesheet 8; Pl.'s Reply 4 (adding three hours for time spent on reply).
Flitter is a partner in his law firm and has been a member of the bar for twenty-five years. Pl.'s Br. Flitter Certification ¶¶ 2-3. He is responsible for litigation at his firm, and his work includes commercial litigation and consumer credit matters. Id. ¶ 2. In 2004, our courts approved his then-rate of $390 per hour in a consumer credit class action, see Ciccarone v. B.J. Marchese, Inc., No. 03-1660, 2004 WL 2966932, *8 (E.D. Pa. Dec. 22, 2004) (Shapiro, J.), and his present rate of $430.00 reflects a 5% increase from 2004. Id. ¶ 16. Lorenz is an attorney with fourteen years of experience. Pl.'s Br. Lorenz Certification ¶¶ 4-9. Each attorney has certified, under penalty of perjury, that his rate "is a fair, reasonable, market rate" for an attorney of similar experience and that the hours he worked were reasonable and necessary. Pl.'s Br. Flitter Certification ¶¶ 15, 21; Lorenz Certification ¶ 10. Michael Donovan, an attorney with twenty-two years of experience and a principal at the firm of Donovan Searles, LLC, has also certified that Flitter's and Lorenz's rates are reasonable and appropriate market rates. Pl.'s Br. Donovan Certification ¶¶ 1-2, 6-8.
Raughley and Pomerantz are legal assistants, with twenty-one and seventeen years of experience in this field, respectively. Lorenz Certification ¶¶ 20-21. The firm did not bill routine matters, such as typing and copying. Id. ¶¶ 20-21.
(v) Since Nelson has met her burden, in a statutory fee case such as this "the party opposing the fee award then has the burden to challenge, by affidavit or brief with sufficient specificity to give fee applicants notice, the reasonableness of the requested fee," Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990);
(w) Notably, our Court of Appeals has held that a "district court cannot `decrease a fee award based on factors not raised at all by the adverse party,'" id. (quoting Bell v. United Princeton Properties, Inc., 884 F.2d 720 (3d Cir. 1989));
In Bell v. United Princeton Properties, Inc., 884 F.2d 713 (3d Cir. 1989), the court resolved a dispute about the meaning of its decision in Cunningham v. City of McKeesport, 753 F.2d 262 (3d Cir. 1985). It "read Cunningham I as holding only that a court may not sua sponte reduce the amount of the award when the defendant has not specifically taken issue with the amount of time spent or the billing rate, either by filing affidavits, or, in most cases, by raising arguments with specificity and clarity in briefs (or answering motion papers)." 884 F.2d at 720. The court specified what is required of parties opposing an award of attorney's fees, an explanation we quote at some length because of its relevance here:
[T]o the extent the challenger seeks to raise a factual issue — for example, a claim that the fee applicant's billing rate was lower than claimed — he or she must introduce affidavits averring the facts upon which the challenge is based. Affidavits are required in such instances because statements made in briefs are not evidence of the facts asserted. As Cunningham I makes clear, the district court, in counsel fee litigation, can never serve as an "expert witness" and may only serve as fact witness when the facts at issue are wholly within its personal knowledge. Thus, with respect to factual issues, the court must be presented with evidence and must make findings based on the evidence.
Turning to the required level of detail, we emphasize that the adverse party's submissions cannot merely allege in general terms that the time spent was excessive. In order to be sufficient, the briefs or answers challenging the fee request must be clear in two respects. First, they must generally identify the type of work being challenged, and second, they must specifically state the adverse party's grounds for contending that the hours claimed in that area are unreasonable. The briefs must be specific and clear enough that the fee applicants have a fair chance to respond and defend their request.Id. at 720 (footnote omitted).
To be sure, the challenging party is not required to "point to each individual excessive entry," but it is required to "specify with particularity the reason for its challenge and the category (or categories) of work being challenged." Id. at 721.
Our Court of Appeals forbids sua sponte fee award reductions by district courts for two reasons. First, such reductions deprive applicants of the right to offer supporting evidence of the reasonableness of the request. See United States v. Eleven Vehicles, Their Equipment and Accessories, 200 F.3d 203, 212 (3d Cir. 2000) (citing Bell, 884 F.2d at 719). Second, statutory fee litigation is adversarial, so there is simply no need to permit district courts to reduce fee awards on their own initiative. See id.
(x) Select argues that Nelson is not entitled to attorney's fees because she is not entitled to damages and has not been awarded any relief;
(y) We have already granted Nelson full victory on the merits of her complaint and have now awarded her $1,000 in additional damages, pursuant to 15 U.S.C. § 1692k(a)(2)(A), so Select's argument is frivolous;
Nelson primarily relies on Buckhannon Bd. and Care Home, Inc. v. West Virginia Dept. of Health and Human Resources, 532 U.S. 598 (2001), and Farrar v. Hobby, 506 U.S. 103 (1992). Those cases are simply beside the point here. Buckhannon addressed the "catalyst theory," namely whether a "prevailing party" "includes a party that has failed to secure a judgment on the merits or a court-ordered consent decree, but has nonetheless achieved the desired result because the lawsuit brought about a voluntary change in the defendant's conduct." 532 U.S. at 600. The Court held that it did not. Id. The Court rejected the attempt to allow "an award of attorney's fees when the merits of the plaintiff's case remain unresolved." Id. at 617 (Scalia, J., concurring). Here, we resolved the merits in Nelson's favor when we granted her motion for summary judgment, and we have now awarded maximal damages. Buckhannon is irrelevant.
In Farrar v. Hobby, 506 U.S. 103 (1992), the Court explained that "[w]hen the plaintiff's success is purely technical or de minimis, no fees can be awarded," id. at 117 (O'Connor, J., concurring), thereby reaffirming Texas State Teachers Assn. v. Garland Independent School Dist., 489 U.S. 782, 792 (1989) ("a technical victory may be so insignificant . . . as to be insufficient to support prevailing party status"). Farrar revisited this issue to make clear that "[w]hile Garland may be read as indicating that this de minimis or technical victory exclusion is a second barrier to prevailing party status, . . . it is part of the determination of what constitutes a reasonable fee." 506 U.S. at 117 (citing Garland, 489 U.S. at 792). Thus, the Court did not introduce a new type of exclusion, but instead clarified how a court must apply the long-standing exclusion forde minimis or technical victories.
Nelson demonstrated that Select violated the FDCPA by misrepresenting the effect of her failure to respond to its first letter. Nelson's victory is therefore neither de minimis nor technical, but constitutes complete success in her FDCPA case.
Moreover, as Farrar emphasized, courts are bound by the choices Congress makes in drafting statutes. Id. at 119. The statute in question there, 42 U.S.C. § 1988, "expressly grants district courts discretion to withhold attorney's fees from prevailing parties in appropriate circumstances." Id. The statute at issue here, 18 U.S.C. § 1692k, grants no such discretion to us, as evident from its plain language and the findings in Graziano, 950 F.2d at 113. Therefore, Farrar's analysis supports our decision to award attorney's fees here.
(z) Select's brief does not challenge the attorneys' rates, their hours, nor any category of their work, see Bell, 884 F.2d at 720-21, despite our Order of April 28, 2006 that required Nelson to brief the issues of damages and attorneys fees and for Select to respond to her brief;
(aa) Nowhere in its brief does Select dispute the reasonableness of the requested fees with the specificity our jurisprudence requires, see id.;
(bb) By simply stating that an award of the requested sum would be "unreasonable" and "obscene," see Def.' Br. at unnumbered 8, Select has leveled precisely the sort of conclusory cavil thatBell disallowed, thereby failing to create any factual issues or raise any specific objections to which we might respond, see 884 F.2d at 720-21;
To illustrate why specific objections are necessary, we need only consider the analysis our courts must undertake to assess reasonable attorney's fees. We must fix the lodestar, which is the product of "the appropriate billing rate for the party's attorneys" and "the number of hours those attorneys reasonably expended on the action." Interfaith Community Organization v. Honeywell Intern., Inc., 426 F.3d 694, 703 n. 5 (3d Cir. 2005).
The only evidence we have before us concerning attorneys' rates and time is Nelson's. If Select had, for instance, challenged the requested rates by creating factual issues concerning Nelson's evidence, we would then "make findings based on the evidence."Bell, 884 F.2d at 720. But since it has not created any factual issues, if we were to make any determinations now, based solely on Nelson's evidence, we would be acting as an "expert witness," something our Court of Appeals expressly forbids. Id.
(cc) Moreover, by not challenging any particular type of work by Nelson's attorneys and then articulating grounds upon which we might find such work unreasonable, Select deprived Nelson of "a fair chance to respond and defend [her] request," id. at 720;
(dd) Select's utter failure to dispute Nelson's requested fees with the requisite specificity deprives us of the ability to exercise discretion in adjusting the fee award, see id. at 721 ("[T]he district court retains a great deal of discretion in deciding what a reasonable fee award is, so long as any reduction is based on objections actually raised by the adverse party.);see also Interfaith Community Organization v. Honeywell Intern., Inc., 426 F.3d 694, 711 (3d Cir. 2005) ("The court may not reduce an award sua sponte; rather, it can only do so in response to specific objections made by the opposing party."); and
(ee) Accordingly, we shall grant Nelson's motion for attorney's fees and costs in the requested sum of $24,693.80,
It is hereby ORDERED that:
1. Plaintiff's motion for leave to file reply is GRANTED;
2. Plaintiff's motion for damages and fees is GRANTED in the amount of $1,000.00 in statutory damages and $24,693.80 in attorney's fees and costs; and
3. The Clerk shall CLOSE this case statistically.