Ninth Circuit Addresses First Impression Issue, Departing From Result Reached by Other Federal Courts.
The Federal Debt Collection Practices Act (FDCPA), at 15 U.S.C. section 1692k(a)(3), provides that a district judge may award to the defendant reasonable attorney’s fees on a finding that an FDCPA action was brought “in bad faith and for the purpose of harassment.” Although this provision can obviously result in fees being assessment against the FDCPA plaintiff, can it also mean that plaintiff’s attorney can be exposed to fee exposure under this statutory provision?
The Ninth Circuit recently answered “no,” in Hyde v. Midland Credit Mgt., Inc., Case No. 07-55326 (9th Cir. June 9, 2009) (for publication).
It based its decision on similar reasoning employed in a False Claims Act case, Pfingston v. Ronan Engineering Co., 284 F.3d 999, 1006 (9th Cir. 2002). The Court of Appeals also was not persuaded by limited contrary analysis in Fourth Circuit and S.D.N.Y. decisions, which either involved imposition of sanctions based on multiple grounds or without precise consideration of the narrow issue under consideration in Hyde.