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Cooper v. Retrieval-Masters Creditors Bureau Inc.

United States District Court, N.D. Illinois, Eastern Division

May 21, 2018




         Jack Cooper sued Retrieval-Masters Credit Bureau (“RMCB”), alleging a violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. Doc. 1. The court granted Cooper summary judgment as to liability, and the case proceeded to a damages trial. Docs. 46-47 (reported at 2017 WL 2404952 (N.D. Ill. June 2, 2017)). The jury awarded Cooper $500 in statutory damages and zero actual damages, and judgment was entered in that amount. Docs. 94, 96. Cooper now moves under 15 U.S.C. § 1692k(a)(3) for an award of $65, 357.90 in attorney fees and $1, 042.37 in costs. Doc. 98. The motion is granted in part and denied in part.


         The factual backdrop of this suit is set forth in the court's summary judgment opinion, familiarity with which is assumed. Cooper filed suit in early March 2016; as permitted by 15 U.S.C. § 1692k(a), he sought statutory and actual damages and attorney fees. Doc. 1. Some five months later, at a July 28, 2016 settlement conference before Magistrate Judge Finnegan, RMCB offered to settle for $500 in damages plus the reasonable attorney fees and costs that Cooper had incurred to date. Doc. 112 at 8; Doc. 129 at 15-16; Doc. 129-1 at 18. Cooper rejected the offer. Doc. 129 at 16. As noted, the jury ultimately awarded Cooper $500 in statutory damages-half the $1, 000 maximum authorized by 15 U.S.C. § 1692k(a)(2)(A)-and zero actual damages. Docs. 93-94.


         “Plaintiffs who prevail under the [FDCPA] are entitled to an award of costs and reasonable attorney's fees.” Schlacher v. Law Offices of Phillip J. Rotche & Assocs., P.C., 574 F.3d 852, 856 (7th Cir. 2009). The parties agree that Cooper qualifies for a fee and cost award, Doc. 112 at 8, but dispute its proper amount.

         I.Attorney Fees

         “Although there is no precise formula for determining a reasonable fee, the district court generally begins by calculating the lodestar-the attorney's reasonable hourly rate multiplied by the number of hours reasonably expended.” Schlacher, 574 F.3d at 856 (citing Hensley v. Eckerhart, 461 U.S. 424, 433-37 (1983)); see also Gastineau v. Wright, 592 F.3d 747, 748 (7th Cir. 2010) (“The touchstone for a district court's calculation of attorney's fees is the lodestar method, which is calculated by multiplying a reasonable hourly rate by the number of hours reasonably expended.”). “[T]he lodestar figure is just the starting point.” Thorncreek Apartments III, LLC v. Mick, 886 F.3d 626, 638 (7th Cir. 2018) (internal quotation marks omitted). After calculating the lodestar, “[t]he district court may then adjust that figure to reflect various factors including the complexity of the legal issues involved, the degree of success obtained, and the public interest advanced by the litigation.” Schlacher, 574 F.3d at 856-57.

         A. Calculating the Lodestar

         1. Hours Reasonably Expended

         RMCB “must pay for hours reasonably expended by [Cooper's counsel]. That means [RMCB] 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). The procedural history of this case bears greatly on the amount of attorney time for which Cooper should be compensated.

         The key aspects of the procedural history are these: in late July 2016, Cooper rejected an offer to settle the case for $500 in damages plus reasonable attorney fees and costs, and at trial more than a year later, he obtained … $500 in damages. Doc. 94. The congruence between RMCB's offer and the jury verdict matters. In Moriarty v. Svec, 233 F.3d 955 (7th Cir. 2000) (Moriarty II), the Seventh Circuit held that “[s]ubstantial settlement offers should be considered by the district court as a factor in determining an award of reasonable attorney's fees, even where Rule 68 does not apply.” Id. at 967. Significant for present purposes, the court explained that “an offer is substantial if … the offered amount appears to be roughly equal to or more than the total damages recovered by the prevailing party.” Ibid. “In such circumstances, a district court should reflect on whether to award only a percentage (including zero percent) of the attorney's fees that were incurred after the date of the settlement offer.” Ibid. “If the district court chooses to use a substantial offer as a cut-off point for the award of attorneys' fees … [it] must offer an explanation as to why it chooses to use one substantial offer as a cut-off, but not another.” Moriarty ex rel. Local Union No. 727 v. Svec, 429 F.3d 710, 720 (7th Cir. 2005) (Moriarty III).

         RMCB's July 2016 settlement offer was a substantial one within the meaning of Moriarty II. For starters, RMCB's offer of $500 in damages exactly matched Cooper's ultimate recovery at trial. See Moriarty II, 233 F.3d at 967. Of equal if not greater importance, Cooper and his attorneys knew-as his trial testimony ultimately demonstrated-that at the time he received the letter from RMCB that violated the FDCPA, he was experiencing numerous personal difficulties. Cooper's mother, sister, and brother-in-law had recently passed away, and he had recently lost the job he had held for 28 years and could no longer afford the apartment where he had lived for 23 years. From the point of view of a reasonable juror, the distress Cooper experienced in the aftermath of receiving RMCB's letter was almost certainly attributable solely to those tragic and unfortunate family- and employment-related circumstances, not to the letter's single FDCPA-violative sentence. Doc. 1-1 at 6; 2017 WL 2404952, at *2. Consequently, from the outset of this case, Cooper and his lawyers knew (or absolutely should have known) that the jury would be highly unlikely to award any actual damages, which in turn would depress any statutory damage award. See Lassiter v. Integrity Sol. Servs., Inc., 2014 WL 1977216, at *2 (D. Colo. May 15, 2014) (considering the absence of “evidence that the letter caused [the plaintiff] distress or anxiety” in awarding $150 in statutory damages); Weiss v. Zwicker & Assocs., P.C., 664 F.Supp.2d 214, 218 (E.D.N.Y. 2009) (finding a $500 statutory damage award “appropriate” where the plaintiff “suffered no actual damages”).

         Moreover, Cooper's counsel knew (or absolutely should have known) that a jury fairly applying the nonexclusive factors set forth § 1692k(b)(1) to guide the assessment of statutory damages-“the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, and the extent to which such noncompliance was intentional, ” 15 U.S.C. § 1692k(b)(1)-was unlikely to award the $1, 000 maximum. Cooper's only evidence bearing on the first and second factors was the single FDCPA-violative sentence in RMCB's one-page letter, Doc. 1-1 at 6; 2017 WL 2404952, at *2, and he presented no evidence relevant to the third factor. By going to trial, Cooper's counsel took the real risk that he would receive even less than the $500 in damages that RMCB offered in July 2016. See Lester E. Cox Med. Ctr. v. Huntsman, 408 F.3d 989, 993-94 (8th Cir. 2005) (finding no abuse of discretion in declining to award statutory damages, explaining that, “[f]or de minimis or technical violations, some courts ...

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