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Opinion Provides Insight on Attorney Fees in FDCPA Cases

November 28, 2012 | Posted in : Fee Award, Fee Jurisprudence, Fee Reduction

Federal courts routinely determine fee petitions for prevailing parties in various fee-shifting cases.  A recent opinion from Magistrate Judge Denise LaRue illustrates guiding principles here.  In M.T. v. Accounts Recovery Bureau Inc., LaRue issued a report and recommendations on fees in a Fair Debt Collection Practices Act (FDCPA) case.  Plaintiff was a prevailing party based on accepting defendant’s offer of judgment, and sought fees and costs pursuant to the act totaling $3,230.  Over objections challenging the claimed hourly rate of $250 and the reasonableness of some of the work, LaRue determined and recommended that the total award be $2,710.  That much is unremarkable, but the 13-page opinion provides a good current summary of this area of federal practice and some useful insights for plaintiff and defense alike.

First, the court explained the general standards, writing “The Supreme Court has recognized that the lodestar method – the product of a reasonable hourly rate and the number of hours reasonably expended on the litigation – yields a fee amount that is presumptively reasonable.  The Court may exercise flexibility to ‘adjust that figure to reflect various factors including the complexity of the legal issues involved, the degree of success obtained, the public interest advanced by litigation.’  The party seeking the fee award bears the burden of proving the reasonableness of the hours worked and the hourly rates claimed.”  LaRue also noted that the “Seventh Circuit recognizes that fee awards should include time that attorneys reasonably spend on fee disputes.”

Second, as the reasonableness of hourly rates, LaRue observed, “Generally, a reasonable hourly rate for an attorney is based on what the attorney charges and receives in the market from paying clients for the same type of work.  Plaintiff bears the burden of producing satisfactory evidence that the hourly rate is reasonable and in line with those prevailing in the community.  If plaintiff satisfies this burden, the opposing party must offer evidence setting forth ‘a good reason why a lower rate is essential.’”

Third, as to the reasonableness of the hours spent on the matter, LaRue went through each aspect of defense objections and recommended:

The time charged for preparation of the form complaint and for undefined “research” should be reduced;

The time charged for secretarial or clerical tasks should not be charged as attorney or paralegal time; and

The time spent in creating billing records after the fact to support a fee award is not compensable.

Finally, and notably for those on the defense side who confront this issue with insurers or corporate clients, LaRue determined that while filing matters in court is administrative time that was not compensable, e-filing is another matter.  She explained, “However, the Court views the filing of electronic documents differently.  Plaintiff points out that electronic filing requires court training and is not available to everyone.”

This article was written by John R. Maley of Barnes & Thornburg, LLP.