Search
Unfair and Deceptive Acts and Practices: 12.8.11.3.1 Standards vary by state
Courts and attorneys may be most accustomed to the lodestar methodology (discussed at § 12.8.11.3.2, infra) that courts use to calculate fees under federal fee-shifting statutes such as the Civil Rights, Truth in Lending, Fair Debt Collection, RICO, Fair Credit Reporting, Equal Credit Opportunity, and Odometer Acts.
Unfair and Deceptive Acts and Practices: 12.8.11.3.2 The lodestar formula
All UDAP practitioners should be familiar with the federal lodestar formula.1403 The method is obviously central in any state adopting the lodestar approach.
Unfair and Deceptive Acts and Practices: 12.8.11.3.3 Fees calculated based on contingency fee agreement
Where the consumer and the attorney have a contingency fee agreement, some courts take it into account in determining the amount of a fee award. For example, the Seventh Circuit, applying the Illinois UDAP statute, approved a $208,333.33 lump sum fee award calculated as one-third of a $625,000 damages award. The attorney presented, as evidence, a one-third contingent fee agreement, and the court found this to be a reasonable measure of the prevailing market rate because it was a standard contingent fee.1424
Unfair and Deceptive Acts and Practices: 12.8.11.4 Awards for Work on Non-UDAP Counts and on Unsuccessful UDAP Counts
The typical UDAP case will include multiple UDAP and non-UDAP counts. For many non-UDAP counts, such as breach of warranty or common law fraud, there will be no attorney fees available. A prevailing consumer may be awarded damages based on some but not all UDAP counts and on some of the non-UDAP counts. The question will then arise whether the consumer should receive attorney fees for all work done on the case, just on the UDAP counts, just on the successful UDAP counts, or just on the successful counts.
Unfair and Deceptive Acts and Practices: 12.8.11.5 Calculating Fees for Public Interest Attorneys
The calculation of fees for legal services and other public interest attorneys should be based on the prevailing market rate.1446 Paying legal services attorneys at the same hourly rate as others agrees with the purpose of UDAP attorney fees of encouraging litigants to seek redress of consumer wrongs involving small dollar amounts, where the amount at stake may not justify the attorney’s time.1447 This is also in accord with the United States Supreme Court’s decision in Blum v.
Unfair and Deceptive Acts and Practices: 12.8.11.6 Fees for Paralegals, Law Clerks
Paralegal and law clerk rates should be calculated using prevailing market rates, not the cost to a firm of these staff.1450 Where a market bills paralegal time at an hourly rate, that is the rate to use.1451 Decisions from the 1990s and late 1980s have awarded $65 and $50 an hour for paralegal or law clerk work on UDAP cases.1452 In 2012, a court awarded $80 an hour for paralegal or law clerk services.
Unfair and Deceptive Acts and Practices: 12.8.11.7 Out-of-Pocket Expenses; Costs
There is little UDAP case law about supplementing an attorney’s hourly rate with out-of-pocket expenses. The clear import of the Supreme Court’s approach to these questions is that a court should follow the prevailing billing practice of the community.1454 If certain items are typically included in an hourly rate, they should not also be reimbursed separately. However, if attorneys typically bill for these items separately, the attorney fee award should include separate provisions for these expenses.
Unfair and Deceptive Acts and Practices: 12.8.12 Effect of Federal Rule of Civil Procedure 68 and Similar State Rules
Federal Rule of Civil Procedure 68 allows parties to a lawsuit to minimize their liability for costs by making an offer to allow judgment for a set amount, including costs then accrued. If the offeree rejects the offer, and the eventual judgment is for a lesser amount, the offeror is not liable for post-offer costs and, instead, the offeree becomes liable for those costs.
Unfair and Deceptive Acts and Practices: 12.8.13.1 Pleading and Documentation Required for a Fee Award
The request for attorney fees should be specifically mentioned in the prayer for relief, although a court may be willing to construe a pleading liberally to include such a claim.1471
Unfair and Deceptive Acts and Practices: 12.8.13.2 The Consumer’s Burden of Proof
The fee applicant has the burden of documenting the amount of time spent on the case and the reasonableness of the fee sought.1476 While several courts have held that a separate evidentiary hearing is not necessary to determine the proper size of attorney fees,1477 other courts have required the consumer to offer evidence of the reasonableness of the attorney fee award.1478 Even where there is a default judgment, this proof may be necessary.
Unfair and Deceptive Acts and Practices: 12.8.13.3 Timing of the Fee Petition
Timing and evidentiary requirements for fee petitions should be interpreted in light of the general mandate of liberal construction of UDAP statutes.1484 Courts have awarded fees that were requested after judgment1485 or even after the judgment has been satisfied.1486 Thus, it may not be unreasonable to seek supplemental attorney fees for work performed collecting a judgment.1487
Unfair and Deceptive Acts and Practices: 12.8.13.4 Who Makes the Fee Determination?
Where a statute specifies that the “court” may award attorney fees, this is usually construed as a determination for the judge, not the jury.1491 However, the Texas rule seems to be that the amount of a reasonable attorney fee is a fact question to be determined by the jury,1492 while the appellate court is entitled to determine whether the amount is excessive based on the entire record, the amount in controversy, the nature of the case, and the common knowledge and experience of the judges
Unfair and Deceptive Acts and Practices: 12.8.13.5 Procedure for Appellate Fees
For appellate fees, be sure to comply with any appellate rules as to preserving the right to attorney fee awards for the appellate work.
Unfair and Deceptive Acts and Practices: 12.8.14 Tips on Handling Attorney Fee Hearings
The following tips on winning attorney fee hearings are based on a list developed by Ron Burdge, a leading consumer trial attorney in Dayton, Ohio:
Consumer Class Actions: 1.7.6.1 Generally
In American Pipe & Construction Co. v. Utah,107 the Supreme Court held that the filing of a class action complaint tolls the statute of limitations for individual claims of members of the putative class until class certification is denied.108 However, the Supreme Court’s opinion in China Agritech, Inc. v.
Consumer Class Actions: 1.7.6.2 Does American Pipe Tolling Apply to Subsequent Class Actions?
In China Agritech, Inc. v. Resh, the Supreme Court held that American Pipe tolling does not apply to subsequent class action claims.110 In an opinion authored by Justice Ginsburg, the Supreme Court clarified that American Pipe tolling does not allow putative class members to file subsequent class actions beyond the applicable statute of limitations:
Consumer Class Actions: 1.7.6.3 Tolling for Individual Actions—The American Pipe Tolling Doctrine
In American Pipe & Construction Co. v. Utah,128 the Supreme Court held that a class action tolls the statute of limitations for individual putative class members who make a timely motion to intervene by permission or as of right after the court has found suit inappropriate for class action.
Consumer Class Actions: 1.7.7.1 Class Definition and Class Certification in General
Careful consideration must be given to the facts, injury, and legal claims that can be asserted on behalf of the class.
Consumer Class Actions: 1.7.7.2 Avoid Claims That Require Proof of Reliance or Other Individual Issues
It is critical for the attorney to determine the suitability of potential substantive claims for class certification. To satisfy the Rule 23 requirements of commonality and predominance, the plaintiff must show that the claims of class members share common issues of law and/or fact and that the common issues predominate.
Consumer Class Actions: 1.7.7.3 Claims That Raise Primarily Legal Questions Are Ideal for Class Treatment
When selecting claims to include in a class action, the factual issues necessary to prove the elements of each claim should be considered. The fewer disputed factual issues presented, the less complicated the case and the more likely the claim will be resolved by summary judgment without the need for an evidentiary hearing or trial. The case will also be less costly and time-consuming than one requiring proof on numerous factual issues.
Consumer Class Actions: 1.7.7.4 Avoid Claims That Are Technical Violations, Yet Threaten Annihilating Damages
Another factor to consider is whether the court will be disposed to grant the relief requested based on the violations alleged. When the defendant’s conduct is egregious, and the class members’ injury is significant, courts will often be willing to order large damages awards. On the other hand, courts are uncomfortable with large statutory damages awards for unintentional, technical violations with minimal or no consumer injury.
Consumer Class Actions: 1.7.7.5 Consider Whether Benefits Can Be Provided to Class Members
The choice of claims will affect the availability of particular remedies. For example, the federal Truth in Lending and Fair Debt Collection Practices Acts contain special class action caps on statutory damages. Bringing a claim under a state debt collection or consumer protection statute may avoid the application of the damages cap. On the other hand, some state consumer protection statutes likewise contain damages caps or do not permit classwide relief.169
Consumer Class Actions: 1.7.8.1 Generally
In many class actions, the class attorney will have the option of including a number of legal claims. It is just as important to decide what viable claims not to raise as it is to decide which ones to pursue.
Consumer Class Actions: 1.7.8.3 Some Risks of Omitting Claims
“Claim-splitting” refers to the general requirement that all claims for relief arising from a single transaction or occurrence must be brought in one action.174 The general rule is that a subsequent suit, arising from the same transaction or events underlying a previous suit, would be barred under the doctrine of res judicata.175 However, a class action “is one of the recognized exceptions to the rule against claim-splitting.”176 For a discussion o