A recent opinion issued by the U.S. District Court for the Western District of Washington again illustrates the challenges for ARM industry companies facing Fair Debt Collection Practices Act (FDCPA) litigation – this time the case ended in a mixed result for the collection agency. The opinion in Wade v. DCS Financial, Inc. (United States District Court, W.D. Washington, Case No. 16-5398) discusses the granting in part and denial in part of a motion by defendant DCS Financial, Inc. (DCS) asking for summary judgment and sanctions in the amount of attorneys’ fees against the plaintiff.

A copy of the opinion can be found here.



On May 25, 2016, plaintiff Steaven Wade filed a complaint alleging that DCS’s debt collection efforts violated “various provisions of the FDCPA, including but not limited to 15 U.S.C. §§ 1692g, 1692d, 1692e(2), 1692e(4), 1692e(10), 1692e(11), 1692f and 1692f(6).”

DCS’s counsel replied on August 4, 2016, sending a letter to Wade’s counsel demanding the complaint be withdrawn within 21 days and warning of a filing for summary judgment to come after that 21 day period. DCS subsequently filed a motion for summary judgment on August 25, 2016. Wade and Wade’s counsel failed to respond until September 15, 2016, at that point filing “an untimely response” that “contested only part of the motion.”

The Court granted the motion for summary judgment in favor of DCS on October 26, 2016.

On November 3, 2016, DCS filed the instant motion requesting sanctions in the amount of reasonable attorneys’ fees for defending against Wade’s action, which was met by another “untimely response” by Wade on November 16, 2016. DCS replied on that same day, November 16, 2016.


Judge Benjamin H. Settle began discussion of the case by noting the Federal Rules of Civil Procedure’s guidelines for cases like this:

“Rule 11(b) of the Federal Rules of Civil Procedure requires that in all representations to the court an attorney conduct ‘an inquiry reasonable under the circumstances.’ If, after notice and a reasonable opportunity to respond, the court determines that Rule 11(b) has been violated, the court may impose an appropriate sanction on any attorney, law firm, or party that violated the rule or is responsible for the violation.”

The Court held that in this case, “at least some of Wade’s claims were frivolous.”

Judge Settle specifically highlights the fact that Wade failed to contest DCS’s motion for summary judgment, noting that although “this failure alone does not show that Wade’s claim was frivolous, DCS’s attorney sent Wade’s attorney a draft motion specifically detailing how the claim was frivolous in light of the facts of this case,” yet “Wade forced DCS to file the motion and failed to respond to the relevant portion of the motion.” This action, in the Court’s view, served to “not only needlessly increase the costs of litigation but also show a failure to adequately investigate the claim before filing the complaint.”

Based on the above, the Court granted DCS’s motion for summary judgment.

Despite ruling in favor of DCS with respect to summary judgment, Judge Settle notes that “DCS has failed to show that Wade’s claim was not well founded,” and that “the Court is unable to conclude that a reasonable attorney would refrain from filing this claim or contesting it on a dispositive motion.”

Considering the facts of the case, the Court does not find fault in Wade’s conduct, but in the conduct of Wade’s counsel for failing to respond to multiple motions in a timely fashion.

Regarding DCS’s request for a sanction in the amount of reasonable attorneys’ fees, the Court “concludes that half of the requested fee is reasonable and warranted,” and that an amount of $2535 “shall be payable by Wade’s attorney because she is responsible for the violation.”

insideARM Perspective

The case is again highlighting the financial burden for firms defending themselves against apparently frivolous FDCPA litigation, and the incredibly difficult challenge of getting a court to award attorneys' fees in full after successfully defending a case.

This case should be read in conjunction with several recent cases covered by insideARM, including:

As we have observed in previous cases, good luck convincing a judge to award attorneys’ fees in full. The threshold is high.

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