Spuhler et al v. State Collection Service Inc
Filing
139
DECISION AND ORDER signed by Magistrate Judge Nancy Joseph on 5/21/2019 granting in part and denying in part 129 Motion for Attorney Fees. The plaintiffs are awarded $80,000.00 in attorneys' fees. The plaintiffs' request for costs is denied without prejudice. (cc: all counsel) (llc)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
KYLE SPUHLER AND NICHOLE SPUHLER,
on behalf of themselves and all others similarly situated,
Plaintiffs,
v.
Case No. 16-CV-1149
STATE COLLECTION SERVICES, INC.,
Defendant.
DECISION AND ORDER ON PLAINTIFFS’ MOTION
FOR ATTORNEYS’ FEES AND COSTS
Kyle and Nichole Spuhler filed a single count complaint against State Collection
Services, Inc. alleging that a debt collection letter sent to them violated the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq. The Spuhlers alleged that the
letter was misleading because it (1) improperly attempted to collect interest on the debt, (2)
failed to specify which portion of the amount due was interest as opposed to principle, and
(3) failed to indicate that interest was accruing on the amount due. Summary judgment was
granted in State Collection’s favor as to the first two arguments, and, after a motion for
reconsideration was filed, summary judgment was granted in the Spuhlers’ favor as to the
third argument. The Spuhlers now seek attorneys’ fees and costs in the amount of
$210,083.45 in attorneys’ fees and $34,341.35 in costs. State Collection opposes the motion.
For the reasons below, the Spuhlers’ motion is granted in part and denied in part.
1.
Legal Standard
Under the FDCPA, a debt collector is liable 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); see
Tolentino v. Friedman, 46 F.3d 645, 651–52 (7th Cir. 1995). The general rule for calculating
attorneys’ fee awards under fee shifting statutes is applicable to attorneys’ fees awards under
the FDCPA. Gastineau v. Wright, 592 F.3d 747, 748–49 (7th Cir. 2010). The starting point
for determining reasonable attorneys’ fees is the lodestar method, which is calculated by
multiplying the number of hours reasonably expended by the reasonable hourly rate. Pickett
v. Sheridan Health Care Center, 664 F.3d 632, 639 (7th Cir. 2011) (citing Hensley v. Eckerhart,
461 U.S. 424, 433 (1983)). There is a “strong presumption that the lodestar represents the
reasonable fee.” City of Burlington v. Dague, 505 U.S. 557, 562 (1992) (internal citation
omitted); Pickett, 664 F.3d at 639. However, once the lodestar is determined, the court may
adjust the fee upward or downward based on a variety of factors, the most important of
which is the degree of success obtained. Hensley, 461 U.S. at 430 n.3, 436. The other factors
to be considered as delineated by the Supreme Court are:
(1) the time and labor required; (2) the novelty and difficulty of the question;
(3) the skill requisite to perform the legal service properly; (4) the preclusion
of employment by the attorney due to the acceptance of the case; (5) the
customary fee; (6) whether the fee is fixed or contingent; (7) any time
limitations imposed by the client or the circumstances; (8) the amount
involved and the results obtained; (9) the experience, reputation, and ability
of the plaintiff’s attorney; (10) the “undesirability” of the case; (11) the
nature and length of the professional relationship with the client; and (12)
awards in similar cases.
Tolentino, 45 F.3d at 652 (citing Hensley, 461 U.S. at 441). In sum, “[t]he standard is whether
the fees are reasonable in relation to the difficulty, stakes, and outcome of the case.”
Connolly v. Nat’l Sch. Bus Serv., Inc., 177 F.3d 593, 597 (7th Cir. 1999). The fee applicant
bears the burden of “produc[ing] satisfactory evidence—in addition to the attorney’s own
affidavits—that the requested rates are in line with those prevailing in the community.” Id.
(quoting Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984)). If the fee applicant satisfies this
burden, the burden shifts to the other party to offer evidence that sets forth “a good reason
why a lower rate is essential.” Id. (internal quotation and citations omitted).
2.
Calculation of the Lodestar
The Spuhlers seek fees for three attorneys and two support staff members.
Specifically, they request 234.1 hours at a rate of $350.00/hour (for a total of $81,935.00) for
Attorney Nathan DeLadurantey, 88.4 hours at a rate of $300.00/hour (for a total of
$26,520.00) for Attorney Heidi Miller, 212.90 hours at a rate of $450.00/hour for Attorney
Thomas J. Lyons, Jr. (for a total of $95,803.45), 5.6 hours at a rate of $125.00/hour (for a
total of $700.00) for support staff member Ethan Webb, and 41.5 hours at a rate of
$125.00/hour (for a total of $5,125.00) for legal assistant Andrea Weber. (Declaration of
Nathan E. DeLadurantey ¶¶ 19–23, Docket # 132; Declaration of Thomas J. Lyons, Jr. ¶ 7,
Docket # 131.)
2.1
Hourly Rate
While State Collection does not challenge the hourly rate for the two support staff
members (Webb and Weber), it challenges the hourly rates of the three attorneys. State
Collection argues that the Spuhlers failed to submit any evidence, besides their own
affidavits and citations to other cases, in support of the attorneys’ claimed hourly rates.
(Def.’s Br. at 12–13, Docket # 135.) The Spuhlers responded by providing the United States
Consumer Law Attorney Fee Survey Report, last updated 2015–2016, which it argues
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further supports their requested hourly rates. (Declaration of Thomas J. Lyons, Jr. ¶ 1, Ex.
1, Docket # 138-1.)
A reasonable hourly rate is:
[O]ne that is “derived from the market rate for the services rendered.” We
presume that an attorney’s actual billing rate for similar litigation is
appropriate to use as the market rate. The fee applicant bears the burden of
“produc[ing] satisfactory evidence—in addition to the attorney’s own
affidavits—that the requested rates are in line with those prevailing in the
community.”
Pickett v. Sheridan Health Care Ctr., 664 F.3d 632, 640 (7th Cir. 2011) (internal citations
omitted). The court can apply other factors to determine an appropriate rate, such as the
lawyer’s years of experience. See Houston v. C.G. Sec. Servs., Inc., 820 F.3d 855, 860 (7th Cir.
2016). The party seeking a fee award bears the burden of establishing the market rate for the
work; if the lawyers fail to carry that burden, the district court can independently determine
the appropriate rate. Montanez v. Simon, 755 F.3d 547, 553 (7th Cir. 2014).
Again, the Spuhlers state that their counsels’ billing rates are as follows:
$350.00/hour for Attorney DeLadurantey, a practitioner with approximately thirteen years
of experience; $300.00/hour for Attorney Miller, a practitioner with approximately seven
years of experience; and $450.00/hour for Attorney Lyons, a practitioner with
approximately twenty-five years of experience. (DeLadurantey Decl. ¶ 10; Declaration of
Heidi Miller, ¶ 12, Docket # 132-5; Lyons Decl. ¶ 4.) The Spuhlers argue these rates are
reasonable, citing to DeLadurantey’s declaration in which he states that his private paying
clients regularly pay him $350.00/hour and pay Attorney Miller $300.00/hour.
(DeLadurantey Decl. ¶¶ 18, 20); Lyons’ declaration in which he states that his rate of
between $400.00 to $450.00/hour has been approved by multiple courts in other districts
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(Lyons Decl. ¶ 7); and a case in this district where the court awarded Attorney Miller fees at
a rate of $300.00/hour for a default judgment (Docket # 132-5).
The Spuhlers also point to the Fee Survey, which several courts in this district have
recognized as a reliable resource in determining the reasonableness of an attorney’s hourly
rate, particularly in conjunction with consideration of counsel’s experience. See Moreland v.
Dorsey Thornton & Assocs., LLC, No. 10-CV-867, 2011 WL 1980282, *3 (E.D. Wis. May 20,
2011) (relying on counsel’s website, which lists the attorney profiles, along with the United
States Consumer Law Attorney Fee Survey in determining that the requested hourly rate
was reasonable); House v. Shapiro & Price, No. 10-CV-842, 2011 WL 1219247 (E.D. Wis.
Mar. 30, 2011) (same); Suleski v. Bryant Lafayette & Assocs., No. 09-C-960, 2010 WL 1904968
(E.D. Wis. May 10, 2010) (same). According to the Fee Survey, the median rate for
attorneys handling credit rights cases in the Milwaukee area is $350.00/hour. (Docket #
138-1 at 372.)
Approximately one year ago, a court in this district, considering the same evidence
the Spuhlers now put forward, set Attorney DeLadurantey’s reasonable rate at
$300.00/hour and Attorney Miller’s reasonable rate at $220.00/hour. Strohbehn v. Weltman
Weinberg & Reis Co. LPA, No. 16-CV-985-JPS, 2018 WL 1997989, at *4 (E.D. Wis. Apr. 27,
2018). In so doing, the court considered the fact that in May 2016, another court in this
district found an hourly rate of $300.00 for Attorney DeLadurantey and $250 for Attorney
Miller to be reasonable. Id. at *3 (citing Gagliano v. State Collection Serv., No. 14-CV-1512,
2016 WL 2853538, at *2 (E.D. Wis. May 13, 2016)). The Spuhlers attempt to distinguish
their case from Gagliano, noting that Gagliano was litigated approximately two years prior to
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this action and was not a class action. (Pl.’s Br. at 14.) While Gagliano was filed two years
prior, Strohbehn was litigated contemporaneously with the Spuhlers’ case. While Strohbehn
was also not a class action, I agree with the court’s analysis in Strohbehn that to “achieve
some level of consistency,” id. at *4, the rates awarded in Strohbehn are appropriate. Thus, I
will set Attorney DeLadurantey’s rate at $300.00/hour and set Attorney Miller’s rate at
$220.00/hour.
As for Attorney Lyons, even considering the median rate for the Minneapolis area
(where he is located), the average rate for an attorney handling credit rights cases is
$350.00/hour. (Docket # 138-1 at 280.) A Minnesota court in 2017 noted that Attorney
Lyons’ rate of $450.00/hour was above the market average for Minnesota and reduced the
rate to $350.00/hour. Kuntz v. Messerli & Kramer, No. 16-CV-2676, 2017 WL 3332222, at
*2–3 (D. Minn. Aug. 4, 2017). Given the fact Attorney Lyons is a more experienced
attorney than Attorneys DeLadurantey and Miller, I find that a reasonable rate for Attorney
Lyons is $350.00/hour.
2.2
Number of Hours Expended
Five individuals spent a total of 582.5 hours litigating this case. While the Spuhlers
agree to reduce their requested hours by 13.9 hours to account for the presence of multiple
attorneys at depositions, they otherwise contend the hours spent were reasonable. (Pls.’
Reply Br. at 8, Docket # 137.) State Collection argues that the hours expended were not
reasonable and generally fall into six impermissible categories: block billing and/or vague
entries; inter-office conferences; multiple timekeepers billing the same tasks; unnecessary
tasks performed; excessive time entries; and time billed for administrative tasks. (Def.’s Br.
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at 11–12.) State Collection proposes reducing the number of hours for DeLadurantey,
Lyons, Miller, and Weber, from 576.9 to 151.39. (Id. at 25.) State Collection does not
contest Webb’s total requested fee of $700.00. (Id. at 26.)
While the Spuhlers are entitled to an award of attorneys’ fees as the prevailing party,
State Collection “is not required to pay for hours that are ‘excessive, redundant, or
otherwise unnecessary.’” Johnson v. GDF, Inc., 668 F.3d 927, 931 (7th Cir. 2012) (quoting
Hensley, 461 U.S. at 434). Plaintiffs’ counsel are expected to exercise “billing judgment”
with respect to the hours requested, Hensley, 461 U.S. at 437, by “winnowing the hours
actually expended down to the hours reasonably expended,” Spegon v. Catholic Bishop of
Chicago, 175 F.3d 544, 552 (7th Cir. 1999) (internal quotation and citation omitted). Hours
that an attorney would not properly bill to his or her client in the private sector cannot
properly be billed to the adverse party under a fee-shifting statute like the FDCPA. Id.
2.2.1 Block Billing
State Collection contends that the Spuhlers’ counsel engaged in block billing, making
it difficult to discern the reasonableness of their fees. The Spuhlers dispute that plaintiffs’
counsel engaged in block billing. I find counsels’ time entries rife with block-billed entries.
Take, for example, Attorney Lyons’ entry on July 14, 2017. He bills 4.30 hours as follows:
Motion Practice
Class cert reply memo/drafting and call to co-counsel about plan of attack –
no limiting class definition any further. Then review the new documents bates
# 001-401. Then resarch [sic] and find new 5th cir FDCPA post spokeo case
Sayles, email to H the resaerch [sic] on spokeo cases and look for FDCPA
classes.
(Docket # 131-2 at 8.) I count six distinct tasks stated in this entry. Or Attorney Lyons’
entry on November 30, 2018 where he billed 2.66 hours as follows:
7
Review text order from Court on plaintiff’s incentive award and then do some
research and digging and then call with Nathan about the same and the 7th
Cir mediation problem what Patrick has created and then review Patrick
email re same. Then review Court’s order dated today on class notice and
class time period.
(Id. at 16.) This entry contains five distinct tasks. The problem with block-billing like this is
that it makes it nearly impossible to determine whether the amount of time spent on each
individual task was reasonable.
While I cite two of the most egregious examples of Attorney Lyons’ block billing,
Attorney Lyons’ billing entries frequently follow the format found in the following entry:
“meeting with co-counsel to review all financial documents turned over by Tax preparer and
creditors documents – then outline email for LR 37.1 to confront Defendant about missing
documents. Then discuss class cert motion with Heidi and outline areas that need more
cites.” (Entry for May 1, 2017, Docket # 131-2 at 6) (emphasis added). The word “then”
precedes a new, distinct task in many of Attorney Lyons’ billing entries. (See, e.g., entries on
8/18/2016, 10/10/2016, 11/15/2016, 11/22/2016, 12/2/2016, 12/12/2016, 1/11/2017,
3/2/2017, 4/19/2017, 5/24/2017, 7/20/2017, 11/2/2017, 11/7/2017, 8/14/2018,
8/23/2018.)
Attorney DeLadurantey also engages in block billing throughout the course of this
litigation, most notably grouping together research and writing of briefs. These are separate
tasks, and should be listed separately in order to determine whether a reasonable amount of
time was spent on the independent tasks of research and writing.
As the Spuhlers state, there “is no requirement that billing entries be limited to one
verb apiece.” In re Feggins, No. 13-11319-WRS, 2016 WL 1068976, at *10 (Bankr. M.D.
8
Ala. Mar. 17, 2016). However, when there are multiple tasks in a single entry, there is no
reasonable way to discern what time was spent on which task. There is a reason the
American Bar Association, in an article entitled “5 Billing Tips for Young Lawyers,” lists as
its second tip to “avoid block billing.”1 Block billing makes it very difficult—for a client or
the court—to discern whether a reasonable amount of time was spent on each task. Because
Attorney Lyons’ block billing does not allow for proper analysis of whether the time spent
for those entries was reasonable, I will deduct 68.3 hours from Attorney Lyons’ requested
fees based on entries containing multiple tasks. See Beach v. LVNV Funding, LLC, No. 12-CV778, 2013 WL 6048989, at *4 (E.D. Wis. Nov. 15, 2013).2 I will also reduce Attorney
DeLadurantey’s requested hours by 52 hours to account for block billing.3
2.2.2 Inter-Office Conferences, Vague Entries, and Multiple TimeKeepers/Excessive Tasks
State Collection also takes issue with the Spuhlers’ counsel billing for inter-office
conferences, vague entries, and for multiple time-keepers billing for the same tasks (or
generally billing excessively). While there is no “blanket rule according to which internal
communication time never would be reimbursed,” because such internal meetings are “not
https://www.americanbar.org/groups/litigation/committees/commercial-business/practice/2017/5-billingtips-for-young-lawyers/ (last visited May 21, 2019).
2
I deducted the following entries I found to improperly contain multiple tasks: 8/18/2016, 9/19/2016,
10/10/2016, 11/15/2016, 11/22/2016, 12/2/2016, 12/12/2016, 12/16/2016, 1/11/2017, 1/12/2017,
3/2/2017, 4/19/2017, 4/20/2017, 5/1/2017, 5/6/2017, 5/24/2017, 7/14/2017, 7/20/2017, 10/26/2017,
11/2/2017, 11/7/2017, 11/16/2017, 11/22/2017, 12/8/2017, 12/11/2017, 1/11/2018, 3/29/2018,
8/1/2018, 8/6/2018, 8/14/2018, 8/22/2018, 8/23/2018, 8/24/2018, 8/25/2018, 8/29/2018, 9/3/2018,
9/4/2018, 9/5/2018, 9/6/2018, 10/29/2018, 10/30/2018, 11/1/2018, 11/2/2018, 11/10/2018, 11/30/2018,
12/3/2018, 12/19/2018, 12/27/2018, 1/2/2019, 1/15/2019, 1/23/2019, 1/28/2019.
3
I deducted the following entries I found to improperly contain multiple tasks: 12/6/2018, 11/16/2018,
11/12/2018, 9/11/2018, 9/6/2018, 8/29/2018, 8/28/2018, 2/19/2018 (second entry), 10/28/2017 (first
entry), 7/18/2017 (second and third entries), 7/17/2017 (second entry), 5/26/2017 (second entry), 5/25/2017
(second entry), 5/23/2017 (first entry), 5/12/2017 (first entry), 5/6/2017 (second entry), 4/17/2017 (second
and third entries), 4/14/2017, 4/13/2017 (third entry), 3/21/2017 (first entry), 2/7/2017 (second entry),
1/12/2017 (second entry), 12/30/2016 (second entry), 12/27/2016, 12/9/2016 (first entry), 11/16/2016,
10/11/2016 (second entry), 10/10/2016, 10/6/2016, 10/4/2016, 8/16/2016.
1
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always the model of efficiency,” attorneys seeking reimbursement for internal meetings
“should identify explicitly the subject matter of their discussions so that we may assess
whether the amount of time recorded was ‘reasonably expended.’” Tchemkou v. Mukasey,
517 F.3d 506, 511 (7th Cir. 2008). The most glaring issue with the billing for the inter-office
meetings is that there are frequent discrepancies between the attorneys as to the meetings
held. For example, Attorney Lyons billed 1.30 hours for meeting with Attorney
DeLadurantey on February 27, 2017 in his office about a discovery plan (Docket # 131-2 at
5) whereas Attorney DeLadurantey billed 1.00 hour for the same meeting (Docket # 132-2
at 37). More confusingly, however, are multiple instances where Attorney Lyons billed for
communication with “co-counsel,” but no such entry appears on either Attorney
DeLadurantey or Attorney Miller’s time sheets. (8/18/2016, 9/19/2016.) Further, many of
counsels’ entries are vague (for example, Attorney DeLadurantey has many entries for calls
or emails with co-counsel regarding “discussion of case” with no further explanation).
Beyond the conclusory assertion that counsels’ time spent conferring amongst
themselves developed a legal strategy that “ultimately won this case” (Pls.’ Reply Br. at 8,
Docket # 137), they do not identify explicitly the subject matter of their discussions. See
Tchemkou, 517 F.3d at 511. I will deduct 8 hours from Attorney Miller and 14.9 hours from
Attorney DeLadurantey for inter-office communication that appears duplicative or vague.4
4
I struck Attorney Miller’s entries on 8/19/2016, 9/16/2016, 10/10/2016, 12/7/2016, 12/8/2016, 12/13/2016,
12/27/2016, 2/23/2017, 2/27/2017, 3/2/2017, 30/20/2017, 4/10/2017, 4/17/2017, 4/19/2017, 5/1/2017, 6/5/2017,
6/14/2017, 6/22/2017, 7/20/2017, 8/23/2017 and Attorney DeLadurantey’s on 2/5/2019, 12/17/2018, 11/30/2018,
11/27/2018, 11/16/2018, 11/5/2018, 10/30/2018, 10/15/2018, 9/27/2018, 9/11/2018, 9/7/2018, 9/6/2018, 9/5/2018,
9/4/2018, 8/28/2018, 8/27/2018, 8/24/2018, 8/23/2018, 8/20/2018, 8/9/2018, 8/9/2018, 8/8/2018, 8/2/2018,
3/12/2018, 12/18/2017, 12/11/2017, 11/2/2017, 11/1/2017, 10/31/2017, 6/7/2017, 5/26/2017, 5/25/2017, 5/24/2017,
5/23/2017, 5/22/2017, 5/19/2017, 5/17/2017, 5/8/2017, 5/6/2017, 5/5/2017, 4/28/2017, 4/25/2017, 4/20/2017,
2/27/2017, 2/1/2017, 1/25/2017, 12/6/2016, 9/21/2016.
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Regarding the use of multiple time-keepers billing or generally billing excessively, I
agree that it was unnecessary for two to three attorneys to participate in the preparation and
attendance of the depositions taken in this case. Attorney Lyons either took or defended the
depositions, so he can bill for his time. I will deduct 11 hours from Attorney Miller’s time
and 27.2 hours from Attorney DeLadurantey’s time for preparation and attendance at the
depositions. State Collection also generally argues that counsel spent an excessive amount
of time researching and briefing in this matter and points out various other entries it believes
are excessive. (Declaration of Patrick D. Newman, ¶ 4, Ex. C, Docket # 136-3.) For
example, Attorney Lyons spent 1.01 hours finding a single case on February 1, 2017 and
Attorney DeLadurantey spent 1.5 hours researching legal issues for the fee petition on
January 28, 2019. State Collection’s argument is well placed as to the few specific instances
of excessive billing it points out in its exhibit; however, given that many of the entries were
already struck because of block billing, I will not further strike the few entries that appear
excessive.
State Collection also argues that Attorney Lyons’ paralegal, Weber, billed excessive
amounts of time for speaking with class members. (Def.’s Br. at 24.) More concerning than
the amount of time spent, the billing entries are vague. For example, on December 14, 2018,
Weber billed one hour for ten phone calls “explaining notice and what it is.” (Docket # 1312.) Was each telephone call six minutes long? Or on December 21, 2018, she billed 12 hours
for “answering class member calls” during the preceding week. (Id.) How many calls did she
answer? How long was each call? What was the nature of the calls? These entries are vague
and will be struck. As such, I will deduct 41 hours of Weber’s time.
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2.2.3 Administrative Tasks
Finally, State Collection argues that counsel improperly billed attorney time for
administrative tasks. The Seventh Circuit has recognized that certain tasks, such as updating
a case list or calendar, constitute administrative, clerical, or secretarial tasks for which the
attorney is not entitled to fees. Spegon, 175 F.3d at 553. A court in this district also found
that tasks such as opening a file, making entries in the system, creating a client file, checking
filing information, preparing correspondence to the process server, or updating the service
chart are administrative tasks for which the attorney is not entitled to fees. Walker v. United
Financial Service, No. 10-C-180, 2010 WL 4942008, *2 (E.D. Wis. Nov. 30, 2010). Although
State Collection does point to a few entries that do indeed seem administrative (such as
Attorney DeLadurantey’s entry for .1 hours on November 20, 2017 for locating a filed claim
and e-mailing it to co-counsel), because many of the entries have been otherwise stricken
due to improper block billing and given that this was not a pervasive issue, I will not further
deduct for administrative tasks.
2.3
The Lodestar
Thus, the lodestar is calculated as follows:
Time Keeper
Attorney
DeLadurantey
Attorney Miller
Hours Requested
234.1
Hours Awarded
140
Reasonable Rate
$300/hour
Total
$42,000.00
88.4
69.4
$220/hour
$15,268.00
Attorney Lyons
212.9
144.6
$350/hour
$50,610.00
Ms. Weber
41.5
.5
$125/hour
$62.50
Mr. Webb
5.6
5.6
$125/hour
$700.00
Total
$108,640.50
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3.
Adjustment of the Lodestar
While there is a strong presumption that the lodestar represents the reasonable fee,
Dague, 505 U.S. at 562, once the lodestar is determined, the court may still adjust the fee
upward or downward based on the Hensley factors listed earlier. The Supreme Court has
cautioned that a request for attorneys’ fees should not result in a second major litigation.
Hensley, 461 U.S. at 437. However, the reason an attorneys’ fee award is reviewed under a
“highly deferential” standard is because the district court is in the best position to evaluate
an attorney’s merit in determining a reasonable fee, having presided over the action. See
Gastineau v. Wright, 592 F.3d 747, 748 (7th Cir. 2010). This case is a relatively
straightforward, run-of-the-mill FDCPA case. The amended complaint has a single cause of
action, alleging that a debt collection letter violated the FDCPA by failing to disclose the
accrual of interest, by failing to delineate which part of the balance due was principle versus
interest, and by improperly charging pre-judgment interest. (Docket # 18.) The amended
complaint was a class action complaint, and briefing was completed on a motion to certify
class, which was granted on October 26, 2017. (Docket # 74.) While the class certification
briefing raised a standing issue pursuant to Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016)—
which at the time of briefing was a newer case—the briefing did not otherwise present
overly unique or complicated issues. While the parties ran into some discovery disputes,
with the Spuhlers filing two motions to compel in order to ascertain the names of specific
consumers to determine whether certain consumers received multiple collection letters, thus
diminishing the potential class size, State Collection conceded that the numerosity predicate
13
was satisfied. (Docket # 74 at 8.) Thus, this discovery litigation early on became much ado
about nothing.
Where this case became complicated, however, was with a summary judgment
process that became a procedural quagmire. State Collection moved for summary judgment
dismissing the Spuhlers’ amended complaint (Docket # 59), and the Spuhlers opposed the
motion (Docket # 78). The Spuhlers’ first two arguments were easily disposed of. I found
that prejudgment interest pursuant to Wis. Stat. § 138.04 is available as a matter of law in
Wisconsin on fixed and determinable claims, or where there is a reasonably certain standard
for measuring damages. Sgrignoli v. Paskin & Oberwetter Law Offices, Ltd., 96-C-841, 1997 U.S.
Dist. LEXIS 24380, at *10–11 (W.D. Wis. Jan. 29, 1997) (citing Weyenberg Shoe Mfg. Co. v.
Seidl, 140 Wis. 2d 373, 389, 410 N.W.2d 604 (Ct. App. 1987)). (Docket # 84 at 5–8.) While
the parties’ summary judgment briefing was pending, the Seventh Circuit decided Aker v.
Americollect, Inc., 854 F.3d 397, 400 (7th Cir. 2017), in which it found that “neither state nor
federal law forbids dunning letters that demand 5% interest from debtors in Wisconsin.” I
also quickly disposed of the Spuhlers’ argument regarding State Collection failing to break
out principle and interest, as the Seventh Circuit’s decision in Hahn v. Triumph Partnerships
LLC, 557 F.3d 755, 757 (7th Cir. 2009) clearly states that a debt collector need not break out
principle and interest. (Docket # 84 at 9–11.)
The gravamen of the Spuhlers’ argument was that the letter violated §§ 1692e and
1692f by failing to disclose the fact that interest was accruing on the account. Neither party,
however, properly cited or argued the “three category” framework articulated by the
Seventh Circuit in Janetos v. Fulton Friedman & Gullace, LLP, 825 F.3d 317, 322–23 (7th Cir.
14
2016) and I failed to address the issue under this standard. I initially denied State
Collection’s summary judgment motion as to this issue, finding that the Spuhlers created a
triable issue of fact as to whether the collection letter was confusing or unclear on its face.
State Collection moved for reconsideration, and the Spuhlers effectively attempted to
belatedly move for summary judgment in their favor through a surreply to the
reconsideration motion. (Docket # 102 at 12.) Upon reconsideration, with the proper three
category framework before me, I sua sponte granted summary judgment in the Spuhlers’
favor. (Id. at 12–13.) The errors made during the summary judgment proceedings caused
State Collection to file an appeal, which was ultimately dismissed for lack of jurisdiction.
(Docket # 117.) Thus, the litigation is this case was complicated based on the failure of both
parties and the court to properly analyze the issue under the “three category” framework in
the first instance. Given that fault does not lie solely with the plaintiffs, I do not find this
justifies a downward adjustment.
Nor do I find a downward adjustment warranted based on the degree of success on
the merits. The Spuhlers raised a single cause of action in their amended complaint, arguing
three distinct ways State Collection violated the FDCPA. The Spuhlers argue that because
the three issues are not distinct in all respects and are interrelated and intertwined, they
cannot be excised. (Pls.’ Reply Br. at 10.) A downward adjustment is not warranted for
unsuccessful claims that are based on interrelated and intertwined theories. See Hensley, 461
U.S. at 434–37, 440. This case is unique because two of the theories raised by the
Spuhlers—(1) that State Collection was not entitled to collect prejudgment interest and (2)
that State Collection needed to break out interest from principle—are matters of relatively
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settled law. Wisconsin law allows prejudgment interest, Aker, 854 F.3d at 400, and the
Seventh Circuit in Hahn states that a debt collector may give the “bottom line” without
breaking out principle and interest, Hahn, 557 F.3d at 757. Thus, a reasonable argument
could be made that a downward adjustment is warranted on that basis. However, given that
Hensley provides that merely raising different theories of violation of the FDCPA (only one
of which was successful) based on the same core facts should not warrant a downward
reduction simply because the court did not adopt each contention raised, see id. at 440, I will
not reduce the lodestar on this basis.
I do find, however, that a downward adjustment is warranted based on the
experience, reputation, and ability of the plaintiffs’ attorneys. While the Spuhlers’ argument
regarding State Collection’s failure to alert them that interest was accruing was clearly a
colorable argument based on the Seventh Circuit case law, but see Bazile v. Fin. Sys. of Green
Bay, Inc., No. 18-CV-1415, 2019 WL 652421 (E.D. Wis. Feb. 15, 2019) (finding the FDCPA
does not require debt collector to inform debtor whether the balance due is or is not
accruing interest), the other two arguments were less so. Given that Attorneys Lyons and
DeLadurantey are experienced attorneys specializing in creditor rights litigation and even
accounting for the procedural twists in this case, it should not have taken them over
$200,000.00 to litigate this FDCPA case. I find that a downward adjustment is warranted
given counsels’ experience, the nature of this litigation, and the arguments made.
Accordingly, I will award $80,000.00 in attorneys’ fees.
Awarding fees in the amount of $80,000.00 is also more aligned with awards in other
FDCPA cases, another Hensley factor to consider. As surveyed by two courts in this district,
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relatively straightforward FDCPA cases proceeding through trial produce awarded
attorneys’ fees ranging from $5,827.50 on the low end to $81,569.97 on the high end. See
Gagliano, 2016 WL 2853538, at *2–6; Strohbehn, 2018 WL 1997989, at *4–7. Awards in the
$40,000.00 to $60,000.00 range were most common. See id. While this case was a class
action and thus undoubtedly created more work for the attorneys, it did not proceed to trial
and was decided on summary judgment. However, as detailed above, the case had
complications that also created more work for the plaintiffs, though the exact amount is
difficult to quantify. For these reasons, plaintiffs are awarded $80,000.00 in attorneys’ fees.
4.
Costs
The Spuhlers also seek costs in the amount of $34,341.35. While the court can assess
costs in the first instance, 28 U.S.C. § 1920; Fed. R. Civ. P. 54(d)(1), it is the practice in this
district to first seek relief from the Clerk of Court pursuant to Civil L.R. 54 (E.D. Wis.). See
Strohbehn, 2018 WL 1997989, at *7. Should the parties seek review of the Clerk of Court’s
determination, they may do so pursuant to Civil L.R. 54(c).
ORDER
NOW, THEREFORE, IT IS HEREBY ORDERED that the plaintiffs’ motion for
attorneys’ fees and costs (Docket # 129) is GRANTED IN PART AND DENIED IN
PART. The plaintiffs are awarded $80,000.00 in attorneys’ fees. The plaintiffs’ request for
costs is denied without prejudice.
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Dated at Milwaukee, Wisconsin this 21st day of May, 2019.
BY THE COURT:
s/Nancy Joseph
NANCY JOSEPH
United States Magistrate Judge
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