Circuit Court Upholds Award of Fees for Defendant in an Absolutely Crazy FDCPA Case

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The Eighth Circuit Court of Appeals Friday upheld a lower court’s ruling that a defendant collection agency was entitled to some $33,000 in attorney’s fees and costs in an FDCPA case found to be brought in bad faith and specifically for the purpose of harassment.

Is that interesting enough? No? Well, it involved an outspoken consumer advocate’s gloating posts on a debtor-focused message board, posts that ultimately led to the awarding of fees.

The case, Brandon Scroggin v. Credit Bureau of Jonesboro (CBJ), seemed relatively straightforward. After a medical bill owed by Scroggin went delinquent, the debt was sent to CBJ for collection. The plaintiff accused the collection agency of then violating the FDCPA by contacting him after sending a written cease and desist letter and for third party disclosure after a friend heard a voice message from the collection agency.

During discovery in the case before a district court in Arkansas, the defendant moved for dismissal of the case and “for order of civility based on comments Scroggin posted on certain websites.” Scroggin, in online message board posts, had been gloating about baiting the collection agency into the violations by sending a deliberately vague cease and desist letter, among other things.

The judge ultimately denied CBJ’s motion to dismiss and for order of civility citing First Amendment concerns, allowing his posts to continue. She did, however, state that any subsequent posts would be allowed to be entered into evidence.

Scroggin forced a jury trial, which he stated was part of his goal, posting online, “I want to maximize the retaliation, do some damage and hopefully goad and/or force them to an actual trial.” After a very short trial on July 15, 2013, a jury found that CBJ had indeed violated the FDCPA twice. But the jury did not award Scroggin any actual or statutory damages for CBJ’s violations of the FDCPA and Arkansas Fair Debt Collection Practices Act (AFDCPA).

Shortly after the verdict, CBJ filed a motion for attorney’s fees and costs “on grounds that Scroggin brought this action in bad faith and for the purpose of harassment.”

After citing numerous instances of Scroggin’s claims on message boards clearly showing he engaged in the case only to harass CBJ and its counsel, District Judge Susan Webber Wright awarded attorney’s fees and costs in the amount of just over $33,000 to CBJ.

In her opinion, Wright wrote, “Scroggin’s conduct as outlined above illustrates the depth of Scroggin’s dishonesty of belief or purpose, his dishonest and oppressive conduct, his hatred, ill will, and spirit of revenge towards CBJ before and after the filing of this action, and his intent to, at a minimum, annoy CBJ persistently with no legitimate purpose. This action was never about Scroggin seeking legitimate redress for what he perceived to be violations of statutes meant to protect consumers but was a vehicle for Scroggin to pursue a vendetta against CBJ and for his own entertainment (after successfully setting up CBJ into violating the FDCPA and AFDCPA) while at the same time generating attorney’s fees for himself and his attorney/employer. Scroggin demeaned and abused the judicial process and he perverted the purposes of the FDCPA and AFDCPA.”

Scroggin appealed the awarding of fees in the case to the Eighth Circuit, which Friday affirmed Wright’s right to award the fees and costs. The Circuit opinion was filed as unpublished, meaning it is not eligible for precedent.

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Posted in Collection Laws and Regulations, Debt Collection, FDCPA, Featured Post .

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