COHEN v. AMERICAN CREDIT BUREAU, INC.
Filing
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MEMORANDUM OPINION ORDER ADOPTING REPORT AND RECOMMENDATIONS ***CIVIL CASE TERMINATED. Signed by Judge William J. Martini on 5/29/12. (gh, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
Civ. No. 10-CV-5112 (WJM)
MIRIAM COHEN,
Plaintiff,
MEMORANDUM
OPINION & ORDER
v.
AMERICAN CREDIT BUREAU, INC.,
Defendant.
THIS MATTER comes before the Court on the March 13, 2012 Report and
Recommendation by United States Magistrate Judge Mark Falk (the “R&R”)
regarding Plaintiff’s counsel’s application for attorney’s fees pursuant to the Fair
Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (the “FDCPA”). ECF No.
32; Cohen v. American Credit Bureau, Inc., No. 10-5112, 2012 WL 847429
(D.N.J. Mar. 13, 2012). The R&R recommended a substantial reduction in the fee
award. Pursuant to Local Civil Rule 72.1(c)(2), the parties received copies of the
R&R and were given fourteen days to submit objections and responses. Defendant
did not file an objection. Plaintiff, however, objected vigorously. Because the R&R
provides a thorough recounting of the factual and procedural history of this case,
this Court need not revisit those facts here and will instead plunge directly into
Plaintiff’s objections.
Local Civil Rule 72.1 governs review of a Magistrate Judge’s Report and
Recommendation and objections thereto. The rule provides that the Court “shall
make a de novo determination of those portions to which objection is made and
may accept, reject, or modify, in whole or in part, the findings or recommendations
made by the Magistrate Judge.” L. Civ. R. 72.1(c)(2). In conducting its review, the
Court “may consider the record developed before the Magistrate Judge, [and make
its] own determination on the basis of that record.” Id.; see also State Farm Indem.
v. Fornaro, 227 F.Supp. 2d 229, 231 (D.N.J. 2002).
First, Plaintiff objects to Judge Falk’s finding that Plaintiff was to blame for
the length of the litigation. Plaintiff insists that the blame should be laid properly
on Defendant, as Defendant’s counsel did not act promptly in serving a formal
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Offer of Judgment pursuant to Federal Rule of Civil Procedure 68. But the Court
has reviewed the R&R de novo on this point and accepts Judge Falk’s finding for
several reasons. Judge Falk correctly recognizes that while it may have been a
technical or tactical mistake on the part of Defendant to delay in serving the Offer
of Judgment, the fact remains that Defendant had made an offer of settlement but
Plaintiff had not yet accepted it. This offer of settlement was substantially the same
as the offer that Plaintiff eventually accepted after waiting several months and
accruing tens of thousands of dollars in additional legal fees. And Judge Falk
correctly recognizes that Plaintiff’s novel and extravagant legal theory prolonged
the litigation and undercut attempts to settle. Plaintiff threatened to bring ten
separate lawsuits all based on one telephone call involving one debt. Plaintiff
rejected multiple settlement offers for months while pursuing this unsupported
legal theory that it ultimately abandoned. On this record, the Court finds that
Plaintiff bears responsibility for prolonging the litigation, and thus, Judge Falk was
correct to consider that burden in recommending a reduced fee award.
Second, Plaintiff objects to Judge Falk’s finding that Plaintiff acted in bad
faith because her legal theory regarding the propriety of successive lawsuits was
unsupported and unreasonable. For the sake of clarity, the Court notes that
Plaintiff’s objection misconstrues the R&R. The R&R specifically finds that
Plaintiff’s “threat of successive lawsuits borders on bad faith” not that Plaintiff
actually acted in bad faith. And this Court’s de novo review of the record leads it to
the conclusion that that Judge Falk’s finding is correct. While Plaintiff eventually
did cite some case law, those cases do not remotely support her position.1 And
Plaintiff’s position runs contrary to well-established law, as the thorough legal
analysis in the R&R reveals. More importantly, she ultimately abandoned her
threat for successive litigation once she had accrued a large amount of attorney’s
fees. For these reasons, the Court agrees with Judge Falk’s finding that Plaintiff’s
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Goins v. JBC & Assocs., P.C., 352 Supp. 2d 262 (D. Conn. 2005), only stands for the proposition that the doctrine
of claim preclusion does not prevent a plaintiff from filing a separate lawsuit for a new FDCPA violation that occurs
after the filing of an earlier action against the same defendant for a different FDCPA violation. See id. at 266-67.
Harper v. Better Business Servs., Inc., 961 F.2d 1561 (11th Cir. 1992), only stands for the straightforward
proposition that under subsection 1692k(a)(2)(A), statutory damages in an FDCPA case are limited to $1,000 per
action even where the action might prove or allege multiple violations. Id. at 1563. The remaining district court
cases Plaintiff cites are in accord with Harper, and not one supports Plaintiff’s contention that she can circumvent
the plain language of subsection 1692k(a)(2)(A) by filing multiple lawsuits all arising from the same set of
circumstances. Even Judge Nathanial Jones’s dissent in Wright v. Fin. Serv. Of Norwalk, Inc., 22 F.3d 647 (6th Cir.
1994), which Plaintiff cites, provides no support for her position. Judge Jones only disagrees with the majority
opinion that the $1,000 limit should apply to each action and instead argues that courts should interpret the limit as
applying per violation in order to prevent unscrupulous debt collectors from continuing to engage in abusive
practices against the same debtor once they have committed the first violation. Id. at 652-53. Judge Jones’s
reasoning assumes that Plaintiff’s position is incorrect; if not, his concerns about abusive practices would be
unfounded because the debtor could discourage further violations by filing a new action for each one.
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novel legal theory was little more than a litigation tactic that multiplied the
proceedings and unnecessarily increased Plaintiff’s attorney’s fees.
Finally, Plaintiff objects to Judge Falk’s findings regarding the level of
success Plaintiff achieved. But this Court’s de novo review of the R&R again
compels the conclusion that Judge Falk’s findings were correct. Judge Falk
reduced the fee, in part, because Plaintiff was unsuccessful in pressing her legal
theory regarding the propriety of successive lawsuits and unsuccessful in her
request for actual damages. Plaintiff claims that these reductions were improper
because Plaint was ultimately successful on her claim for statutory damages, and
she cites both Hensley v. Eckerhart, 461 U.S. 424 (1983), and Texas State
Teachers Ass’n v. Garland School Dist., 489 U.S. 782 (1989), as standing for the
principle that success on any significant issue in the litigation forecloses a
reduction in the awarded fees. But Plaintiff misconstrues the holdings of both
Hensley and Texas State Teachers. Plaintiff selectively quotes Hensley as holding
that “the fee award should not be reduced simply because the plaintiff failed to
prevail on every contention raised in the lawsuit.” 461 U.S. at 435. The true
holding of Hensley is far less broad than Plaintiff pretends it to be, as revealed by
review of the full passage Plaintiff quotes:
Where a plaintiff has obtained excellent results, his attorney should recover
a fully compensatory fee. Normally this will encompass all hours
reasonably expended on the litigation, and indeed in some cases of
exceptional success an enhanced award may be justified. In these
circumstances the fee award should not be reduced simply because the
plaintiff failed to prevail on every contention raised in the lawsuit. Litigants
in good faith may raise alternative legal grounds for a desired outcome, and
the court’s rejection of or failure to reach certain grounds is not a sufficient
reason for reducing a fee. The result is what matters.
Id. (citation omitted). This is a far cry from Plaintiff’s claim that a court may not
reduce an attorney’s fees if the client obtained any significant success whatsoever.
This passage from Hensley cautions district courts not to penalize attorneys who
pled several claims in the alternative merely because they were not successful on
all of their alternative claims. Hensley also holds that in cases “the district court
should focus on the significance of the overall relief obtained by the plaintiff in
relation to the hours reasonably expended on the litigation.” Id. As the R&R
reflects, Judge Falk applied Hensley correctly and faithfully by focusing on the
final result and overall relief Plaintiff’s counsel obtained. Texas State Teacher also
supports Judge Falk’s recommendation, as it recognizes that a district court may
consider the degree of a plaintiff’s success in fixing the amount of fees to award.
See 489 U.S. at 790 (holding that under Hensley “the degree of the plaintiff’s
success in relation to the other goals of the lawsuit is a factor critical to the
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determination of the size of a reasonable fee.”). Thus, it was not only correct but
necessary for Judge Falk to consider Plaintiff’s overall success in determining the
reasonableness of the fee award.
In addition to the de novo review discussed above, the Court has reviewed
the R&R in its entirety and finds it to be thorough, well-reasoned, and correct in all
aspects.
For the foregoing reasons, and good cause appearing,
IT IS on this 29th day of May 2012, hereby,
ORDERED that the R&R is adopted as the Opinion of this Court; and it is
further
ORDERED that Plaintiff’s application for fees is GRANTED IN PART
AND DENIED IN PART; and it is further
ORDERED that Plaintiff is awarded $1,046.75 in attorney’s fees and
$453.00 in costs for a total award of $1,499.75.
/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.
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