Wiley v. Portfolio Recovery Assocs., LLC

594 F.Supp.3d 1127

Sonji Washington WILEY, Plaintiff,

v.PORTFOLIO RECOVERY ASSOCIATES, LLC, Defendant.

Melissa Becker, Plaintiff,

v.Portfolio Recovery Associates, LLC, Defendant.

Felicia Yang, Plaintiff,

v.Portfolio Recovery Associates, LLC, Defendant.

Dominique Mayfield, Plaintiff,

v.Portfolio Recovery Associates, LLC, Defendant.

Case No. 20-cv-00737 (SRN/DTS)

Case No. 20-cv-00791 (SRN/DTS)

Case No. 20-cv-01397 (SRN/DTS)

Case No. 21-cv-00001 (SRN/DTS)

United States District Court, D. Minnesota.

Signed March 28, 2022

Darren B. Schwiebert, DBS Law LLC, 301 Fourth Avenue South, Suite 280N, Minneapolis, MN 55415, for Plaintiffs.

Avanti Bakane and Benjamin Kinney, Gordon Rees Scully Mansukhani, LLP, 1 North Franklin, Suite 800, Chicago, IL 60606; and Susanne L. Jones, Gordon Rees Scully Mansukhani, LLP, 100 South Fifth Street, Suite 1900, Minneapolis, MN 55402, for Defendant.

ORDER

SUSAN RICHARD NELSON, United States District Judge

This matter is before the Court on two motions filed in four related cases. Plaintiffs Sonji Washington Wiley, Melissa Becker, Felicia Yang, and Dominque Mayfield (collectively, "Plaintiffs") each move for summary judgment on damages and for attorney's fees [20-cv-00737, Doc. No. 65; 20-cv-00791, Doc. No. 90; 20-cv-01397, Doc. No. 47; 21-cv-00001, Doc. No. 51]. Based on a review of the files, submissions, and proceedings herein, and for the reasons below, the Court GRANTS Plaintiffs’ Motions for Partial Summary Judgment on Damages and GRANTS IN PART and DENIES IN PART their respective requests for Attorney's Fees and Costs.

I. BACKGROUND

The Court incorporates by reference the background information provided in its March 1, 2021 Order in the Wiley, Becker , and Yang actions, and the nearly identical August 9, 2021 Order in the Mayfield action. (See, e.g. , Wiley , 20-cv-737 (Mar. 1, 2021 Order [Doc. No. 52]; Mayfield , 21-cv-00001 (Aug. 9, 2021 Order [Doc. No. 47].)¹

At various points in 2020, Wiley, Becker, Yang, and Mayfield filed individual lawsuits against Defendant Portfolio Recovery Associates, LLC ("PRA"), under the Fair Debt Collections Practices Act, ("FDCPA"), 15 U.S.C. § 1692 et seq. All of the cases arise from PRA's debt collection efforts and related Minnesota state court litigation, in which PRA sued Plaintiffs individually to collect debts that Plaintiffs allegedly owed on several store credit cards. (Mar. 1, 2021 Order at 2–3.)

In each state court case, Plaintiffs challenged the propriety of the summons used by PRA to initiate the actions against them. (Id. at 3–4.) They argued that the summons was defective under Minnesota Rule of Civil Procedure 4.01, which, at all times relevant to the proceedings at issue, provided that a "summons shall ... give an address within the state where the subscriber may be served in person and by mail."² (Id. ) PRA's summons, however, directed Plaintiffs to respond to a person in North Dakota. (Id. at 2–3.) The summons also contained the threat to pursue default judgments against Plaintiffs if they failed to serve their Answer to the North Dakota address. (Id. ) In the state court actions, each of the state courts found that the summons did not comply with Rule 4.01. (Id. at 3–4.)

Plaintiffs then commenced these federal lawsuits, alleging that because the summons violated Rule 4.01, PRA violated several provisions of the FDCPA, including 15 U.S.C. § 1692e(2), (5), (10), and 1692f(1), which generally prohibit debt collectors from using false, deceptive, or misleading representations or unfair means to collect debts. (Id. at 4.) The parties engaged in dispositive motion practice, with PRA ultimately moving for judgment on the pleadings, asserting that Plaintiffs had not plausibly alleged standing and that the summons did not violate the FDCPA as a matter of law. Plaintiffs moved for partial summary judgment, arguing there was no disputed issue of material fact as to PRA's liability under the FDCPA based on its defective summons and threat of default judgment based on the faulty summons. (Id. ) The Court rejected Defendant's arguments and ruled in Plaintiffs’ favor, finding that PRA's threat to obtain a default judgment based on its defective summons constituted a "threat to take an[ ] action that cannot legally be taken" under § 1692(e)(5). (Id. at 8–12.) Accordingly, the Court denied PRA's motion and granted Plaintiffs’ motions. (Id. at 8, 12.)

The Court then permitted discovery on the issue of actual damages, and to the extent the parties were unable to resolve any disagreements on the issue, directed them to submit the matter to the Court. (Wiley , May 14, 2021 Order [Doc. No. 60].) Because the parties were unable to reach a consensus, now, Plaintiffs each move for summary judgment on actual and statutory damages, and request costs and attorney's fees. PRA opposes the motions. The parties presented oral argument on these issues before the undersigned judge on November 10, 2021.

II. DISCUSSION

A. Plaintiffs’ Requested Relief

The FDCPA provides that a prevailing individual plaintiff is entitled to three types of relief: (1) actual damages; (2) statutory damages not to exceed $1,000; and (3) the costs of the action, together with a reasonable attorney's fee as determined by the court. 15 U.S.C. §§ 1692k(a)(1)-(3).

Plaintiffs here seek all three forms of relief. First, as a form of actual damages, Wiley, Becker, and Yang seek the recovery of the attorney's fees and costs incurred in the state court litigation.³ Specifically, these three Plaintiffs request the following amounts in actual damages:

Wiley	$22,120
Becker	$43,320
Yang	$13,960

(Wiley , Schwiebert Decl. [Doc. No. 69] ¶ 15, Ex. E (Wiley State Ct. Billing Stmt.); Becker , Schwiebert Decl. [Doc. No. 94] ¶ 15, Ex. G (Becker State Ct. Billing Stmt.); Yang , Schwiebert Decl. [Doc. No. 51] ¶ 15, Ex. I (Yang State Ct. Billing Stmt.)

Second, each of the Plaintiffs request statutory damages in the maximum amount of $1,000. (Pls.’ Mem. [Doc. No. 68] at 8–11, 23–24.)

Finally, with respect to the instant FDCPA action, Plaintiffs seek attorney's fees and costs in the following amounts:

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[Editor's Note: The preceding image contains the reference for footnote⁴ ].

(See Pls.’ Mem. at 17; Wiley , Schwiebert Decl. [Doc. No. 69] ¶ 19 & Ex. F (Wiley FDCPA Billing Stmt.; Wiley , Supp'l Schwiebert Decl. [Doc. No. 85] ¶ 3; Becker , Schwiebert Decl. [Doc. No. 94] ¶ 19 & Ex. H (Becker FDCPA Billing Stmt.); Yang , Schwiebert Decl. [Doc. No. 51] ¶ 19 & Ex. J (Yang FDCPA Billing Stmt.); Mayfield , Schwiebert Decl. [Doc. No. 55] ¶ 19 & Ex. J (Mayfield FDCPA Billing Stmt.).)

B. Damages

1. Standard of Review

As noted, Plaintiffs move for partial summary judgment on damages. Summary judgment is appropriate if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A fact is ‘material’ if it may affect the outcome of the lawsuit." TCF Nat'l Bank v. Mkt. Intelligence, Inc. , 812 F.3d 701, 707 (8th Cir. 2016). And a factual dispute is "genuine" only if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In evaluating a motion for summary judgment, the Court must view the evidence and any reasonable inferences drawn from the evidence in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

Although the moving party bears the burden of establishing the lack of a genuine issue of fact, the party opposing summary judgment may not "rest on mere allegations or denials but must demonstrate on the record the existence of specific facts which create a genuine issue for trial." Krenik v. Cnty. of Le Sueur , 47 F.3d 953, 957 (8th Cir. 1995) (internal quotation marks omitted); see Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Moreover, summary judgment is properly entered "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. , 477 U.S. at 322, 106 S.Ct. 2548.

2. Actual Damages

As noted, the FDCPA permits the recovery of actual damages. 15 U.S.C. § 1692k(a)(1). Plaintiffs seek to recover their underlying state court attorney's fees and costs as actual damages. (Pls.’ Mem. at 6.)

PRA offers several arguments in opposition. First, it contends that the underlying attorney's fees are only recoverable as actual damages if Plaintiffs actually paid such fees to their attorney, out-of-pocket. (Def.’s Opp'n [Doc. No. 72] at 5–6.) But since Plaintiffs’ counsel performed the underlying work pursuant to a contingency-fee agreement, i.e., in exchange for the right to recover fees and a percentage of damages if the FDCPA actions proved to be successful, PRA contends that Plaintiffs offer no credible evidence that their requests for actual damages represent compensation for any out-of-pocket expenditures, nor were they incentivized to mitigate their respective legal fees. (Id. )

Second, PRA challenges the underlying billing statements, arguing that they fail to support Plaintiffs’ requests. (Id. at 13–14.) PRA contends that the majority of the attorney's fees are unrelated to the summons issued in the federal case, are improper and excessive, and were incurred at a billing rate unsupported by any evidence. (Id. )

Finally, PRA characterizes the nature of the FDCPA violation here as a "meaningless and since-abolished state rule of civil procedure" for which Plaintiffs suffered no actual damages. (Id. at 14–17.) Consequently, PRA contends that Plaintiffs lack a concrete injury sufficient to confer standing. (Id. )

The Court considers these arguments in turn.

a. Attorney's Fees and Costs from Underlying State Court Collection Actions

The FDCPA authorizes...