Attorneys' Fees Brief: Maryland

[David A. Szwak]

REGINALD L. ROBINSON
Plaintiff

* IN THE CIRCUIT COURT FOR PRINCE GEORGE’S COUNTY

versus

PROPHECY HOMEOWNERS et al. *
Defendant * CASE NO.: CAL 00-25507


* * * * * * * * * * * * *


MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF’S FEE PETITION

[ Introduction edited for Word version for web site ]

MARYLAND CONSUMER LAW

The Maryland Consumer Protection Act is an effort to protect consumers from many deceptive and unfair practices. The Maryland legislature designated and codified that it "shall be construed liberally to promote its purpose." CL art. § 13-105. Violations of certain sections of the act allow a private citizen to bring an action for damages, including attorneys fees. CL art. § 13-408. Section 13-301(14)(iii) of the act specifically provides that violations of the Maryland Consumer Debt Collection Act, CL art. § 14-201-204, are subject to private actions for damages, including attorneys fees. The operative fee language is "Any person who brings an action to recover for injury or loss under this section and who is awarded damages may also seek, and the court may award, reasonable attorney’s fees." CL art. § 13-408(b).

The importance Maryland puts on providing for private attorneys to earn fees in order to represent persons is reflected by this fee provision, a specific provision for private actions over and above the separate provision for the Maryland Attorney General to seek costs under CL art. § 13-409. The importance of preventing abusive debt collection practices is reflected in the prohibited conduct listed at CL art. § 14-202, and by the provision for liability for any damages proximately caused by violations "including damages for emotional distress or mental anguish suffered with or without accompanying physical injury." § 14-203. The Maryland law parallels and supplements the federal Fair Debt Collection Practices Act, which also provides for attorney fees and costs to prevailing plaintiffs. 15 U.S.C. § 1692k(a)(3).

The only reported case counsel is aware of that discusses attorneys fees under the Maryland unfair and deceptive trade practices act is Mercedes-Benz of North America, Inc. v. Garten, 94 Md. App. 547 (1993). Attorney’s fees are discussed at the end of this opinion, where the court enunciated the following principles: (1) a plaintiff is not required to include a request for attorney’s fees is the complaint; (2) attorney’s fees are considered a collateral matter to the litigation and may be sought following final judgment on the underlying claim; (3) fees sought under Rule 1-341 (bad faith litigation) are distinguishable from fees sought under Maryland’s consumer protection laws, and fees sought for consumer protection violations do not require the detailed records required under Rule 1-341. Mercedes-Benz, 94 Md. App. at 568-569. In Maryland the determination of attorneys fees is made by the judge, not the jury. Admiral Mortgage, Inc. v. Cooper, 357 Md. 533, 553 (2001).

Although relaxing the standard for detailed records, the conclusions in Mercedes-Benz are generally consistent with federal case law interpreting attorney’s fees in fee-shifting statutes, including the federal debt collection law, the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692k. Maryland courts look to federal interpretations on analogous federal rules for guidance, or when Maryland case law is lacking. Androutsos v. Fairfax Hospital 323 Md. 634, 639 (1991) ("Since our discovery rules are patterned after the federal rules, we look to those federal decisions for guidance in this area.); Garay v. Overholtzer, 332 Md. 339, 355 (1993) (reiterating that where Maryland rule essentially tracks federal rule, interpretations of that federal rule are persuasive as to meaning and proper applications of the Maryland rule); Beatty v. Trailmaster, 330 Md. 726, 738 n. 8, (1993) ("Because the Maryland summary judgment rule is derived from the federal rule, judicial interpretations of the federal rule are persuasive as to the meaning and proper application of the Maryland rule."); Jackson v. State, 340 Md. 705, 716 (1995) (noting that when federal rule of evidence contains same language as Maryland rule of evidence, court may look to former when interpreting latter); Philip Morris Inc. v. Angeletti, 358 Md. 689, 724 (2000) ("There is a dearth of authority in Maryland analyzing the specific requirements of Maryland Rule 2-231. We need not consider the application of these requirements in a void, however, as there exists an abundance of cases from other jurisdictions, federal and state, that have analyzed class action rules either identical to or similar to Maryland's rule.").

It is therefore proper to look at the FDCPA and other federal fee-shifting statutes, given the scarcity of case law interpreting the Maryland Consumer Debt Collection Act and the attorney’s fees provisions of the principal Maryland consumer protection statute.

FEDERAL CASE LAW ON ATTORNEY’S FEES

The attorney’s fee language in CL art. § 13-408(b) is similar to the language in the federal civil rights statue, 42 U.S.C. § 1988: " . . . the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee as part of the costs."

The U.S. Supreme Court has found that under this language "a prevailing plaintiff should ordinarily recover an attorney’s fee unless special circumstances would render such an award unjust." Hensley v. Eckerhart, 461 U.S. 424, 429 (1983) (citations omitted). The Supreme Court has pointed out that "Fee-shifting statutes' similar language is 'a strong indication' that they are to be interpreted alike." Independent Federation of Flight Attendants v. Zipes, 491 U.S. 754, 759 (1989) (citations omitted).

In the context of debt collection violations under the FDCPA "[o]nly in unusual circumstances, however, may the court decline to award a fee." Graziano v. Harrison, 950 F.2d 107, 114 (3d Cir. 1991). "Inability of a losing party to pay the attorney's fee is not a relevant consideration" in awarding a reasonable attorney fee. Id. (citing Inmates of Allegheny County Jail v. Pierce, 716 F.2d 177, 180 (3rd Cir. 1983)).

Plaintiffs suing under a fee-shifting statute are "private attorneys general" in the sense that they seek to vindicate important public rights. Awards of these fees are critical, because if "plaintiffs were routinely forced to bear their own attorneys’ fees, few aggrieved parties would be in a position to advance the public interest." Newman v. Piggie Park Enterprises, Inc. 390 U.S. 400, 402 (1968). An attorney’s fee award also deters non-compliance with the law, and encourages settlement. Eddy v. Colonial Life Ins. Co., 59 F.3d 201, 207-208 (D.C. Cir. 1995).

The initial estimate of a reasonable attorney’s fee is properly calculated by multiplying the number of hours reasonably expended on the litigation times a reasonable hourly rate. Hensley, 461 U.S. at 433 (the ‘lodestar’ amount). While the trial court has discretion to determine the proper fee amount, "where, as here, the party achieves success on the merits, an award of all reasonable hours at a reasonable hourly rate, i.e., the lodestar figure, is presumptively appropriate." DiFilippo v.Morizio, 759 F.2d 231, 234 (2d Cir. 1985). If a "court augments or reduces the lodestar figure it must state its reasons for doing so 'as specifically as possible.’" Id. (citations omitted). The fact that the nature of case may straightforward and non-novel nature is not grounds for a reduction of the lodestar award. DiFilippo v. Morizio, 759 F.2d 231, 235 (2d Cir. 1985) (citing Blum v. Stenson, 465 U.S. 886(1984)).

The amount of a reasonable fee should be calculated according to the prevailing market rates in the relevant community, regardless of whether the prevailing party is represented by a private attorney or a nonprofit legal aid organization. Blum v. Stenson, 465 U.S. 886 (1984). If contingent, the fee award should compensate counsel for the risk of receiving no compensation, and in fact, this contingency is an adequate basis for an upward adjustment to compensate for the contingent nature of success. Id. at 903 ("Lawyers operating in the marketplace can be expected to charge a higher hourly rate when their compensation is contingent on success than when they will be promptly paid, irrespective of whether they win or lose.") (J. Brennan, concurring). However, Plaintiff here is not seeking any upward adjustment of the "lodestar" amount.

Although "no fees should be awarded for time spent on unsuccessful claims that were unrelated to successful ones," when "however, the facts of an unsuccessful claim are ‘inextricably intertwined’ with those of a successful claim, fees for total time spent are appropriately awarded because both claims required investigation of a ‘common core of facts.’" Thomas v. Peacock, 39 F.3d 493, 507 (4th Cir. 1994) (FDCPA case). See also Brown v. David K. Richards & Co., 978 P.2d 470, ¶ 19-21 (Utah 1999). The Supreme Court has recognized the distinction between multiple distinct claims, as opposed to multiple common claims. Hensley, 461 U.S. at 434. However, the plaintiff should still recover fees for unsuccessful claims based on alternative legal grounds:

Where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee. Normally this will encompass all hours reasonably expended on the litigation, and indeed in some cases of exceptional success an enhanced award may be justified. In these circumstances the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit. See Davis v. County of Los Angeles, supra, at 5049. Litigants in good faith may raise alternative legal grounds for a desired outcome, and the court's rejection of or failure to reach certain grounds is not a sufficient reason for reducing a fee. The result is what matters.


Hensley, 461 U.S. at 435. Thus, although plaintiff in the instant case could seek and the court should award fees for the factually intertwined FDCPA counts that plaintiff was not successful on, Thomas, 39 F.3d at 507, plaintiff is not seeking any fees for work on the closely related FDCPA claims, or for the unsuccessful procedural and evidentiary motions.

There is a presumption "that a reasonable attorney's fee includes reasonable travel time billed at the same hourly rate as the lawyer's normal working time. Henry v. Webermeier, 738 F.2d 188, 194 (7th Cir. 1984); Wheeler v. Durham City Bd. Of Ed., 585 F.2d 618, 623-624 (4th Cir. 1978) (holding that attorney’s fees includes litigation expenses such as supplemental secretarial costs, copying, telephone, and necessary travel costs, which are services all integrally related to the work of an attorney and which "may play a significant role in the ultimate success of litigation."). The Henry court explained travel costs in a fee context:

When a lawyer travels for one client he incurs an opportunity cost that is equal to the fee he would have charged that or another client if he had not been traveling. That is why lawyers invariably charge their clients for travel time, and usually at the same rate they charge for other time, except when they are able to bill another client for part of the travel time (a lawyer might do work for client A while flying on an airplane to a meeting with client B). And if they charge their paying clients for travel time they are entitled to charge the defendants for that time in a case such as this where the plaintiffs have shown a statutory right to reasonable attorneys' fees.


Id. Only if the travel is unnecessary, or if the travel is unnecessarily luxurious, should the time spent in travel be subtracted out. Id. None of these factors are present here. Counsel is not charging for all reasonable travel time, and his second meeting with the plaintiff was coordinated to reduce counsel’s travel time. See accompanying Affidavit of Michael C. Worsham at ¶ 17.

Finally, a Defendant’s general statement that the hours claimed are excessive, standing alone, is not enough: "We emphasize that the adverse party's submissions cannot merely allege in general terms that the time spent was excessive." Bell v. United Princeton Properties, Inc., 884 F.2d 713, 720 (3d Cir. 1989). The "party advocating the reduction of the lodestar amount bears the burden of establishing that a reduction is justified." United States Football League v National Football League, 887 F.2d 408, 413 (2d Cir. 1989). The fee application opponent has a burden of rebuttal that requires submission of evidence challenging the accuracy and reasonableness of the hours charged or the facts asserted by the prevailing party in its submitted affidavits. Gates v. Deukmejian, 987 F.2d 1392, 1397-98 (9th Cir. 1992). "[W]here an opposing party has been afforded the opportunity to raise a material fact issue as to the accuracy of representations as to the hours spent or the necessity for their expenditure and declines to do so, there is ordinarily no reason for a court to disregard uncontested affidavits of a fee applicant." Brinker v. Giuffrida, 798 F.2d 661, 668 (3d Cir. 1986).

THE FEES REQUESTED ARE REASONABLE AND PLAINTIFF ACHIEVED SUBSTANTIAL SUCCESS IN THIS CASE

The total number of hours expended by plaintiff’s attorney since entering the case and pursuing the claim through a three-day jury trial is reasonable. Plaintiff’s supporting Affidavit and time sheets detail and explain the hours for which fees are sought, as well as numerous hours for which fees are not being sought, even though the case law supports award for all or most of those hours (such as for factually overlapping claims even though ultimately not successful). Counsel is only seeking six hours out of the total of over 16 hours expended to prepare the Fee Petition and all accompanying support documents.

A key factor considered by courts is "the impact this litigation will have on Defendant." Creighton, 1998 U.S. Dist. Lexis 6589 at 14. Most significantly, in the instant case plaintiff Reginald Robinson was successful at trial. This will stop the Prophecy Homeowner’s Association from future publication of his name and that of dozens of others in his community, and the debts they allegedly owed, in a "Hall of Shame" newsletter distributed throughout his community to both homeowners and renters alike.

Additionally, plaintiff’s suit changed and corrected H&E Management’s practices regarding sending out debt collection notices. Even though plaintiff’s pro se Third Amended Complaint abandoned his earlier claims against H&E Management for FDCPA violations for inadequate notice under 15 U.S.C. § 1692e(11) (see ¶ 6 of both the Amended Complaint and Second Amended Complaint), after plaintiff filed this suit, H&E Management corrected the deficient collection notices they had been sending out. Plaintiff’s Trial Exh. 4, a collection letter sent to plaintiff by H&E Management on July 23, 1999, did not, as required by federal law, disclose clearly "that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose." 15 U.S.C. § 1692e(11). However, after plaintiff filed this suit on Nov. 13, 2000, the subsequent collection letter to plaintiff from H&E Management dated April 24, 2001 (Trial Exh. #5) does contain this language required by the FDCPA. Besides this specific and documented improvement and success, it is likely that this suit caused H&E Management to examine and improve their debt collection procedures in general.

Thus, Plaintiff’s suit has been very successful, having achieved the main purposes sought in the litigation, including a favorable change in Defendant H&E Management’s debt collection practice during pre-trial on the federal FDCPA claim that was ultimately not litigated at

trial.1 Since the record of the case discloses the nature of the proceedings, the trial court may rely upon its own knowledge and experience in appraising the value of the attorney’s services. See Deleon v. Zaino, 92 Md. App. 399, 419-420 (1992). Should the trial court exercise any discretionary power to adjust the requested lodestar fee, it should, in order to aid the reviewing court:

To play fair, a trial judge relying upon discretionary powers should place on record the circumstances and factors that were crucial to his determination. He should spell out his reasons as well as he can so that counsel and the reviewing court will know and be in a position to evaluate the soundness of his decision. If the appellate court concludes that he considered inappropriate factors or that the range of his discretionary authority should be partially fenced by legal bounds, it will be in a position to do this intelligently.


Kilsheimer v. Dewberry & Davis, 106 Md. App. 600, 629 (1995) (citing M. Rosenberg, Judicial


Discretion of the Trial Court, Viewed From Above, 22 Syracuse L. Rev. 635, 665-666 (1971)).


ATTORNEY’S FEES ARE NOT RELATED TO THE DAMAGE AWARD

The attorney’s fee awarded is not related to the size of the damage award to the plaintiff. Creighton v. Emporia Credit Service, Inc., 1998 U.S. Dist. Lexis 6589 at 14-15 (E.D. Va. 1998) ("Courts generally will not look to the size of the damage award in determining reasonable attorney’s fees in consumer cases") (an FDCPA case citing Smith v. Chapman 436 F. Supp 58, 66 (W.D. Tex. 1977); Jordan v. Transnational Motors, Inc., 212 Mich. App. 94, 537 N.W.2d 471 (1995) (abuse of discretion to limit attorneys’ fees to 40% of amount obtained at trial); Loggins v. Delo, 999 F.2d 364, 368 (8th Cir. 1993) (the trial court "acknowledged that proportionality between the amount of damages and fee awards was not required") (citing City of Riverside v. Rivera, 477 U.S. 561 (1986)); Rice v. Mike Ferrell Ford, Inc., 403 S.E.2d 774 (W.Va. 1991) (overturning fee award limited to 1/3 of amount recovered and remanding for consideration of lodestar amount and other factors); General Motors Acceptance Corp. v. Jankowitz, 230 N.J. Super. 555, 553 A.2d 1380 (App. Div. 1989) (remanding on issue of attorneys’ fees because trial court limited attorney fees to verdict amount); Fleetwood Motor Homes of Pennsylvania, Inc. v. McGehee, 182 Ga. App. 151, 355 S.E.2d 73 (1987) (rejecting claim that under the Magnuson-Moss act, court should be limited to awarding a fee proportional to the amount of damages obtained).

The reasoning behind these cases is that "Monetary awards understate the real stakes. Judicial decisions have effects on strangers." Barrow v. Falck, 977 F.2d 1100, 1103-1104 (7th Cir. 1992). The Jordan court stated these important policy considerations this way:

In consumer protection as this, the monetary value of the case is typically low. If courts focus only on the dollar value and the result of the case when awarding attorney fees, the remedial purposes of the statutes in question will be thwarted. Simply put, if attorney fee awards in these cases do not provide a reasonable return, it will be economically impossible for attorneys to represent their clients. Thus, practically speaking, the door to the courtroom will be closed to all but those with either potentially substantial damages, or those with sufficient economic resources to afford the litigation expenses involved. Such a situation would indeed be ironic: it is but precisely those with ordinary consumer complaints and those who cannot afford their attorney fees for whom these remedial acts are intended


Jordan v. Transnational Motors, Inc., 537 N.W.2d 471, 474 (1995).

Separate from the issue of whether the plaintiff successfully reached the goals of the litigation, as was clearly done here, is that there are numerous cases under a variety of laws where the awarded attorney’s fees were many times higher than the damages. Loggins v. Delo, 999 F.3d 364, 368 (8th Cir. 1993) ($25,000 attorney’s fee award in civil rights suit for recovery of $102.50 in actual damages); Perez v. Perkiss, 742 F.Supp. 883 (D. Del. 1990) (an FDCPA case where court awarded over $10,000 in fees on a $1,200 jury verdict, including 11 hours defending the fee petition); United States Football League v National Football League, 887 F.2d 408, (2d Cir. 1989) (antitrust suit awarding $5,529,247.25 in attorney's fees and $62,220.92 in costs for a jury verdict of $3.00); Ratner v. Chemical Bank, 54 F.R.D. 412 (S.D.N.Y. 1972) ($20,000 fees for $100 damages in a Truth in Lending Act case).

Notably, under the FDCPA, which has the same fundamental policy goals as the Maryland Consumer Debt Collection Act, reasonable fees and costs are mandatory even if there has been no award of actual or statutory damages. Emanuel v. American Credit Exchange, 870 F.2d 805, 809 (2d Cir. 1989). In the instant case of course, damages were awarded by the jury.

DEFENDANT’S ATTORNEY FEES ARE DISCOVERABLE

The effort expended by the Defendant’s counsel is relevant to the fees and costs requested by a prevailing plaintiff. This principle is well-established. An early case is Stastny v. Southern Bell Telephone and Telegraph Co., 77 F.R.D. 662 (D. N.C. 1978). The Stastny court stated that "Amounts spent in defense have a bearing on the burden to be overcome by plaintiffs and on the importance of the case." Id. 663. This information is not protected by attorney client privilege: "The number of hours that attorneys worked to prepare and try a case would not, however, be a ‘communication,’ and would not be subject to the privilege." Id. (citing Calhoun v. United States, 306 F.2d 633 (2nd Cir. 1962)).

Defense counsel in this case was experienced and capable. Plaintiff is not at this time requesting discovery or information on Defendant’s counsel fees and costs, but will do so should the Defendant object to the fee now sought by Plaintiff and engage in fee dispute litigation. If requested, "the Defendant must provide information as to the number of hours that each attorney (private and house counsel) spent on this case. They should also indicate on what matters the time was spent." Stastny, 77 F.R.D. at 664. It is an abuse of discretion to refuse to allow discovery as to defense counsel’s hours and fees when defendant is challenging the reasonableness of plaintiff’s hours and fees. Henson v. Columbus Bank & Trust Co., 770 F.2d 1566,1575 (11th Cir. 1985).

Finally, a related issue, should Defendant make it one, is that time spent litigating fees is compensable:

If an attorney is required to spend time litigating his fee claim, yet may not be compensated for that time, the attorney’s effective rate for all the hours expended on the case will be correspondingly decreased. Recognizing this fact, attorneys may become wary about taking . . . cases for which attorney’s fees are statutorily authorized. Such a result would not comport with the purpose behind most statutory fee authorizations, Viz, the encouragement of attorneys to represent indigent clients and to act as private attorneys general.


Prandini v. National Tea Co., 585 F.2d 47, 53-54 (3d Cir. 1978).


[ Conclusion edited out for Word version for web site ]


Respectfully,




Michael C. Worsham, Esq.

1916 Cosner Road

Forest Hill, Maryland 21050-2210

(410) 557-6192

Fax: (509) 357-1930

Attorney for Plaintiff Reginald Robinson