JOANNE S. FAULKNER STEVEN H. KOVAL. Effect of FDCPA case on debt collection lawsuit ... What is...

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ABCs OF FAIR DEBT COLLECTION PRACTICES LITIGATION

JOANNE S. FAULKNER STEVEN H. KOVAL

123 Avon Street New Haven, CT 06511

203-772-0395 [email protected]

3575 Piedmont Road 15 Piedmont Center, Suite 120

Atlanta, GA 30305 404-513-6651

[email protected]

I. FDCPA (15 U.S.C. § 1692) Overview

A. Enacted in 1976; amended in 1986 to include attorneys B. Principle: debt collection doesn’t have to rely on threats, lies,

invasion of privacy. Violations continue mostly because of incentive pay given to debt collectors and types of employees attracted.

C. Elements 1. Debt (personal, transaction). What isn’t covered:

business debt or tort; municipal fine/parking ticket. Examples of what is covered: medical bills, bounced check, credit card, mortgage.

2. Effort to collect debt by a debt collector 3. Communication 4. One-year SOL

D. Standard: Least sophisticated consumer except in some instances in 7th Cir.

E. Remedy: statutory damages up to $1,000 per case + actual damages + attorneys’ fees and costs

F. Class Actions expressly provided. Get help from experienced practitioner.

G. Strict liability mostly. Materiality. H. Bona Fide Error (BFE) Defense. Raised frequently, but rarely are

elements met. I. Venue. State or federal court. Pros & cons of each.

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II. Case & Client Selection A. Intake interview B. Effect of FDCPA case on debt collection lawsuit C. Pre-litigation letter & SLAPP D. Is client a frequent flyer? E. Bringing FDCPA claim as state court counterclaim F. Dismissal with prejudice vs. dismissal without prejudice G. Can you collect on judgment against defendant debt collector? H. Should you sue debt collector, debt buyer, attorneys, and/or

individuals I. The Intake Interview

1. Phone vs. in-person 2. Provide an intake form

a. Ask the tough questions (i.e., have you filed bankruptcy? are you contemplating filing bankruptcy? have you been convicted of a crime? have you been sued?)

b. Get the documents (make sure you see the front and back of any collection letter, and envelope)

3. Assess the client a. Think about compatibility and personality issues b. How will the client appear to a judge or jury? c. What are the client’s views towards the justice system

and attorneys in general? d. Any red flags?

4. Value of credit reports 5. Call logs – be careful 6. If you’re not taking the case, send a declination letter 7. Client handouts (on conference website)

a. Appendix A: General Info for Client b. Appendix B: Collection Scam Info

J. Managing Client Expectations Upfront 1. What does the client expect? Ask! 2. Discuss the client’s responsibilities

a. Reviewing the complaint, Rule 26(a) disclosures, and written discovery

b. Attending a deposition, settlement conference or mediation, and trial

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3. Explain attorneys’ fees. How will client feel if client receives $1,000 in statutory damages and attorney receives $30,000 in attorney’s fees?

4. Explain office procedures, including the length of time it takes to prosecute an average case and your office’s communication guidelines – plus, make sure the client understands the scope of your representation

III. What Should Complaint Look Like

A. How much detail should be in complaint? B. What is object of complaint? C. Sample Complaints

1. Appendix C: Basic FDCPA with state claims – Pape 2. Appendix D: Basic FDCPA against law firm – Odell IV. Settlement Demands

A. Reasonable, documented & frequent B. Lump sum or separate damages + fees

V. How to Deal with Defendant’s Answer & Defense Strategies

A. Affirmative defenses B. Offers of Judgment

VI. Discovery Issues

A. How extensive should your discovery be? B. Handling bogus objections to your discovery

1. Assertion of privilege/work product (Appendix E: Ruling on Pending Discovery Motions – Avoletta) 2. Boilerplate objections (Appendix F: Ruling on Plaintiffs’ Motion to Compel – Ocana) VII. Summary Judgment

A. Filing for plaintiff 1. Appendix G: Motion for Partial Summary Judgment – Avoletta 2. Appendix H: Memorandum Supporting Plaintiff’s MSJ – Pape B. Responding to defendant

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VIII. Attorney’s Fees A. Contemporaneous and accurate timekeeping B. Importance of 1st fee application C. Appendix G: Plaintiff’s Memorandum Re Attorneys Fees

IX. Additional Claims Frequently Arising out of Same Facts

A. FCRA B. TCPA C. State claims

X. Appeals: Consult experienced appellate counsel!

XI. Resources A. Use the NCLC manuals as a starting point B. NACA membership and conferences C. Experienced FDCPA practitioners – they’ll be willing to talk you

through your case – get a second (or third) opinion before you file XII. Appendices on Conference Website (referenced above)

A. General Info for Client B. Collection Scam Info C. Basic FDCPA with State Claims (Pape v. Amos Financial) D. Basic FDCPA against Law Firm (Odell v. Lubus) E. Ruling on Pending Discovery Motions (Avoletta v. Danforth) F. Ruling on Plaintiffs’ Motion to Compel (Ocana v. Metro-North) G. Motion for Partial Summary Judgment (Avoletta v. Danforth) H. Memorandum Supporting Plaintiff’s MSJ (Pape v. Amos Financial) I. Plaintiff’s Memorandum Re Attorneys Fees (Rousseau)

APPENDIX A: GENERAL INFO FOR CLIENT

You can stop collection calls and letters simply by writing to the creditor or

collector, identifying the debt (name, address, account #) and telling them “I refuse to

pay” or "Do not contact me again." The letter should be sent by both regular and certified

mail. KEEP A COPY! A creditor can continue only to bill you. A collection agency can

send one more strictly limited notice, but usually doesn't. If you just want to stop calls at

work, the same type of letter will do, telling them not to contact you at work. If you tell

the caller that you cannot receive personal calls at work, the collector may not call you at

work again. It is better to also tell them in writing so you have proof.

If you want to dispute the debt, you MUST WRITE (don't call) to tell the debt

collector about the dispute within 30 days of the first contact from the collection agency.

The letter should be sent by both regular and certified mail. KEEP A COPY!

No one has to talk to a debt collector. Simply hang up. Don't talk to collectors who

make you angry, make you cry, make false threats ("legal papers will be served

tomorrow"). Don't make promises, just pay what you can if you can, even if the collector

says "we can't accept anything less than $__." (If bankruptcy is a possibility, and

payments are not making a dent in the interest, you might better use the money to buy

food or pay rent.) Another downside to paying small amounts is that payment will extend

the statute of limitations, that is, the time within which they can sue.

Keep a careful record of the dates and times of collection contacts, get names if

possible. Save all collection communications, other than monthly bills, with the

postmarked envelope. Don't throw them away; they may be worth money.

Do NOT change your phone to an unlisted number to avoid collection calls. That will

only provide an excuse to call at a place of employment, or call neighbors and relatives

with "an urgent message."

RE-RECORD AND SAVE ANY VOICE MAIL MESSAGES AND GIVE ME A

TRANSCRIPTION OF WHAT THEY SAY.

BE SURE TO SEND ME COLLECTION AGENCY LETTERS + ENVELOPE

[I DON’T WANT TO SEE CREDITOR LETTERS, ONLY COLLECTION AGENCY]

APPENDIX B: COLLECTION SCAM INFO You are probably a victim of a payday loan or other collection scam. Lots of complaints across the country. For those clients dealing with elusive, unidentifiable collection scams, I urge you to report to the FTC https://www.ftccomplaintassistant.gov/FTC_Wizard.aspx?Lang=en and the Consumer Financial Protection Bureau at http://www.consumerfinance.gov/complaint/ http://www.consumerfinance.gov/complaint/ Make sure you let them know if there were also contacts with your friends, relatives, or employers. You should report to the State Attorney General as [email protected]. Office of the Attorney General, Consumer Inquiries, at 860-808-5318 and Department of Banking Consumer Affairs Division at 860-240-8170, or toll-free at 1-800-731-8225, or online at www.ct.gov/dob. FBI WARNS ABOUT PAYDAY LOAN COLLECTION SCAM http://www.fbi.gov/news/pressrel/press-releases/paydayloanscam_120710 The Internet Crime Complaint Center has received many complaints from victims of payday loan telephone collection scams. Callers claim the victim is delinquent in a payday loan and must repay the loan to avoid legal consequences. The callers purport to be representatives of the FBI, Federal Legislative Department, various law firms, or other legitimate-sounding agencies. They claim to be collecting debts for companies such as United Cash Advance, U.S. Cash Advance, U.S. Cash Net, and other Internet check-cashing services. CT Consumer Protection warns about collection scam http://www.ct.gov/dcp/cwp/view.asp?Q=521290&A=4187 HARTFORD, March 22 2013 – At least two Connecticut residents have gotten calls in the last week from persons claiming to be from the Federal Bureau of Investigation, but did not fall for the scammers’ pressurized pitch, the Department of Consumer Protection said today.

“We’ve been notified by a resident that she and a friend both got similar calls recently from people indicating that they were with the FBI and threatening legal action,” Consumer Protection Commissioner William Rubenstein said today. “Thankfully, neither resident was taken in by the intimidation, which could be quite alarming to many.” The caller, who used the names John Wright and Adam Scott in the scam attempts, left messages on a West Hartford resident’s answering machine, indicating that charges were being brought against her and asking for a return phone call. The resident ignored the messages. In the other case, the caller reached a potential victim by phone in Manchester and, claiming to be a representative of the “FBI crime investigation department,” informed

her that a “legal court file had been charged against her and her identity.” The caller then asked if she had been contacted earlier in the week by Connecticut State Police, outlining the charges. After the potential victim said she would first call the FBI in New Haven to confirm the truth of this information, the caller angrily informed her that she had half an hour to surrender herself or “they would come get” her.

Attorney General, Banking Commissioner Alert Consumers To Debt Collection Scams

This news release was issued jointly with the Attorney General's Office

October 24, 2012

Attorney General George Jepsen and state Banking Commissioner Howard F. Pitkin are alerting consumers about misleading scam debt collection practices and what they can do to protect themselves. This alert is intended to help consumers detect and avoid debt-collection scams because dealing with debts and debt-collectors can be frightening and overwhelming.

“Scammers may claim to be from law firms, government agencies, or even law enforcement agencies and threaten to arrest consumers if they don't pay,” said Attorney General Jepsen. “The law prohibits legitimate debt collectors from such practices.”

Commissioner Pitkin noted that “Consumers may fall prey to these calls because they may be frightened by the scammers who often have accurate personal information about the consumers they target. They may demand payment, but refuse to send consumers any written proof that the debts are legitimate. Federal and state law requires a debt collector to send proof of a debt.” The Attorney General and Commissioner Pitkin offer the following suggestions to consumers who receive intimidating calls:

First, check your records to determine whether you owe the debt. If you have no record of the debt, do not make a payment or follow the caller’s instructions until you receive proof of the debt.

If you have provided banking information to the caller, alert your bank that your account may have been compromised. Also, consider putting a fraud alert or security freeze on your credit reports through the three credit reporting agencies.

Do not confirm or provide additional personal information to a caller until you verify with the Department of Banking that the debt collector is licensed to operate in Connecticut. If the caller is licensed, report any abusive behavior.

Do not be intimidated into making payments on an unknown debt by a caller who falsely claims to be from a government agency, or who threatens arrest.

If you believe you are in physical danger, contact your local police department. Carefully review copies of your credit reports and look for fraudulent activity.

Consumers may check the license of a debt collector, or make a complaint, by contacting the Department of Banking Consumer Affairs Division at 860-240-8170, or toll-free at 1-800-731-8225, or online at www.ct.gov/dob. For more information about how to handle callers who claim to be debt collectors, see Who’s Calling? That Debt Collector Could Be a Fake on the Federal Trade Commission’s website. For more information about debt collection practices and protections for consumers, see Debt Collection FAQs: A Guide for Consumers. BBB WARNS PUBLIC ABOUT FRAUDULENT, AGGRESSIVE COLLECTION CALLS July 2013 The Better Business Bureau Serving Greater Cleveland is warning consumers about a company claiming to be a collection agency that is attempting to extort money from people by scaring them with fake lawsuits. According to the BBB, consumers claim LRS Litigation Services makes robocalls that state they have been named in a lawsuit and, if they do not call LRS within four hours, a restraining order will be issued against them. LRS has used nearly a dozen different phone numbers, many of which are answered by messages indicating the mailbox is full. Some have been disconnected. Complainants have reported repeated calls to places of employment after notification to stop and the inability of the company to produce or describe any specific documentation of the debt they are trying to collect. In addition, the company reportedly keeps calling and harassing individuals even after being notified that LRS is calling the wrong person. St. Paul, MN -- The Better Business Bureau of Minnesota and North Dakota (BBB) has received reports of fraudulent and aggressive collection calls targeting area consumers. In some cases, consumers have been threatened with arrest if they don't pay off alleged debts immediately. OTHER ALERTS July 2013

Every day, dozens of Kansans call our office to report scams or potential fraudulent activities. In the past few months, we have received an increasing number of complaints regarding debt collection scams.

It can be a scary phone call to receive. The caller will often make repeated calls – sometimes even to your workplace – claiming to be from a collection agency trying to collect money owed on a payday loan. In some cases, the scam artist has somehow acquired a list of past payday loan customers. But, in many cases the person being called has never taken out a payday loan. Even after informing the caller that you do not owe the debt, they keep calling.

Usually, the caller will tell you that you need to make a portion of the payment immediately, or you will be arrested. The caller will ask for your credit card or bank account information to process they payment. This is just a trick to get you to give the scammer access to your accounts.

Our Consumer Protection investigators have traced most of the calls to overseas. Unfortunately, that means that it is difficult for law enforcement officials to find them and shut them down. The best way to avoid becoming a victim of this scam is simply to ignore the calls. http://ag.ks.gov/media-center/news-releases/2013/07/01/consumer-corner-debt-collection-scams-on-the-rise December 2012: "Jokhoo allegedly utilized the various resources available to debt collectors to gather information regarding individuals, including dates of birth, social security numbers, addresses, employment and financial information. He allegedly contacted victims and falsely told them they had past due debts that they owed him. He would also sometimes make threats against the victims, placed multiple calls to the victims at unreasonable hours of the day and contacted the victims’ families or employers as a way to induce payments from the victims." http://minnesota.cbslocal.com/2012/12/20/fmr-lonsdale-debt-collector-indicted-for-bank-mail-wire-fraud/ http://minnesota.cbslocal.com/2012/12/20/fmr-lonsdale-debt-collector-indicted-for-bank-mail-wire-fraud/ ATTORNEY GENERAL MADIGAN ISSUES WARNING ABOUT FAKE PAYDAY LOAN COLLECTION CALLS Chicago - Attorney General Lisa Madigan today warned Illinois residents to be on the alert for scam artists posing as collectors of payday loan debt. The scammers call consumers and threaten them with legal action unless the victims authorize payments from their bank accounts. Here is the attorney general of KS warning about the same thing. http://www.ksag.org/page/consumer-alert-attorney-general-warns-kansans-of-debt-collection-scam SCAM ALERT: FAKE DEBT COLLECTION SCAMS February 3, 2011 The Oregon Department of Justice has received several complaints regarding phony debt collection calls. Scam artists pose as debt collectors or law enforcement officers calling about an outstanding debt from an online payday loan. They frequently use fake phone numbers and official sounding business names. They also do their research. Some Oregonians have been tricked into paying nonexistent debt because the scam artist knew personal information about them, including their Social Security number, home address, e-mail, and names of family and personal references. Attorney General Warns Vermonters Of Fake, Threatening And Harassing Collection Calls March 9, 2011

Vermont Attorney General William H. Sorrell is cautioning Vermonters to be wary of fake collection calls that threaten consumers with dire consequences for failing to pay on a supposed debt. "These calls violate Vermont law. Collection agents may not threaten arrest, garnishments of wages, loss of personal property or other consequences they cannot enforce without a court order," says Sorrell. Many of the calls claim to be collecting on an unpaid "payday" or short-term loan. In some cases, consumers had received short term loans, but had paid them in full. Payday loans are unlawful in Vermont, as the interest rates far exceed the rates allowable under Vermont banking law. CONSUMER ALERT:: PAYDAY LOANS AND COLLECTION CALLS PHOENIX -- Arizona Attorney General Tom Horne warns consumers to be aware of collection call scams relating to outstanding payday loans. Many Arizona consumers have received collection calls from fake law firms or fake government agencies telling consumers they owe monies to a payday loan company and threaten consumers with legal action. They also ask the consumer to provide bank account information to pay off the outstanding debt. 5/18/11 August 4, 2011 PIERRE, S.D. – Attorney General Marty Jackley is warning consumers about a debt collection scam in which debt collectors are impersonating law enforcement officers in effort to collect money. The scam artists most often claim they are attempting to collect a debt related to a payday loan obtained over the internet. Many of the consumers who have been contacted have never obtained a payday loan or the loan has been paid in full. The callers have most recently identified themselves as Criminal Investigations. The fraudsters call the victim's home, cell phone, and place of employment. They refuse to provide to the consumers any details of the alleged payday loans and become abusive when questioned. The callers threaten with legal actions, arrests, and in some cases physical violence if they refuse to pay. These collection calls are an attempt to obtain payment by instilling fear in the victims. Do not follow the instruction of the caller. Feb 2012

Denver, CO – February 16, 2012 – A call from any bill collector is certainly cause for alarm, especially if the collector threatens to have you arrested. According to consumers who have recently contacted the BBB, these are exactly the types of calls they’ve received – but they don’t owe the debt and the collector isn’t who he says he is.

While calls are coming from different numbers and the caller may even impersonate a police officer, the pitch is always the same. The caller tells the consumer they owe a debt on a payday loan and due to their nonpayment, they are going to be arrested unless they pay it over the phone immediately.

“We have heard of these scare tactics being used in such scams before,” said Dale Mingilton, president and CEO of the BBB Serving Denver/Boulder. “But we urge consumers not to panic and to verify debts and know their rights before making any payment to http://www.bbb.org/us/article/phony-payday-loan-collection-calls-spark-up-again-32670anyone.”

JUNE 2012 Hundreds of thousands of cash-strapped Americans have been targeted by abusive debt collectors operating out of overseas call centers suspected of links to organized crime in India, law enforcement officials told ABC News. The calls are part of a massive scam, one that appears to target struggling Americans -- especially those who have gone online to apply for payday loans. Armed with personal information from those pilfered applications, the threatening callers, who claim to be debt collectors poised to initiate legal action, have managed to pry loose millions of dollars from their victims -- even when the victims never owed money in the first place. all trace back to the same small town in Western India called Ahmedabad. Callers use technology to make it appear that the calls originate inside the U.S. Victims provided ABC News with recordings of dozens of the calls, and many of the thickly accented callers appear to be reading off a script. "Subpoenas have been readied, and Monday morning you're going to be picked up from your home," one caller says on a victim's voicemail. "And you have children. Don't worry about your children. We have a childcare department to take care of the children." "You will be behind bars for six months," said another caller. "And once you go behind bars, you will lose your job. Once you are behind the bars, you won't get a single drop of water." more here http://is.gd/r6CQP8 Tracy man accused of taking millions, bilking victims in debt collection scheme By Katie Nelson Contra Costa Times San Jose Mercury News Posted: MercuryNews.com TRACY -- A Tracy man faces two decades in prison and $250,000 in fines if he is found guilty of coercing millions of dollars from victims of a fake debt collection company. Kirit Patel, 68, was indicted by a federal grand jury in Sacramento on Friday for allegedly creating a false debt collection company to fleece victims. He faces 21 counts of wire fraud and mail fraud. According to court documents, Patel is accused of being a part of a scheme in which a ring of false debt collectors not only coerced but harassed unsuspecting victims into paying online loans that didn't exist. The scheme involved more than 2.7 million calls to at least 600,000 different phone numbers nationwide, according to the Federal Trade Commission, which investigated the case.

The company, called Broadway Global Master, allegedly had schemers from call centers in India impersonate law enforcement officers who falsely threatened victims with arrest warrants if they did not pay their debts. According to court documents, victims told the FTC they would often receive calls from law enforcement agents such as "Officer Mike Johnson" or representatives of fake government agencies like the "Federal Crime Unit of the Department of Justice." One consumer reported that the caller threatened to have her children taken away if she didn't pay, according to court documents. It is believed by FTC investigators that Patel opened the front company to process payments received from those who fell prey to the scheme. Fraudulent transactions totaled more than $5 million, which was collected in less than two years. http://www.mercurynews.com/top-stories/ci_21411778/tracy-man-accused-taking-millions-bilking-victims

UNITED STATES DISTRICT COURTDISTRICT OF CONNECTICUT

PHILIP PAPE JURY TRIAL DEMANDED

v. CASE NO. 3:13CV

AMOS FINANCIAL LLCLAW OFFICES OF FRANK N. PELUSO, P.C.

COMPLAINT

1. Plaintiff seeks relief pursuant to the Fair Debt Collection Practices Act

(“FDCPA”), 15 U.S.C. § 1692, the Connecticut Creditor’s Collection Practices Act, Conn.

Gen. Stat. §36a-648 (“CCPA”), and the Connecticut Unfair Trade Practices Act, §42-110g

(CUTPA).

2. The Court has jurisdiction. 15 U.S.C. § 1692k; 28 U.S.C. §1331, § 1367.

3. Defendant Amos is a foreign limited liability company registered to do business in

Connecticut.

4. Amos is in the business of purchasing defaulted consumer debt.

5. Amos collects on the debt it purchases using means of interstate commerce,

including the mail, internet, and telephone.

6. Amos purports to have purchased a home improvement loan entered into by

plaintiff with Key Bank, N.A.

7. Defendant Peluso sent plaintiff a collection letter on behalf of Amos Financial

dated July 31, 2012.

8. Defendant Amos knew and approved of the form of the letter.

9. Said letter twice requested payment within 7 days of plaintiff’s receipt of the letter,

in violation of 15 U.S.C. §169g.

Case 3:13-cv-00063-AVC Document 1 Filed 01/14/13 Page 1 of 3

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10. Peluso threated that Peluso would report the amount to the IRS as Debt

Cancellation if unpaid, which Peluso could not legally do.

FIRST COUNT

11. In the collection efforts within one year prior to the date of this action, each

defendant violated the FDCPA, § 1692d, -e, –f(1) or -g.

SECOND COUNT

12. In the collection efforts within one year prior to the date of this action, defendant

Amos violated the CCPA.

THIRD COUNT

13. In the collection efforts within three years prior to the date of this action, defendant

Amos violated CUTPA by the actions described above.

WHEREFORE plaintiff respectfully requests this Court to:

1. Award plaintiff such damages as are permitted by law, including $1,000 statutory

damages against each defendant under the FDCPA, plus $1,000 statutory damages against

defendant Amos under the CCPA, and actual and punitive damages against defendant

Amos under CUTPA.

2. Award the plaintiff costs of suit and a reasonable attorney's fee.

3. Award such other and further relief as law or equity may provide.

THE PLAINTIFF

BY__/s/ Joanne S. Faulkner__JOANNE S. FAULKNER ct04137123 AVON STREET


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NEW HAVEN, CT 06511-2422(203) [email protected]


UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

NICHOLAS ODELL JURY TRIAL DEMANDED v. CASE NO. 3:13CV ROBERT C. LUBUS , JR.

COMPLAINT

1. This is an action for damages, costs and attorney's fees seeking relief

pursuant to the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692.

2. This Court has jurisdiction. 15 U.S.C. §1692k; 28 U.S.C. §1331.

3. The FDCPA was enacted because “Existing laws and procedures for

redressing [consumer] injuries are inadequate to protect consumers.” § 1692(b).

4. The FDCPA preempts state laws that are less protective of consumers.

§1692n.

5. Attorneys were included within the FDCPA when Congress found that

"[c]learly, bar associations have failed to fulfill their obligations underlying the premise

of the attorney exemption [from the FDCPA]. There is no indication that this is about to

change. Having undermined the basis for the exemption, attorneys cannot complain

about being brought under the Act." H.R. Rep. No. 405 at 7, reprinted in 1986

U.S.C.C.A.N. at 1757. See also Congressman Annunzio's statement on the floor of

Congress at 131 Cong. Rec. at H10535.

6. Plaintiff is an individual who resides in Connecticut.

7. Defendant regularly engages in the practice of consumer debt collection.

8. Defendant sued plaintiff on behalf of plaintiff’s personal creditor, and

obtained judgment thereon in state court (the State Court judgment).

Case 3:13-cv-00530-JBA Document 1 Filed 04/16/13 Page 1 of 3

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9. Plaintiff was represented by counsel in the state court lawsuit.

10. During 2009, the creditor in the State Court judgment ceased using defendant

as outside collection counsel.

11. Defendant was aware that plaintiff was also represented by separate counsel

since he acted upon to a communication dated June 30, 2012, with regard to an execution

on the State Court judgment, and provided a payoff figure by letter dated August 8, 2012.

12. As of June 30, 2012, defendant was aware that plaintiff was out of work and

receiving Worker’s Compensation.

13. Defendant intentionally communicated with plaintiff directly in December,

2013, purportedly in connection with the State Court judgment, although he identified the

location of the court as Meriden instead of New Haven.

14. Defendant intentionally sent the communication to an address where plaintiff

no longer resided, in the hope that plaintiff would not respond so he could obtain further

orders against plaintiff.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff respectfully prays that relief be granted as follows:

(a) That judgment be entered against the defendant for statutory

damages, pursuant to 15 U.S.C. § 1692.

(b) That the Court award costs and reasonable attorneys’ fees,

pursuant to 15 U.S.C. § 1692k(a)(3); and,

(c) That the Court grant such other and further relief as may be just and proper.


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THE PLAINTIFF

BY /s/ Joanne S. Faulkner_ Joanne S. Faulkner ct04137 123 Avon Street New Haven, CT 06511-2422 (203) 772-0395 [email protected]


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UNITED STATES DISTRICT COURT

DISTRICT OF CONNECTICUT

JOANNE AVOLETTA :

:

:

v. : CIV. NO. 3:11CV1126 (WWE)

:

BRIAN D. DANFORTH, :

TOLISANO & DANFORTH LLC :

:

:

RULING ON PENDING DISCOVERY MOTIONS

Plaintiff alleges Fair Debt Collection Practices Act violations

pursuant to 15 U.S.C. §1692c, e or g, in connection with defendants’

efforts to collect on a personal credit card account. [Doc. #31].

Plaintiff bases her FDCPA violation on (1) a sentence in a collection

letter; (2) failure to respond to plaintiff’s June 30, 2010, letter;

(3) commencement of a small claims action and the representation that

defendants mailed a letter to plaintiff on June 22, 2011. Plaintiff

is seeking $1,000 statutory damages against each defendant and

attorney’s fees and costs under the FDCPA. [Amend. Compl. Doc. #31].

PLAINTIFF=S MOTION TO COMPEL [DOC. #16]

Plaintiffs Joanne Avoletta moves to compel responses to

discovery requests served September 29, 2011.

Case 3:11-cv-01126-WWE Document 44 Filed 07/31/12 Page 1 of 7

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Boilerplate Privilege Objections

Plaintiff objects to defendants’ boilerplate privilege

objections, which state, “[t]his Interrogatory would have the

defendants reveal information related to their representation of

their client in violation of Rule 1.6 of Connecticut’s Rules of

Professional Conduct as well as reveal information that may be

protected by attorney-client privilege and/or the work product

doctrine.”

Rule 1.6

Plaintiff argues, and the Court agrees, that Rule 1.6 is not

intended to, and does not apply to judicial proceedings in which a

lawyer may be required to produce evidence concerning a client.1 See

Conn. R. Prof. Conduct 1.6(c)(4) and this excerpt from the comment

to Rule 1.6:

The attorney-client privilege and work

product doctrine apply in judicial and

other proceedings in which a lawyer may be

called as a witness or otherwise required

to produce evidence concerning a client.

The Rule [1.6] of client-lawyer

confidentiality applies in situations

other than those where evidence is sought

from the lawyer through compulsion of law.

1Rule 1.6 (a) states, “A lawyer shall not reveal information relating to representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation, or the disclosure is permitted by subsection (b),(c) or (d).” Rules of Professional Conduct Rule 1.6 Confidentiality of Information.


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“Thus, while Rule 1.6 may be applicable to conversations with

plaintiff’s counsel, for example, Rule 1.6 is inapplicable to

discovery requests and deposition questions.” Burke v. Messerli &

Kramer, P.A., Civil No. 09-1630 (ADM/AJB), 2010 WL 2520615, *2 (D.

Minn. June 15, 2010) (Applying Minnesota Rule of Professional Conduct

1.6). It is undisputed here that defendants were representing

Barclays Bank Delaware in an attempt to collect a debt from the

plaintiff. [Doc. #19 at 4]. Defendants do not specify what

subsection of Rule 1.6 applies when the law firm is hired to collect

a debt, and not in the context of providing legal advice. As set forth

below, the privilege does not apply where, as here, an attorney or

law firm is acting as a business advisor or collection agent.

Attorney-Client Privilege/Work Product Privilege

The party asserting a privilege has the burden of establishing

its applicability. See e.g. U.S. v. Mejia, 655 F.3d 126, 131 (2d Cir.

To invoke the attorney-client privilege, a party must show

“(1) a communication between client and counsel that (2) was intended

to be and was in fact kept confidential, and (3) was made for the

purpose of obtaining or providing legal advice.” In re County of

Erie, 473 F.3d 413, 419 (2d Cir. 2007).

“[W]here the attorney acts as a . . . collection agent, . . .

the communications between him and his client are not protected by

the privilege.” In re Edwin Shapiro, 381 F. Supp. 21, 22 (N.D. Ill.


4

1974); see FTC v. Lundgren, Misc. S-96-0267 EJG JFM, 1997 U.S. Dist.

LEXIS 9557, * 7 (E.D. Cal. Apr. 29, 1997) (citing In re Edwin Shapiro).

“The privilege does not protect incidental legal advice given during

the course of correspondence pertaining to business and not made in

response to a request made primarily for the purpose of securing legal

advice. Finally, the privilege does not immunize from disclosure the

facts communicated where those facts can be learned from some source

other than the privileged communication; put another way, a

nonconfidential document does not become privileged merely by its

transmittal by a client to his or her attorney. ” Lundgren, 1997

U.S. Dist. LEXIS 9557, * 7-8 (citations omitted).

Defendants do not argue that at all times they were acting as

legal counsel. Indeed, defendants’ privilege log dated December 14,

2011, contains four categories of documents: the client file,

paperless file, itemized costs invoice and communication logs.

[Doc. #16-1]. Defendants state that the subject matter of these four

categories concern the “underlying collection matter” but may also

contain information either “unrelated to this case” or contain

material “concerning the lawyer’s representation of the client” or

“communications between the attorney and his trial counsel in the

present case.” Id. Clearly, some of these documents relate to

defendants’ actions solely as a collections agent. However, no

documents have been produced to plaintiff. In the privilege log,


5

defendants did not provide a general description of each

communication, the purpose of each communication, the parties

involved in each communication, and the specific factual and legal

grounds for the assertion of the privilege or privileges. Based on

defendants’ privilege log, the Court has no way to assess what parts

of the documents may be protected by attorney-client privilege.

Defendants did not bring the documents to oral argument for the

Court’s review and the privilege log does not assist the Court in

making a determination.2 On this record, defendants have not met

their burden to assert the attorney-client privilege or work product

protection. Mejia, 655 F.3d at 131.

Relevance Objection

As a preliminary matter, the Court notes that defendants filed

their opposition to plaintiff’s Motion to Compel before the Amended

Complaint was filed. Plaintiff filed an Amended Complaint on April

12, 2012. [Doc. #31]. Defendants argue that, even if the documents

are not privileged, they are not relevant. The objections on the

basis of relevance are also without merit.

2 The Court notes that defendants, in their brief in opposition, argue that Rule 26(e) requires that a “privilege log must contain the following information with respect to documents and electronically stored information to which protection is asserted: (1) the type; (2) general subject matter; (3) date; (4) author; (5) each recipient.” Fed. R. Civ. P. 26(e); United States v. Constr. Prod. Research, 73 F.3d 464, 473 (2d Cir. 1996). However, defendants did not provide this information in their privilege log.


6

Under the Federal Rule governing discovery,

parties “may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense-including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter.” Fed. R. Civ. P. 26(b)(1). The Rule further specifies that “[r]elevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Id. Moreover, “relevance” in this context is given a “broad” construction, and a party arguing that

information sought in discovery is not relevant “bears the burden of demonstrating ‘specifically how, despite the broad and liberal construction afforded the federal discovery rules, each [request] is not relevant[.]’ ”

Safeco Ins. Co. of America v. Vecsey, 259 F.R.D. 23, 26

n.1 (D. Conn. 2009) (quoting Klein v. AIG Trading Group

Inc., 228 F.R.D. 418, 422 (D. Conn. 2005)).

Based on the foregoing, plaintiff’s Motion to Compel is GRANTED

as to Interrogatory Nos. 1-13.3 Defendants will provide responses

within fourteen days.

PLAINTIFF=S MOTION FOR SANCTIONS [DOC. #19]

The Court declines to award sanctions on this record. It is

plausible that defendants’ counsel contacted chambers and got

permission to attend the settlement conference without a client

representative. The lack of a courtesy call or e-mail to plaintiff’s

3 Defendants withdrew their objections to Interrogatories 1, 3,

4. Defendants will provide responses within fourteen days.


7

counsel notifying her of the granting of this request does not rise

to sanctionable conduct on this record. Plaintiff is not precluded

from seeking costs and attorneys’ fees for attending the conference

at the end of the case, if she is the prevailing party.

CONCLUSION

Accordingly, plaintiff’s Motion to Compel [doc. #16] is GRANTED

and Motion for Sanctions [doc. #19] is DENIED. Defendants will

provide responses within fourteen days.

This is not a recommended ruling. This is a discovery ruling

and order which is reviewable pursuant to the "clearly erroneous"

statutory standard of review. 28 U.S.C. ' 636 (b)(1)(A); Fed. R. Civ.

P. 6(a), 6(e) and 72(a); and Rule 2 of the Local Rules for United States

Magistrate Judges. As such, it is an order of the Court unless

reversed or modified by the district judge upon motion timely made.

SO ORDERED at Bridgeport this 30th day of July 2012.

______/s/_____________________

HOLLY B. FITZSIMMONS

UNITED STATES MAGISTRATE JUDGE


1



:

ROBERT VIDAL :

HOLGER OCANA :

:

v. : CIV. NO. 3:12CV248 (MPS)

:

METRO-NORTH COMMUTER :

RAILROAD COMPANY :

:

:

RULING ON PLAINTIFFS’ MOTION TO COMPEL [DOC. #47]

This action is brought by plaintiffs Robert Vidal and

Holger Ocana, alleging discrimination in employment on the basis

of their Hispanic ethnicity, when they were denied acceptance

into the Maintenance of Equipment Promotion-To-Foreman Training

Program (the “FIT Program”), by their employer Metro-North

Commuter Railroad Company, an alleged violation of Title VII of

the Civil Rights Act of 1964, 42 U.S.C. §2000e et seq. Pending

is plaintiffs’ Motion to Compel responses to their First Set of

Interrogatories and Requests for Production of Documents [Doc.

#47].

A telephone conference was held on January 23, 2013, at the

request of plaintiffs, seeking an interim ruling on discovery

objections to Interrogatory Nos. 7, 8 and 9 in advance of the

settlement conference. The Court overruled defendant’s

objections to interrogatories 7 and 8, as follows. Defendant was

ordered to state the number of people accepted into the FIT

Program in 2007 and the number of Foreman positions filled in

Case 3:12-cv-00248-MPS Document 70 Filed 03/28/13 Page 1 of 7

2

2007. The ruling was without prejudice to plaintiffs’ requesting

further information if defendant asserts a more extensive lack

of mitigation affirmative defense. Objections to interrogatory 9

were overruled as follows. Defendant was ordered to state the

number of people who completed the FIT Program for the years

2003-06 and the number of Foreman positions filled in 2003-06.

A settlement conference was held on January 31, 2013. At

the conclusion of the conference the parties met with the Court

to resolve the remaining discovery issues raised in the motion

to compel. This ruling and order memorializes the order of the

Court and the agreement of the parties.

1. General Objections Incorporated in Each Response

Defendant’s interrogatory responses to Nos. 2, 7, 8, 9 and

13 incorporate by reference all of the substantive general

objections (eight in total), stating, “In addition to the

General Objections, Defendant objects to this Interrogatory on

the grounds that it is overly broad, unduly burdensome and not

reasonably calculated to lead to the discovery of admissible

evidence.” [Doc. #47-2, Defendant’s Supplemental Objections and

Responses dated December 3, 2012]. Defendant will specify which

of the “General Objections” it relies on for Interrogatories 2,

7, 8, 9, 13 and 14. Defendant will provide supplemental

responses within seven (7) days.

Before defendant files its supplemental responses the Court

is compelled to comment generally on the use of “General

Objections” and other boilerplate discovery objections.

Defendant repeats the same verbiage into each interrogatory


3

response, using the familiar boilerplate phrase that each and

every request is “overly broad, unduly burdensome and not

reasonably calculated to lead to the discovery of admissible

evidence” and further that it relies on an unspecified “General

Objection.” The frustration expressed by plaintiff with respect

to defendant’s non-specific objections is shared by this Court

and, quite frankly, only serves to increase litigation expenses

on motion practice, potentially extend deadlines for completion

of discovery unnecessarily and delay resolution of cases.

“[T]he scope of discovery under Fed. R. Civ. P. 26(b) is very

broad, ‘encompass[ing] any matter that bears on, or that

reasonably could lead to other matter that could bear on, any

issue that is or may be in the case.’” Maresco v. Evans

Chemetics Div. of W.R. Grace & Co., 964 F.2d 106, 114 (2d Cir.

1992) (quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340,

351, (1978)). “A party seeking discovery may move for an order

compelling an answer, designation, production, or inspection.”

Fed. R. Civ. P. 37(a)(3)(B). “Motions to compel made pursuant to

Fed. R. Civ. P. 37 are “entrusted to the sound discretion of the

district court.” United States v. Sanders, 211 F.3d 711, 720

(2d Cir. 2000). “The grounds for objecting to any interrogatory

must be stated with specificity. Any ground not stated in a

timely objection is waived unless the court, for good cause,

excuses the failure. Fed. R. Civ. P. 33(b)(4). “[B]oilerplate

objections that include unsubstantiated claims of undue burden,

overbreadth and lack of relevancy,” while producing “no

documents and answer[ing] no interrogatories . . . are a


4

paradigm of discovery abuse.” Jacoby v. Hartford Life &

Accident Ins. Co., 254 F.R.D> 477, 478 (S.D.N.Y. 2009). A party

resisting discovery has the burden of showing “specifically how,

despite the broad and liberal construction afforded the federal

discovery rules, each interrogatory is not relevant or how each

question is overly broad, burdensome or oppressive, . . .

submitting affidavits or offering evidence revealing the nature

of the burden.” Compagnie Francaise d’Assurance Pour le

Commerce Exterieur v. Phillips Petroleum Co., 105 F.R.D. 16, 42

(S.D.N.Y. 1984) (citation omitted).

Defendant is cautioned that continued failure to follow the

Federal Rules of Civil Procedure with respect to making specific

objections to discovery demands may result in the imposition of

sanctions and/or payment of costs.

2. Interrogatory Nos. 13 & 14

Interrogatory 13: State the factual basis for the assertion that the CHRO “unreasonably delayed in acknowledging its lack of jurisdiction.” Interrogatory 14: State the factual basis of the assertion that “[t]he EEOC and Department of Justice unreasonably delayed processing plaintiffs’ administrative charges after the CHRO finally acknowledged that it lacked jurisdiction.”

Defendant provided identical responses to these

interrogatories as follows:

Subject to and without waiving the General Objections, Defendant states that Plaintiffs improperly filed charges with the CHRO, an agency which statutorily lacked jurisdiction over their claims, pursuant to Conn. Gen. Stat. 16-344(a).


5

since the CHRO never had jurisdiction over

Plaintiffs’ claims, Plaintiffs’ filings with the CHRO were void ab initio. Plaintiffs’ failure to timely and diligently pursue their appropriate administrative remedies solely before the EEOC resulted in extraordinary delays in the administrative processing of their charges of discrimination to Defendant’s detriment.

Defendant’s ability to defend itself in this action has been damaged by the delay caused by Plaintiffs’ defective filing with the CHRO which led directly to further delays before the EEOC and Department of Justice. Plaintiffs failed to request right-to-sue letter in a timely manner, so it has now been over six years since the

events occurred about which plaintiffs claim.

Plaintiffs seek further clarification regarding the alleged

conduct by plaintiffs, the CHRO, the EEOC and the DOJ that

supports defendant’s laches defense. Defendant contends that it

has answered the interrogatories and that plaintiffs are aware

of the timeline associated with the administrative process. If

there is anything further, defendant may supplement the

responses and provide further information regarding the “factual

basis” for its defense within seven days.

3. Request for Production 10

On January 8, 2013, defendant stated in response to

plaintiffs’ motion to compel that it had produced all responsive

documents and referenced the Bates numbered documents produced.

[Doc. #57]. On reply, plaintiffs stated that defendant’s

response was “improper and confusing.” [Doc. #60 at 3]. At the

conference, plaintiffs did not explain how the production was

insufficient under the Federal Rules. If there are no other

responsive documents, after a good faith effort to locate them,


6

defendant will so state under oath and withdraw its objection.

Accordingly, plaintiff’s motion to compel request for

production 10 is moot on this record.

CONCLUSION

Accordingly, plaintiffs’ Motion to Compel [Doc. #47] is

GRANTED as set forth in this ruling and the Court’s interim

ruling dated January 23, 2013. [Doc. #62]. Defendant’s

supplemental discovery responses are due in seven (7) days.

Defendant’s response to Request for Production 10 is due in

fourteen (14) days.

Plaintiff’s Motion to Compel request for production 10 is

moot on this record.

The parties are reminded of their on-going duty to

supplement or correct disclosures or responses under Fed. R.

Civ. P. 26(e).1

The parties are encouraged to contact chambers to schedule

1Fed. R. Civ. P 25(e) Supplementing Disclosures and Responses.

(1) In General. A party who has made a disclosure under Rule

26(a)--or who has responded to an interrogatory, request for

production, or request for admission--must supplement or correct

its disclosure or response:

(A) in a timely manner if the party learns that in some material

respect the disclosure or response is incomplete or incorrect,

and if the additional or corrective information has not

otherwise been made known to the other parties during the

discovery process or in writing;


7

a conference, if any issues arise that may impact the deadlines

set in this ruling/order.

This is not a recommended ruling. This is a discovery

ruling and order which is reviewable pursuant to the "clearly

erroneous" statutory standard of review. 28 U.S.C. ' 636

(b)(1)(A); Fed. R. Civ. P. 6(a), 6(e) and 72(a); and Rule 2 of

the Local Rules for United States Magistrate Judges. As such,

it is an order of the Court unless reversed or modified by the

district judge upon motion timely made.

SO ORDERED at Bridgeport this 28th day of March 2013.

______/s/_________________

HOLLY B. FITZSIMMONS

UNITED STATES MAGISTRATE JUDGE


UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT JOANNE AVOLETTA v. CASE NO. 3:11CV 1126 (WWE) BRIAN D. DANFORTH November 4, 2013 TOLISANO & DANFORTH LLC MOTION FOR PARTIAL SUMMARY JUDGMENT Pursuant to the Scheduling Order, Plaintiff moves for partial summary judgment as to

liability alone as to only two of her claims since discovery is not yet complete as to other claims.

Defendants violated black letter law under the Fair Debt Collection Practices Act by failing to

provide the notice required by § 1692g(3) or by continuing to collect the debt without first

verifying it after receiving plaintiff’s dispute notice, in violation of § 1692g(b). Plaintiff needs to

prove only one of these violations to prevail.

THE PLAINTIFF

BY__/s/ Joanne S. Faulkner__ JOANNE S. FAULKNER ct04137 123 AVON STREET NEW HAVEN, CT 06511-2422

(203) 772-0395 [email protected]

Certificate of Service I hereby certify that on November 4, 2013, a copy of within was filed electronically. Notice of this filing will be sent by e-mail to all parties by operation of the Court’s electronic filing system. Parties may access this filing through the Court’s system. ____/s/ Joanne S. Faulkner___ JOANNE S. FAULKNER ct04137 UNITED STATES DISTRICT COURT

2

DISTRICT OF CONNECTICUT JOANNE AVOLETTA v. CASE NO. 3:11CV 1126 (WWE) BRIAN D. DANFORTH November 4, 2013 TOLISANO & DANFORTH LLC MEMORANDUM SUPPORTING PLAINTIFF’S

MOTION FOR PARTIAL SUMMARY JUDGMENT Plaintiff’s motion for partial summary judgment is based on defendants’ violation of

black letter law under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692g, by

failing to provide the notice required by § 1692g(3); or by continuing to collect the debt without

first verifying it once it had received plaintiff’s dispute notice, in violation of § 1692g(b).

Plaintiff needs to prove only one violation to prevail. Bentley v. Great Lakes Collection Bureau,

Inc., 6 F.3d 60, 62 (2d Cir. 1993).

The documents on which plaintiff bases her motion are undisputed: defendants’ letter

of July 28, 2010, plaintiff’s dispute letter of July 30, 2010, and a small claims writ mailed to

plaintiff on July 2, 2011. See plaintiff’s affidavit attached to her Statement of Material Facts.

Defendants’ letter of July 28, 2010, attempting to collect a personal credit card

account allegedly owed to the creditor Barclays Bank Delaware, stated, “Unless you dispute

the validity of the debt, or any portion thereof, within thirty (30) days after receipt of this

notice, the debt will be assumed to be valid by Barclays Bank Delaware.” (Emphasis

added). In contrast to defendants’ quoted notice, §1692g(a)(3) mandates that the debt

collector disclose that “unless the consumer, within thirty days after receipt of the notice,

disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid

3

by the debt collector.” (Emphasis added). Defendants’ alteration of the §1692g(a)(3) notice

by removing themselves as the party who would assume the debt to be valid and substituting

the account creditor is an archetypal FDCPA violation for which they are now liable.

Plaintiff replied on July 30, 2010, stating, inter alia, “I deny that I owe the amount of

$3,057.40.” Despite failing to respond to this dispute and in particular by not first verifying the

debt as required by the FDCPA, on July 2, 2011 defendants served a small claims action on

plaintiff in patent violation of §1692g(b).

1. The FDCPA Applies

Plaintiff meets the essential three requirements to establish a violation of the FDCPA.

Under the FDCPA, (1) the plaintiff is the consumer who allegedly owes the debt or a person who

has been the object of efforts to collect a consumer debt, (2) the defendant collecting the “debt” is

a “debt collector” as defined, and (3) the defendant has engaged in any act or omission in

violation of the prohibitions or requirements of the law. McCorriston v. L.W.T., Inc., 536 F.

Supp. 2d 1268, 1273 (M.D. Fla. 2008): Riveria v. MAB Collections, Inc., 682 F. Supp. 174, 175-

76 (W.D.N.Y. 1988). The first two elements are uncontroverted [Statement of Material Facts],

and defendants’ violations of the FDCPA are established as a matter of law, as shown here.

2. Overview of the FDCPA

The FDCPA establishes a system of enforcement by private attorneys general. 15

U.S.C. § 1692k; Jacobson v. Healthcare Financial Services, 516 F.3d 85, 91 (2d Cir. 2008)

(“[T]he FDCPA enlists the efforts of sophisticated consumers like Jacobson as ‘private

attorneys general’ to aid their less sophisticated counterparts, who are unlikely themselves to

bring suit under the Act, but who are assumed by the Act to benefit from the deterrent effect

4

of civil actions brought by others”).

The standard for interpretation and application of the FDCPA is whether the “least

sophisticated consumer” could have been deceived or misled. Clomon v. Jackson, 988 F.2d

1314, 1318 (2d Cir. 1993). The “least sophisticated consumer” is a naive, credulous, gullible,

ignorant, unthinking, person of "below-average sophistication or intelligence" "with a

rudimentary amount of information about the world and a willingness to read a collection

notice with some care.” Id. This objective standard applies even if the plaintiff is a learned

professor or a knowledgeable lawyer; thus plaintiff’s knowledge or educational level is not a

consideration in whether defendants violated the Act.

A letter is deceptive or misleading if it is subject to an inaccurate yet reasonable

interpretation by the least sophisticated consumer. Russell v. Equifax A.R.S., 74 F.3d 30, 36

(2d Cir. 1996)

The FDCPA is liberally construed in favor of the consumer to effectuate its purposes.

Cirkot v. Diversified Financial Systems, Inc., 839 F. Supp. 941, 944 (D. Conn. 1993);

Brown v. Card Serv. Ctr., 464 F.3d 450, 453 (3d Cir. 2006)

The FDCPA is a strict liability statute. Russell, 74 F.3d at 33.

3 Defendants did not adequately convey the statutory dispute right.

Defendants’ letter of July 28, 2010, attempting to collect a personal credit card

account, asserted, “Unless you dispute the validity of the debt, or any portion thereof, within

thirty (30) days after receipt of this notice, the debt will be assumed to be valid by Barclays

Bank Delaware.” The notice did not comply with FDCPA §1692g(a)(3), which provides:

(a) Notice of debt; contents

5

Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing-- … (3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

The statutory notice requires a debt collector to state the intent of the debt collector –

not of the creditor. Section 1692g(a)(3) encourages an oral or written dispute, in the absence

of which, “the debt will be assumed to be valid by the debt collector.” Barclays Bank is the

creditor here, not the debt collector. Contrary to defendants’ quoted statement, the FDCPA in

fact affirmatively precludes any suggestion that the creditor may ever construe the

consumer’s failure to dispute “as an admission of liability by the consumer.” §1692g(c).

Furthermore, defendants’ variation fails to convey the information required by the statute and

thus establishes defendants’ per se violation of this provision. Galuska v. Collectors Training

Inst., Inc., 2008 WL 2050809 * 3 (M.D. Pa. May 13, 2008) (letter must include language “by

the debt collector” in order to identify the person who would be assuming the debt to be

valid); Smith v. Hecker, 2005 WL 894812 *6 (E.D. Pa. Apr.18, 2005) (same); Pierce v.

Carrington Recovery Servs, LLC, 2009 WL 2525465 (W. D. Pa. Aug. 17, 2009) (omission of

“by the debt collector”); Harlan v. NRA Group, L.L.C., 2011 WL 500024 (E.D. Pa. Feb. 9,

2011) (failure to state that it was the debt collector who makes the assumption could mislead

the least sophisticated debtor to ‘‘reasonably believe that failure to dispute the debt would

create an evidentiary presumption of validity by a court or other entity of authority in a

subsequent collection proceeding); Koch v. Atkinson, Diner, Stone, Mankuta, & Ploucha,

P.A., 2011 WL 4499100 *3 (S.D. Fla. Sep. 27, 2011): Philip v. Sardo & Batista, P.C., 2011

6

WL 5513201 *4-5 (D.N.J. Nov 10, 2011); Smith v. Lyons, Doughty & Veldhuius, P.C., 2008

WL 2885887,*3 (D.N.J. Jul. 23, 2008). It may be licit to add reference to the creditor, but it

is a violation not to mention “by the debt collector” at all. Greco v. Trauner, Cohen &

Thomas, L.L.P., 412 F.3d 360, 365-66 (2d Cir. 2005).

In addition, this improper disclosure is also a violation of §1692e’s prohibition against

all false, deceptive, or misleading representations. The standard for deception under §1692e

(“subject to an inaccurate yet reasonable interpretation”) is set forth in Russell, 74 F.3d at 34.

Russell also establishes that a §1692g violation may also violate §1692e. Id. at 35. The

least sophisticated consumer might well perceive that the dispute must be made with

Barclays, since it is Barclays that is said to deem the debt valid in the absence of dispute. The

letter properly directs the written dispute to the debt collector, but not the oral dispute. Cf.

Macarz v Transworld Systems, Inc. 26 F. Supp. 2d 368 (D. Conn. 1998) (the validation notice

must make it sufficiently clear that a dispute must be directed to the debt collector, as opposed

to the creditor).

Summary judgment should enter for plaintiff on this violation, in which case the Court

need not address the second violation.

4. Defendants continued their efforts to collect without first verifying plaintiff’s dispute.

Section 1692g of the FDCPA requires a debt collector to send the consumer a written

notice, which includes identification of the debt and the consumer’s dispute rights. Subsection (b)

specifies:

If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector

7

obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

Plaintiff sent a dispute letter dated July 30, 2010 informing defendants that she denied

owing the amount stated. Without responding and without mailing any verification whatsoever,

defendants instead mailed her a small claims writ. Defendants did not cease collection of the

account, despite receiving plaintiff’s dispute notice, and thus violated § 1692g(b)’s mandate. The

Second Circuit explained the significance of the statutory protection in Jacobson:

As a response to "the recurring problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid," S. Rep. No. 95-382, at 4 (1977), as reprinted in 1977 U.S.C.C.A.N. 1695, 1699, the FDCPA gives the consumer the right to dispute a debt claimed by a debt collector, and to seek verification of the validity of the debt. 15 U.S.C. § 1692g(b). If the consumer notifies the debt collector in writing, "within the thirty-day period" afforded by the Act, that she disputes the debt or any portion of the debt, the debt collector must "cease collection." Id. The debt collector may resume collection activities only when it has obtained verification of the debt, and has mailed a copy of the verification to the consumer. Id.

Jacobson, 516 F. 3d at 89 (emphasis added).

As contemplated by the FDCPA, plaintiff’s letter invoked her rights both to dispute

the debt [§ 1692g] and to compel defendants to cease further collection communications

[§ 1692c(c)]. Case law has made clear that when a consumer wants to both exercise her

dispute right and require the collector to cease collection efforts, the collector can simply

respond to the dispute and provide necessary verification to comply with § 1692g and must do

so without seeking payment that would violate § 1692c(c). Johnson v. Equifax Risk Mgmt.

Servs, 2004 WL 540459, *9 (S.D.N.Y. Mar. 14, 2004); see also Cohen v. Beachside Two-I

Homeowners' Ass'n, 2006 WL 1795140 *13-14 (D. Minn. June 29, 2006) (“As a result, while

Cohen's October 18 letter does inform Krietzman and Felhaber that Cohen wishes to have no

8

further communication with respect to the debt generally, it does not ban any future

communication. Cohen solicits Krietzman and Felhaber to communicate with him regarding

settlement of the debt.”); Recker v. Cent. Collection Bureau, Inc., 2005 WL 2654222, at *4

(S.D. Ind. Oct.17, 2005) (“Contrary to Defendant's assertion, Defendant could have complied

with both provisions § 1692g(b) and § 1692c(c) by sending the verification with a

communication stating that the Defendant intended to invoke a specified remedy, namely the

filing of a suit in a small claims court.”); Marino v. Hoganwillig, PLLC, 2012 WL 1424733

*2 (W.D.N.Y. April 24, 2012). Once the collector verifies the dispute, the collector is free to

bring suit or invoke other remedies. Defendants skipped the dispute response but went

directly to suit, a clear violation of the FDCPA.

Summary judgment should enter in favor of plaintiff for this violation.

CONCLUSION

Judgment should enter in favor of plaintiff.

THE PLAINTIFF



Certificate of Service I hereby certify that on November 4, 2013, a copy of within was filed electronically. Notice of this filing will be sent by e-mail to all parties by operation of the Court’s electronic filing system.

9

Parties may access this filing through the Court’s system. ____/s/ Joanne S. Faulkner___ JOANNE S. FAULKNER ct04137

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

PHILIP PAPE v. CASE NO. 3:13CV 63 (AVC) AMOS FINANCIAL LLC LAW OFFICES OF FRANK N. PELUSO, P.C. September 5, 2013 MEMORANDUM SUPPORTING PLAINTIFF’S

MOTION FOR SUMMARY JUDGMENT Over eight years ago, Mr. Pape took out a $25,554.50 home equity loan from Key

Bank to finance home improvements. Unfortunately, after he made more than 30

payments of $259.02, foreclosure ensued, leaving Key Bank with no security. Years

later, defendant Amos Financial LLC (Amos) began collection efforts, claiming to have

bought the account from Key Bank in 2011 (no doubt for pennies on the dollar), and

adding several years’ worth of interest. 1

In 2012, Mr. Pape received a letter from defendant law firm (“Peluso”) stating

that defendant Amos had purchased his Key Bank loan, and that the balance was over

$35,000. The Peluso letter, attached hereto and to Local Rule 56(a)1 Statement ¶ 6, is a

virtual poster child for FDCPA violations. The letter misstated the balance,

overshadowed the validation notice, and included threats and intimidation, in violation

of §1692e and §1692g.

Mr. Pape seeks only statutory damages ($3,000) plus fees and costs based on

defendants’ violation of the Fair Debt Collection Practices Act ("FDCPA") and Amos’s

violation of the Connecticut Creditor’s Collection Practices Act (“CCPA”), Conn. Gen.

1 “Most debt buyers acquire the debts for a fraction of the balance, but then attempt to collect the entire debt.” Gonzales v. Arrow Financial Services, LLC, 660 F.3d 1055, 1059 (9th Cir. 2011).

2

Stat. §36a-648, within one year prior to the date of the filing of the Complaint.

Plaintiff needs to prove only one violation of each statute to prevail. Bentley v.

Great Lakes Collection Bureau, Inc., 6 F.3d 60, 62 (2d Cir. 1993).2 Thus, the Court need

not consider alternative violations once it finds any violation.

A. BASIS OF LIABILITY

1. The FDCPA Applies

Plaintiff meets the essential three requirements to establish a violation of the

FDCPA. Under the FDCPA, (1) the plaintiff is the consumer who allegedly owes the debt,

(2) the defendant collecting the “debt” is a “debt collector” as defined,3 and (3) the

defendant has engaged in any act or omission in violation of the prohibitions or

requirements of the law. McCorriston v. L.W.T., Inc., 536 F. Supp. 2d 1268, 1273 (M.D. Fla.

2008): Riveria v. MAB Collections, Inc., 682 F. Supp. 174, 175-76 (W.D.N.Y. 1988).

Amos, itself a debt collector, is vicariously liable for any improper collection

activities of those acting on its behalf. See Pollice v. Nat'l Tax Funding, L.P., 225 F.3d

379, 404 (3d Cir. 2000). In Pollice, the Third Circuit explained that allowing a claim of

vicarious liability against a debt collector is “a fair result because an entity that is

2 Defendants also violated §1692f(1) by self-adjudicating prejudgment interest, despite longstanding state law pursuant to which prejudgment interest is discretionary with the court. Daimlerchrysler Ins. Co., LLC v. Pambianchi , 2011 WL 721630 *1 (D.Conn. Feb. 23, 2011) (MRK); Weber v. FujiFilm Medical Systems U.S.A., Inc., 2013 WL 1149932 *16 (D. Conn. Mar. 19, 2013) (JBA). Plaintiff intends to pursue that claim if this summary judgment motion is not granted in his favor. 3 A debt buyer is a debt collector as well as a creditor. See, e.g. Ruth v. Triumph P’ships, 577 F.3d 790, 796-97 (7th Cir. 2009); Pacheco v. Joseph McMahon Corp., 698 F. Supp. 2d 291, 295 (D. Conn. 2010) (“well settled”).

3

itself a ‘debt collector’—and hence subject to the FDCPA—should bear the burden of

monitoring the activities of those it enlists to collect debts on its behalf.” Id. at 405.

Thus, Amos is liable for the acts of its attorney Peluso.

The Answer to the Complaint (Doc. No. 11) admits factors (1) and (2). See also Local

Rule 56(a)1 Statement ¶¶ 1-4. The remaining question is whether defendants violated the

FDCPA, discussed in Parts B and C below.

2. The CCPA Applies

The CCPA. parallel to the FDCPA, applies to creditors. “’Creditor’ means any

person to whom a debt is owed by a consumer debtor and such debt results from a

transaction occurring in the ordinary course of such person’s business.” Conn. Gen.

Stat. § 36a-645(2). Amos claimed to be a creditor of plaintiff. The Connecticut Banking

Department has adopted regulations pursuant to § 36a-647 that prohibit what

happened in this case: The false representation of the character, amount or legal status

of a debt, or the threat to take any action that cannot legally be taken or that is not

intended to be taken, or soliciting any amount, including any interest, fee, charge or

expense incidental to the principal obligation, unless such amount is authorized by the

agreement creating the debt or permitted by law. Reg. Conn. State Agencies § 36a-647-

5(7); §36a-647- 6(2), (6). The remedies are provided in § 36a-648.

3. Overview of the FDCPA

The FDCPA establishes a system of enforcement by private attorneys general. 15

U.S.C. § 1692k; Jacobson v. Healthcare Financial Services, 516 F.3d 85, 91 (2d Cir.

2008) (“[T]he FDCPA enlists the efforts of sophisticated consumers like Jacobson as

4

‘private attorneys general’ to aid their less sophisticated counterparts, who are unlikely

themselves to bring suit under the Act, but who are assumed by the Act to benefit from

the deterrent effect of civil actions brought by others”).

The FDCPA is liberally construed in favor of the consumer to effectuate its

purposes. Cirkot v. Diversified Financial Systems, Inc., 839 F. Supp. 941, 944 (D.

Conn. 1993); Brown v. Card Serv. Ctr., 464 F.3d 450, 453 (3d Cir. 2006)

The FDCPA is a strict liability statute. Russell v. Equifax A.R.S., 74 F.3d 30, 33

(2d Cir. 1996).

B. DEFENDANTS’ LETTER VIOLATED §1692g BY ITS TENOR AND CONTENTS

Section 1692g is an important disclosure provision, so important that the law itself

prohibits inconsistent or overshadowing communications:

(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing— (1) the amount of the debt; (2) the name of the creditor to whom the debt is owed; (3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector; (4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and (5) a statement that, upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor. (b). . . .Any collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer’s right to dispute the debt or request the name and address of the original creditor.

5

First, the amount and characterization of the debt was wrong. Second, and more

important, even though the body of the letter arguably sets forth the correct §1692g

disclosure, the selected fonts, the two requests for payment in 7 days, the false threats,

the bold underlined paragraphs—the most prominent in the letter-- overshadow or are

inconsistent with the mandatory §1692g disclosures.

“We request payment in full within 7 days of the receipt of this letter.” (end of first

paragraph)

The entire §1692g mandatory notice uses italics, a difficult to read font. It is the third

paragraph in an eight paragraph letter.

The additional italicized paragraph on page 2 is not part of the §1692g notice, but it is

in the same italics. Its language is confusing: “If, however you request proof of the

debt… within the thirty day time period that begins upon our receipt of this notice,

the law…. “ (Emphasis added.) [Peluso’s receipt of what notice?]

The next paragraph includes: “Our client may report information about your account

to credit bureaus.” Admittedly false: Amos does not credit report.

“We may also report this to the IRS as Debt Cancellation Income. . .” False threat.

Then, two bold faced underlined paragraphs of three sentences each enumerating the

possible dire consequences of a judgment.

“We request payment in full within 7 days of the receipt of this letter.” (Penultimate

sentence of last paragraph.)

6

1. Two requests for payment in 7 days overshadowed, absent explanation.

Even though the notice gives a consumer 30 days to dispute, Peluso sought

payment within 7 days—twice: once at the outset, and once after three intimidating

paragraphs. Long ago, the Second Circuit ruled that such a demand for early payment

violated the FDCPA: “CCI's violation of the Act consisted of its decision to ask for

immediate payment without also explaining that its demand did not override the

consumer's rights under Section 1962g to seek validation of the debt.” Savino v.

Computer Credit, Inc., 164 F.3d 81, 86 (2d Cir. 1998). Peluso did not include any

explanatory language related to the two early payment demands.

2. Confusing statement of dispute right.

The second italicized paragraph seems to mandate that Peluso receive some kind

of notice “If, however you request proof of the debt… within the thirty day time period

that begins upon our receipt of this notice, the law…. (Emphasis added.)” Does some

unexplained notice from the consumer trigger some kind of 30-day time period for

Peluso’s response? It is undoubtedly confusing for the least sophisticated consumer, or

for any reader, for that matter.

7

3. Typography overshadowed the mandatory notice

Two paragraphs are in italics. One of the paragraphs is the mandatory §1692g

notice. The other is not, but it is given the same emphasis. Using italics makes for

deliberately difficult reading.4

Moreover, the italicized paragraphs are far less noticeable than the two bolded,

underlined intimidating paragraphs – those paragraphs are the typographical

equivalent to pounding the table or shouting.

The mandatory notice was typographically overshadowed.

4 Use italics sparingly since text in italics is difficult to read in large amounts. This advice is applicable for script fonts as well. Both script and italics can be difficult to read and even if used sparingly in a string of no more than 4 or 5 words, effective technical communicators set italics or script in a relatively large type size. http://icarus.lmc.gatech.edu/info/hints.shtml Italics are sometimes used to highlight text. However, the reason you shouldn’t use italicized text is because they are hard to read. The letters have a slightly jagged line compared to non-italic fonts. The letters also lean over slightly making it hard for dyslexic users to read words accurately. When the text size is small, the text is practically illegible. A better way to highlight is to use bold text because the letters are clearer and give better contrast. http://uxmovement.com/content/6-surprising-bad-practices-that-hurt-dyslexic-users/ (footnotes omitted) When you italicize a word or a phrase, it gets noticed. However, italics (typeface that slants to the right) are a bit understated and do not attract the same attention as say, bold or underline. http://grammar.yourdictionary.com/punctuation/when/when-to-italicize.html

8

4. Intimidation also overshadowed the mandatory notice

The letter includes three bullying paragraphs on page two, which further distract

from the mandatory notice by anxiety-inducing threats: reporting to credit bureaus,

reporting to the IRS if not paid, postjudgment enforcement possibilities—liens,

examination under oath, execution against wages, personal property or bank accounts.

The paragraphs seem designed to make the least sophisticated consumer overlook the

mandatory notice that was set forth at the bottom of the prior page.

5. Wrong debt amount.

First, the “amount of the debt” must be correct as of the date the letter was sent.

Miller v. McCalla, Raymer, Padrick, Cobb, Nichols, and Clark, LLC, 214 F.3d 872, 875 (7th

Cir. 2000). Instead of setting forth the amount as of the July 31 date of the letter, the

“Outstanding Balance” was actually the amount “due” on July 5, 2012. Moreover, the

claimed amount included principal and interest, without revealing the much lower

balance on which interest would accrue ($24, 189.84) or the rate of interest. Local Rule

56(a)(1) Statement ¶¶ 12-14. As Judge Chatigny ruled in Jones v. Midland Funding,

LLC, 755 F. Supp. 2d 393, 397 (D. Conn. 2010), “I agree with the Miller line of cases that

when a debt is accruing interest, a validation notice fails to correctly state the amount of

the debt as required by § 1692g unless it discloses the fact that interest is accruing and

informs the consumer of the applicable interest rate.”

9

A consumer is allowed to dispute “any portion” of the debt [§1692g(a)(3),(4);

§1692g(b)], but one cannot dispute the interest portion of the debt if he does not know

that the demanded amount includes interest or at what rate. Failure to state the correct

amount of the debt -- by implying that the balance is entirely made up of principal --

concomitantly violates §1692e(2)(A) (prohibiting the false representation of the

character, amount or legal status of the debt).

Second, the letter stated that the “unpaid balance of $35,048.63 [was] originally

owed” to Key Bank. Defendants’ own document showed that the amount originally owed

to Key Bank was substantially less -- $24,189.84. Local Rule 56(a)1 Statement ¶ 13. The

characterization of the substantially higher amount as originally owed was false,

deceptive, or misleading. §1692e(2)(A).

Summary judgment should enter for Mr. Pape because defendants did not

convey the mandatory §1692g notice accurately, or because they obscured the

mandatory notice by typography, demands for payment in 7 days, and threats. (The

threats also violate §1692e; that violation is discussed in Part C, below.)

C. THREATENING OR INTIMIDATING LANGUAGE VIOLATES § 1692e

The second paragraph of the Peluso letter says, “Our client may report

information about your account to credit bureaus.” For emphasis, it again refers to the

credit report: “Late payments, missed payments, or other defaults on your account may

be reflected in your credit report.” But Amos admittedly did not, and does not, file any

credit reports. Local Rule 56(a)1 Statement ¶ 10. The additional implication that

defaults on the Amos account might already be reflected is also false. “[T]he FDCPA

10

specifically prohibits the threat to take any action ‘that is not intended to be taken’

(citation omitted).” Bentley v. Great Lakes Collection Bureau, 6 F.3d 60, 63 (2d Cir.

1993).

Not only was plaintiff’s credit report threatened, but Peluso threatened to report

him to the IRS if he did not pay: “We may also report this to the IRS as Debt

Cancellation Income pursuant to IRS Reg. S1.61-12 if payment is not received.” Since

Peluso was not the creditor and the debt was not owed to Peluso, it could not report to

the IRS.5 Peluso so admitted. Local Rule 56(a)(1) Statement ¶ 8. Amos testified that it

has not reported debt cancellation income. Statement ¶ 9.

False threats of IRS reporting violate the FDCPA. Wideman v. Monterey

Financial Services, Inc., 2009 WL 1292830 *3 (W.D. Pa. May 7, 2009); Wagner v.

Client Services, Inc., 2009 WL 839073 *4 (E.D. Pa. Mar. 26, 2009).

Most intimidating of all is the bolded and underlined description of the

consequences of a judgment – several months before suit was even filed:

Please keep in mind that if litigation against the debtor proceeds to judgment in the creditor’s favor, under Connecticut law the creditor has certain methods at is disposal to obtain actual payment in satisfaction of the judgment rendered. For example, the creditor can question a judgment debtor under oath about available assets. Further, liens can be placed on any real property owned by the judgment debtor. The creditor can also request the court to order the judgment debtor to make installment payments to satisfy the judgment. If payments are then not made in accordance with the court order, an execution can be issued against the judgment debtor’s wages, personal property, or bank account so that the creditor can satisfy

5 Peluso was not an applicable entity for the purpose of filing a 1099-C. http://www.irs.gov/pub/irs-drop/n-12-65.pdf

11

the debt out of the judgment debtor’s wages, bank accounts, or non-exempt personal property. Under Connecticut law, some property is exempted from execution by statute.

Long ago, Judge Cabranes found that such language violated the FDCPA:

I find the list of possible remedies particularly intimidating, and particularly extraneous for any purpose other than bullying plaintiff. Cf. Floersheim v. F.T.C., 411 F.2d 874, 877 (9th Cir.1969), cert. denied, 396 U.S. 1002, 90 S.Ct. 551, 24 L.Ed.2d 494 (1970). Faced with such a list of dire consequences, an unsophisticated debtor cannot help but feel unduly threatened. While the qualifying phrases “after judgment” and “available to attorneys in your area,” make these possible consequences technically true, they do nothing to make their enumeration less intimidating or to create a more accurate impression upon a layman. “[A] statement which is literally true may, nonetheless, be unlawfully deceptive.” Bailey Employment Sys. v. Hahn, 545 F.Supp. 62, 67 (D.Conn.1982) (Daly, J.), aff'd, 723 F.2d 895 (2d Cir.1983).

Rosa v. Gaynor, 784 F. Supp. 1, 5 (D. Conn. 1989). Almost as long ago, Judge Burns

agreed. Woolfolk v. Van Ru Credit Corp., 783 F. Supp. 724, 727 (D. Conn. 1990) (“Upon

review, the court determines that the listing of possible creditor remedies was unduly

threatening and deceptive, and grants summary judgment with respect to liability in

favor of plaintiff Woolfolk.”). More recently, Magistrate Judge Garfinkel condemned

similar post-judgment intimidation. Nolan v. Credit Management Corp., 2007 WL

4460310 *5 -7 (D. Conn. 2007) (conditional nature of threats “did not make this less

intimidating, especially to a layperson unfamiliar with Connecticut legal procedures”).

D. PLAINTIFF SEEKS $1,000 STATUTORY DAMAGES UNDER FDCPA AND CCPA

Each statute relied on allows $1,000 statutory damages. Peluso and Amos would

each be liable under the FDCPA for $1,000; Amos would be liable for $1,000 under the

CCPA.

12

Statutory damages are meant to deter violations of the collection laws. When the

FDCPA was enacted in 1976, the award was capped at $1,000. In today’s dollars, the

value of $1,000 is actually around $5,000. Courts in this district routinely award the

maximum $1,000. Clomon v. Jackson, 988 F.2d 1314, 1323 (2d Cir. 1993); Austin v.

Great Lakes Collection Bureau, Inc., Civil No. 3:92CV263 (RNC) (HBF) Doc. No. 60;

Kimberly v. Great Lakes Collection Bureau, Inc., Civil No. 3:91CV220 (HBF) (Doc.

Nos. 49, 79); Herbert v. Monterey Financial Services, Inc., Civil No. 3:93CV523

(AHN) Doc. No. 31; Kizer v. American Credit & Collections, Civil No. B-90-78

(TFGD) Doc. No. 78 (endorsement); Dowin v. Goldman, Civil No. 3:94CV1394 (PCD)

Doc. No. 8 ($3,000); Nolan v Credit Management Corp., 2007 WL 4460310 (D. Conn.

Dec. 14, 2007) (WIG).

Elsewhere, the $1,000 has been routinely awarded. E.g., Edwards v. National

Business Factors, Inc., 897 F. Supp. 455, 458 (D. Nev. 1995) ($1,000 for §1692g

violation); Tolentino v. Friedman, 46 F.3d 645, 649 (7th Cir. 1995) (§1692e(11)

notice); Chauncey v. JDR Recovery Corp., 118 F.3d 516 (1997) (short truncation of

30-day notice); Withers v. Eveland, 988 F. Supp. 942, 948 (E.D. Va. 1997)

(overshadowing).

13

CONCLUSION

Judgment should enter in favor of plaintiff for $1,000 under FDCPA against each

defendant and for an additional $1,000 against Amos under CCPA.

THE PLAINTIFF



Certificate of Service I hereby certify that on September 5, 2013, a copy of within was filed electronically. Notice of this filing will be sent by e-mail to all parties by operation of the Court’s electronic filing system. Parties may access this filing through the Court’s system. ____/s/ Joanne S. Faulkner___ JOANNE S. FAULKNER ct04137



MICHAEL ROUSSEAUJURY TRIAL DEMANDED

v. CASE NO. 3:11CV 1794 (SRU)

BENJAMIN MORRIS August 15, 2013LIENFACTORS, LLC

PLAINTIFF'S MEMORANDUM RE ATTORNEYS FEES

Plaintiff applies for an award of costs and fees against Defendant following

entry of judgment in favor of plaintiff for $1,000, in statutory damages under the Fair

Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692k(a)(2)(A), and parallel

state law. The time records show reductions in the exercise of billing judgment: some

entries (+) indicating more time was incurred; some entries (++) indicating

substantially more time was incurred. In the exercise of billing judgment, some

discovery entries were deleted. Because this case paralleled Palmer v Cuda, 3:12CV34

(SRU), no time in that case was duplicated in this one, or only half the time was

entered in each.

Fee-shifting under the FDCPA.

The FDCPA, §1692k(a)(3), provides that a defendant who fails to comply

with any of its provisions "is liable" to the plaintiff for a "reasonable attorney's fee

as determined by the court."

The Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §1692 et seq. was

enacted over three decades ago because of “abundant evidence of the use of abusive,

Case 3:11-cv-01794-SRU Document 50-2 Filed 08/15/13 Page 1 of 20

2

deceptive, and unfair debt collection practices” that harm the marketplace economy by

“contribut[ing] to the number of personal bankruptcies, to marital instability, to the

loss of jobs, and to invasion of individual privacy.” Congress found that existing laws

and procedures were “inadequate to protect consumers” and “means other than

misrepresentation or other abusive debt collection techniques are available for the

effective collection of debts.” § 1692(b), -(c). Congress encouraged consumers to

bring FDCPA actions before a Federal Article III judge by eliminating any “amount in

controversy” requirement. §1692k(d). Congress also fostered enforcement of the

FDCPA by enacting statutory damages and mandating that the debt collector pay the

consumer’s fees. 1692k(a)(3).

Article III judges are accustomed to monetarily significant cases between

corporate parties who can afford to pay their attorneys. FDCPA cases give the average

citizen the same dignity and quality of justice as the rich, but have a wider public

interest impact on many consumers because of the incentives embedded in the FDCPA

for compliance. The consumer may have had medical or marital or employment

problems, or may have become entangled with predatory lenders or identity thieves.

Yet, there is the comfort of knowing that the federal bench will apply the law to

protect against scofflaws and accomplish the purposes of Congress.

Vigorous defense. In awarding fees, the Court can consider the substantial

effort of plaintiff's attorney caused by defense "counsel who fought the case bitterly to

the very end and even now continue their recalcitrant posture." Birmingham v. Sogen-


3

Swiss Intern. Corp. Retirement Plan, 718 F.2d 515, 523 (2d Cir. 1983).

Although private parties looking only to their own interests would notinvest more in litigation than the stakes of the case, the combination of self-interest with the American Rule on the allocation of legal costs means thatpeople can get away with small offenses. A two-day suspension may beunconstitutional, but a few hours of legal time costs more than the wages lost.Section 1988 helps to discourage petty tyranny. Awarding the full cost oflitigation, which looks excessive in the single case, is sensible because it aids inthe enforcement of rules of law. [citation omitted]. Put another way: Monetaryawards understate the real stakes. Judicial decisions have effects on strangers.This litigation was prosecuted by a lawyer retained by a union of publicemployees and stoutly resisted by the county. If as the defendants say "only"$3,700 was at stake, why the tenacious resistance? Defendants do not contendthat the exertion on plaintiff's side was unreasonable in relation to the defense;no more is necessary to show that the judge acted within his discretion inawarding fees exceeding the monetary recovery.

Barrow v. Falck, 977 F.2d 1100, 1103-04 (7th Cir. 1992).

"While [defendant] is entitled to contest vigorously [plaintiff's] claim, once it

does so it cannot then complain that the fees award should be less than claimed

because the case could have been tried with less resources and with fewer hours

expended." Henson v. Columbus Bank & Trust Co., 770 F.2d 1566, 1575 (11th Cir.

1985). To the same effect: Copeland v. Marshall, 641 F.2d 880, 904 (D.C. Cir. 1980)

(en banc) (Title VII; contentious litigation strategy forced plaintiff to respond in kind);

Loggins v. Delo, 999 F.2d 364, 368 (8th Cir. 1993) ($25,000.00 attorney's fee award

for recovery of $102.50 in actual damages).

Rule 11

The plaintiff made an effort to avert some of the time expended by serving a

Rule 11 motion, attached. Defendant should not be heard to quibble about fees.


4

FDCPA Fee Standards

Where, as here, an attorneys fee provision is phrased in mandatory terms,

"fees may be denied a successful plaintiff only in the most unusual of

circumstances." De Jesus v. Banco Popular de Puerto Rico, 918 F.2d 232, 234 (1st

Cir. 1990) (truth in lending). An award of fees is mandatory in FDCPA cases even if

there had been no award of actual or statutory damages. Savino v. Computer Credit,

164 F.3d 81, 87 (2d Cir. 1998), citing Emanuel v. American Credit Exchange, 870

F.2d 805, 809 (2d Cir. 1989); Pipiles v. Credit Bureau of Lockport, 886 F.2d 22, 28

(2d Cir. 1989).

"The reason for mandatory fees is that congress chose a 'private attorney

general' approach to assume enforcement of the FDCPA." Camacho v. Bridgeport Fin.,

Inc., 523 F.3d 973, 978 (9th Cir. 2008); Jacobson v. Healthcare Fin. Servs., Inc., 516

F.3d 85, 91 (2d Cir. 2008) (“[T]he FDCPA enlists the efforts of sophisticated

consumers like Jacobson as ‘private attorneys general’ to aid their less sophisticated

counterparts, who are unlikely themselves to bring suit under the Act, but who are

assumed by the Act to benefit from the deterrent effect of civil actions brought by

others”); Zagorski v. Midwest Billing Services, Inc., 128 F.3d 1164 (7th Cir. 1997);

Tolentino v. Friedman, 46 F.3d 645, 651 (7th Cir. 1995) (George C. Pratt, C.J.);

Graziano v. Harrison, 950 F.2d 107, 113-14 (3d Cir. 1991) (FDCPA "mandates an

award of attorney's fees as a means of fulfilling Congress's intent that the Act

should be enforced by debtors acting as private attorneys general").


5

Civil suits will deter abusive practices only if it is economically feasible forconsumers to bring them. Unless consumers can recover attorneys fees it maynot be possible for them to pursue small claims .... [U]nscrupulouscollection agencies have little to fear from such suits if consumers must paythousands of dollars in attorney fees to protect hundreds. Congressrecognized this problem and specifically provided for the award of attorneyfees to successful plaintiffs.

Venes v. Professional Service Bureau, Inc., 353 N.W.2d 671 (Minn. App. 1984).

"[T]he most critical factor" in a district court's determination of what constitutes

reasonable attorney's fees in a given case "is the degree of success obtained." Barfield

v. N.Y. City Health & Hosps. Corp., 537 F.3d 132, 152 (2d Cir. 2008). Here, plaintiff

recovered $1,000 statutory damages under state and federal law. Where the statutory

damages are limited, recovery of a significant amount of the statutory damages is

success. Nigh v. Koons Buick Pontiac GMC, Inc., 478 F.3d 183, 190 (4th Cir. 2007)

(Truth in Lending Act: “Koons's contention that this recovery is somehow de minimis

betrays a profound misunderstanding of either the expression or the facts of this case.)

The law is clear that a plaintiff can be compensated even for unsuccessful

claims as long as they are based on the same facts or legal theories. The seminal case

is Hensley v. Eckerhart, 461 U.S. 424 (1983). Hensley ruled that a fee request can be

reduced where the plaintiff presented "distinctly different claims for relief that are

based on different facts and legal theories." 461 U.S. at 434. That is not the case

herein. Plaintiff's claims were based on defendant’s course of action relating to

collection of her alleged debts. Therefore, as in Hensley, 461 U.S. at 435:

the plaintiff's claims for relief will involve a common core of facts or will bebased on related legal theories. . . .In these circumstances the fee award should


6

not be reduced simply because the plaintiff failed to prevail on every contentionraised in the lawsuit. . . .Litigants in good faith may raise alternative legalgrounds for a desired outcome, and the court's rejection of or failure to reachcertain grounds is not a sufficient reason for reducing a fee.

Hensley, 461 U.S. at 440, ultimately held:

Where the plaintiff has failed to prevail on a claim that is distinct in all respectsfrom his successful claims, the hours spent on the unsuccessful claims shouldbe excluded in considering the amount of a reasonable fee. Where a lawsuitconsists of related claims, a plaintiff who has won substantial relief should nothave his attorney's fee award reduced simply because the district court did notadopt each contention raised.

See also LeBlanc-Sternberg v. Fletcher, 143 F.3d 748 (2d Cir. 1998) (claims

intertwined); Dominic v. Consolidated Edison Co., 822 F.2d 1249, 1259-60 (2d Cir.

1987) (fully compensatory fee proper where factual basis and legal theories same

throughout); United States Football League v. National Football League, 887 F.2d

408, 415 (2d Cir. 1989) (common core of facts and law). The distinction made in Mary

Beth G. v. Chicago, 723 F.2d 1263, 1279 (7th Cir. 1983), seems apt: "[A]n

unsuccessful claim will be unrelated to a successful claim when the relief sought on

the unsuccessful claim is intended to remedy a course of conduct entirely distinct and

separate from the course of conduct that gave rise to the injury on which the relief

granted is premised." Plaintiff submits that, since all claims were based on the same

underlying collection effort, no reduction should be made for "unsuccessful" claims.1

The Second Circuit agrees. In Grant v. Martinez, 973 F.2d 96 (2d Cir. 1992), the

plaintiffs settled for $60,000 and did not get all the relief they requested. The lodestar


7

figure of $500,000 for the attorneys was upheld. The decision noted that burden of

proof is on the party seeking any downward adjustment; and, a court can reject hours

expended in unsuccessful claims only if those claims were wholly unrelated to

successful claims. See also McCann v. Coughlin, 698 F.2d 112, 129-30 (2d Cir. 1983);

Dominic v. Consolidated Edison Co., 822 F.2d 1249, 1259-60 (2d Cir. 1987); Dague

v. City of Burlington, 935 F.2d 1343, 1358-59 (2d Cir. 1991), reversed on other

grounds, 505 U.S. 557, 112 S. Ct. 2638 (1992) (district court did not abuse its

discretion in awarding full fee requested on all aspects of the case, although plaintiffs

were unsuccessful on preliminary injunction and interlocutory appeal, some arguments

failed, and some were not fee-generating).

Typically, FDCPA fee awards substantially exceed the recovery.

Ellis v. Solomon & Solomon P.C., 2009 U.S. Dist. LEXIS 96785, Civil No.

3:05CV1623 (D. Conn. Oct. 20, 2009) ($36,000 fees and costs on $1,000 statutory

recovery); Carter v. Reiner, Reiner & Bendett, P.C., Civil No. 3:06CV988 (AWT) (D.

Conn. Aug. 28, 2008) ($34,000 in fees and costs on $1,000 statutory recovery); Goray

v. Unifund CCR Partners, Civ. No. 06-00214 HG-LEK (D. Hawaii June 13, 2008)

($53,522.50 in fees and $2048.57 in costs on $1000 statutory recovery); Register v.

Reiner, Reiner & Bendett, P.C., Civil No. 3:06CV987 (JCH) (D. Conn. Oct. 19, 2007)

($37,000 in fees and costs on $1,000 statutory recovery); Torgersen v. Arrow Fin.

Servs., 2007 U.S. Dist. LEXIS 50156 * 11-12 (N.D. Ill. June 29, 2007) ($8,427.98 in

1 Arguably, a reduction in plaintiff's fees, which correspondingly benefits defendants, would amount toRule 11 sanctions, by the back door.


8

fees and costs on $1,500 Offer of Judgment); McKinney v. Cadleway Props., Inc.,

2007 U.S. Dist. LEXIS 41588 * 2, 7 (N.D. Ill. June 8, 2007), aff¹d, 2007 U.S. Dist.

LEXIS 79786 (N.D. Ill. Oct. 23, 2007) (affirming $40,595.50 in attorneys’ fees and

costs of $ 1,192.62 on a $1,000 judgment for statutory damages), rev¹d on other

grounds, 548 F.3d 496 (7th Cir. 2008) (reversing summary judgment entered in favor

of the plaintiff); Gradisher v. Check Enforcement Unit, 2003 U.S. Dist. LEXIS 753 *

1, 29, 2003 WL 187416 (W.D. Mich. Jan. 22, 2003) ($69,872.00 in attorney¹s fees and

$7,808.44 in costs on $1,000 statutory damages); Armstrong v. The Rose Law Firm,

P.A., 2002 U.S. Dist. LEXIS 16867, 2002 WL 31050583 (D. Minn. Sept. 4, 2002)

($43,180.00 in attorney¹s fees on recovery of $1,000.00 statutory damages); In re

Martinez, 266 B.R. 523, 544 (Bankr. S.D. Fla. 2001), aff'd, 271 B.R. 696 (S.D. Fla.

2001) (affirming bankruptcy court’s award of attorney's fees of $29,037.50 on

recovery of $1,000 statutory damages); Norton v. Wilshire Credit Corp., 36 F. Supp.

2d 216 (D.N.J. 1999) (awarding over $57,000 in fees in an FDCPA case); Perez v.

Perkiss, 742 F. Supp. 883 (D. Del. 1990) ($10,110 in attorney’s fees where the

plaintiff's recovery was $1,200).

Costs

In a fee shifting case, recoverable costs “encompass a far broader range of

expenses than costs that are taxable under 28 U.S.C. § 1920 and the Local Rules.”

Tsombanidis v. City of W. Haven, 208 F. Supp. 2d 263, 286 (D. Conn. 2002). E.g.,

LeBlanc-Sternberg v. Fletcher, 143 F.3d 748 (2d Cir. 1998) ("’Attorney's fees awards


9

include those reasonable out-of-pocket expenses incurred by attorneys and ordinarily

charged to their clients.’" United States Football League v. National Football League,

887 F.2d 408, 416 (2d Cir. 1989)”). There can be no question that the modest costs are

recoverable herein consisting largely of the $350 filing fee and miscellaneous

expenses.

The $400 Hourly Rate is Reasonable

Counsel seeks fees at $400 per hour. Please see affidavit submitted herewith,

reciting comparable fee awards. "Paying counsel in FDCPA cases at rates lower

than those they can obtain in the marketplace is inconsistent with the congressional

desire to enforce the FDCPA through private actions, and therefore misapplies the

law." Zagorski, supra, citing Tolentino, 46 F.3d at 653.

Lodestar Figure

There is a strong presumption that the lodestar figure (reasonable hours times

reasonable rate) represents a reasonable fee. Blanchard v. Bergeron, 489 U.S. 87, 95

(1989), quoting Pennsylvania v. Delaware Valley Citizens' Council for Clean Air,

478 U.S. 546, 656 (1986). Currently prevailing marketplace rates establish the

lodestar amount. Missouri v. Jenkins by Agyei, 491 U.S. 274, 283 (1989); Blum v.

Stenson, 465 U.S. 886, 895 (1983); DiFilippo v. Morizio, 759 F.2d 231, 235 (2d

Cir. 1985) (rejecting 46 hours on pretrial memo and 42 hours on fee application);

Cohen v. West Haven Bd. of Police Com'rs, 638 F.2d 496, 506 (2d Cir. 1980).


10

”The district court may not reduce the established market rate by some factor

that it believes accounts for differences between large firms and small firms. Lawyers

of common expertise and experience in the same market are entitled to the same rate.”

Bankston v. State of Illinois, 60 F.3d 1249, 1255-56 (7th Cir. 1995); Bailey v. District

of Columbia, 839 F. Supp. 888, 891 (D.D.C. 1993) (no distinction between solo and

large firm rate); Gary v. Kason Credit Corp., Civil No. 3:95CV 54 (TPS) (D. Conn.

Oct. 21, 1998) (rejecting “overhead” argument).

We want to caution, however, that district courts should not treat an attorney'sstatus as a solo practitioner as grounds for an automatic reduction in thereasonable hourly rate. Cases suggest that in determining the relevant "market,"a court may look to rates charged by those similarly situated, including lookingto the rates charged by large- or medium-sized law firms, based on the widely-held premise that a client represented by a medium-sized firm pays less than aclient represented by a large firm with higher overhead costs. See, e.g.,Chambless, 885 F.2d at 1058-59; Algie v. RCA Global Commc'ns, Inc., 891 F.Supp. 875, 895 (S.D.N.Y. 1994). But whether or not the aforementionedpremise - that the bigger the firm the higher the attorneys' hourly rates charged -is correct, and even assuming it may be that solo practitioners of equal skill,expertise and reputation, charge less than those at large- or medium-sized firms,courts should not automatically reduce the reasonable hourly rate based solelyon an attorney's status as a solo practitioner. Overhead is not a valid reason forwhy certain attorneys should be awarded a higher or lower hourly rate. Cf.Miele, 831 F.2d at 409; Blum, 465 U.S. at 892, 895-96 (rejecting the SolicitorGeneral's suggestion that fees awarded to non-profit legal aid societies be basedon a "cost-related standard"). Rather, overhead merely helps account for whysome attorneys charge more for their services. Indeed, it may be that in certainniche practice areas, attorneys of the highest "skill, expertise, and reputation"have decided to maintain a solo practice instead of affiliating themselves with afirm. The reasons for doing so may be numerous, including the inherentproblems of higher overhead, fee-sharing, and imputed conflicts of interest. Thefocus of the inquiry into the reasonable hourly rate must instead be determinedby reference to "prevailing [rates] in the community for similar services bylawyers of reasonably comparable skill, expertise, and reputation." Blum, 465U.S. at 895 n.11; Chambless, 885 F.2d at 1058-59. Working as a solopractitioner may be relevant to defining the market, See Chambless, 885 F.2d at


11

1059 ("smaller firms may be subject to their own prevailing market rate"), but itwould be error to use an attorney's status as a solo practitioner as an automaticdeduction or shortcut for determining the reasonable hourly rate.

McDonald v. Pension Plan of the NYSA-ILA Pension Trust Fund, 450 F.3d 91, 98 n.6

(2d Cir. 2006) (emphasis added).

While the Court has discretion to determine the proper fee amount, "[T]he

latitude of its discretion is narrowed by a presumption that successful civil rights

litigants should recover reasonable attorney's fees unless special circumstances

render such an award unjust. . . . Furthermore, where, as here, the party achieves

success on the merits, an award of all reasonable hours at a reasonable hourly

rate, i.e., the lodestar figure, is presumptively appropriate." DiFilippo, 759 F.2d at

234.

"[A] party advocating the reduction of the lodestar amount bears the burden

of establishing that a reduction is justified." United States Football League v.

National Football League, 887 F.2d 408, 413 (2d Cir. 1989) (awarding $5,500,000 in

fees on $3 recovery), cited in Grant v. Martinez, 973 F.2d 96, 101 (2d Cir. 1992). See

Laura B. Bartell, Taxation of Costs and Awards of Expenses in Federal Court, 101

F.R.D. 553, 560-62 (1984).

Plaintiff submits that fee standards in civil rights cases are applicable here,

because an important public policy was vindicated. See Delaware Valley, 478 U.S.

at 559-60; Zagorski, supra; Tolentino, 46 F.3d at 652; Ferland v. Conrad Credit Corp.,

244 F.3d 1145, 1149 n.4 (9th Cir. 2001) (approving lodestar method in FDCPA case);


12

Hollis v. Roberts, 984 F.2d 1159, 1161 (11th Cir. 1983) (FDCPA award $1,500;

fees granted for 24.9 hours at $150/hr., prevailing rate in the community).

No Adjustment Should Be Made

The burden of proof is on the opponent to present specific evidence that a lower

amount is appropriate. E.g., United States Football League v. National Football

League, 887 F.2d 408, 413 (2d Cir. 1989); Gates v. Deukmejian, 987 F.2d 1392, 1397-

98 (9th Cir. 1992) (fee opponent must submit evidence); Brinker v. Giuffrida, 798

F.2d 661, 668 (3d Cir. 1986) ("[T]here is ordinarily no reason for a court to disregard

uncontested affidavits of a fee applicant").

Plaintiff does not request an upward or downward adjustment, despite the

arguable application of 28 U.S.C. § 1987. If defendant requests such an adjustment,

factors identified in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-

719, may be considered. Hensley v. Eckerhart, 461 U.S. 424 (1983), however, makes

clear that the Johnson factors matter only as they bear on the market rate or hours

reasonably expended, or, in rare cases, if they are a basis for adjusting the lodestar. Id.

at 434 n.9 ("[M]any of those factors usually are subsumed within the initial

calculation of hours reasonably expended at a reasonable hourly rate"); U.S.

Football League, 887 F. 2d at 415.

1. The time and labor required (see affidavit). Plaintiff submits that the

time expended in the prosecution of this action is modest, especially compared with

defense fees, due to counsel's experience in consumer protection litigation. In these


13

cases, which are small monetarily but help others because a defendant changes its

forms and procedures, defendants should not be encouraged to expend resources

beyond the value of the case in the hope of reducing plaintiff's fee award.

2. The novelty and difficulty of the question. Even if the case had been

straightforward, the lodestar amount may not be reduced. DiFilippo, 759 F.2d at

235.

3. The skill requisite to perform the legal services properly: plaintiff's counsel

knows of very few Connecticut attorneys who purport to be able to litigate plaintiffs'

Consumer Credit Protection Act cases.

4. The preclusion of other employment. The time spent on this case was

not, and could not be, spent at the same time on other cases.

5. The customary fee is what the plaintiff's counsel requests.

6. Whether the fee is fixed or contingent. In a Consumer Credit Protection

Act case, the fee is always contingent -- not on the amount of damages, but on award

by the court or agreement of opponent. In a private attorney general case, Congress

encourages counsel to bring suit, recognizing that counsel cannot charge the client an

hourly fee, because the fee may be out of proportion to the recovery.

“A contingent fee must be higher than the fee for the same legal services as

they are performed. The contingent fee compensates the lawyer not only for the legal

services he renders, but also for the loan of those services. The implicit interest rate on

such a loan is higher because the risk of default (the loss of the case, which cancels the


14

debt of the client to the lawyer) is much higher than that of a conventional loan.”

Posner, Economic Analysis of Law, 534, 567 (4th ed. 1992).

If contingent on an award by the Court, the fee award should compensate

counsel for the risk of receiving no compensation, Blum, 465 U.S. at 903, and to

permit counsel "to earn an income that would be competitive with colleagues who get

paid win or lose." Bayless v. Irv Leopold Imports, Inc., 659 F. Supp. 942 (D. Ore.

1987) (odometer case).

7. Time limitations imposed by the client or the circumstances (none except

reasonableness).

8. The amount involved and the results obtained. "[C]ourts generally will not

look to the size of the damage award in determining a reasonable attorney's fee in

consumer cases." Smith v. Chapman, 436 F. Supp. 58, 66 (W.D. Tex. 1977). The

results in this case are more than the maximum amount of statutory damages for the

plaintiff. Because the statute itself limits damages, the amount of damages awarded

does not justify a reduction in the lodestar amount. Cowan v. Prudential Ins. Co., 935

F.2d 522, 527 (2d Cir. 1991).

The Second Circuit rejects the "proportionality" argument as the basis for a fee

award. E.g., Lunday v. City of Albany, 42 F.3d 131, 134 (2d Cir. 1994); DiFilippo v.

Morizio, 759 F.2d 231, 234 (2d Cir. 1985); McCann v. Coughlin, 698 F.2d 112, 129

(2d Cir. 1983). Indeed, fee awards in civil rights and consumer protection matters

regularly exceed the plaintiff's recovery. E.g., City of Riverside, 477 U.S. at 580


15

(awarding $245,450 fees on a $33,350 recovery, including 143 hours for trial

preparation); Grant v. Martinez, 973 F.2d 96, 101 (2d Cir. 1992) (fee award of

$500,000 on $60,000 settlement); United States Football League v. National Football

League, 887 F.2d 408, 413-15 (2d Cir. 1989) ($5.5 million fee award on $3.00

recovery); Chambless v. Masters, Mates & Pilots Pension Plan, 885 F.2d 1053,

1057-60 (2d Cir. 1989) ($415,000 fee for recovering $2,689.02 monthly pension). See

Norton v. Wilshire Credit Corp., 36 F. Supp. 2d at 220 (rejecting proportionality in

awarding $58,000 in fees in an FDCPA case).

In a Consumer Credit Protection Act case such as this one, the award is often

limited by statute. “There is little reason to look to the limited award of statutory

damages to determine the reasonableness of attorneys’ fees which are generated by the

unlimited costs of litigation.” Postow v. Oriental Bldg Ass’n, 455 F. Supp. 781, 791

(D.D.C. 1978). See also Bittner v. Tri-County Toyota, 569 N.E.2d 464. 466 (Ohio

S.Ct. 1991) (the remedial/consumer protection purpose of the statute is undermined if

relatively small dollar amount cases cannot fully compensate the attorneys who take

them on).

9. The experience, reputation and ability of the attorney. Plaintiff's counsel has

an outstanding nationwide reputation for her experience and ability in the consumer

protection field, and is a contributing editor of the National Consumer Law Center’s

Fair Debt Collection Practices manual. In 2002, she was the honored recipient of Vern

Countryman Award “for excellence and dedication in the practice of consumer law on


16

behalf of low-income consumers.”

10. The undesirability of the case (see affidavit as to risk of loss and dearth of

practitioners in the Connecticut area). Consumer cases are brought in the public

interest by private attorneys general, but are particularly undesirable to lawyers for

many reasons. They are often labor-intensive to obtain the requisite proof to win the

case. The results are uncertain so taking such cases imposes risks upon the

practitioner. It becomes difficult for consumers to vindicate their rights under

consumer protection statutes as a result, especially where small amounts of money are

involved. It is not uncommon for defendants in consumer cases to spend a lot of time

and money vigorously defending the case, as defendant did here. Compensation is both

contingent upon success and deferred until after the end of the case -- when (and if) it

is collected from the defendant. For these reasons, consumer protection plaintiffs’

cases are not, for the most part, attractive cases to most practitioners. The vast majority

of attorneys simply will not take these cases.

11. The nature and length of the professional relationship with the client

(representation limited to Consumer Credit Protection claims). Often, where an

attorney has a lengthy and repeated professional relationship with a client, the client

negotiates a “volume discount” for legal services. Not so here. In consumer cases, the

plaintiffs are typically not a “repeat” or “volume” client.

12. Awards in similar cases. See discussion above and affidavit for the

current market rate.


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Purpose of fee award.

Congress enacted fee-shifting statutes to compensate "private attorneysgeneral" and thereby to encourage private enforcement of civil rights statutes, tothe benefit of the public as a whole. See H.R. Rep. No. 94-1558, at 2 (1976)(citing Newman v. Piggie Park Enters., Inc., 390 U.S. 400, 402, 19 L. Ed. 2d1263, 88 S. Ct. 964 (1968) (per curiam)); see generally S. Rep. No. 94-1011(1976). The public interest in private civil rights enforcement is not limited tothose cases that push the legal envelope; it is perhaps most meaningfully servedby the day-to-day private enforcement of these rights, which securescompliance and deters future violations. Congress meant reasonable attorney'sfees to be available to the private attorneys general who enforce the law, seegenerally S. Rep. No. 94-1011, not only to those whose cases make new law.

Quaratino v. Tiffany & Co., 166 F.3d 422, 426 (2d Cir. 1999).

Attorneys fees are central to the enforcement of the Consumer Credit Protection

Act (of which the FDCPA is a part) by private attorneys general. "The value of an

attorney's services is not only measured by the amount of the recovery to the plaintiff,

but also the non-monetary benefit accruing to others, in this case the public at large

from this successful vindication of a national policy to protect consumers from fraud

in the used car business." Fleet Inv. Co. v. Rogers, 620 F.2d 792, 794 (10th Cir. 1980)

(odometer law case).

Such fees are particularly important in consumer cases, under the principles

discussed by the Supreme Court in Rivera, supra, a civil rights case. Consumer Credit

Protection Act cases also support this proposition. See, e.g., Ratner v. Chemical Bank,

54 F.R.D. 412 (S.D.N.Y. 1972) ($20,000 fees, $100 damages).

A defendant should not be encouraged to litigate in the expectation that the

Court will reduce the plaintiff's fee request, even though the defendant's fees to its own


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attorney are not similarly scrutinized and reduced by the Court. Cf. Eddy v. Colonial

Life Ins. Co., 59 F.3d 201, 207-08 (D.C. Cir. 1995) (a fee award deters noncompliance

with the law and encourages settlement); Benavides v. Benavides, 11 Conn. App. 150

(1987) (same).

An inadequate award diminishes the inducement created by fee-shifting

statutes, and undermines the goal of promoting private representation in FDCPA

actions. In language which could appropriately be applied to FDCPA actions, the

Second Circuit noted:

A plaintiff who is successful in establishing certain practices as violative of hisconstitutional rights will deter officials from continuing this conduct, andthereby help assure that others are not subjected to similar constitutionaldeprivations. This deterrent effect of successful §1983 actions is whollyindependent of the relief which the plaintiff seeks or is ultimately awarded, andtherefore it is inappropriate to condition attorney's fee awards on the nature ofthe relief granted.

McCann v. Coughlin, 698 F.2d 112, 129 (2d Cir. 1983).

An award should be made at a rate which recognizes the vindication of public

policy expressed in the FDCPA. "The award of attorney's fees, as a practical matter, is

a critical and integral part of [the creation of a system of private attorneys general]."

James v. Home Constr. Co., 689 F.2d 1357, 1359 (11th Cir. 1982).

CONCLUSION

Plaintiff, as a “private attorney general,” is the “chosen instrument of Congress

to vindicate a policy that Congress considered of the highest priority.” This litigation

accomplished the purposes of the FDCPA. Attorney’s fees encourage defendants to


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comply with the FDCPA, as well as providing the consumer an incentive and the

financial ability to bring FDCPA suits. Postow, 455 F. Supp. at 785, 786. Fees should

be awarded as requested.

Plaintiff submits that the fee application is modest in hourly rate, time expended

and amount requested. He respectfully submits that it should be awarded as requested.

THE PLAINTIFF

BY____/s/ Joanne S. Faulkner___JOANNE S. FAULKNER ct04137123 Avon StreetNew Haven, CT 06511-2422(203) [email protected]

Certificate of Service

I hereby certify that on August 15, 2013, a copy of within was filedelectronically. Notice of this filing will be sent by e-mail to all parties by operation ofthe Court’s electronic filing system. Parties may access this filing through the Court’ssystem.

____/s/ Joanne S. Faulkner___


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UNITED STATES DISTRICT COURTDISTRICT OF CONNECTICUT

MICHAEL ROUSSEAU

v. CASE NO. 3:11CV 1794 (SRU)

ESTATE OF BENJAMIN MORRISLIENFACTORS, LLC

MOTION FOR RULE 11 SANCTIONS

Plaintiff moves for Sanctions pursuant to Fed. R. Civ. P. Rule 11(c). Defendants’

Answer and Defenses include claims, defenses, or legal contentions that are not warranted by

existing law, or not supported by fact, and are frivolous:

-Any claim that Lienfactors is not responsible for, or did not take, the actions taken by

its attorney is frivolous.

-Any claim that Lienfactors is not a debt collector is frivolous

-Any claim that Lienfactors did not attempt to collect, directly or indirectly, plaintiff’s

alleged debt is frivolous

-Any claim that the Law Office of Benjamin Morris, LLC appeared in the state court

case against Rousseau is false

-Any claim that plaintiff’s release to MarshallFry included these defendants is false

-Any claim that defendants are not separately liable for their own actions and violations

is frivolous.

THE PLAINTIFF

By:_____/s/ Joanne S. Faulkner_____ Date: April 18, 2013Joanne S. Faulkner ct 04137123 Avon StreetNew Haven, CT 06511(203) 772-0395


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