In Hanrahan c. Statewide Collection, Inc., No. 21-16187 (9th Cir. September 1, 2022), the Ninth Circuit upheld an award of attorney’s fees in favor of the plaintiff in an action brought under the Fair Debt Collections Practices Act (FDCPA). The case makes it clear that while the amount is discretionary, attorney fees awarded to predominant plaintiffs are mandatory under the FDCPA.
Plaintiff Leah Hanrahan initiated a medical bill which was sent to defendant Statewide Collection, Inc. (Statewide) for collection. In January 2018, Statewide sent the complainant a collection letter, which she said was misleading and falsely threatened to have a negative credit report. Plaintiff filed an action in the United States District Court for the Northern District of California asserting violations of the FDCPA and the Rosenthal Fair Debt Collection Practices Act, Cal. Civil. Code, § 1788 and following. (Rosenthal law). On December 23, 2020, the district court granted summary judgment in favor of plaintiff on the issues of liability under the FDCPA and the Rosenthal Act, but denied summary judgment on the issue of damages. Statewide then made a judgment offer of $7,500 excluding attorneys’ fees, which was accepted by the plaintiff on February 8, 2021. Following the acceptance of the judgment offer, the district court issued an order awarding the plaintiff $53,604 in attorneys’ fees. and $3,135.05 in costs. The state appealed.
On appeal, the Ninth Circuit upheld the award of attorney’s fees. He rejected Statewide’s argument that awarding attorney fees was discretionary, saying the FDCPA’s plain language makes awarding fees mandatory. In addition, because Statewide’s settlement offer excluded attorneys’ fees, the plaintiff could recover the time spent establishing its right to fees. Finally, it allowed the plaintiff to recover the fees for the time spent before being admitted to practice before the district court, finding that the plaintiffs’ attorneys were admitted pro hac viceand there was no reason to believe that they would not have been automatically admitted had they applied earlier.
This case serves as a reminder that while the court has discretion to determine what amount is considered reasonable, Section 1692k(a)(c) of the FDCPA mandates an award of attorney’s fees to the winning plaintiff. of cause.