In a decision that will affect some attorneys’ willingness to prosecute Fair Debt Collection Practices Act ("FDCPA") claims, the Eleventh Circuit recently affirmed a drastic reduction in attorneys’ fees in a successful FDCPA case. In Hepsen v. J.C. Christensen & Assocs., Inc., No. 10-12231, 2010 WL 3329836 (11th Cir. Aug. 25, 2010), the court affirmed a magistrate judge’s decision to cut the plaintiff’s attorneys requested fees from $54,000 to $22,000.
After a one day trial, the trial court awarded the plaintiff $500 in statutory damages after finding that the defendant violated the FDCPA. The plaintiff’s attorney then filed a motion for attorney’s fees of $54,273.50 based on 165.6 hours at $350 per hour. The magistrate judge found that the time entries were excessive, vague, and that billing for co-counsel’s services was unnecessary. The trial court also lowered the billable rate to $300 because the case was a routine and straight-forward. Accordingly, the trial court determined the lodestar amount to be $25,153.50.
The magistrate then lowered the fees an additional 10% because of the plaintiff’s limited success. The plaintiff sought $1,000 in statutory damages, $2,500 in actual damages, and unspecified punitive damages, but only recovered $500 in statutory damages. The plaintiff’s attorney was awarded a total of $22,638.15 that was affirmed as reasonable by the Eleventh Circuit.
This result will cause attorneys to hesitate before prosecuting an FDCPA claim. With generally limited damages at stake, such as in the Hepsen case, many attorneys rely on receiving their fees through a court order. Nevertheless, courts must also protect defendants from unreasonable rates and excessive billing.