The issue of attorney fees and to what extent a plaintiff is entitled to them if they prevail on a Fair Debt Collection Practices (FDCPA) and Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA) was recently addressed by the Eleventh Circuit in Alhassid v. Nationstar Mortgage, LLC, No. 18-11985 (11th Cir. Apr. 8, 2019). This case involved some twists and turns, including two appeals to the Eleventh Circuit and a focus on state law.

In Alhassid, the consumer was successful on her FDCPA and FDUTPA claims. She was awarded $5,000 in actual damages and $1,000 in statutory damages under the FDCPA. The FDCPA allows the plaintiff to recover reasonable legal fees and costs if he or she prevails on the claim; the FDUTPA allows attorneys’ fees to the prevailing party (either plaintiff or defendant). Since the consumer prevailed, the district court awarded her $435,704.50 in attorney fees. Nationstar appealed the award, arguing that it was unreasonable, but the Eleventh Circuit affirmed the district court’s order.

The consumer then filed a motion to recover the attorney fees she incurred as a result of Nationstar’s appeal. The district court held that the consumer was not entitled to the appellate attorney fees and, on a second appeal in this case, the Eleventh Circuit agreed.

Since this case involved a state law claim under the FDUTPA, the Eleventh Circuit looked to Florida law for guidance. The answer was found in a state appellate case titled B & L Motors Inc. v. Bignotti, which states that in order for the prevailing party to recover attorneys fees under FDUTPA, it needs to show that the fees were to the benefit of the prevailing party rather than its attorneys.

The consumer did not challenge the fact that she had no interest at stake in whether the appellate fees were awarded since the case was taken on a contingency basis. Due to this, the Eleventh Circuit found that she was entitled to the appellate fees under B & L Motors.

insideARM Perspective

Even though the consumer prevailed on both the FDUPTA and FDCPA claims, this decision interestingly only discusses appellate fees under the FDUPTA. After digging into the court docket and reviewing the appellate briefs, it seems that the entire fee award dispute centered around the FDUPTA. Since this doesn’t address fees under the FDCPA, it is likely not binding on FDCPA cases. However, this decision presents a good idea for an argument when fighting an FDCPA fee award. Considering the cottage industry of attorneys who file FDCPA claims, at what point can it be argues that the litigation turn from benefitting the consumer to benefitting the consumer’s attorney? Could the courts be persuaded that whenever this line is crossed, the fees are no longer reasonable?

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