Washington Wiley v. Portfolio Recovery Associates, LLC

Background

This order addressed two motions in four related cases brought by Sonji Washington Wiley, Melissa Becker, Felicia Yang, and Dominique Mayfield against Portfolio Recovery Associates, LLC (PRA). Each plaintiff alleged that PRA violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., through debt-collection lawsuits involving store-credit-card debts.

PRA’s state-court summonses directed the plaintiffs to respond to a person in North Dakota, even though the applicable Minnesota rule required an address within Minnesota for personal service and service by mail. The summonses also threatened default judgments if the plaintiffs did not serve answers at that address. The state courts found the summonses defective. In earlier rulings in these federal cases, the court held that threatening to obtain a default judgment based on the defective summonses was a threat to take an action that could not legally be taken, violating the FDCPA.

After allowing discovery on damages, the court considered the plaintiffs’ motions for partial summary judgment on actual and statutory damages and their requests for attorney’s fees and costs. PRA opposed the motions, arguing that the plaintiffs had not suffered recoverable actual damages, that the underlying legal fees were unsupported or excessive, that the plaintiffs lacked standing, and that the requested statutory damages and fees were unwarranted.

Actual damages

The court held that attorney’s fees incurred in defending the underlying state-court collection actions could qualify as actual damages under the FDCPA. It rejected PRA’s argument that the plaintiffs could recover those fees only if they had paid counsel out of pocket. The plaintiffs’ counsel represented them under contingency-fee arrangements, but the court found that the plaintiffs incurred the fees as a direct result of PRA’s collection actions.

The court also held that the plaintiffs were not required to plead those fees as special damages under Federal Rule of Civil Procedure 9(g). The complaints alleged that PRA violated the FDCPA by bringing state-court actions using summonses that violated Minnesota rules, and the plaintiffs requested actual damages. The court found that the relationship between the state and federal proceedings gave PRA sufficient notice of the claimed damages.

The court rejected PRA’s challenges to the billing statements, finding that the documented fees resulted from defending collection actions that were legally faulty because of the defective summonses and related threats. It also rejected PRA’s renewed standing argument, noting that the court had already found that the plaintiffs had standing and that PRA identified no new evidence or change in law requiring a different result.

The court awarded actual damages as follows:

- Sonji Washington Wiley: $22,150 - Melissa Becker: $43,320 - Felicia Yang: $13,960 - Dominique Mayfield: $0, because she did not request actual damages

Statutory damages

The FDCPA permits up to $1,000 in statutory damages for an individual plaintiff. The court found that each plaintiff was entitled to the maximum amount. PRA used identical language in the four summonses, continued using the defective summonses after courts found them unlawful, and continued defending the summonses in federal court. The court characterized the conduct as persistent and intentional and found that the threats were more than a technical violation because they threatened invalid default judgments and impeded the FDCPA’s consumer-protection purpose.

Each plaintiff therefore received $1,000 in statutory damages.

Attorney’s fees and costs

Because the plaintiffs prevailed under the FDCPA, the court considered their requests for reasonable attorney’s fees and costs using the lodestar method: reasonable hours multiplied by a reasonable hourly rate. The court found counsel’s hourly rates reasonable—$400 for work in the Wiley, Becker, and Yang cases and $450 for work in the Mayfield case—based on counsel’s experience, declarations about local billing rates, prior fee awards, and the court’s own knowledge of prevailing rates.

The court found that the cases were unusual, heavily litigated, and required substantial work involving the defective summonses, Minnesota procedure, FDCPA issues, motions, discovery, and fee petitions. It rejected PRA’s request for a 75% across-the-board reduction and found that the hours were not excessive, duplicative, or improperly billed. The court also found that fees for preparing and litigating the fee requests were generally recoverable.

The court did, however, apply a 5% overall reduction to the requested fees for federal-court work to account for noncompensable administrative tasks, including electronic filing. It awarded costs to Wiley, Becker, and Yang in the requested amounts and awarded no costs to Mayfield.

Disposition

The court granted each plaintiff’s motion for partial summary judgment on damages and granted in part and denied in part each request for attorney’s fees and costs. The awards were:

- Sonji Washington Wiley: $22,150 in actual damages, $1,000 in statutory damages, and $37,545.59 in attorney’s fees and costs, consisting of $37,012 in fees and $533.59 in costs. - Melissa Becker: $43,320 in actual damages, $1,000 in statutory damages, and $41,433.63 in attorney’s fees and costs, consisting of $40,622 in fees and $811.63 in costs. - Felicia Yang: $13,960 in actual damages, $1,000 in statutory damages, and $30,241.87 in attorney’s fees and costs, consisting of $29,716 in fees and $525.87 in costs. - Dominique Mayfield: $1,000 in statutory damages and $29,326.50 in attorney’s fees, with no costs awarded.

Judge Susan Richard Nelson ordered that judgment be entered accordingly.