United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
D. Leinenweber, Judge.
Petition for Attorneys' Fees and Costs (Dkt. No. 41) is
granted in part and denied in part: Plaintiff is entitled to
$9, 826.73 in attorneys' fees and $400.00 in costs.
Cynthia Lloyd commenced this action in June 2018, alleging
that Defendant Credit Systems International, Inc., a debt
collector, violated the FDCPA. The Court denied the
parties' Cross-Motions for Summary Judgment in May 2019.
(See Order, Dkt. No. 38). The parties agreed to
settle Plaintiff's claims on June 12, 2019, and
thereafter jointly stipulated to dismiss the action.
(See Joint Dismissal, Dkt. No. 47.) Plaintiff
accepted Defendant's settlement offer of $1, 000.00 (the
maximum statutory damages for an individual plaintiff under
the FDCPA, see 15 U.S.C. § 1692k(a)), with
attorneys' fees and costs to be determined by the Court.
Plaintiff now seeks $30, 285.77 in attorneys' fees and
$1, 845.44 in costs.
touchstone for a district court's calculation of
attorney's fees is the lodestar method, a court
calculates by multiplying a reasonable hourly rate by the
number of hours reasonably expended. Gastineau v.
Wright, 592 F.3d 747, 748 (7th Cir. 2010) (citing
Hensley v. Eckerhart, 461 U.S. 424, 433-37 (1983)).
If necessary, the Court has the flexibility to “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.” Id. The Court must assess
“whether the fees are reasonable in relation to the
difficulty, stakes, and outcome of the case.”
Court will first evaluate whether Plaintiffs'
attorneys' hourly rates are reasonable, and then
determine whether the number of hours they expended is
reasonable. In determining the appropriate hourly rate, the
Court considers, among other factors, the market rate for the
services rendered, Denius v. Dunlap, 330 F.3d 919,
930 (7th Cir. 2003), the “attorney's actual billing
rate for similar litigation, ” and rates that are
“in line with those prevailing in the community.”
Pickett v. Sheridan Health Care Ctr., 664 F.3d 632,
640 (7th Cir. 2011). Because the FDCPA is a fee-shifting
statute, billing rates can be difficult to determine, as
plaintiffs' attorneys rarely bill their clients directly
for FDCPA cases. In these circumstances, courts look to the
“‘next best evidence' of an attorney's
market rate, namely ‘evidence of rates similarly
experienced attorneys in the community charge paying clients
for similar work and evidence of fee awards the attorney has
received in similar cases.'” Id. at 640
(quoting Spegon v. Catholic Bishop of Chicago, 175
F.3d 544, 555 (7th Cir. 1999)).
seeks the following rates for her three attorneys: $450 for
Andrew Finko, $372 for Michael Wood, and $335 for Celetha
Chatman. However, these rates are higher than what courts in
this district have approved for these attorneys. The Court
approves a $415 rate for Finko, as other courts in this
district have recently approved that reasonable rate. See
Rhone v. Medical Business Bureau, LLC, No. 16-cv-5215,
Order at 3 (N.D. Ill. April 27, 2018); Evans v. Portfolio
Recovery Assocs., LLC, No. 15 C 4498, 2017 WL 2973441,
at *3 (N.D. Ill. July 12, 2017). A $352 rate for Wood, and a
$315 rate for Chatman, are appropriate for the same reason.
See Rhone, Order at 3 (setting $352 rate for Wood);
Chatman v. Stellar Recovery, Inc., No. 16 C 833,
2017 WL 951246, at *2 (N.D. Ill. Mar. 10, 2017) (setting $315
rate for Chatman on services rendered post-May 2016).
case, determining the appropriate number of hours is more
complex than setting the rate. Defendant asserts that the
Court must deny any attorneys' fees that Plaintiff
incurred after September 21, 2018, the date that Defendant
tendered an Offer of Judgment under Federal Rule of Civil
Procedure 68. On that date, Defendant offered judgment
“in favor of Plaintiff” in the amount of $1, 001
plus reasonable attorneys' fees and taxable costs
“incurred in this action prior to expiration of this
offer, such fees and costs to be determined by agreement of
the parties and, if the parties cannot agree, by the Court
upon Motion of the Plaintiff.” (Offer of Judgment, Ex.
A to Def.'s Resp., Dkt. No. 44-1.) Plaintiff did not
accept the offer, and it expired on October 5, 2018.
See Fed. R. Civ. P. 68.
offer of judgment pursuant to Rule 68 “limits a
plaintiff's ability to recover costs incurred after the
date of the offer.” Paz v. Portfolio Recovery
Assocs., LLC, 924 F.3d 949, 953 (7th Cir. 2019); see
also Fed. R. Civ. P. 68(d) (“If the judgment that
the offeree finally obtains is not more favorable than the
unaccepted offer, the offeree must pay the costs incurred
after the offer was made.”). The rule's purpose is
to encourage settlement and to discourage protracted
litigation. Sanchez v. Prudential Pizza, Inc., 709
F.3d 689, 691 (7th Cir. 2013). The Rule's limit on a
plaintiff's recovery of costs often limits the recovery
of attorneys' fees in fee-shifting cases. Paz,
924 F.3d at 953. Rule 68 incorporates the definition of
“costs” from the relevant fee-shifting statute,
and therefore cuts off recoverable attorneys' fees after
a Rule 68 offer when the statute defines “costs”
to include attorneys' fees. Paz, 924 F.3d at 953
(7th Cir. 2019) (citing Marek v. Chesny, 473 U.S. 1,
9 n.2 (1985)). However, in setting forth the damages to which
a plaintiff in a “successful action” is entitled,
the FDCPA separates costs and attorneys' fees.
See 15 U.S.C. § 1692k(a)(3). Therefore, a
prevailing party in an FDCPA action is entitled to
attorneys' fees notwithstanding Rule 68. Paz,
924 F.3d at 953. Because Plaintiff was successful in
obtaining judgment against Defendant, she is entitled to
reasonable attorneys' fees under the FDCPA.
even when Rule 68 does not operate to bar the recovery of
attorneys' fees after an offer of judgment, a district
court must consider a substantial settlement offer as a
factor in determining whether a fee award is reasonable.
Moriarty v. Svec, 233 F.3d 955, 967 (7th Cir. 2000).
Fees “accumulated after a party rejects a substantial
offer provide minimal benefit to the prevailing party, and
thus a reasonable attorney's fee may be less than the
lodestar calculation.” Id. (citing
Marek, 473 U.S. at 11). 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.” Moriarty,
233 F.3d at 967. 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.”
Paz v. Portfolio Recovery Assocs., LLC, 924 F.3d 949
(7th Cir. 2019), the Seventh Circuit considered whether a
plaintiff was entitled to recover attorneys' fees after
rejecting a Rule 68 offer that contained similar language as
in the offer that Plaintiff rejected. In Paz, an
FDCPA defendant offered: judgment to be entered in favor of
the plaintiff, not to be construed as an admission of
liability by defendant, $3, 501 for the plaintiff, and
“reasonable attorneys' fees and costs through the
date of acceptance of the offer in an amount agreed upon by
the parties, or (as necessary) by the district court.”
Paz, 924 F.3d at 952. The plaintiff rejected this
offer, proceeded to trial, and ultimately obtained the
maximum $1, 000 in statutory damages. Id. at 953.
Plaintiff then sought to recover $187, 410 in attorneys'
fees and $2, 744 in costs under 15 U.S.C. § 1692k(a)(3).
The district court concluded that the many hours
plaintiff's counsel spent on the case after the Rule 68
offer were unreasonable and awarded only $10, 875 in
attorneys' fees. The district court awarded the plaintiff
$436 in costs as the prevailing party under Rule 54, and
awarded the defendant $3, 064 in costs, representing the
expenses the defendant incurred after the date of its Rule 68
offer. The Seventh Circuit affirmed these rulings.
Id. at 955-56. The plaintiff argued on appeal that
the Rule 68 offer was not “substantial” under