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Davis v. Credit Bureau of South

United States Court of Appeals, Fifth Circuit

November 16, 2018

CRYSTAL DAVIS, Plaintiff - Appellant
v.
CREDIT BUREAU OF THE SOUTH, Defendant-Appellee

          Appeal from the United States District Court for the Eastern District of Texas

          Before STEWART, Chief Judge, and JONES and ENGELHARDT, Circuit Judges.

          PER CURIAM.

         Crystal Davis appeals the district court's denial of her motion for attorney's fees, arguing that an award of reasonable attorney's fees is mandatory for a successful action under the Fair Debt Collection Practices Act. Based on the outrageous facts in this case and the conduct of Davis' attorneys, we AFFIRM.

         Facts and Proceedings

         Appellant Crystal Davis (Davis) filed a complaint in the Eastern District of Texas alleging that Credit Bureau of the South (CBOTS), a debt collector, violated the Fair Debt Collection Practices Act (FDCPA)[1] and the Texas Debt Collection Act (TDCA)[2] by using the words "credit bureau" in its name, misrepresenting itself as a credit bureau in an attempt to collect a debt. Davis identified two incidents when CBOTS allegedly attempted to unlawfully collect the debt at issue-a 2013 water bill in the amount of $107.29 Davis owed to the City of Shreveport. First, Davis alleged that on August 18, 2015, CBOTS mailed her a collection letter on letterhead "that clearly stated 'Credit Bureau of the South, Inc.'" The second violation Davis alleged involved a recorded phone call she made to CBOTS on September 22, 2015, during which Davis claims CBOTS misrepresented itself as a credit bureau in its collection efforts.

         The parties filed cross motions for summary judgment.[3] Following a hearing, the magistrate judge concluded in his Report and Recommendation that "summary judgment evidence establishes that Defendant engaged in debt collection activities while using the term 'credit bureau' in its name, even though it ceased to be a consumer reporting agency years ago." Relying on McKenzie v. E.A. Uffman & Assocs., Inc., 119 F.3d 358 (5th Cir. 1997), the magistrate judge found that these facts "constitute the false representation or implication that [CBOTS] is a consumer reporting agency in violation of the FDCPA," and recommended that Davis be awarded $1, 000 in statutory damages. Accepting the magistrate judge's recommendation and finding that CBOTS violated section 1692e(16) of the FDCPA, the district court granted summary judgment, in part, in favor of Davis and awarded her statutory damages of $1, 000.[4] The district court rejected all other claims.[5]

         Davis filed a subsequent opposed motion for attorney's fees in the amount of $130, 410, pursuant to 15 U.S.C. § 1692k(a)(3).[6] The motion was referred to the magistrate judge, who denied Davis' motion for attorney's fees, finding that the case involved special circumstances that would render an award of attorney's fees unjust:

It appears that this cause of action was created by counsel for the purpose of generating, in counsel's own words, an "incredibly high" fee request. While Defendant has been found to have committed a violation of the FDCPA, which ordinarily justifies an award of fees as a disincentive to future similar conduct, the Court is even more concerned about disincentivizing the conduct of Plaintiff's counsel.

         As further support of his decision, the magistrate judge discussed, inter alia, that the collusion between Davis and her counsel essentially created her claim. Additionally, the magistrate judge explained that the court was "stunned" by Davis' request for $130, 000 in attorney's fees, noting that there were substantial duplicative and excessive fees charged by Plaintiff's multiple counsel; the case was simple with a Fifth Circuit case on point and was disposed of on summary judgment; and the number of hours (nearly 300 hours), as well as the hourly rate of $450 demanded by Plaintiff's counsel, was "excessive by orders of magnitude."

         Davis objected to the magistrate judge's denial of attorney's fees, contending that given the favorable summary judgment ruling and the plain language of the statute, an award of attorney's fees is mandatory. Thus, Davis argued that the magistrate judge erred in denying her mandatory attorney's fees and that his reasoning was flawed. Without providing further written reasons, the district judge overruled Davis' objections to the magistrate judge's denial of attorney's fees, adopting the order as its final judgment. Davis timely appealed.

         Standard of Review

         We review the district court's denial of attorney's fees for abuse of discretion. Sw. Bell Tel. Co. v. City of El Paso, 346 F.3d 541, 550 (5th Cir. 2003). "In evaluating whether the district court abused its discretion to award attorney's fees, this Court reviews the factual findings supporting the grant or denial of attorney's fees for clear error and the conclusions of law underlying the award de novo." Dearmore v. City of Garland, 519 F.3d 517, 520 (5th Cir. 2008) (citing Energy Mgmt. Corp. v. City of Shreveport, 467 F.3d 471, 482 (5th Cir. 2006)). "A district court abuses its discretion if it bases its decision on an erroneous view of the law or on a clearly erroneous assessment of the evidence." CenterPoint Energy Hous. Elec. LLC v. Harris Cnty. Toll Rd. Auth., 436 F.3d 541, 550 (5th Cir. 2006) (quoting Ross v. Marshall, 426 F.3d 745, 763 (5th Cir. 2005)).

         Discussion

         According to the FDCPA, "[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. Specifically, the Act prohibits the "false representation or implication that a debt collector operates or is employed by a consumer reporting agency . . . ." 15 U.S.C. § 1692e(16). The FDCPA's fee-shifting provision provides that any debt collector who fails to comply "is liable . . . in the case of any successful [FDCPA] action . . . [for] the costs of the action, together with a reasonable attorney's fee as determined by the court." 15 U.S.C. § 1692k(a)(3) (emphasis added). This provision evidences Congress' intent to enforce the FDCPA through a "private attorney general" approach. See Graziano v. Harrison, 950 F.2d 107, 113 (3d Cir. 1991).

         Based on the plain language of the statute, a debt collector who fails to comply with the FDCPA "is liable" for reasonable attorney's fees, which suggests that district courts are denied the discretion to determine whether or not attorney's fees are appropriate. Several circuits have held that the award of attorney's fees to a successful plaintiff in an FDCPA action is mandatory. See, e.g., Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015, 1032 (9th Cir. 2012); Zagorski v. Midwest Billing Servs., Inc.,128 F.3d 1164 (7th Cir. 1997); Emanuel v. Am. Credit Exch., 870 F.2d 805, 809 (2d Cir. 1989). Thus, these courts have found it ...


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