[FCRA] BEWARE FCRA Dangers: Court Awards $400k in Attorneys’ Fees to Plaintiff After Trial Win—But Defendant Avoids Potential $165MM in Punitive Damages

FCRA cases can be dangerous. Potentially deadly. Especially when the FCRA plaintiff’s counsel pros get a hold of you.

One defendant recently found that out the hard way in a suit that saw an award of over $100k in damages and nearly $400k in attorney’s fees awarded to a Plaintiff in an individual suit.

The case spun out of a dispute involving the furnisher’s alleged unreasonable investigation into a consumer dispute. The Plaintiff contended—and the jury ultimately found—that the Defendant violated the FCRA. It awarded over $100k in damages as a result.

Importantly, however, the Plaintiff’s lawyers—demanded $165MM in closing argument. Yes, $165 MILLION. The jury, obviously, did not bite on that and one wonders whether the over-zealous ask might have actually cost the Plaintiff an additional recovery.

But the fight did not end at trial. Remember that attorney’s fees are available under FCRA—which is very different than the TCPA in that regard. The Plaintiff’s lawyers aggressively sought nearly $700k in fees—again on a $101k recovery.

Still the Court noted the successful result and hard-fought nature of the litigation and awarded the Plaintiff’s lawyers more than a pittance—just under $400k.            

            There are a couple of big takeaways here:

 1.  Individual FCRA Suits Can Be Dangerous: Sure the class actions get most of the press—and they should—but the availability of attorney’s fees in FCRA suits encourages knowledgeable plaintiffs’ firms to act aggressively on behalf of their clients.  And while a six figure recovery of damages is bad enough—the risk of huge punitive damages in the event of a willfulness showing coupled with the recovery of large fees really compels companies to take FCRA compliance seriously.

2.  Fight Attorney’s Fee Motion Hard:  While no one wants to be on the losing end of a suit in an FCRA case, sometimes the biggest battle comes after trial. The Defendant in this latest FCRA special fought hard and earned a significant reduction in the awarded fees. (The Czar rather famously once fought a FCRA fee award until it was basically cut in half).  There are many tools available to Defendants in challenging demanded fees—including questioning the hourly rates charged by the Plaintiff’s firm and diving into the reasonable necessity of the work performed.  But the best argument is usually under the lodestar formulation—a rule that allows a Court to take into account the extent of the victory earned for the Plaintiff in assessing the reasonableness of a fee request.  Assuming the defense is mostly victorious as compared to pre-trial demand amounts—and if you aren’t then why’d you try the case folks?—a court can take the Plaintiff’s failure to reach the damages demanded at trial into account in reducing the fees. That is what really hung up the Plaintiff’s legal team here who saw their fees cut by 25%.

Just another day in FCRA paradise.

 

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