United States District Court, S.D. Indiana, Indianapolis Division
DENNIS CASTRO individually and on behalf of all others similarly situated, Plaintiff,
LLOYD & MCDANIEL, PLC a Kentucky limited liability company, PCA ACQUISITIONS V, LLC a Delaware limited liability company, Defendants. PHILIPPS & PHILIPPS, LTD., Interested Party.
ENTRY ON PETITION FOR ATTORNEY'S FEES AND
WALTON PRATT, JUDGE.
matter is before the Court on Interested Party Philipps &
Philipps, Ltd. (“Philipps”) Petition for Payment
of Attorney's Fees and Expenses, under the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C.
§ 1692, et seq. (Filing No. 62.) On
February 26, 2016, the Court entered a final Order approving
the class action settlement between the Plaintiffs Dennis
Castro (“Mr. Castro”) on behalf of himself and
all others similarly situated, and Defendants Lloyd &
McDaniel, PLC (“L&M”), and PCA Acquisitions
V, LLC (“PCA”) (collectively, “the
Defendants”). Philipps served as Class Counsel in this
matter and requested that the Court award it $72, 302.50 in
fees and $3, 104.96 in expenses, as well as $6, 686.50 in
fees to Taft, Stettinius and Hollister, LLP
(“Taft”). Defendants filed a Response in
Opposition to the amount of fees requested. (Filing No.
66.) On April 22, 2016, Class Counsel filed their Reply
in Support of Petition for Payment of Attorney's Fees and
Expenses, in which they assert that Class Counsel should be
awarded the total amount of $84, 124.46 in fees and $3,
410.50 in expenses to Philipps & Philipps, Ltd., and $27,
783.00 in fees to Taft Stettinius & Hollister LLP; for
time spent preparing and defending the fee petition.
(Filing No. 71.) Having considered the Petition,
Response in Opposition, and the Reply, the Court issues the
operates a nationwide debt collection business, in which PCA
buys large portfolios of defaulted consumer debt.
Id. at 2. PCA then employs other collection
agencies, such as L&M, to collect defaulted debt.
Id. It is unclear at what point PCA acquired Mr.
Castro's defaulted credit card debt. (Filing No. 19
at 2.) However, PCA admits that it did. Id. On
September 19, 2014, L&M sent Mr. Castro a debt collection
letter on behalf of PCA. (Filing No. 20 at 3.)
Thereafter, on April 8, 2015, Mr. Castro filed a complaint
bringing suit against the Defendants under the FDCPA.
(Filing No. 1.) That same date, attorneys David J.
Philipps, Mary E. Philipps, and Angie K. Robertson, with the
Chicago area law firm of Philipps and Philipps, Ltd., each
filed their Notice of Appearance on behalf of Mr. Castro.
(Filing No. 3, Filing No. 4, and Filing
suit, Mr. Castro alleged that the Defendants violated the
FDCPA by failing to effectively identity the current
creditor, in violation of section 1692g(a)(2) and alleged
that the Defendants' statement “[b]ecause of
interest, late charges and other charges that may vary from
day to day, the amount due on the day you pay may be
greater” was false, deceptive or misleading, in
violation of section 1692e. Id. at 5.
October 28, 2015, Mr. Castro, as an individual and on behalf
of all others similarly situated, entered into a settlement
agreement with the Defendants. (Filing No. 59 at 1.)
As part of the settlement agreement, the Defendants agreed to
discontinue the practices alleged in Mr. Castro's
Complaint, to pay Mr. Castro $1, 000.00 as a class
representative, and to pay $21, 550.00 to the class.
Id. On February 26, 2016, this Court approved the
settlement agreement. Id. Unfortunately, the parties
were not able to reach an agreement for attorney's fees
and expenses, so Mr. Castro filed the motion currently before
order to handle the petition for attorney's fees and
expenses, Philipps, as class counsel, employed the legal
services of Taft law firm. Initially, Philipps'
attorney's fees and expense petition was for a total
amount of $75, 407.46 in fees and expenses. (Filing No.
63 at 10.) However, Mr. Castro incurred an additional
$6, 686.50 in fees from Taft for preparing the expense
petition. Id. Subsequently, the Defendants filed a
twenty-seven page objection to the fees petition, which
caused Mr. Castro's attorneys to incur additional
expenses and fees. (Filing No. 71 at 1.) Thus, Mr.
Castro now petitions this Court to grant an award of $84,
124.46 in fees and $3, 410.50 in expenses to Philipps and an
award of $27, 783.00 in fees to Taft. Id. at 19.
Together, Mr. Castro has requested a total amount of $115,
317.96 in his attorney's fees petition.
plaintiffs under the FDCPA are entitled to an award of costs
and reasonable attorney's fees as determined by the
court. 15 U.S.C. § 1692k(a)(3); Tolentino v.
Friedman, 46 F.3d 645, 651 (7th Cir. 1995). In proving
the reasonableness of attorney's fees, the burden rests
on the party seeking the fees award. Spegon v. Catholic
Bishop of Chi., 175 F.3d 544, 550 (7th Cir. 1999).
However, if the petitioner of attorney's fees meets his
or her burden, then the opposing party bears the burden of
providing evidence that demonstrates why a lower rate is
essential. Pickett v. Sheridan Health Care Ctr., 664
F.3d 632, 640 (7th Cir. 2011). The same burden applies to the
market rate component of the lodestar calculation. The burden
of proving the market rate is on the petitioner, however, a
petitioner's own affidavit is insufficient to establish a
reasonable market rate. Id. Instead, a petitioner
can meet his or her burden if the petitioner presents third
party affidavits from similar attorneys who charge similar
rates for comparable work. Spegon, 175 F.3d at 556.
In the alternative, the petitioner can provide evidence of
clients paying him or her a similar rate for similar work in
the relevant market. Id.
the fees amount is not mechanically linked to the amount of
the plaintiff's award, Eddleman v. Switchcraft,
Inc., 927 F.2d 316, 318 (7th Cir. 1991), the
lodestar method of calculating the number of hours reasonably
expended on the litigation multiplied by a reasonable hourly
rate is an appropriate and helpful determination.
Gastineau v. Wright, 592 F.3d 747, 748 (7th Cir.
2010). This method may be adjusted by the court to
“reflect various factors including the complexity of
the legal issues involved, the degree of success obtained,
and the public interest advanced by the litigation.”
Schlacher v. Law Offices of Phillip J. Rotche &
Assocs., P.C., 574 F.3d 852, 856-57 (7th Cir.
2009). In this manner, the lodestar method produces a fees
award that is presumptively reasonable, while still deferring
to the district court's “greater familiarity with
the case”, regarding the reasonable number of hours
expended on the case. See Pa. v. Del. Valley Citizens
Council for Clean Air, 478 U.S. 546, 565 (1986); see
also Gastineau, 592 F.3d at 748 (stating that a
“highly deferential” version of the abuse of
discretion standard applies when reviewing a district
court's fees award).
the lodestar figure is calculated, by multiplying the number
of hours reasonably expended on the litigation by a
reasonable hourly rate, the Seventh Circuit permits district
courts to adjust the amount up or down after considering
various relevant factors, including:
the time and labor required; the novelty and difficulty of
the questions; the skill requisite to perform the legal
services properly; the preclusion of employment by the
attorney due to acceptance of the case; the customary fees;
whether the fees are fixed or contingent; time limitations
imposed by the client or the circumstances; the amount
involved and the results obtained; the experience,
reputation, and ability of the attorneys; the
“undesirability” of the case; the nature and
length of the professional relationship with the client; and
awards in similar cases.
Mathur v. Bd. of Trs. of S. Ill. Univ., 317 F.3d
738, 742 n.1 (7th Cir. 2003). Determining the amount
of a fees and expense award is a matter that rests within the
sound discretion of the trial court. See In re Dairy
Farmers of Am., Inc., Cheese Antitrust Litig.,
80 F.Supp.3d 838, 844 (N.D. Ill. 2015).
evaluating the reasonable time expended for the
lodestar calculation, courts will consider similar factors
used to reduce the total lodestar amount. For example, when
assessing the reasonableness of time expended, courts look at
“the time and labor required, the novelty and
difficulty of the issues, the legal skill required, the
reputation of the attorneys, the time burdens imposed by the
client or the circumstances, and awards in similar
cases”. Owens v. Howe, 365 F.Supp.2d 942, 947
(N.D. Ind. 2005).
evaluating the reasonable rate for the lodestar
calculation, courts consider what the petitioner's
attorneys charge for similar work in the relevant market.
Bratton v. Thomas Law Firm, P.C., 943
F.Supp.2d 897, 902 (N.D. Ind. 2013). In particular, courts
consider what lawyers with similar abilities and experience
charge their clients for similar work in the same market.
Owens, 365 F.Supp. 2d. at 947. Nonetheless, courts
generally presume the attorney's billing rate for
comparable work to be a reasonable rate. Id.
initial matter, on April 25, 2016, the Defendants filed a
Motion for Leave to File Sur-reply. (Filing No. 72.)
Therein, the Defendants requested the opportunity to reply to
additional fees being petitioned by Mr. Castro. However, the
Defendants stated that such objections would be similar in
nature to the objections raised in their initial brief. The
Defendants petition this Court to be allowed to raise
objections to the additional fees sought by Mr. Castro, if
the Court would find it useful. The Court finds that the
similar information would add no value to the analysis
regarding the additional fees being petitioned by Mr. Castro.
Therefore, the Court finds a sur-reply unnecessary and the
motion for leave (Filing No. 72.) is
Philipps firm is comprised of three attorneys, David J.
Philipps (Managing Partner), Mary E. Philipps (Partner), and
Angie K. Robertson (Associate). (Filing No. 62-1 at
8.) In Mr. Philipps' declaration, he asserts that
his firm charges $575.00 per hour for his work, $565.00 per
hour for Ms. Philipps' work, $275.00 per hour for Ms.
Robertson's work, and $185.00 per hour for the work of
their paralegals. Id. at 19. According to the
expense report submitted by the Philipps firm, all three
attorneys and two paralegals contributed to the litigation of
Mr. Castro's case. (Filing No. 62-2.)
two partners and one associate from the Taft law firm worked
on the fees petition, resulting in additional legal expenses.
(See Filing No. 63 at 7.) The Taft
attorneys that worked on the fees petition were Samuel Hudson
(Partner), Tracy Betz (Partner), and Tammara Porter
(Associate), billing $435.00 per hour, $360.00 per hour, and
$295.00 per hour, respectively. Id. For the reasons
stated below, the Court finds the rates and some of the time
expended by Mr. Castro's attorneys to be reasonable.
The rates charged by the Philipps and Taft firms were
Defendants argue that the rates sought by Mr. Castro's
attorneys are unreasonable and that Mr. Castro has failed to
satisfy his burden of establishing the market rate for his
attorneys. (Filing No. 64 at 2.) The Court is not
Philipps is the senior partner in the Philipps firm with over
25 years of experience, and has litigated in numerous
consumer protection cases. (Filing No. 63. At 5.)
Mr. Philipps has been approved as class counsel in
twenty-nine contested cases, and has been appointed as class
counsel for settlements in another 190 cases. Id.
Ms. Philipps is the co-founder of the Philipps firm.
Id. Ms. Robertson is an Associate at the Philipps
firm, and has over five years of legal experience.
support of the market rates claimed by the Philipps firm, Mr.
Castro cites to past decisions in this District, including
this one, in which courts have found comparable rates claimed
by the Philipps firm to be reasonable. (See
Filing No. 63 at 6; Filing No. 71 at 5-6.)
While the Seventh Circuit has held that fees assessed in
similar cases by other courts are not binding, the Seventh
Circuit stated that they must be considered and must not be
ignored. See Spegon, 175 F.3d at 556.
Castro cites to Paulus v. Pride Acquisitions., to
support the reasonableness of the rates sought by the
Philipps firm. (Filing No. 63 at 6.) Paulus
involved violations of the FDCPA. No. 1:12-cv-1433-LJM-MJD
(S.D. Ind. Oct. 2, 2013). In the decision, the court found
the market rates of $505.00 per hour for Mr. Philipps,
$495.00 per hour for Ms. Philipps, and $165.00 per hour for
paralegals, to be reasonable. Id. (order granting
final approval of class settlement). Another decision cited
by Mr. Castro in support of the rates sought is Baker v.
Nations Recovery Ctr., which also concerned violations
of the FDCPA. In that decision, the undersigned approved, the
market rates of $505.00 per hour for Mr. Philipps, $495.00
per hour for Ms. Philipps, and $165.00 per hour for
paralegals were again found to be reasonable. See Baker
v. Nations Recovery Ctr., 1:13-cv-0071-TWP-DML (S.D.
Ind. Nov. 15, 2013) (order granting final approval of class
addition, and perhaps the most compelling case cited by Mr.
Castro, is the decision Wood v. State Collection
Serv., which also dealt with allegations of FDCPA
violations. Therein, the court approved the exact same rates
being requested in this petition. See Wood v. State
Collection Serv., No. 1:15-cv-0475-SEB-DKL (S.D. Ind.
Jan. 29, 2016) (order granting final approval of class
settlement). In that decision, the court found the market
rate of $575.00 for Mr. Philipps, $565.00 for Ms. Philipps,
$275.00 for Ms. Robertson, and $200.00 for paralegals, ...