District Judge Failed to Gauge Success Where Small Amount At Issue, Requiring a Lodestar Reanalysis on Remand.
The Ninth Circuit in Evon v. Law Offices of Sidney Mickell, Case No. 10-16615 et al. (9th Cir. Aug. 1, 2012) (published) dealt with a plaintiff suing a collecting law firm under the Fair Debt Collection Practices Act (FDCPA) after she accepted a F.R.Civ. P. § 68 settlement offer of $1,010.99 (statutory FDCPA damages) and reserving the mandatory fee-shifting determination for the district judge at a later stage. The district judge only awarded her attorneys fees/costs of $2,301.95 for drafting the complaint, denying the requested $91,474 in fees and $2,942 in litigation costs. Also, the district judge sanctioned defense counsel in the amount of $1,260 for violating his own protective order and failing to seal/redact his client’s confidential documents.
On appeal by both sides, the fee/costs award was reversed and remanded, while the sanctions award was affirmed.
The fee/costs award was overturned primarily because a substantial level of success can be gauged other than by damages awarded. Here, plaintiff succeeded in getting the attorney to abandon his practice of sending debt collection letters to debtors’ workplaces, an FDCPA violation. Plaintiff also recovered the full amount of allowable statutory damages, so that the district judge too myopically focused on the amount of damages to the exclusion of other relevant lodestar factors–requiring a redetermination on remand to a different judge (based upon a reassignment due to some remarks made by the prior district court about his perceptions of the case).
A different result on the sanctions award. Under the district court’s inherent power to sanction an attorney for litigation abuses, the attorney’s violation of a protective order that he fashioned was certainly well within the district judge’s discretion to sanction.