Civil Litigation, Bankruptcy, and Administrative Law

Lodestar Method Not Necessarily Applicable to an Award of Attorney’s Fees Under the FDCPA

A recent unpublished per curiam decision by the Fourth Circuit Court of Appeals serves as a reminder that the FDCPA does not require an attorney fee award under the lodestar method.  See Randle v. H&P Capital, Incorporated, et al., 2013 U.S. App. LEXIS 4506 (4th Cir. 2013).  In this case, the Defendants settled with the Plaintiff agreeing to pay $6,000 in full and final settlement of all of Plaintiff’s claims as well as attorney’s fees.  Plaintiff subsequently submitted a request for attorney’s fees and costs exceeding $89,000.  While the District Court sustained Defendants’ objection to $9,090 of fees reported by one of Plaintiff’s attorneys, it awarded Plaintiff $76,876.59 in attorney’s fees and costs.

On appeal, the Fourth Circuit Court of Appeals, recognizing a district court’s broad discretion to award attorney’s fees under the twelve factors first set forth in Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974) and adopted by the Fourth Circuit in Barber v. Kimbrell’s, Inc., 577 F.2d 216, 226 (4th Cir. 1978), affirmed the award of $76,876.59.  The twelve factors contemplated by Barber include, among others, “the time and labor required, the difficulty of the issues litigated, customary fees in similar situations, and the results obtained.”  While these factors are typically included in the calculation of reasonable fees, the Court, citing Blum v. Stenson, 465 U.S. 886, 897 (1984) noted that the FDCPA “does not mandate a fee in the lodestar amount.”  Instead, the District Court has discretion to depart from the lodestar amount in appropriate circumstances.  Accordingly, the Court of Appeals rejected the Defendant’s argument that the District Court abused its discretion by failing to account for the Plaintiff’s lack of success on her class claims and efforts to obtain non-monetary relief.

This decision serves as an important reminder of the significant amount of deference given to awards of attorney’s fees by a district court in FDCPA claims as well as the need to consider this discretion as a possibly significant factor when settling such claims.

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