Demetra Baylor v. Mitchell Rubenstein & Associat , 857 F.3d 939 ( 2017 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 7, 2017 Decided May 30, 2017
No. 16-7070
DEMETRA BAYLOR,
APPELLANT
v.
MITCHELL RUBENSTEIN & ASSOCIATES, P.C.,
APPELLEE
Consolidated with 16-7071
On Appeals from the United States District Court
for the District of Columbia
(No. 1:13-cv-01995)
Radi Dennis argued the cause and filed the briefs for
appellant/cross-appellee.
Ronald S. Canter argued the cause and filed the briefs for
appellee/cross-appellant.
Before: HENDERSON, Circuit Judge, and EDWARDS and
SENTELLE, Senior Circuit Judges.
Opinion for the Court filed by Senior Circuit Judge
EDWARDS.
2
Concurring opinion filed by Circuit Judge HENDERSON.
EDWARDS, Senior Circuit Judge: In order to pursue a
Master’s degree in Computer Graphics, Demetra Baylor
(“Appellant”) took out six student loans. Several years after her
graduation, Mitchell Rubenstein & Associates, P.C.
(“Appellee”) came calling to collect. At the heart of this case
are a number of inconsistencies in letters that Appellee sent
Appellant over the course of several months regarding her
loans and the amounts that she owed on them, as well as
Appellee’s failure to direct all of its communications to
Appellant’s attorney after she retained counsel. In response,
Appellant filed suit on December 17, 2013, alleging that
Appellee had violated the Fair Debt Collection Practices Act
(“FDCPA”), the District of Columbia Consumer Protections
Procedures Act (“CPPA”), and the District of Columbia Debt
Collection Law (“DCDCL”), statutes which target abusive debt
collection and improper trade practices. See 15 U.S.C.
§ 1692(e); D.C. CODE §§ 28-3904, -3814.
Over the course of the next few years, the parties engaged
in what the District Court termed a “particularly striking
expenditure of effort and resources,” generating “excessive,
repetitive, and unnecessarily sharp pleadings.” Order, Dkt. No.
41, at 2. Nonetheless, all of Appellant’s statutory claims were
eventually resolved. Appellant accepted Appellee’s offer of
judgment regarding her FDCPA claim and the District Court,
with the aid of a Magistrate Judge, determined the attorney’s
fees to which she was entitled for this success. Appellee,
meanwhile, prevailed in its Motion to Dismiss all of
Appellant’s CPPA claims and some of her DCDCL claims, the
remainder of which were rejected when the District Court
subsequently granted Appellee’s Motion for Summary
Judgment.
3
A number of orders from this “clutter[ed]…docket” are
challenged on appeal. Id. First, the parties dispute the District
Court’s decision to adopt a Magistrate Judge’s
recommendation that Appellant receive approximately twenty
percent of the attorney’s fees that she requested. Second,
Appellant asserts that the District Court erred in finding that
Appellee’s conduct does not fall within the aegis of the CPPA.
Third, Appellant also contends that the District Court abused
its discretion in failing to credit her objections to a different
Magistrate Judge’s denial of her Motion to Compel the
disclosure of communications between Appellee and an agent
of Appellant’s creditor on the grounds that these documents
were protected by attorney-client privilege. Appellant
additionally disputes the District Court’s refusal to award her
attorney’s fees for her efforts in litigating this issue. Finally,
Appellant argues that the District Court improperly granted
Appellee’s Motion for Summary Judgment on her DCDCL
claims. On this last point, Appellant contends that the District
Court failed to appropriately account for evidence
demonstrating that Appellee had “willfully violated” the
DCDCL and was therefore subject to liability under the statute.
We do not reach the question of whether the District Court
abused its discretion in awarding Appellant only a percentage
of the attorney’s fees she sought in connection with her FDCPA
claim. In addressing this issue, the District Court relied on the
standard set forth in Local Civil Rule 72.2 in finding that the
Magistrate Judge’s proposed disposition was not “clearly
erroneous or contrary to law.” This was error. Federal Rules of
Civil Procedure 54(d)(2)(D) and 72(b)(3) foreclose the District
Court from using a “clearly erroneous or contrary to law”
standard when evaluating a Magistrate Judge’s proposed
disposition of a fee request. The correct standard of review is
de novo. We therefore reverse and remand to allow the trial
judge to reconsider this matter in the first instance applying de
4
novo review to assess the Magistrate Judge’s recommendation.
We affirm all of the remaining Orders challenged on appeal.
I. BACKGROUND
On February 21, 2013, Appellee, a law firm whose
primary focus is the recovery of consumer debts, sent the first
of several letters to Appellant notifying her that her account,
which had been assigned file number R80465, “ha[d] been
referred to [its] office for collection.” Complaint, Dkt. No. 1,
Ex. E; see Answer, Dkt. No. 28, at 2. It listed the creditor for
her debt as Arrowood Indemnity Company and stated that she
currently owed $26,471.07, though cautioned that, “[b]ecause
of interest, late charges and other charges that may vary from
day to day, the amount due on the day you pay may be greater.”
Complaint, Dkt. No. 1, Ex. E. Following a request for more
information regarding both the ownership and amount of this
debt from Appellant, Appellee sent a second letter. It provided
a new total for the amount that Appellant owed, $31,268, a
slight reformulation of the name of Appellant’s creditor,
Arrowood Indemnity Company/Tuition Guard, and identified
her original creditor as Citibank (South Dakota) N.A.
Complaint, Dkt. No. 1, Ex. D; Baylor v. Mitchell Rubenstein &
Assocs., P.C., 55 F. Supp. 3d 43, 46 (D.D.C. 2014).
Appellant retained counsel, who contacted Appellee
regarding the provenance of this debt and advised that any
“future communication regarding this matter should be
directed to [her] firm” rather than to Appellant. Complaint,
Dkt. No. 1, Ex. B. The parties then entered into settlement
negotiations, during which Appellant informed Appellee that
she had additional outstanding loans not referenced in its
second letter. Appellee’s client referred these new loans to
Appellee so that Appellant could settle all of her debt at once.
See Baylor v. Mitchell Rubenstein & Assocs., P.C., 174 F.
5
Supp. 3d 146, 150 (D.D.C. 2016); Appellee’s Statement of
Undisputed Facts, Dkt. No. 96 ⁋⁋ 12–13. On August 22, 2013,
Appellee sent another letter to Appellant’s home, albeit
addressed to her attorney, regarding this second set of loans.
Complaint, Dkt. No. 1, Ex. A. It provided a new file number
for this debt, R83798, which totaled $27,459.48, and noted that
her creditor was Tuitionguard Arrowood Indemnity. Id. After
Appellant’s counsel requested additional information
regarding these loans, Appellee stated that Appellant owed
“$27,459.48 plus interest from 10/21/11 at the rate of 3.75%
until paid” and listed Tuitionguard/Arrowood Indemnity and
Student Loan Corp. as the creditor and original creditor,
respectively, of this debt. Complaint, Dkt. No. 1, Ex. C.
On December 17, 2013, Appellant filed suit in the District
Court. She claimed that the inconsistencies in the
communications she had received from Appellee, including,
most notably, the variance in the “character and amount” of
Appellant’s alleged debt and the creditors associated with these
loans, as well as Appellee’s failure to direct all of its
communications to Appellant’s counsel after she had retained
legal representation, constituted violations of both the FDCPA
and CPPA. Complaint, Joint Appendix (“JA”) 26–28, 31–33.
She also asserted that these actions were proof that Appellee
had both violated various provisions of the DCDCL and
“knowingly maintained policies, practices and procedures that
were intentionally and willfully inadequate” to meet its
obligations under this statute. Id. at 29–31.
Appellee moved to dismiss the Complaint. However,
while this motion was pending, Appellee extended, and
Appellant accepted, an offer of judgment regarding her
FDCPA claims. See Baylor v. Mitchell Rubenstein & Assocs.,
P.C., 77 F. Supp. 3d 113, 115 (D.D.C. 2015). A judgment was
then entered “in the amount of $1,001.00 plus costs and
6
expenses together with reasonable attorney fees for all claims
under the [FDCPA]” by the Clerk of Court. Id. Appellant
thereafter filed a motion seeking $155,700 in attorney’s fees
for 346 hours of work at a rate of $450 an hour. Id. She was
later permitted to amend her requested fees due to subsequent
filings in this case. Id. at 115–16.
The District Court referred this request to a Magistrate
Judge pursuant to Local Civil Rule 72.2. After reviewing the
matter, the Magistrate Judge recommended that the hours
included in Appellant’s initial fee request be reduced by 85%
because they were significantly higher than reasonable. Baylor
v. Mitchell Rubenstein & Assocs., P.C., 2014 WL 7014280, at
*4 (D.D.C. Oct. 24, 2014). She found that certain tasks were
not eligible for attorney’s fees under the statute; some of the
hours requested were expended on Appellant’s unsuccessful
state law claims or occurred after Appellant had already
accepted Appellee’s offer of judgment; and Appellant’s
counsel had failed to “heed the Court’s admonition” to
moderate the tenor of her filings. Id. at *4–5. The Magistrate
Judge also determined that a 50% reduction should be applied
to Appellant’s additional request for fees because Appellant
had “again engaged in the tactics against which the Court
cautioned, thus expending considerable unproductive activity.”
Id. at *5. The District Court reviewed the Magistrate Judge’s
Report and Recommendation to determine if it was “clearly
erroneous or contrary to law” and, after determining that it was
not, adopted it in its entirety. Baylor, 77 F. Supp. 3d at 124.
In July 2014, the District Court granted Appellee’s Motion
to Dismiss all of Appellant’s claims under the CPPA and some
of her DCDCL claims. Following a contentious discovery
process, in which the District Court affirmed a Magistrate
Judge’s Memorandum Opinion granting in part and denying in
part Appellant’s Motion to Compel production of certain
7
communications between Appellee and an agent of its client,
Appellant’s creditor, Appellee filed a Motion for Summary
Judgment and Appellant filed a cross-Motion for Partial
Summary Judgment. The District Court granted the former and
denied the latter.
II. ANALYSIS
A. Standard of Review
This court reviews de novo the District Court’s decision to
grant a motion to dismiss or motion for summary judgment and
the “legal question” of whether it “improperly applied [a local
rule] in place of the standards prescribed by [the Federal Rules
of Civil Procedure].” Winston & Strawn, LLP v. McLean, 843
F.3d 503, 506 (D.C. Cir. 2016); see Nat’l Wildlife Fed’n v.
Browner, 127 F.3d 1126, 1128 (D.C. Cir. 1997). We will,
however, generally review discovery orders only for abuse of
discretion, unless the District Court applied the wrong legal
standard. United States v. Deloitte LLP, 610 F.3d 129, 134
(D.C. Cir. 2010).
B. Appellant’s Fee Request
Local Civil Rule 72.2(a) permits the District Court to refer
“any pretrial motion or matter,” with the exception of certain
motions and petitions set forth in Local Civil Rule 72.3, to a
Magistrate Judge. If any party files written objections to a
Magistrate Judge’s ruling on such a matter, the District Court
“may modify or set aside any portion of [the] order … found to
be clearly erroneous or contrary to law.” Local Civil Rule
72.2(c). Because Local Civil Rule 72.3 makes no specific
mention of motions for attorney’s fees, the District Court
assumed that a Magistrate Judge’s recommendation on a fee
8
award could be reviewed according to the deferential “clearly
erroneous or contrary to law” standard. This was error.
Federal Rule of Civil Procedure 54(d)(2)(D) states that a
court “may refer a motion for attorney’s fees to a magistrate
judge under Rule 72(b) as if it were a dispositive pretrial
matter,” a process which requires that a district judge
“determine de novo any part of the magistrate judge’s
disposition that has been properly objected to,” FED. R. CIV. P.
72(b)(3). The permissive language of Rule 54(d)(2)(D),
specifically its use of the word “may,” appears to have led the
District Court to believe that referral via Local Civil Rule 72.2,
with its attendant “clearly erroneous or contrary to law”
standard of review, provided a legitimate alternative to the de
novo review standard set forth in Federal Rules of Civil
Procedure 54(d)(2)(D) and 72(b)(3). See Baylor, 77 F. Supp.
3d at 117 & n.2. This was not an unreasonable mistake, but it
was a mistake.
The Federal Magistrates Act permits district courts to draw
upon the assistance of Magistrate Judges to resolve “any
pretrial matter pending before the court.” 28 U.S.C.
§ 636(b)(1)(A). The power vested in Magistrate Judges to
dispose of issues referred to them under this provision depends
upon the type of motion at issue. 28 U.S.C. § 636(b)(1)(A) lists
eight pretrial motions, including motions for summary
judgement and injunctive relief, for which Magistrate Judges
may only provide “proposed findings of fact and
recommendations for the disposition [of the matter].” Id.
§ 636(b)(1)(B). These recommendations must be reviewed de
novo by a district court judge if properly objected to by one of
the parties. See id. § 636(b)(1)(C). For all other pretrial
motions, Magistrate Judges are permitted to “hear and
determine” the matter, and a district court will only set aside
their order where it has been shown that it is “clearly erroneous
9
or contrary to law.” Id. § 636(b)(1)(A); see Phinney v.
Wentworth Douglas Hosp., 199 F.3d 1, 5–6 (1st Cir. 1999).
This differentiation between the degree of authority a
Magistrate Judge is permitted to wield over certain motions,
and the standard of review which must be applied to the judge’s
proposed resolution of such matters, is rooted in
“[c]onstitutional concerns,” specifically the “possible . . .
objection that only an article III judge may ultimately
determine the litigation.” 12 CHARLES ALAN WRIGHT ET AL.,
FEDERAL PRACTICE AND PROCEDURE § 3068.2, p. 367 (3d ed.
2014); see PowerShare, Inc. v. Syntel, Inc., 597 F.3d 10, 13 (1st
Cir. 2010).
When Rule 72 was promulgated to “implement the
legislative mandate of Section 636(b)(1),” it retained §
631(b)(1)’s basic structure – dividing pretrial motions between
issues that a Magistrate Judge could determine and those for
which the judge could simply provide recommendations for
consideration by the district court. 12 CHARLES ALAN WRIGHT
ET AL., FEDERAL PRACTICE AND PROCEDURE § 3068, p. 351 (3d
ed. 2014). It adopted a slightly different organizing principle,
however. Rather than relying on § 636(b)(1)(A)’s list of eight
motions to identify the pretrial matters that a Magistrate Judge
could not “determine,” Rule 72 distinguished between motions
that were “not dispositive of a party’s claim or defense” and
those that were. FED. R. CIV. P. 72(a)–(b); see 12 CHARLES
ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE
§ 3068.2, p. 366 (3d ed. 2014). Nondispositive matters would
be referred to a Magistrate Judge pursuant to Rule 72(a) and a
district court would be required to “consider timely objections
and modify or set aside any part of [an order issued following
such a referral] that [was] clearly erroneous or [was] contrary
to law.” Dispositive motions, meanwhile, would be referred to
a Magistrate Judge via Rule 72(b) and the district court would
10
be required to “determine de novo any part of [a] magistrate
judge’s [recommendation] that ha[d] been properly objected
to.” FED. R. CIV. P. 72(b)(3).
In spite of the legal significance of the distinction between
dispositive and nondispositive motions it is not immediately
apparent from the text of Rule 72 how, precisely, to determine
whether a particular type of motion should be deemed to be
“dispositive of a party’s claim.” While most courts agree that
the eight motions set forth in § 636(b)(1)(A) are “dispositive,”
this list has largely been deemed to be illustrative of the matters
that could fall within the scope of Rule 72(b), rather than
exhaustive. See Phinney, 199 F.3d at 5–6; Massey v. City of
Ferndale, 7 F.3d 506, 508 (6th Cir. 1993).
Prior to the promulgation of Rule 54(d)(2)(D), therefore,
courts lacked any specific guidance regarding whether
Magistrate Judges had the authority to provide a determination
regarding a request for attorney’s fees as if it was a
nondispositive motion or were instead permitted only to
provide a recommendation regarding the disposition of such
matters. Faced with this uncertainty, three circuits held that
motions for attorney’s fees should be treated as dispositive
motions and thus subject to de novo review by a district court
judge if properly objected to. See Massey, 7 F.3d at 509–10;
Estate of Conners by Meredith v. O’Connor, 6 F.3d 656, 659
(9th Cir. 1993); Ins. Co. of N. Am. v. Bath, 968 F.2d 20, 1992
WL 113746, at *2 (10th Cir. 1992) (Order and Judgment). Two
of these courts also held that Magistrate Judges lacked the
authority to “determine[]” a fee request because it was a “post-
dismissal motion[]” and Rule 72, by its terms, applies only to
“pretrial matters.” Massey, 7 F.3d at 510 (quoting Bennett v.
Gen. Caster Serv. of N. Gordon Co., 976 F.2d 995, 998 n.5 (6th
Cir. 1992)); see Estate of Conners by Meredith, 6 F.3d at 659
n.2.
11
Rule 54(d)(2)(D) thus took effect at a time when it was by
no means certain what, if any, authority Magistrate Judges
could wield when evaluating motions for attorney’s fees and
the degree of oversight district courts were required to provide
over such matters. Its purpose, as described by the
accompanying Advisory Committee Note, was to “eliminate[]
any controversy” regarding a court’s ability to treat “motions
for attorneys’ fees . . . as the equivalent of a dispositive pretrial
matter that can be referred to a magistrate judge.” Advisory
Comm. Notes 1993 Amend. The statutory and legal backdrop
against which this amendment took place make clear that this
Rule was not intended to permit courts to rely upon the
standards and procedures associated with dispositive motions
in addition to those for nondispositive motions. Indeed,
providing district courts with the ability to alternate between
these different standards would be anathema to the
constitutional concerns that underlie the structure of
§ 636(b)(1) and Rule 72. Rather, Rule 54(d)(2)(D) provided
that if a district court wished to refer a motion for attorney’s
fees to a Magistrate Judge it could do so pursuant to the
procedures laid out in Rule 72(b), which include a requirement
that the district court review a Magistrate Judge’s
recommendation regarding a fee award de novo if properly
objected to. Thus, in context, it is clear that Rule 54(d)(2)(D)'s
use of the permissive verb "may" refers to the permissive
nature of the district judge’s authority to refer the case to a
magistrate, with no effect on the standard of review to be
applied if the reference is made.
It is no response that Local Civil Rule 72.2 provides an
“alternative[]” to Rule 54(d). Baylor, 77 F. Supp. 3d at 117 n.2.
While Rule 54(d)(2)(D) permits courts to establish by local rule
“special procedures to resolve fee-related issues without
extensive evidentiary hearings,” there is no indication this
language was intended to loosen the standard that should be
12
applied to a Magistrate Judge’s recommendation after such
hearings have been conducted. Therefore, because district
courts may not “circumvent the Federal Rules of Civil
Procedure by implementing local rules or ‘procedures’ which
do not afford parties rights that they are afforded under the
Federal Rules,” we join a number of our sister circuits in
requiring that motions for attorney’s fees be reviewed de novo
if referred to a Magistrate Judge and properly objected to.
Jackson v. Finnegan, Henderson, Farabow, Garrett & Dunner,
101 F.3d 145, 151 n.4 (D.C. Cir. 1996) (quoting Brown v.
Crawford Cty., 960 F.2d 1002, 1008 (11th Cir. 1992)); see
McCombs v. Meijer, Inc., 395 F.3d 346, 360 (6th Cir. 2005);
ClearOne Commc’ns, Inc. v. Bowers, 509 F. App’x 798, 804–
05 (10th Cir. 2013); McConnell v. ABC-Amega, Inc., 338 F.
App’x 24, 26 (2d Cir. 2009); cf. Rajaratnam v. Moyer, 47 F.3d
922, 924 & nn.5, 8 (7th Cir. 1995) (finding that motion for
attorney’s fees referred via 28 U.S.C. § 636(b)(3) required de
novo review). To the extent that Local Civil Rule 72.2 can be
understood to suggest anything to the contrary, it is overruled.
Because we find that the District Court applied the wrong
standard when reviewing the Magistrate Judge’s Report and
Recommendation, we will not reach the parties’ claims that the
District Court erred in adopting the Magistrate Judge’s
proposal to award Appellant approximately twenty percent of
her requested attorney’s fees. Instead, we remand this matter to
the District Court so that it can review the Magistrate Judge’s
Report and Recommendation anew, and de novo.
C. Appellant’s CPPA Claims
Appellant contends that the District Court erred in
dismissing her claim that Appellee’s conduct violated the
CPPA, which creates an “enforceable right to truthful
information from merchants about consumer goods and
13
services that are or would be purchased, leased, or received in
the District of Columbia.” D.C. CODE § 28-3901(c). We
disagree. “In answering questions involving the proper
interpretation of D.C. statutes, [we rely] on the construction of
these laws by the D.C. Court of Appeals.” Poole v. Kelly, 954
F.2d 760, 761 (D.C. Cir. 1992) (per curiam). The D.C. Court
of Appeals’ precedents and the text of the CPPA itself support
the District Court’s determination that Appellee’s conduct does
not fall within the aegis of this law.
One of the principal goals of the CPPA is to “assure that a
just mechanism exists to remedy all improper trade practices.”
D.C. CODE § 28-3901(b)(1). To that end, it embraces both an
expansive understanding of the conduct which constitutes a
“trade practice” – “any act which does or would create, alter,
. . . make available, provide information about, or, directly or
indirectly, solicit or offer for or effectuate, a sale . . . or transfer,
of consumer goods or services, which are “any and all parts of
the economic output of society, at any stage or related or
necessary point in the economic process, and includes
consumer credit . . . and consumer services of all types” – and
provides an extensive list of unlawful trade practices. D.C.
CODE § 28-3901(a)(6)–(7); see id. § 28-3904; Howard v. Riggs
Nat’l Bank, 432 A.2d 701, 708 (D.C. 1981). These prohibited
practices can only be committed by a merchant, an individual
who “sell[s]…or transfer[s], either directly or indirectly,
consumer goods or services” or who, in the ordinary course of
business, “suppl[ies] the goods or services which are or would
be the subject matter of a trade practice.” D.C. CODE § 28-
3901(a)(3); see DeBerry v. First Gov’t Mortg. & Inv’rs Corp.,
743 A.2d 699, 701 (D.C. 1999).
There is little question, as Appellant notes, that a merchant
who provides a consumer with credit, such as the loans at issue
in this case, would fall comfortably within the scope of the
14
CPPA. See DeBerry, 743 A.2d at 701; cf. Jones v. Dufek, 830
F.3d 523, 527–28 (D.C. Cir. 2016). Yet, that is not this case.
Instead, we are confronted with a situation in which a debt
collector, attempting to recoup funds on behalf of a creditor
who did not itself provide Appellant with any credit, can be
found liable under the CPPA. We tread carefully in analyzing
this issue, as the D.C. Court of Appeals has explicitly refrained
from addressing a related matter. See Logan v. LaSalle Bank
Nat’l Ass’n, 80 A.3d 1014, 1026–27 (D.C. 2013) (abstaining
from determining whether “the CPPA applies to the trade
practices of a mortgage loan servicer”). However, our
interpretation of that court’s precedents suggests that
Appellee’s conduct does not fall within the bounds of this
statute.
The CPPA applies only to consumer-merchant
relationships. See Snowder v. District of Columbia, 949 A.2d
590, 598–600 (D.C. 2008). However, decisions from the D.C.
Court of Appeals indicate that a merchant need only be
connected with the “supply side” of a consumer transaction for
liability to attach. See Save Immaculata/Dunblane, Inc. v.
Immaculata Preparatory Sch., Inc., 514 A.2d 1152, 1159 (D.C.
1986) (quoting Howard, 432 A.2d at 709). In this case, it
appears that there are two ways in which the interactions
between Appellant and Appellee might be viewed to come
within the compass of this statute.
First, Appellant suggests that Appellee is connected to the
supply side of the transaction in which Appellant first acquired
her student loans. See Reply Br. for Appellant at 13. In our
view, this argument is based on a strained construction of the
statute. It is hard to see Appellee as a culpable party on the
supply side of the transaction when we know that there was a
merchant who initially provided the consumer credit and then
subsequently transferred ownership of this debt after it was in
15
default to a new creditor who, without providing Appellant
with any “goods or services” to speak of, retained Appellee to
collect on these loans. In this situation, it seems implausible to
characterize Appellee as someone who sold or transferred
consumer goods or services or who supplied the goods or
services which are or would be the subject matter of a trade
practice. See Osinubepi-Alao v. Plainview Fin. Servs., Ltd., 44
F. Supp. 3d 84, 92–93 (D.D.C. 2014) (refusing to apply CPPA
to “a licensed attorney [attempting] to collect the debt through
litigation” where the attorney was not engaged in the practice
of extending credit or selling debt); Busby v. Capital One, N.A.,
772 F. Supp. 2d 268, 279–80 (D.D.C. 2011) (refusing to apply
CPPA to parties that did not sell or give goods or services to
plaintiff).
Second, it might be argued that Appellee is a merchant in
its own right. Yet, it seems perverse to suggest that the
“consumer” of the services it provides – debt collection – is the
individual from whom it is attempting to collect rather than the
creditor who retained it. The provisions of the CPPA cited in
Appellant’s Complaint, D.C. CODE § 28-3904(e) and (f),
appear to apply only when a consumer is, or could be, misled
by a merchant’s actions. See id. (“It shall be a violation of this
chapter, whether or not any consumer is in fact misled [or]
deceived…for any person to…misrepresent as to a material
fact which has a tendency to mislead” or “fail to state a material
fact if such failure tends to mislead.”). The situation here does
not fit within the statutory proscription.
In light of the terms of the statute, we are constrained to
hold that Appellee’s conduct falls outside the scope of the
CPPA. Appellant’s arguments to the contrary are unpersuasive.
Because we find that Appellee’s actions did not take place
within the context of a consumer-merchant relationship, as
required by the CPPA, we need not address Appellant’s claim
16
that debt collection is a “trade practice” as defined by this
statute.
It is also unnecessary for us to address Appellant’s claim
that the CPPA permits certain individuals or entities to seek
remedies for “the use of a trade practice in violation of a law of
the District,” including the DCDCL. D.C. CODE § 28-
3905(k)(1)(A); see id. § 28-3909; Br. for Appellant at 55. It is
true that “[a]lthough § 28-3904 makes a host of consumer trade
practices unlawful . . . [t]he remainder of the statute . . .
contemplates that procedures and sanctions provided by the
[CPPA] will be used to enforce trade practices made unlawful
by other statutes.” Atwater v. D.C. Dep’t of Consumer &
Regulatory Affairs, 566 A.2d 462, 466 (D.C. 1989). However,
Count III of Appellant’s Complaint asserts only that Appellee’s
actions ran counter to two specific provisions of the CPPA
itself, D.C. CODE § 28-3904(e)–(f). Complaint, JA 31–33. It
makes no mention of Appellee’s alleged violations of any other
laws as grounds for recovery under this statute.
For the foregoing reasons, we affirm the District Court’s
decision to dismiss Appellant’s CPPA claims.
D. Appellee’s Claim of Attorney-Client Privilege
After the District Court granted in part Appellee’s Motion
to Dismiss, the parties embarked on an “extremely long and
contentious discovery process.” Baylor, 174 F. Supp. 3d at 151.
Further problems arose when Appellant filed a Motion to
Compel production of certain communications between
Appellee and Sunrise Credit Services, Inc. (“Sunrise”), the
organization which retained Appellee to collect Appellant’s
debt on her creditor’s behalf. Appellee refused to produce these
documents, claiming that they were protected by attorney-
client privilege. See Baylor v. Mitchell Rubenstein & Assocs.,
17
P.C., 130 F. Supp. 3d 326, 328 (D.D.C. 2015). The District
Court referred this matter to a Magistrate Judge who found that,
because Appellant’s creditor, Arrowood Indemnity Company
(“Arrowood”), had retained “Sunrise for the limited purpose of
finding an attorney to help Arrowood collect [Appellant’s]
debt,” Sunrise had “acted as Arrowood’s agent for obtaining
legal services.” Baylor v. Mitchell Rubenstein & Assocs., P.C.,
2015 WL 4624090, at *4 (D.D.C. July 31, 2015). The
Magistrate Judge, after reviewing the matter, concluded in turn
that attorney-client privilege attached to some of the
communications that Appellee wished to withhold.
In finding that attorney-client privilege attached to
communications between Sunrise and Appellee, the Magistrate
Judge looked to both Maryland and D.C. law, and held that
both states recognize that attorney-client privilege extends to
communications between a client’s agent and his attorney. See
id. at *1–2; Baylor, 130 F. Supp. 3d at 330 n.2 (explaining that
the court need not resolve a dispute regarding which state’s law
applied because there were no substantive differences between
the two jurisdictions (citing Cruz v. Am. Airlines, 356 F.3d 320,
332 (D.C. Cir. 2004))); see also In re Sealed Case (Medical
Records), 381 F.3d 1205, 1212 (D.C. Cir. 2004) (noting that
when an individual asserts “state claims,” such as the DCDCL
claims at issue here, “state privilege law applies”). We need not
address this determination because Appellant does not contest
it on appeal.
The arguments advanced by Appellant before this court
speak only to the questions of: (1) whether Appellee provided
“record evidence” in support of its claims regarding the nature
of the relationships between Appellee, Sunrise and Arrowood,
Br. for Appellant at 65; and (2) whether two cases, E.I. du Pont
de Nemours & Co. v. Forma-Pack, Inc., 718 A.2d 1129 (Md.
1998) and J.H. Marshall & Associates., Inc. v. Burleson, 313
18
A.2d 587 (D.C. 1973), preclude this court from holding that
attorney-client privilege could attach to the communications at
issue. We find that the District Court did not abuse its
discretion in resolving these issues. We are also unpersuaded
by Appellant’s claim that the District Court abused its
discretion in refusing to award her attorney’s fees for her
efforts in relation to this matter.
The District Court properly found that Appellee had
“proffered adequate evidence” to support its assertion that
Sunrise served as Arrowood’s agent and an attorney-client
relationship existed between Appellee and Arrowood. See
Baylor, 130 F. Supp. 3d at 331; id. at 330 (noting that “[a]t
bottom, most of [Appellant’s] objections boil down to her
claim that [Appellee] failed to offer evidence sufficient to show
an agency relationship between Arrowood and Sunrise”).
Appellee offered an affidavit describing the relationship
between Arrowood and Sunrise and two “authorizations by
Arrowood for Sunrise to retain counsel.” See id. at 331;
Appellee’s Opposition to Appellant’s Motion to Compel, Dkt.
No. 72-2, Ex. 4, at 41–42; Dkt. No. 72-3, Ex. 4, at 64–65; Dkt.
No. 73-4, Ex. 5, at ⁋⁋ 4–5. Although the affidavit is spare, we
cannot say that the District Court abused its discretion in
holding that the Magistrate Judge’s determination that this
evidence sufficed to support a finding of attorney-client
privilege was not clearly erroneous or contrary to law.
Appellant raises two additional arguments to suggest that
attorney-client privilege cannot attach to the disputed
communications. First, she contends that attorneys engaged in
the business of debt collection cannot invoke this privilege. Br.
for Appellant at 64 (citing E.I. du Pont, 718 A.2d 1129). The
precedent she cites in support of this claim, E.I. du Pont, is
distinguishable from the instant case. In E.I. du Pont, the court
held that the privilege did not apply to communications
19
between a corporation and a “non-lawyer collection agency”
where the corporation had hired this agency only “for the
typical business purpose of collecting a debt” even though the
agency had subsequently hired an attorney to “litigate the debt
collection matter after [the agency’s] efforts [to collect on the
debt] proved unsuccessful.” 718 A.2d at 1141–42. It justified
this decision by noting that the agency “may certainly have
been [the corporation’s] agent for the business purpose of
collecting [a] debt” but it was “not hired as an agent for
purposes of litigation.” Id. at 1142. Here, however, the
Magistrate Judge specifically found that Sunrise was hired only
for “the limited purpose of finding an attorney to help
Arrowood collect [Appellant’s] debt” and never itself
attempted to undertake “direct collection actions” against
Appellant. Baylor, 2015 WL 4624090, at *3–4. We find that
the District Court properly held that the Magistrate Judge was
not clearly erroneous in determining that this precedent did not
preclude Appellee from claiming that certain of its
communications with Sunrise were covered by attorney-client
privilege. See Baylor, 130 F. Supp. 3d. at 334–35.
Second, Appellant asserts that Sunrise’s actions constitute
the unauthorized practice of law and, as such, attorney-client
privilege cannot attach to its communications. In support of this
claim, Appellant draws upon J.H. Marshall, in which the D.C.
Court of Appeals held that a collection agency that filed suit to
collect on a debt assigned to it by a creditor had engaged in the
unauthorized practice of law. 313 A.2d at 590–91. Central to
the D.C. Court of Appeals’ reasoning in that case was its belief
that a collection agency could not “interpose itself between a
creditor and an attorney seeking to collect the creditor’s claim,”
id. at 595, and a concern that the collection agency in J.H.
Marshall was “sell[ing] the services of a lawyer, whom it
controls and directs, thereby destroying the privity between
attorney and client,” id. at 597. However here the Magistrate
20
Judge specifically held that Sunrise served only to find “an
attorney to help Arrowood collect [Appellant’s] debt.” Baylor,
2015 WL 4624090, at *4. The Magistrate Judge made no
findings that Sunrise ever attempted to collect on Appellant’s
debt on its own or otherwise serve as anything other than an
“intermediary between Arrowood and [Appellee].” Id. at *3. In
the absence of additional findings suggesting that Sunrise
controlled and directed Appellee’s conduct, we hold that the
District Court did not abuse its discretion in affirming the
Magistrate Judge’s determination that Sunrise did not engage
in the unauthorized practice of law.
Finally, Appellant claims that the District Court abused its
discretion in refusing to award her attorney’s fees relating to
her Motion to Compel production of communications between
Appellee and Sunrise. However, this motion was only partially
successful, and Federal Rule of Civil Procedure 37(a)(5)(C)
vests the District Court with discretion to “apportion . . .
reasonable expenses,” if such a motion is “granted in part and
denied in part,” as it was here. See Order, JA 185. We see no
abuse of discretion in the District Court’s determination that
Appellant’s limited success and “unduly contentious and
overly lengthy pleadings” did not entitle her to attorney’s fees
and costs. Baylor, 130 F. Supp. 3d at 337.
E. Appellant’s DCDCL Claims
In her Complaint, Appellant asserted that Appellee’s
conduct had violated a variety of provisions of the DCDCL, a
statute which prohibits creditors and debt collectors from
engaging in certain activities such as “collect[ing] any money
. . . by means of threat [or] coercion.” D.C. CODE § 28-3814(c);
see Complaint, JA 29–31. Only two of these claims survived
Appellee’s Motion to Dismiss: (1) Appellant’s contention that
Appellee misrepresented the amount that she owed in its
21
various letters to her, and (2) her argument that Appellee
improperly contacted her after she retained counsel. See
Baylor, 55 F. Supp. 3d at 49–53. Following a protracted
discovery process, the District Court granted Appellee’s
Motion for Summary Judgment and denied Appellant’s Motion
for Partial Summary Judgment regarding these claims. We
affirm this decision.
A creditor or debt collector is subject to liability under the
DCDCL only when a claimant offers substantial evidence to
prove a “willful violation” of the law. See D.C. CODE § 28-
3814(j)(1). We note, as the District Court did in the proceeding
below, that neither this court nor the D.C. Court of Appeals
appears to have set forth the standard for determining what
constitutes “willful” conduct. While we can find no fault in the
District Court’s decision to treat this term as embracing “not
only knowing violations of [the DCDCL], but reckless ones as
well,” we refrain, out of deference to the D.C. Court of
Appeals, from specifically adopting this standard when
interpreting this statute. Baylor, 174 F. Supp. 3d at 153
(quoting Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 57
(2007)). Instead, we note simply that no definition of
willfulness advanced by any party in this litigation suggests
that Appellee’s conduct can be viewed as a “willful” violation
of this law. See id. at 153 n.5 (summarizing definitions of
“willfulness” advanced by Appellant in the proceeding below,
including her claim that this standard is satisfied if Appellee
“knowingly and intentionally committed an act in conscious
disregard for the rights of others” or violates the statute
“voluntarily with either an intentional disregard of, or plain
indifference to, the Act’s requirements”); Br. for Appellee at
15 (adopting District Court’s interpretation of willfulness).
In reviewing Appellant’s contention that the District Court
erred in granting Appellee’s Motion for Summary Judgment
22
and denying her Partial Motion for Summary Judgment, this
court must determine whether a genuine dispute as to any
material fact exists when “viewing the evidence in the light
most favorable to the non-movant.” Wheeler v. Georgetown
Univ. Hosp., 812 F.3d 1109, 1113 (D.C. Cir. 2016). We are
cognizant that where, as here, we consider cross-motions for
summary judgment, we must accord both parties the solicitude
owed non-movants. Nevertheless, in this case, in order to
resolve the parties’ disputes over the DCDCL claims, it will
suffice for us to address Appellant’s claims in order and assess
the evidence in the light most favorable to her. As we explain
below, even on these terms, Appellant’s claims fail.
1. D.C. CODE § 28-3814(g)(5): Appellee’s Contact With
Appellant After She Retained Counsel
Section 28-3814(g)(5) of the DCDCL bars “debt
collector[s] . . . [from using] unfair or unconscionable means to
collect or attempt to collect on any claim . . . [by
communicating] with a consumer whenever it appears that the
consumer has notified the creditor that he is represented by an
attorney and the attorney’s name and address are known.”
Neither party disputes the fact that Appellant received a letter
from Appellee after her counsel had informed it to cease
contacting Appellant directly. Appellee, however, notes that
this letter was addressed to Appellant’s counsel, and attributes
its appearance at Appellant’s doorstep to a “computer error.”
Declaration of Mitchell Rubenstein, JA 508. In an affidavit
attached to Appellee’s Motion for Summary Judgment, its
president explained that Appellee’s computer system had
merely “failed to update the address on the letter to reflect
[Appellant’s counsel’s] mailing address.” Id.
Appellant, meanwhile, argues that Appellee lacked
“procedures reasonably calculated to avoid [this] error” and
23
claims that Appellant’s explanation for its failure to direct all
of its communications to Appellant’s counsel in its Motion for
Summary Judgment differs from that proffered in its Motion to
Dismiss. Appellant’s Opposition to Appellee’s Motion for
Summary Judgment, Dkt. No. 90, at 5; see Br. for Appellant at
58. Yet, the record contains evidence that Appellee did, in fact,
have procedures which explicitly barred its staff from
“contact[ing] or respond[ing] to a consumer if the consumer is
represented by counsel.” Baylor, 174 F. Supp. 3d at 159.
Furthermore, as the District Court noted, there is no reason why
Appellee cannot offer “an alternative explanation for its
conduct” at summary judgment. See id. at 158–59 n.9. Because
Appellee’s assertion that the letter was mistakenly sent to
Appellant’s home due to a computer error is not controverted
by anything in the record, we find that, even assessing the
evidence in the light most favorable to Appellant, she has failed
to raise a genuine question of material fact as to whether
Appellee violated § 28-3814(g)(5) of the DCDCL. See Johnson
v. Perez, 823 F.3d 701, 705 (D.C. Cir. 2016) (noting that a court
“may not . . . believe one witness over another . . . [but] if one
party presents relevant evidence that another party does not call
into question factually, the court must accept the
uncontroverted fact”).
2. D.C. CODE § 28-3814(f)(5): Appellee’s
Misrepresentations Regarding the Amount that
Appellant Owed
D.C. CODE § 28-3814(f)(5) provides that a debt collector
may not “use any fraudulent, deceptive, or misleading
representation or means to collect or attempt to collect claims
. . . [via] any false representation or implication of the
character, extent, or amount of a claim against a consumer.”
There is no question that Appellee provided different figures
for the amount that Appellant owed on her first and second set
24
of loans in its various letters to her. However, Appellee’s
president avers that these errors were due to its reliance on
Sunrise’s representation of the “amount forwarded” for
collection from Arrowood. Declaration of Mitchell
Rubenstein, JA 506. He stated that during Appellee’s fifteen
year “relationship with Sunrise . . . . [he had] found that the
‘amount referred’ listed in [its] referral form to be [an] accurate
statement as to the present balance owed on [an individual’s]
debt” and that Appellee had not “knowingly failed to include
accrued interest” in its February 21 and August 22, 2013 letters
“or otherwise misstate the amount” Appellant owed. Id. at 506–
508.
In response, Appellant puts forth a slew of claims
regarding the training Appellee’s employees received and the
roles which non-attorneys perform in attempting to collect on
various debts. See Memorandum in Support of Appellant’s
Motion for Partial Summary Judgment, Dkt. No. 91-1, at 2–6;
Opposition to Appellee’s Motion for Summary Judgment, Dkt.
No. 90, at 5–7; Reply to Opposition to Motion for Partial
Summary Judgment, Dkt. No. 103, at 4–16. Only two appear
to be relevant to the specific question of whether Appellee
willfully misrepresented the amount that Appellant owed: (1)
Appellant’s claim that Appellee failed to “maintain or
implement any practices or procedures to prevent its employees
and managing partner from demanding inaccurate amounts in
its demand letters” and lacks “any procedures relating to the
DCDCL,” Dkt. No. 103, at 4; see Br. for Appellant at 56; and
(2) her argument that a conversation between Appellee and
Sunrise, in which Appellee asked if it was possible to “make
things simple” by applying an interest rate of 3.75% from the
date of Appellant’s last payment to her debt after Sunrise had
informed Appellee the loans had been “accruing interest at 4%
since placement,” demonstrated that Appellee permitted its
employees to falsify the amount of debt owed by the
25
individuals it sent collection letters to. Collection Notes, JA
489–90; Br. for Appellant at 58–59.
The first of these arguments is easily set aside. As the
District Court noted, Appellee maintains policies and
procedures which state that “[p]rior to the issuance and mailing
of any demand letter, a firm attorney must review the file to
ensure that . . . [t]he claim amount matches the amount the
creditor claims is owed.” Baylor, 174 F. Supp. 3d at 157.
Nothing in the record indicates that an attorney did not review
the demand letters sent to Appellant, or that more specific
policies are required to ensure that the firm’s policies are in
step with the requirements of the DCDCL.
Appellant’s claim that the conversation between Appellee
and Sunrise regarding the correct interest rate to be applied
surely does not suffice to demonstrate that Appellee willfully
misrepresented the amount that Appellant owed. Even
assessing this evidence in the light most favorable to Appellant,
what she offers by way of argument is not enough to show a
willful violation of the law. Indeed, if anything, the interaction
appears to demonstrate that Appellee was attempting to bring
the interest rate it would relay to Appellant in line with the
information it had been provided regarding this debt, rather
than conjure an interest rate “on a whim,” as Appellant claims.
See Dkt. No. 84-4, Ex. 3, at 13 (noting that the “interest
amount” had been calculated through “8-12-11,” that the
interest rate was 3.75%, and that the last date Appellant had
paid was 10-21-11); Appellee’s Opposition to Motion to
Compel, Dkt. No. 71, at 4 (describing this document as the
“account referral and suit authorization from” Sunrise to
Appellee). In other words, the uncontested facts hardly support
an inference that Appellee acted to willfully violate the law.
26
In light of the record before us, and after having reviewed
the claims de novo, we affirm the District Court’s decision to
grant Appellee’s Motion for Summary Judgment on
Appellant’s DCDCL claims.
III. CONCLUSION
For the reasons set forth above, we remand the District
Court’s Order awarding Appellant attorney’s fees in relation to
her FDCPA claim so that it may review the Magistrate Judge’s
Report and Recommendation on this matter de novo. We affirm
all of the other Orders challenged in this appeal.
KAREN LECRAFT HENDERSON, Circuit Judge, concurring:
It is a time-honored bargaining tactic: make an unreasonable
opening offer in an effort to “anchor” the ensuing give-and-
take to an artificially high (or low) range of prices. Russell
Korobkin, Aspirations and Settlement, 88 CORNELL L. REV. 1,
32 (2002). Even if the offer has no basis in reality and is
rejected out of hand, it may for psychological reasons yield an
artificially high (or low) final price. Id. at 32 & nn.151-53
(citing evidence that people “often begin [a negotiation] with a
reference value . . . and then adjust from that point to arrive at
their final determination,” even if starting point does “not bear
a rational relationship to the item subject to valuation”). That
may be fine for selling a car or conducting a business
negotiation. But a request for attorney’s fees is not a
negotiation.
Federal fee-shifting statutes typically authorize the
recovery of a reasonable attorney’s fee. If a party seeks more
than that—making an excessive demand in hopes that the
award, although short of the demand, will be artificially high—
a district court can impose a sanction to deter future violations
and to protect the integrity of its proceedings. In particular,
the court has discretion to deny an award altogether or “impose
a lesser sanction, such as awarding a fee below what a
‘reasonable’ fee would have been.” Envtl. Defense Fund, Inc.
v. Reilly, 1 F.3d 1254, 1258 (D.C. Cir. 1993).
I say all this because Radi Dennis, counsel for plaintiff
Demetra Baylor, made what I consider a grossly excessive fee
request. In Baylor’s name, Dennis sought a total of $221,155
for her work on Baylor’s $1,001 settlement and on the fee
request itself. 1 The $221,155 demand was more than five
times the $41,990 that a magistrate judge determined to be
1
For simplicity, I round all monetary figures to the nearest
dollar and all increments of time to the nearest hour.
2
reasonable. Reviewing for clear error, the district court
overruled objections from both sides and awarded Baylor
$41,990. The Court today holds, and I agree, that a remand is
in order because the district court erred by not reviewing the
magistrate’s recommendation de novo. 2 Maj. Op. 3, 7-12, 26.
The Court is careful not to dictate the outcome on remand, Maj.
Op. 3, 12, and rightly so because of the district court’s
discretion in fee matters, Copeland v. Marshall, 641 F.2d 880,
901 (D.C. Cir. 1980) (en banc). I write separately only
because, on reviewing the fee order, I am uncertain whether the
district court recognizes just how broad its discretion is. On
the extreme facts of this case—and because Dennis is a repeat
offender, see Jones v. Dufek, 830 F.3d 523, 529 & n.6 (D.C.
Cir. 2016) (affirming denial of excessive fee request Dennis
made on behalf of another client)—I believe the court’s
discretion includes awarding a fee substantially below an
otherwise reasonable one.
I. BACKGROUND
The Court details many of the facts, Maj. Op. 4-7, but I
recount a few more to provide context for Baylor’s fee request.
A. DENNIS’S WORK ON THE FDCPA CLAIM
AND FEE REQUEST
Baylor attended graduate school, which she financed with
student loans. Through an intermediary, one of Baylor’s
creditors enlisted defendant Mitchell Rubenstein & Associates
(MRA), a law firm, to collect on the debt. In February 2013,
MRA sent Baylor the first of several letters about the debt.
2
I also agree that the district court correctly disposed of
Baylor’s claims under District of Columbia law. Maj. Op. 12-26.
Accordingly, I join the Court’s opinion in full.
3
The letters contained minor inadvertent discrepancies about
(inter alia) the amount Baylor owed. See Maj. Op. 4-5. In
March 2013, Baylor disputed the debt and retained Dennis for
$325 per hour on a contingency basis. See Decl. of Radi
Dennis ¶ 14 (Mar. 12, 2014).
Dennis almost immediately began researching the viability
of a claim under the Fair Debt Collection Practices Act
(FDCPA), 15 U.S.C. §§ 1692 et seq. According to her billing
records, she performed about 30 hours of FDCPA research
between April and December 2013. During the same period,
she had unfruitful settlement discussions with MRA.
Dennis spent about 56 hours researching, drafting, editing
and serving Baylor’s complaint against MRA. The
complaint—15 pages long and filed in December 2013—
alleged that MRA had violated the FDCPA and District of
Columbia (D.C.) law. Eight pages of the complaint were
devoted to factual allegations and other matters common to all
counts. Four pages set forth Baylor’s D.C. claims, which were
ultimately unsuccessful. Only three pages were dedicated
exclusively to Baylor’s FDCPA claim.
MRA’s president authorized a $1,001 offer of judgment on
the FDCPA claim in order “to limit the time and expense of
litigation.” 3 Aff. of Mitchell Rubenstein ¶ 18 (Mar. 25, 2014);
see FED. R. CIV. P. 68 (“Offer of Judgment”). MRA’s counsel
extended the offer to Dennis by certified mail on January 7,
3
It did not have the intended effect. See generally Maj. Op.
1-26; 174 F. Supp. 3d 146 (D.D.C. 2016); 130 F. Supp. 3d 326
(D.D.C. 2015); 77 F. Supp. 3d 113 (D.D.C. 2015); 55 F. Supp. 3d 43
(D.D.C. 2014).
4
2014. The offer reached Dennis’s address on January 17 but
she waited until January 29 to open and read it.
In the meantime, on January 14, 2014, MRA moved to
dismiss all counts of the complaint. Between January 18 and
January 27—a ten-day period during which she should have
known that MRA had offered to settle the FDCPA claim—
Dennis wasted more than 87 hours researching and drafting
Baylor’s opposition to the motion to dismiss. She filed the
opposition on January 27.
Dennis finally retrieved the offer of judgment on January
29, 2014. In the two weeks that followed, she spent about 34
hours researching Rule 68. Baylor accepted MRA’s offer on
February 28. The judgment was for $1,001 “plus costs and
expenses together with reasonable attorney fees for all claims
under the Fair Debt Collection Practices Act.” J. on Offer and
Acceptance (Feb. 28, 2014). The reference to “reasonable
attorney fees” accorded with the FDCPA’s fee-shifting
provision, which states in relevant part that, “in the case of any
successful [FDCPA] action,” a debt collector who has violated
the FDCPA “is liable” to the plaintiff 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).
In Baylor’s name, Dennis sought a “lodestar” 4 fee award
of $155,700 for her work on the FDCPA claim and on the fee
4
The “lodestar” method of calculating a fee award “looks to
the prevailing market rates in the relevant community.” Perdue v.
Kenny A., 559 U.S. 542, 551 (2010) (internal quotation omitted). It
is meant to “produce[] an award that roughly approximates the fee
that the prevailing attorney would have received if he or she had been
representing a paying client who was billed by the hour in a
comparable case.” Id. (emphasis omitted).
 5
request itself. 5 She based the amount on two assertions: (1)
she had spent a total of 346 hours litigating the FDCPA claim
and fee motion, including at least 85 hours on the latter; and (2)
her rate under the “Laffey Matrix” 6 is $450 per hour. She
subsequently sought another $40,075 for drafting Baylor’s
reply to MRA’s opposition to the fee motion, 7 bringing the
tally to $195,775. And then she sought another $25,380 for
56 hours she allegedly spent responding (and seeking fees on
the response) to MRA’s five-page motion for sanctions and
relief from judgment — a motion the district court denied in a
three-page order. In all, then, Dennis sought $221,155 in
fees. 8
5
Because Baylor did not succeed on her D.C. claims, she
could not seek a fee award on them. See Brandywine Apartments,
LLC v. McCaster, 964 A.2d 162, 169 (D.C. 2009) (“successful”
claim required).
6
The Laffey Matrix provides a “schedule of prevailing rates”
for attorneys who litigate in the D.C. area. Eley v. District of
Columbia, 793 F.3d 97, 100-01 (D.C. Cir. 2015).
7
Dennis said she had spent more than 110 hours on the reply
but was willing to give MRA a “discount.” Supplemental Decl. of
Radi Dennis ¶ 6(f) (Apr. 1, 2014).
8
The $221,155 does not include an additional $48,195 that
Dennis sought for preparing objections to the magistrate judge’s
report and recommendation on the fee award. The district court
concluded that the additional $48,195 was too attenuated from the
FDCPA claim to be reimbursable. Baylor does not appeal that
ruling and MRA does not argue that the additional $48,195 is
relevant to whether the earlier request was outrageously excessive.
I therefore use $221,155 as an extremely conservative figure for the
total fee request.
6
MRA opposed the fee request, urging the district court to
deny it in toto because it was grossly exaggerated.
B. THE DISTRICT COURT’S FEE ORDER
The district court referred the fee request to a magistrate
judge, who recommended awarding a fee but reducing the total
to a reasonable amount: $41,990. Reviewing for clear error,
the district court overruled both parties’ objections to the
magistrate’s report and recommendation. 77 F. Supp. 3d 113,
117-23 (D.D.C. 2015). The court adopted the report and
recommendation and thus awarded $41,990, which it
considered “quite generous.” Id. at 121; see id. at 115, 124.
In rejecting Baylor’s claim for a larger award, the district
court deferred to the magistrate judge’s view that a “reasonable
attorney” in Dennis’s shoes would have spent about 93 hours
on the FDCPA claim and the fee request. 77 F. Supp. 3d at
121. The court saw no clear error in the magistrate’s
conclusion that Dennis’s time beyond 93 hours was (1)
attributable to Baylor’s D.C. claims, id. at 121-22 & n.6, and
(2) “wasteful” and “unnecessary” because (inter alia) Dennis
failed to timely retrieve MRA’s offer of judgment, id. at 121-
23 & n.5.
In rejecting MRA’s entreaty to award nothing, the district
court acknowledged cases permitting it to “reject[] an award
outright” because of an “outrageous” request. 77 F. Supp. 3d
at 118. Elsewhere the court remarked on the fact that Dennis
“sought more than $220,000 in fees for a successful FDCPA
claim worth only $1,001.00 to her client.” Id. at 122. But the
court discerned no clear error in the magistrate judge’s
recommendation against a sanction. Id. at 118-19. Because
a fee award under the FDCPA “is mandatory in all but the most
unusual circumstances,” the court was reluctant to deny the fee
request in its entirety. Id. at 119 (quoting Carroll v. Wolpoff
7
& Abramson, 53 F.3d 626, 628 (4th Cir. 1995)). And in light
of the already “significant reduction” to $41,990—a reduction
the magistrate judge deemed necessary to make the award
reasonable—the court was unpersuaded that any punitive
reduction was necessary. Id.
Both sides appealed. Baylor claims the award is too low
and MRA claims it is too high.
II. ANALYSIS
We and other courts of appeals have held, in several
different statutory contexts, that a court may punish an
intolerably excessive fee request by denying any award at all.
See, e.g., Envtl. Defense Fund, Inc. v. Reilly, 1 F.3d 1254, 1258
(D.C. Cir. 1993) (Resource Conservation and Recovery Act, 42
U.S.C. § 6972(e)); Jordan v. Dep’t of Justice, 691 F.2d 514,
518 & n.37 (D.C. Cir. 1982) (Freedom of Information Act, 5
U.S.C. § 552(a)(4)(E)); see also, e.g., Scham v. District Courts
Trying Criminal Cases, 148 F.3d 554, 556-59 (5th Cir. 1998)
(Civil Rights Attorney’s Fees Awards Act, 42 U.S.C.
§ 1988(b)), abrogated on other grounds as noted in Bailey v.
Mississippi, 407 F.3d 684, 686-87 (5th Cir. 2005); Fair Hous.
Council v. Landow, 999 F.2d 92, 96-98 (4th Cir. 1993) (same);
Lewis v. Kendrick, 944 F.2d 949, 958 (1st Cir. 1991) (same);
Brown v. Stackler, 612 F.2d 1057, 1059 (7th Cir. 1980) (same).
We have also recognized the authority to “impose a lesser
sanction, such as awarding a fee below what a ‘reasonable’ fee
would have been in order to discourage fee petitioners from
submitting an excessive request.” Reilly, 1 F.3d at 1258.
The district court was hesitant to deny Baylor’s fee request
in toto because the FDCPA provides for mandatory fee
shifting. 77 F. Supp. 3d at 119. The concern is
understandable but goes only so far. True, the cases listed
above involved statutes under which a court “may” award a fee,
8
5 U.S.C. § 552(a)(4)(E); 42 U.S.C. §§ 1988(b), 6972(e),
whereas the FDCPA provides that a defendant “is liable” for a
fee, 15 U.S.C. § 1692k(a). But at least two courts of appeals
have suggested the FDCPA permits outright denial in “unusual
circumstances.” Carroll, 53 F.3d at 628 (4th Cir.); Graziano
v. Harrison, 950 F.2d 107, 114 & n.13 (3d Cir. 1991). And
even assuming arguendo that some “reasonable” fee is always
required, 15 U.S.C. § 1692k(a)(3), the statutory text does not
preclude a court from deciding—consistent with its inherent
authority to protect the integrity of its proceedings, Chambers
v. NASCO, Inc., 501 U.S. 32, 42-51 (1991)—that a
“reasonable” fee in response to an exorbitant request is a
nominal amount approaching zero.
I do not dispute that, if one leaves aside the magnitude of
the fee request, $41,990 is reasonable — or at least represents
a non-reversible determination of reasonableness within the
district court’s broad discretion. See Morgan v. District of
Columbia, 824 F.2d 1049, 1066 (D.C. Cir. 1987) (“[W]e are
ill-positioned to second guess the [district] court’s [fee]
determination.”). Nor do I contend that the court must
exercise its discretion to reduce the award for punitive reasons.
But in deciding whether or not to do so, the court must start
with the correct legal baseline. See Koon v. United States, 518
U.S. 81, 100 (1996) (“A district court by definition abuses its
discretion when it makes an error of law.”). I am not sure the
court started with the correct baseline here.
The district court suggested that, in light of the already
“significant reduction” to $41,990, it did not need to reduce the
award further as a sanction. 77 F. Supp. 3d at 119. But the
question is not whether an award of $41,990 is grossly
excessive; it is whether a request of $221,155 is grossly
excessive given that a reasonable fee is $41,990. After all, the
point is to deter unreasonable requests:
9
If . . . the Court were required to award a
reasonable fee when an outrageously
unreasonable one has been asked for, claimants
would be encouraged to make unreasonable
demands, knowing that the only unfavorable
consequence of such misconduct would be
reduction of their fee to what they should have
asked for in the first place. To discourage such
greed a severer reaction is needful, and the
District Court responded appropriately in
[denying an award entirely].
Brown, 612 F.2d at 1059; see Reilly, 1 F.3d at 1258 (approving
Brown’s rationale in our Circuit); Landow, 999 F.2d at 98
(forbidding “gamesmanship” of filing excessive request “in the
hope that the district court [will] at least award some,
preferably high, percentage of the requested fees”); Lewis, 944
F.2d at 958 (emphasizing that fee request is “not an opening
gambit in negotiations to reach an ultimate result”).
None of this is to say that denial or reduction of fees is
routine punishment. As the Court explained in Jordan:
Total denial of requested fees as a purely
prophylactic measure . . . is a stringent sanction,
to be reserved for only the most severe of
situations, and appropriately invoked only in
very limited circumstances. Outright denial
may be justified when the party seeking fees
declines to proffer any substantiation in the
form of affidavits, timesheets or the like, or
when the application is grossly and intolerably
exaggerated, or manifestly filed in bad faith.
691 F.2d at 518 (footnotes omitted). Still, the sanction is not
as rare as hen’s teeth. In several of the cases cited above, a fee
10
was denied or reduced as punishment for a grossly excessive
request. Reilly, 1 F.3d at 1258-60; Scham, 148 F.3d at 556-
59; Landow, 999 F.2d at 96-98; Lewis, 944 F.2d at 954-58;
Brown, 612 F.2d at 1059. In Reilly, for example, this Court
reduced a fee request for “outrageously excessive time entries,”
noting especially that the attorney had tried to claim hours that
were “about three times what the work should have required.”
1 F.3d at 1259-60. Likewise in Landow, the Fourth Circuit
reversed a fee award in its entirety because the request on
which it was based was “outrageously excessive” insofar as it
did not carve out hours spent on unsuccessful claims. 999
F.2d at 97-98. And in Lewis the First Circuit reversed an
award because the lawyers’ fee request was intolerably out of
sync with the “degree of success [they] obtained” for their
client. 944 F.2d at 956, 958 (internal quotation omitted).
The sanction may be “strong medicine,” Lewis, 944 F.2d
at 958; see Jordan, 691 F.2d at 518, but an equally strong case
can be made for it here. The record suggests that Dennis,
desiring an artificially large award, impermissibly treated the
$221,155 fee request as an opening bid. Compare Reilly, 1
F.3d at 1258; Landow, 999 F.2d at 97-98; Lewis, 944 F.2d at
958; Brown, 612 F.2d at 1059; see also Korobkin, Aspirations
and Settlement, 88 CORNELL L. REV. at 32-33. The hours she
reported are difficult to explain any other way. She reported
the 87 hours she had spent opposing MRA’s motion to dismiss.
She claimed those hours even after realizing they had been
wasted because she did not timely open her mail. 9 She
claimed 34 hours for researching Rule 68 when a few hours
should have sufficed. She claimed at least 85 hours for the fee
motion itself. She claimed 110 hours—nearly three standard
work weeks at a total “discount” price of $40,075—for
9
It is one thing to make a mistake. It is quite another to bill
it to someone else, especially when it costs $39,150 (87 x $450).
11
replying to MRA’s opposition to the fee motion. And she
claimed 56 hours for responding (and seeking fees on the
response) to MRA’s five-page motion for sanctions.
Through Baylor, Dennis sought more than five times the
amount the magistrate judge thought reasonable and the district
court thought “quite generous.” 77 F. Supp. 3d at 121; see id.
at 124. In Reilly we cut back a request because (inter alia) the
lawyer tried to claim hours that were “about three times what
the work should have required.” 1 F.3d at 1259. A fortiori,
that case counsels a similar result here.
Moreover, Dennis sought nearly 221 times the $1,001 she
recovered for Baylor. The client’s “degree of success” is
ordinarily a “critical factor” in calculating a fee award.
Hensley v. Eckerhart, 461 U.S. 424, 436 (1983); see Goos v.
Nat’l Ass’n of Realtors, 68 F.3d 1380, 1387 (D.C. Cir. 1995).
The First Circuit in Lewis believed it “inexcusable” that the
lawyers there sought “payment . . . amounting to 140 times the
worth of the injury.” 944 F.2d at 956. I believe the same
conclusion is warranted here. Dennis spent more time
working on fee matters than on tasks essential to Baylor’s
FDCPA claim. The time she spent on the fee motion (at least
85 hours) and the reply to MRA’s fee opposition (110 hours)
easily exceeded the time she spent researching the FDCPA (30
hours) and working on Baylor’s complaint (56 hours) — the
latter of which was devoted in part to D.C. claims that Baylor
lost. See Landow, 999 F.2d at 97-98 (fee request excessive
because it did not discount work on unsuccessful claims). No
wonder the district court said of the fee request that “the tail
[is] wagging the dog . . . in this case.” 130 F. Supp. 3d 326,
337 (D.D.C. 2015).
In short, Dennis lost sight of the real party in interest. As
further proof, recall that she sought the Laffey rate of $450 per
12
hour despite having agreed to represent Baylor for $325 per
hour. Dennis has not explained the discrepancy, at least not in
this Court. Nor can the FDCPA support such a windfall. The
fee-shifting provision states that the defendant is liable to the
plaintiff for a reasonable attorney’s fee. 15 U.S.C. § 1692k(a)
(“[A]ny debt collector who fails to comply with any provision
of this subchapter with respect to any person is liable to such
person . . . .” (emphasis added)). In other words, the district
court is to award Baylor whatever the FDCPA litigation
reasonably cost her. And Baylor’s contingency agreement
with Dennis manifests that, at least for the latter’s services, the
litigation cost her $325 per hour. See Decl. of Radi Dennis
¶ 14 (Mar. 12, 2014). The extra $125 per hour—a good living
for most people—is nothing but avarice.
Importantly, such excess in a fee request is not victimless:
the money has to come from someone. Here the money comes
from MRA. 15 U.S.C. § 1692k(a) (“debt collector . . . is
liable”). Yes, MRA owes damages, costs and a reasonable
attorney’s fee. But by law that is all it owes. Assuming
$41,990 is a reasonable attorney’s fee, 10 Dennis improperly
demanded $179,165 of MRA’s money. Thankfully, the tactic
did not succeed. If similar demands become the norm,
however, they will sow distrust and spawn satellite fee
litigation — one of the last things lawyers and judges should
be spending their time on. See Carroll, 53 F.3d at 628 (noting
10
Lest it be forgotten, I repeat here that Dennis believes
$41,990 is unreasonably low. Br. of Appellant 22-48. I have my
doubts but acknowledge that the matter is for the district court.
Morgan, 824 F.2d at 1066. The court may conclude on de novo
review of the magistrate judge’s report and recommendation that a
reasonable fee is higher or lower than $41,990. If it does so, the new
number will become the baseline from which the court must decide
whether Dennis’s request of $221,155 was grossly excessive.
13
“systemic costs” of satellite fee litigation, which is “one of the
least socially productive types of litigation imaginable”
(internal quotation omitted)). For fee-shifting to work
properly, a court must be able to depend on counsel for a
measured accounting from the outset. Dennis’s accounting
was nowise measured.
In the event the district court concludes on remand that the
fee request was grossly excessive, such that the award needs to
be further reduced, the following considerations may aid its
calculation. First, for reasons already explained, I think the
court should award $325 per hour instead of $450. Second, I
think the court may deny Dennis any credit for fee-related
pleadings. See Trichilo v. Sec’y of HHS, 823 F.2d 702, 708
(2d Cir. 1987) (“If counsel makes inflated or outrageous fee
demands, the court could readily deny compensation for time
spent in pressing them, since that time would not have been
reasonably spent.” (internal quotation omitted)). Indeed, I do
not think it would be an abuse of discretion to award Dennis
the same amount she won for Baylor: $1,001. Steep
overbilling ought to come at a steep price.