Carroll v. Wolpoff & Abramson

• Decision Date: 04 May 1995
• Docket Number: No. 93-2162,93-2162
• Citation: 53 F.3d 626
• Parties: Susan J. CARROLL, Plaintiff-Appellant, v. WOLPOFF & ABRAMSON, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 626

53 F.3d 626

Susan J. CARROLL, Plaintiff-Appellant, v. WOLPOFF & ABRAMSON, Defendant-Appellee.

No. 93-2162.

United States Court of Appeals Fourth Circuit.

Argued March 6, 1995.

Decided May 4, 1995.

ARGUED: Andrea Goodwin Green, UAW Legal Services Plan, Newark, DE, for appellant. Ronald Marc Abramson, Wolpoff & Abramson, Bethesda, MD, for appellee. ON BRIEF: Ronald S. Canter, Wolpoff & Abramson, Bethesda, MD, for appellee.

Before WILKINSON and WILKINS, Circuit Judges, and SPROUSE, Senior Circuit Judge.

Affirmed by published opinion. Judge WILKINSON wrote the opinion, in which Judge WILKINS and Senior Judge SPROUSE joined.

OPINION

WILKINSON, Circuit Judge:

Appellant Susan J. Carroll challenges the district court's refusal to award attorney's fees equal to the lodestar amount in this litigation brought pursuant to the Fair Debt Collection Practices Act ("FDCPA" or "the Act"), 15 U.S.C. Secs. 1692-1692o. Counsel for Carroll submitted a fee request in the amount of $9,783.63. The district court, in reliance on Farrar v. Hobby, --- U.S. ---- 113 S.Ct. 566, 121 L.Ed.2d 494 (1992), awarded Carroll $500 in light of her limited success in the underlying litigation. Because we believe that the district court did not abuse its discretion in declining to award the lodestar amount, we affirm.

I.

Macy's Northeast, Inc., retained the law firm of Wolpoff & Abramson to recover the costs of a ring appellant Carroll acquired from the department store but failed to pay for. When Carroll did not respond to collection letters sent by the law firm, Wolpoff & Abramson brought suit on the debt in Maryland state court. Following a bench trial, the state court entered judgment against Carroll in May 1990. Wolpoff & Abramson then undertook to collect the amount of the judgment debt via further correspondence governed by the FDCPA.

Specifically, the law firm sent a two-sentence, four-line follow-up letter dated June 11, 1990, which purported to advise Carroll of Wolpoff & Abramson's efforts to collect the debt:

Your past due account is in our office for legal action.

It is imperative that you contact us immediately if you wish to make arrangements to pay this debt prior to additional litigation.

Carroll never responded to the letter; she eventually filed for Chapter 7 bankruptcy.

On May 10, 1991, Carroll brought suit against Wolpoff & Abramson alleging that the June 1990 letter violated the FDCPA in several respects, including a failure to comply with the Act's debt collection notice requirements. See 15 U.S.C. Sec. 1692e(11) (requiring disclosure, "in all communications made to collect a debt or to obtain information about a consumer, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose"). ¹ Carroll sought both actual damages for emotional distress precipitated by the June 11 letter and statutory damages of $1,000 pursuant to 15 U.S.C. Sec. 1692k. The district court, noting a split of authority among the circuits as to the necessity of including the debt collection notification language in follow-up correspondence, held that Wolpoff & Abramson need not have repeated the disclosure in the June 11 letter and granted summary judgment in favor of the law firm.

On appeal, this court disagreed. In an opinion dated March 30, 1992, we held that the statutory mandate was clear: the debt collection notification must be included in all correspondence. Carroll v. Wolpoff & Abramson, 961 F.2d 459, 461 (4th Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 298, 121 L.Ed.2d 222 (1992). We remanded to the district court to determine the appropriate damages award in light of Wolpoff & Abramson's failure to insert the requisite disclosure in the June 11 letter.

On remand, Carroll abandoned her claim for actual damages and sought only $1,000 in statutory damages. See 15 U.S.C. Sec. 1692k(a)(2)(A) (providing for statutory damages, in addition to actual damages, "as the court may allow, but not exceeding $1,000"). In a judgment order dated June 15, 1993, the district court awarded damages in the amount of $50 under Sec. 1692k(a)(2)(A) for Wolpoff & Abramson's single violation of the Act.

Carroll thereafter filed a motion for award of attorney's fees pursuant to Sec. 1692k(a)(3). The UAW Legal Services Plan, Carroll's counsel, submitted affidavits detailing various legal services provided to Carroll and requesting compensation in the amount of $9,783.63. In an order dated August 9, 1993, the district court awarded $500 in attorney's fees. In its memorandum opinion, the court noted that Carroll had received little more than nominal damages in the underlying litigation and that Wolpoff & Abramson's single violation of the Act was at most a technical misstep. Carroll appeals the award, claiming error in the district court's failure to adhere to the lodestar formula announced in Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1983). The lodestar is the amount determined by multiplying "the number of hours reasonably expended on the litigation" by "a reasonable hourly rate." Id.

II.

It is for the district court in the first instance to calculate an appropriate award of attorney's fees. See generally Hensley, 461 U.S. at 437, 103 S.Ct. at 1941. On appeal, "this court has a duty to affirm an [attorney's fee] award which falls within the district court's broad discretion." Daly v. Hill, 790 F.2d 1071, 1085 (4th Cir.1986). See also Ballard v. Schweiker, 724 F.2d 1094, 1098 (4th Cir.1984).

This abuse of discretion standard serves several policies of overriding importance. First, district courts enjoy a decided advantage over appellate courts in calculating fee awards. As a trial court, the district court has a "ringside view of the relevant conduct of the parties and of the underlying legal dispute," Alexander v. Mayor & Council of Cheverly, Md., 953 F.2d 160, 162 (4th Cir.1992), and accordingly has ready access to the data that should inform a fee calculation. See also Hensley, 461 U.S. at 437, 103 S.Ct. at 1941 (recognizing that the abuse of discretion standard is fitting "in view of the district court's superior understanding of the litigation and the desirability of avoiding frequent appellate review of what essentially are factual matters"); Ballard, 724 F.2d at 1098 (noting that a district court "is in the better position to evaluate the quality and value of the attorney's efforts" when calculating a reasonable fee).

Reviewing fee awards solely for abuse of a district court's discretion restricts a litigant's propensity to engage in secondary or satellite litigation. Justice Brennan aptly characterized appeals of attorney's fee awards as "one of the least socially productive types of litigation imaginable." Hensley, 461 U.S. at 442, 103 S.Ct. at 1944 (Brennan, J., concurring in part and dissenting in part). The systemic costs of such appeals are often disproportionate to the limited benefits achieved by appellate second-guessing of a district court's fee calculation.

Hensley warned in fact that "[a] request for attorney's fees should not result in a second major litigation." 461 U.S. at 437, 103 S.Ct. at 1941. Were we inclined to review de novo every award of attorney's fees by a district court, however, we would in essence guarantee dual appeals in FDCPA and similar cases: a first appeal from the district court's resolution of the merits and a second appeal seeking review of the district court's fee award. It is precisely such litigation that the abuse of discretion standard discourages. Cf. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 404, 110 S.Ct. 2447, 2460, 110 L.Ed.2d 359 (1990) (deference to district courts' determinations of appropriate Rule 11 sanctions will "discourage litigants from pursuing marginal appeals, thus reducing the amount of satellite litigation").

III.

The abuse of discretion standard governs our review of fee awards under the statute in this case. Section 1692k of the FDCPA indicates that a successful plaintiff is entitled to recover, in addition to actual and statutory damages, costs plus "a reasonable attorney's fee as determined by the court." 15 U.S.C. Sec. 1692k(a)(3). It is true that in Hensley, the language of the relevant attorney's fee statute itself incorporated the abuse of discretion standard. See 42 U.S.C. Sec. 1988 ("the court, in its discretion, may allow the prevailing party ... a reasonable attorney's fee as part of the costs"). See also Quesinberry v. Life Ins. Co. of North America, 987 F.2d 1017, 1028 (4th Cir.1993) (en banc) (noting that ERISA Sec. 502(g), 29 U.S.C. Sec. 1132(g), a statute worded similarly to Sec. 1988, "places the determination of whether attorneys' fees should be awarded in an ERISA action completely within the discretion of the district court").

The absence of the term "discretion" in the FDCPA does not, however, dictate a different standard of review. Although the fee award under Sec. 1692k is mandatory in all but the most unusual circumstances, see Graziano v. Harrison, 950 F.2d 107, 113-14 (3d Cir.1991), the statute makes clear that calculation of the appropriate award must be left to the district court. First, the concept of reasonableness--the statutory centerpiece of the Sec. 1692k fee award--itself implies that the fee calculation is inextricably linked to the facts and circumstances of the underlying litigation. As discussed above, the district court is in the best position to observe and evaluate the factors that should inform the computation of a "reasonable" fee. Moreover, the statutory language announces a clear intent to allow district courts wide latitude in the calculation of appropriate fee awards: a "reasonable" fee is to be "determined by the district court," without further statutory qualification.

The case law interpreting Sec. 1692k reinforces our reading of the statute. In Hollis v. Roberts, 984 F.2d 1159 (11th Cir.1993), for instance, the...