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CEB Prac. Guide § 2A.64 -- Defenses -- "Reverse" Attorneys' Fees

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In Alcivar v. Enhanced Recovery Co., No. 17-CV-2275 (ILG), 2020 U.S. Dist. LEXIS 88998, at *3-6 (E.D.N.Y. May 20, 2020), Judge Glasser awarded $33,916.84 in attorneys' fees and $2,769.14 in costs to defense counsel based on the following facts. Discovery proved contentious, in two ways. First, Tawanda Frazier refused to comply with Defendant's subpoena. (ECF No. 16 at 2). Second,… Read More

In Chacker v. JPMorgan Chase Bank, N.A., 2018 WL 4474732, at *7 (Cal.App. 2 Dist., 2018), the Court of Appeal declined to award reverse attorneys' fees under the Rosenthal Act. Plaintiff's operative complaint alleged, in its third cause of action, that Chase engaged in unlawful debt collection practices in violation of the Rosenthal Act and an analogous federal statute. We… Read More

In Forto v. Capital One Bank, N.A., No. 14-cv-05611-JD (MEJ), 2017 WL 4168529 (N.D. Cal. Sept. 20, 2017), Magistrate Judge James noted the different standards applicable to “reverse” attorneys fees under the FDCPA and the Rosenthal Act, finding that “reverse” attorneys’ fees were not due a debt collector under the FDCPA but were due the debt collector under the Rosenthal… Read More

In Diaz v. First Marblehead Corp., 2016 WL 736361, at *7 (11th Cir. 2016), the Court of Appeals for the 11th Circuit reversed the trial court's ruling imposing reverse attorneys' fees against a debtor. Although there was no evidence that Diaz, herself, had acted in bad faith or for the purpose of harassment when she brought the lawsuit, the magistrate… Read More

In Montgomery v. GCFS, Inc., 2015 WL 3653314, at *1-2 (Cal.App. 1 Dist., 2015), the Court of Appeal affirmed dismissal of a Rosenthal Act claim premised on an alleged prohibition against assignment of a debt from a CFL holder to an unlicensed entity.  I've changed the order of the opinion somewhat for brevity here; but, the facts were as follows: In… Read More

In Flint v. Beneficial Financial I Inc., 2013 WL 552622 (E.D.Cal. 2013), Judge Burrell declined to award reverse-attorneys’ fees under the FDCPA without more than conclusory statements of bad faith. Further, Defendant has not shown that sanctions should be awarded under 15 U.S.C. § 1692k(a)(3), which requires “a finding by the court that [Plaintiff's FDCPA claim] was brought in bad… Read More

In Arutyunyan v. Cavalry Portfolio Services, 2013 WL 500452 (C.D.Cal. 2013), Judge Gutierrez found that Plaintiff’s counsel’s pleadings did not arise to the level of misconduct that would allow an award of reverse attorneys’ fees under FCRA and the FDCPA, but did under other federal law. Under FCRA, the Court explained: As a threshold matter, § 1681n(c) imposes attorneys' fees… Read More

The CFPB's and FTC's amicus brief urges the Supreme Court to overturn the Marx decision of the U.S. Court of Appeals for the Tenth Circuit, where Ms. Marx sued General Revenue Corporation under the FDCPA.  Marx lost.  The 10th Circuit ruled that Marx was responsible for paying more than $4,500 to cover the debt collector’s litigation costs, even though she… Read More

SCOTUS granted cert in the Marx v. General Revenue Corporation case that we reported on previously. SCOTUS' review will address whether a prevailing defendant in an FDCPA matter can recover its costs under FRCP 54(d) or must prove, in order to recover such costs, whether the Action was filed in bad faith by the Plaintiff, as required by 15 USC 1692k(a)(3)  … Read More

In Rodriguez v. Portfolio Recovery Associates, LLC, --- F.Supp.2d ----, 2012 WL 211511 (W.D.Wash. 2012), Judge Martinez held that a debt collector’s claim for ‘reverse attorneys’ fees’ arising from the debtor’s bad-faith filing of an FDCPA claim must be brought as an attorney fee motion, not as a separate counter-claim.    A few courts have allowed § 1692(k)(a)(3) counterclaims. See… Read More

In Marx v. General Revenue Corporation, the Court of Appeals for the Tenth Circuit affirmed a district court's ruling after a bench trial that a fax by a debt collector to a debtor's employer to verify employment for purposes of wage garnishment was not a prohibited third party communication under the FDCPA.  The Court of Appeals explained: The facsimile in… Read More

In Coleman v. Credit Management LP, 2011 WL 913210 (N.D.Tex. 2011), Judge Lynn held that a separate counter-claim for bad faith is not the proper way for an FDCPA defendant to challenge a Plaintiff’s FDCPA claim on bad faith grounds.  Judge Lynn granted Plaintiff's Motion to Dismiss, holding held that a Defendant has the right to allege bad faith in post-judgment proceedings,… Read More

In Kropf v. TCA, Inc., --- F.Supp.2d ----, 2010 WL 4722282 (E.D.Mich. 2010), Judge Lawson addressed whether a Plaintiff, who had filed suit against a debt collector and its president alleging violations of the FDCPA, should prevail on an FRCP 12(b)(6) motion as to debt collector’s counterclaim for attorney's fees and costs.   Judge Lawson noted that the FDCPA provides that,… Read More

In Hyde v. Midland Credit Management, Inc., --- F.3d ----, 2009 WL 1587902 (9th Cir. 2009), the Court of Appeals for the Ninth Circuit held that the FDCPA (15 U.S.C. § 1692k(a)(3)) does not allow an award of reverse attorneys’ fees against the debtor’s attorney, only the debtor.  In Hyde, the defendants prevailed on the merits against the debtor’s FDCPA… Read More