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Clark v. Capital Credit & Collection Services

June 11, 2008


The opinion of the court was delivered by: John Jelderks U.S. Magistrate Judge


Plaintiffs Linda Clark and Jerry Clark seek an award of attorney's fees in the amount of $192,567.50 and costs in the amount of $5,720.01 from defendants Capital Credit & Collection Services, Inc. (Capital Credit); Janine Brumley, an employee of Capital Credit (collectively "Capital Credit defendants"); and Jeffrey Hasson.*fn1


The background to this action is fully set out in an Opinion and Order filed by this court, Clark v. Capital Credit, CV 03-340 (D. Or. Jan. 4, 2004), and in a decision by the Ninth Circuit Court of Appeals, Clark v. Capital Credit, 460 F.3d 1162 (9th Cir. 2006). I will therefore review the background only briefly here.

Plaintiffs filed this action in March, 2003, alleging that defendants had violated various provisions of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et seq., and the Oregon Unfair Debt Collection Practices Act (UDCPA), O.R.S. § 646.639 et seq. On their federal claim, plaintiffs sought recovery of $150,000 in general damages, recovery of the "actual damages," and statutory damages in the amount of $1,000 from each defendant for each plaintiff. On their state claim, plaintiffs sought recovery of their actual damages, or, in the alternative, $200 from each defendant. Plaintiffs sought punitive damages on the state claim, and sought recovery of attorney's fees and costs under both claims.

In an Opinion and Order filed on January 23, 2004, I denied plaintiffs' motion for partial summary judgment, granted defendant Hasson's motion for summary judgment, and granted the Capital Credit defendants' motion for summary judgment as to most of plaintiffs' claims. I denied the Capital Credit defendants' motion for summary judgment on plaintiffs' claim that was based upon a telephone call defendant Brumley made to Ms. Clark on July 30, 2002. Though I concluded that plaintiffs had waived objection to the call itself because Ms. Clark had telephoned defendant Hasson's office seeking additional information, I concluded that material issues of fact existed as to the scope and nature of defendant Brumley's communication with Ms. Clark during the call.

On February 10, 2004, before the remaining issue was tried, plaintiffs filed a notice of appeal of this decision to the Ninth Circuit Court of Appeals. On February 23, 2004, after plaintiffs' counsel had expended 21.8 hours of work on the appeal, plaintiffs moved to dismiss the appeal. I granted the motion. Plaintiffs now assert that they were required "to resolve the residual claim at trial as a predicate to appeal" because defendants would not "accept[] appeal without trial of the residual claim. . . ." Plaintiffs' memorandum in support of motion for attorney's fees at 7. They further assert that the "first appeal sought to avoid trial of the residual issue for which defendants now dispute liability." Plaintiffs' reply memo in support of motion for attorney's fees at 6.

Plaintiffs' remaining claim was tried in a three-day jury trial that concluded with a defense verdict on May 28, 2004. A judgment and amended judgment were subsequently entered in defendants' favor, and costs in the amount of $1,794.50 were awarded in defendants' favor. Defendants' motion to recover attorney's fees was denied.

Plaintiffs appealed, and defendants cross-appealed. Plaintiffs appealed the rulings on the parties' cross motions for summary judgment, and defendants appealed the denial of their motion to recover attorney's fees.

In two separate opinions filed on August 24, 2006, the Ninth Circuit Court of Appeals affirmed in part, reversed in part, and remanded the action to this court for further proceedings. In a Memorandum opinion, the Court of Appeals affirmed the granting of summary judgment in the defendants' favor as to plaintiffs' claims brought pursuant to 15 U.S.C. §§ 1692g(b) and 1692e(3) and pursuant to the UDCPA, and affirmed the denial of defendants' motion to recover attorney's fees. In a published opinion, the Court of Appeals affirmed this court's conclusion that defendant Hasson could not be liable for defendant Brumley's July 30, 2002 telephone call to plaintiff Linda Clark, but reversed as to the conclusion that Ms. Clark had necessarily waived objection to the call. The Court of Appeals also reversed the grant of summary judgment on plaintiffs' claim that defendants violated 15 U.S.C. § 1692e(2)(a), which prohibits false representation of "the character, amount, or legal status of any debt," and as to plaintiffs' claim under §§ 1692d, 1692f(1), and 1692g(a)(1). The Court of Appeals also concluded that this court had erred in failing to evaluate the merits of plaintiffs' motion to compel before addressing the merits of the parties' motions for summary judgment. In the conclusion of its published opinion, the Court of Appeals noted that

This case presents a complicated web of problems that has required us to address a litany of issues for which there is a dearth of applicable precedent. Clark, 460 F.3d at 1179.

On November 8, 2007, after the action was remanded to this court, the parties resolved the substantive portion of their dispute during a settlement conference conducted by Magistrate Judge Thomas Coffin. Under the terms of the settlement, defendant Hasson agreed to pay plaintiffs $7,500, and the Capital Credit defendants agreed to pay plaintiffs $7,500. The parties agreed that defendants would present plaintiffs an offer of judgment reflecting these amounts, that plaintiffs would accept the offer, and that a judgment dismissing this action with prejudice would ultimately be entered. The agreement provided that an outstanding bill of costs in the approximate amount of $1,800, which had been pending since a judgment was rendered in defendants' favor before the appeal, would be deemed satisfied. The agreement further provided that plaintiffs could seek an award of plaintiffs' reasonable attorney's fees and costs, and that I would determine the amount of fees and costs that would be awarded. Judge Coffin agreed with Hasson's counsel's assertion that the petition for fees and the request for costs would be divided into two parts, separately specifying the amounts sought from the Capital defendants and the amounts sought from defendant Hasson. Judge Coffin also agreed with plaintiffs' counsel's request that he be allowed to request fees and costs from all defendants in a single petition which separated the amounts sought from Hasson and the Capital Credit defendants. Plaintiffs agreed that they would not seek recovery of attorney's fees for any services performed after November 8, 2007.

Plaintiffs subsequently filed a single bill of costs and motion for attorney's fees which did not separate the amounts sought from defendant Hasson from the amounts sought from the Capital Credit defendants. In addition, except as to the time spent responding to defendants' motions for summary judgment, plaintiffs did not segregate the time expended related to defendant Hasson from time expended related to the Capital Credit defendants in either counsel's billing records or the memoranda supporting the motion to recover attorney's fees. Plaintiffs now assert that "segregation of attorney time is not feasible because common issues of discovery and claims rely, in part, upon vicarious liability of Capital Credit for collection activity by Hasson." Plaintiffs' memorandum in support of motion for attorney's fees at 6. They add that "billing statements filed in support of an award of attorney's fees by defense counsel provide an inference that there was a collaborative defense effort that mitigates in favor of joint and several liability." Id. Notwithstanding Judge Coffin's instruction that they separate the fees and costs sought from defendant Hasson from those sought from the Capital Credit defendants, plaintiffs now "request a single award and joint and several liability for attorney fees." Plaintiffs' reply memo in support of motion for attorney's fees at 7. They add that, "[t]o the extent joint and several liability is not available, each defendant contributed to the totality of the attorney time incurred, each contributed proportionately to common tasks, each contributed proportionately to settlement and there is a presumption of 50% liability for each." Id.

I. Attorney's Fees

A. Factors Considered in Determining Amount of Attorney's Fees Award

Determination of the amount of attorney's fees that should be awarded begins with calculation of the "lodestar" figure derived by multiplying the number of hours the prevailing party reasonably expended on the litigation by the reasonable hourly rate. E.g., Morales v. City of San Rafael, 96 F.3d 359, 363 (9th Cir. 1996). The "lodestar" amount may then be adjusted by those "Kerr factors" that have not been subsumed into the lodestar calculation. Intel Corp. v. Terabyte Int'l, Inc., 6 F.3d 614, 622 (9th Cir. 1993); see Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 69-70 (9th Cir. 1975). These factors include the time and labor required; the skill required to provide the legal services; the preclusion of other employment caused by acceptance of the case; the customary fee; the limitations imposed by the client or the case; the amount in controversy and the results obtained; the experience, reputation, and ability of counsel; the undesirability of the case; the nature of the professional relationship with the client; and awards in similar actions.*fn2

In determining a reasonable hourly rate, courts consider the prevailing rates in the community for similar legal services. Intel, 6 F.3d at 622. In this district, courts consider the Oregon State Bar Economic Survey as an initial benchmark in determining whether a requested hourly rate is reasonable. Roberts v. Interstate Distributor Co., 242 F.Supp. 2d 850, 857 (D. Or. 2002).

In fixing a reasonable fee award, the most critical factor is the degree of success that the prevailing party obtained. Farrar v. Hobby, 506 U.S.103, 114 (1992). If a plaintiff has obtained excellent results, his attorney should recover fees that fully compensate for the work performed. Hensley v. Eckerhart, 461 U.S. 424, 435 (1983). However, if a plaintiff has not succeeded on all claims, the court has discretion to reduce the "lodestar" calculation. Schwarz v. Secretary of Health and Human Services, 73 F.3d 895, 901 (9th Cir. 1995). Where plaintiff has succeeded on only some of the claims, the court must consider whether the failed claims were unrelated to the claims that were successful, and whether the plaintiffs " 'achieved a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award[.]'" Id. (quoting Hensley, 461 U.S. at 434). If the successful and unsuccessful claims are "distinctly different," the hours devoted to the unsuccessful claims should be excluded, because work on an unsuccessful claim cannot be deemed to have been expended in pursuit of an ultimately successful result. Id. If the claims are related, the court focuses on the significance of the overall relief the plaintiff obtained in relation to the hours reasonably expended, and should not reduce attorney's fees awarded simply because the plaintiff did not prevail on every contention. Id. (citations omitted). Full compensation may be appropriate if the plaintiff obtained excellent results, but may be excessive if the plaintiff's success was limited. Thorne v. City of El Segundo, 802 F.2d 1131, 1141 (9th Cir. 1986).

There is no precise method for determining the amount of attorney's fees that a partially successful plaintiff should recover. Hensley, 461 U.S. at 436. A district court may attempt to determine particular hours that should be eliminated from the lodestar calculation for claims upon which the plaintiff was unsuccessful, or "may simply reduce the award to account for the limited success." Id. at 436-37. See also Schwartz, 73 F3d at 906 (district court has authority "to make across-the-board percentage cuts" in the number of hours claimed "as a practical means of trimming the fat from a fee application").

The party seeking an award of attorney's fees bears the burden of establishing entitlement to an award and documenting the time expended and the hourly rates. Hensley, 461 U.S. at 437. Billing records should be maintained in a manner that allows the reviewing court to identify distinct claims. Id.

B. Determining the Amount of Attorney's Fees Plaintiffs should ...

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