Claim For Excessive Attorney's Fees Denied

I ran across a recent case on the Fair Debt Collection Practices Act (FDCPA) where a consumer was successful but was not awarded attorney's fees because the amount, $130,000, was excessive and unsubstantiated. The case is interesting because it is the other side of the coin to the case I recently blogged about involving a western New York debt collection firm, Campbell Capital that used extremely aggressive and fraudulent methods of debt collection.

In Davis v. Credit Bureau of the South, the defendant debt collector was not a credit reporting agency as its name implied, but a collection agency, and since FDCPA 15 U.S.C. s. 1692e(16) explicitly prohibits a debt collector from falsely claiming is it a consumer reporting agency, the judge found the debt collector violated the law.  The violation amounted to the appearance of the name on the debt collector's stationary and reference to its name in a phone call. Ms. Davis neither alleged nor proved any actual harm resulting from the use of a prohibited name, but her attorneys correctly argued the FDCPA's mandates an award of reasonable attorney's fees.

In finding there were 'special circumstances' compelling it to find the attorney's fees request unreasonable, the court focused on:

• Ms. Davis contested a $107.23 water bill owed to the City of Shreveport, Louisiana, where she lived
• Ms. Davis falsely claimed she was a Texas resident
• she requested the debt collector send the water bill to her parents' address in Texas, thereby generating jurisdiction in Texas under a failed Texas Debt Collection Act claim
• Ms. Davis employed her attorneys prior to some of the complained of FDCPA violations
• she briefly worked for her attorneys
• at least  one call forming the basis of the suit was made in her attorney's presence and recorded by her attorneys
• it was inferrable that the extreme attorney's fee request was an aggressive 'opening bid' to garner the maximum negotiated attorney's fees amount
• her attorney's work was full of grammatical errors, formatting issues, and improper citations
• the work was of neither the quality nor the quantity (there was no trial, it was decided on summary judgment) that would support fees of $450/hour or over 250 hours of work

In the Campbell Capital case the debt collectors posed as law enforcement officers and threatened consumers with jail, along with other abusive and oppressive threats, so that case is in a different class than this one. And in Davis, the collector did violate the law, albeit without actually harming the claimant. The Davis case provides the other end of the spectrum of extreme acts in the debt collection sphere.