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Piccinetti v. Clayton, Myrick, McClanahan & Coulter, PLLC

United States District Court, D. New Jersey

October 26, 2018

BRIAN A. PICCINETTI, Plaintiff,
v.
CLAYTON, MYRICK, MCCLANAHAN & COULTER, PLLC, et al., Defendants.

          MEMORANDUM OPINION

          HONORABLE TONIANNE J. BONGIOVANNI UNITED STATES MAGISTRATE JUDGE.

         This matter comes before the Court upon Plaintiff Brian A. Piccinetti's (Plaintiff) motion for attorneys' fees and costs. [Docket Entry No. 47]. Defendants Clayton, Myrick, McClanahan & Coulter, PLLC (the “PLLC”), Internal Credit Systems, Inc. (“ICS”) and Robert J. Nauseef (“Nauseef”) (collectively, “Defendants”) oppose Plaintiff's motion. The Court has fully reviewed and considered all arguments made in support of and in opposition to Plaintiff's motion for attorneys' fees and costs. The Court considers Plaintiff's motion without argument pursuant to L.Civ.R. 78.1(b). For the reasons set forth below, Plaintiff's motion is GRANTED IN PART.

         I. Background and Procedural History

         Plaintiff filed this action against Defendants on July 5, 2016 alleging that Defendants used an unfair and unconscionable means to collect a debt in violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq. The debt at issue involved money purportedly owed to Gold's Gym. Plaintiff stylized his Complaint as a class action brought on behalf of “a class of New Jersey consumers seeking redress for Defendant's [sic] actions[.]” (Compl. ¶3; Docket Entry No. 1). Defendants answered Plaintiff's Complaint on August 1, 2016, denying any culpable conduct and raising several affirmative defenses. (See generally, Def. Answer; Docket Entry No. 6).

         On March 2, 2017, Defendants filed a motion for partial judgment on the pleadings under Fed.R.Civ.P. (“Rule”) 12(c), arguing that they were entitled to judgment as a matter of law on Counts III and IV of Plaintiff's Complaint. (See generally, Def. Br. in Support of Motion for Judgment on the Pleadings; Docket Entry No. 23-1). Count III asserted claims against the PLLC and Nauseef for violations of §§ 1692e(2), 1692e(5) and 1692e(10) of the FDCPA. (See Pl. Compl. ¶¶ 67- 71). Section 1692e(2) prohibits a debt collector from falsely representing “the character, amount, or legal status of any debt[.]” Section 1692e(5) prohibits a debt collector from “threat[ening] to take any action that cannot legally be taken or that is not intended to be taken.” Section 1692e(10) prohibits a debt collector from using “any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.” Count IV of Plaintiff's Complaint asserted a violation of § 1692j of the FDCPA. (See Pl. Compl. ¶¶ 72 - 75). Section 1692j makes it “unlawful to design, compile, and furnish any form knowing that such form would be used to create the false belief in a consumer that a person other than the creditor of such consumer is participating in the collection of or in an attempt to collect a debt such consumer allegedly owes such creditor, when in fact such person is not so participating.” In the alternative, Defendants requested permission to file an Amended Answer, allowing Nauseef to assert additional affirmative defenses. (See Def. Br. in Support of Motion for Judgment on the Pleadings at 12-15).

         The District Court granted in part and denied in part Defendants' motion for partial judgment on the pleadings. Specifically, the District Court granted Defendants' motion with respect to certain claims asserted in Count III of the Complaint and as to Count IV in its entirety. With respect to Count III, the District Court dismissed Plaintiff's claims for violations asserted under §1692e(2) as well as for any purported violations of §1692e based on the PLLC and Nauseef's lack of meaningful involvement in the collection of Plaintiff's debt, but found that Plaintiff adequately stated claims against the PLLC and Nauseef for violating §§ 1692e(5) and 1692e(10). In dismissing Plaintiff's claim that the PLLC and Nauseef violated §1692e(2), the District Court noted that Plaintiff did not respond to Defendants' arguments that Plaintiff owed money to Gold's Gym and that the amount stated in the collection letter at issue was correct, apparently conceding that there was no §1692e(2) violation. Mem. Op. of 9/5/2017 at 4; Docket Entry No. 27. Further, with respect to Plaintiff's lack of meaningful involvement by attorneys claim under § 1692e, the District Court noted that “Count Three does not appear to allege Clayton and Nauseef's lack of meaningful involvement as a basis for a violation of 15 U.S.C. §1692e.” Id. at 7. Given Plaintiff's “failure to allege any facts regarding the purported lack of meaningful involvement by attorneys, ” the District Court granted Defendants' motion “with respect to this claim.” Id. Finally, the District Court granted Defendants' motion to dismiss Plaintiff's claim for alleged violations of §1692j, noting that Plaintiff failed to respond to Defendants' argument that §1692j “‘does not apply to collection letters sent by one debt collector on behalf of another debt collector[, ]” thereby apparently conceding that Defendants were right. Id. at 8. The aforementioned dismissals were made without prejudice, and Plaintiff was given permission to file an Amended Complaint. Order of 9/5/2017 at 1-2; Docket Entry No. 28; Mem. Op. of 9/5/2017 at 4 n. 5, 8 n. 9.

         On September 19, 2017, Defendants filed a motion for reconsideration with respect to the District Court's September 5, 2017 decision granting in part and denying in part Defendants' motion for partial judgment on the pleadings. [Docket Entry No. 30]. Through their motion for reconsideration, Defendants argued that: (1) the District Court's dismissals should have been made with, not without, prejudice; (2) the District Court should have also dismissed Plaintiff's claims asserted under 15 U.S.C. §§ 1962e(5) and (10) and that these dismissals should be made with prejudice; and (3) the District Court never addressed Defendants' request for alternative relief and should Plaintiff's claims not be dismissed with prejudice, Defendants should be permitted to amend their Answer to allow Nauseef to raise additional defenses. (See generally, Def. Letter Br. of 9/19/2017; Docket Entry No. 30-1).

         On September 20, 2017, Plaintiff filed his Amended Complaint. In same, Plaintiff did not pursue any claims for violations of 15 U.S.C. § 1692j. Plaintiff did, however, reassert claims based on purported violations of § 1692e(2), adding limited additional factual allegations in support of same. Plaintiff also made certain changes to his class allegations and added Theodore Lachman (“Lachman”) as a defendant, seeking relief from Lachman in Counts I and II of the Amended Complaint.

         Shortly after the Amended Complaint was filed, the Court scheduled a status conference with the parties. Text Order of 10/10/2017; Docket Entry No. 38. During the conference, the Court engaged in settlement discussions with counsel and scheduled a formal settlement conference for November 7, 2017. See Minute Entry of 10/26/2017. The settlement conference was later adjourned to December 12, 2017 at the parties' request. Text Order of 11/8/2017; Docket Entry No. 40. While the matter did not settle on December 12, 2017, headway was made, and the parties were to report back with an update by December 22, 2017. See Minute Entry of 12/12/2017.

         On December 28, 2017, the parties informed the Court that a settlement had been reached. Defendants agreed to pay Plaintiff $2, 500 on or before January 15, 2018. The parties further consented to Magistrate Judge jurisdiction with respect to Plaintiff's anticipated fee application, as the parties could not reach an agreement with respect to what was a reasonable fee for Plaintiff's counsel. (See Email from Christopher Dalton to Hon. Tonianne J. Bongiovanni with cc to Ari Marcus and Patrick D. Doran of 12/28/2017 at 12:34 p.m., Ex. A. to Decl. of Christopher J. Dalton, Esq. of 3/30/2018; Docket Entry No. 52-1); Order and Notice of Consent to Jurisdiction by U.S. Magistrate Judge of 1/8/2018, Docket Entry No. 43. In light of the parties' settlement agreement, Defendants withdrew their motion for reconsideration as moot. See Letter Order of 1/29/2018; Docket Entry No. 44. The Court set a briefing schedule for Plaintiff's motion for attorneys' fees and costs. That motion is fully briefed and now ripe for the Court's consideration.

         II. Legal Standard

         The FDCPA affords prevailing plaintiffs the right to recoup their reasonable attorneys' fees and costs. See 15 U.S.C.A. §1692k(a)(3). Generally, courts use the “lodestar” method in evaluating a fee application and, indeed, the lodestar calculation is presumed to yield a reasonable attorney fee award. See Machado v. Law Offices of Jeffrey, Civil Action No. 14-7401 (MAS) (TJB), 2017 WL 2838458, *2 (D.N.J. June 30, 2017). Under the lodestar method, an attorney's reasonable hourly rate is multiplied by the number of hours the attorney reasonably spent working on a matter. Interfaith Cmty. Org. v. Honeywell Int'l, Inc., 426 F.3d 694, 703 n.5 (3d Cir. 2005) (citing Blum v. Stenson, 565 U.S. 886, 888, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984) (citations omitted)).

         The “party seeking attorney fees bears the ultimate burden of showing that its requested hourly rates and the hours it claims are reasonable.” Id. (citing Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990)). “Reasonable hourly rates are typically determined based on the market rate in the attorney's community for lawyers of similar expertise and experience.” Machado, 2017 WL 2838458, at *2 (citing Interfaith, 426 F.3d at 713). Evans v. Port Auth. of N.Y. and N.J., 273 F.3d 346, (3d Cir. 2001). The attorney seeking fees bears the burden of establishing that the rate requested “constitutes a reasonable market rate for the essential character and complexity of the legal services rendered.” Smith v. Philadelphia Hous. Auth., 107 F.3d 223, 225 (3d Cir. 1997). With respect to the hours claimed, it is incumbent upon the Court to “exclude hours that are not reasonably expended.” Rode, 892 F.2d at 1183 (citing Hensely v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983)). “Hours are not reasonably expended if they are excessive, redundant, or otherwise unnecessary.” Id. The Court, however, may not reduce a fee award sua sponte. Instead, “it can only do so in respect to specific objections made by the opposing party. But once the opposing party has made a specific objection, the burden is on the prevailing party to justify the size of its request.” Interfaith, 426 F.3d at 711 (citing Bell v. United Princeton Props., Inc., 884 f.2d 713, 719 (3d Cir. 1989).

         Further, while the lodestar calculation is “strongly presumed to yield a reasonable fee” (Washington v. Phila. County Ct. of C.P., 89 F.3d 1031, 1035 (3d Cir. 1996) (citing City of Burlington v. Dauge, 505 U.S. 557, 112 S.Ct. 2638, 120 L.Ed.2d 449 (1992)), “[t]he court can adjust the lodestar downward if the lodestar is not reasonable in light of the results obtained.” Rode, 892 F.2d at 1183 (citing Hensley, 461 U.S. at 434-37). “Indeed, ‘the most critical factor' in determining the reasonableness of a fee award ‘is the degree of success obtained.'” Farrar v. Hobby, 506 U.S. 103, 114, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992) (quoting Hensley, 461 U.S. at 436). As such, where a plaintiff has achieved only limited or partial success, “the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount.” Hensely, 461 U.S. at 436. When a fee award based on the lodestar calculation would be excessive, the Court may exercise its measured discretion to reduce same. Farrar, 506 U.S. at 115; see Machado, 2017 WL 2838458, at *2. In fact, the Court “retains a great deal of discretion in deciding what a reasonable fee award is” (Bell, 884 F.2d at 721), and, it is understood that “in determining whether the fee request is excessive . . . the court will inevitably engage in a fair amount of ‘judgment calling' based upon its experience with the case and the general experience as to how much a case requires.” Evans, 273 F.3d at 362. However, given the purpose of mandatory fee-shifting statutes like the FDCPA, a “reasonable” attorneys' fee does not necessarily mean a proportionate fee. See Agostino v. Quest Diagnostics, Inc., Civil Action No. 04-4362 (SRC), 2011 WL 13138113, *2 n.2 (D.N.J. Oct. 6, 2011).

         III. Analysis

         A. Reasonable Hourly Rate

         Here, Plaintiff seeks to recover attorneys' fees for three professionals: Ari Marcus, Yitzchak Zelman and Lori Hague. Both Messrs. Marcus and Zelman have submitted declarations outlining their credentials and experience in support of their claimed hourly rates. Ms. Hague has not, and neither Mr. Marcus nor Mr. Zelman explain her role in this litigation.

         Mr. Marcus states that his regular hourly rate is $450.00 per hour, though he is only seeking to be reimbursed in this matter at $400.00 per hour.[1] (Decl. of Ari Marcus, ¶ 10 n.1; Docket Entry No. 47-3). In support of the $400.00 per hour rate, Mr. Marcus notes that he graduated from Brooklyn Law School in June 2010 and has been licensed to practice by the State of New Jersey since 2010. (Id. ¶¶ 4 & 5). Mr. Marcus notes that he has been continuously practicing consumer protection law in the Federal Courts since 2010 and indicates that he has appeared in various consumer law matters in a number of Federal Courts across the country. (Id. ¶ 6). Mr. Marcus further notes that he founded the law firm of Marcus Law, LLC in 2011, which became Marcus & Zelman, LLC in 2015 when Mr. Zelman joined the firm and that since that time, the firm has recovered millions of dollars vindicating consumers' rights. (Id. ¶¶ 7 & 8). Mr. Marcus points out that in a different matter pending in the District of New Jersey, the Honorable Peter G. Sheridan appointed Marcus & Zelman, LLC as class counsel, finding the firm to be “qualified and experienced in consumer action lawsuits.” (Id. ¶ 9 (internal quotation marks and citation omitted)). Mr. Marcus declares that his requested rate is in line with other attorneys who share his “skill, background and acumen[.]” (Id. ¶ 11). In this regard, Mr. Marcus relies on the rates set forth in the 2015-2016 United States Consumer Law Attorney Fee Survey Report as well as cases decided in this District in which he was awarded an hourly rate of $450.00 per hour to support the reasonableness of a $400 hourly rate. (Id. ¶¶ 12-15). Mr. Marcus also relies on a letter submitted by William Pinilis, Esq. to support his requested hourly rate. (Letter from William J. Pinilis to Hon. Tonianne J. Bongiovanni of 3/14/2018; Docket Entry No. 49).

         Mr. Zelman states that his regularly hourly rate is $350.00 per hour and he seeks to be reimbursed at that rate in this litigation. (Decl. of Yitzchak Zelman, ¶ 10; Docket Entry No. 47-2). In support of this hourly rate, Mr. Zelman notes that he graduated from the Benjamin N. Cardozo School of Law in June 2012 and has been licensed to practice by the State of New Jersey since 2012. (Id. ¶¶ 4 & 5). Mr. Zelman notes that he has been continuously practicing consumer protection law in the Federal Courts since 2012 and indicates that he has appeared in various consumer law matters in a number of Federal Courts across the country. (Id. ¶ 6). Mr. Zelman further notes that with Mr. Marcus, he founded the law firm of Marcus & Zelman, LLC in June 2015 and that since its creation, the firm has recovered millions of dollars vindicating consumers' rights. (Id. ¶¶ 7 & 8). Mr. Zelman, like Mr. Marcus, points out that in a different matter pending in the District of New Jersey, the Honorable Peter G. Sheridan appointed Marcus & Zelman, LLC as class counsel, finding the firm to be “qualified and experienced in consumer action lawsuits.” (Id. ¶ 9 (internal quotation marks and citation omitted)). Mr. Zelman declares that his requested rate of $350.00 per hour is in line with other attorneys who share his “skill, background and acumen.” (Id. ¶ 11). In this regard, Mr. Zelman relies on the rates set forth in the 2015-2016 United States Consumer Law Attorney Fee Survey Report as well as cases decided in this District in which he was awarded an hourly rate of $350.00 per hour to support the reasonableness of his request to be compensated at an hourly rate of $350.00 per hour. (Id. ¶¶ 12-15). Like Mr. Marcus, Mr. Zelman also relies on the letter submitted by William Pinilis, Esq. to support his requested hourly rate. (Letter from William J. Pinilis to Hon. Tonianne J. Bongiovanni of 3/14/2018).

         Defendants' object to Messrs. Marcus and Zelman's respective requests to be compensated at $400.00 and $350.00 per hour, arguing that said hourly rates are unsupported and excessive. Defendants contend that Mr. Pinilis's letter submitted in support of Messrs. Marcus and Zelman's fee request should be given no weight as it “offers an unhelpful net opinion with no analysis.” (Def. Opp. Br. at 4; Docket Entry No. 52). Defendants further take issue with Messrs. Marcus and Zelman's references to other cases in which their requested hourly rates were upheld, noting that “their fee requests were unopposed” in same. (Id. at 5). Defendants contend that a better benchmark for determining the reasonableness of the requested hourly rates is by reference to the Community Legal Services of Philadelphia (“CLS”) fee schedule, which has been utilized in this District before. (Id. at 5-6 (citing Machado, 2017 WL 2838458, at *2-3)). Based on same, Defendants suggest hourly rates of $270 and $225 per hour for Messrs. Marcus and Zelman respectively. (Id. at 6). Defendants note that such rates would be consistent with the Court's award of $15, 000 in Beneli v. BCA Fin. Servs., Inc., Civ. Act. No. 16-2737, 2018 WL 734673, at *16 (D.N.J. Feb. 6, 2018), which effectively worked out to a blended rate of $251 per hour for the work performed by Messrs. Marcus and Zelman. (Id. at 6).

         Despite Defendants' objections to the contrary, the Court finds the hourly rates requested by Messrs. Marcus and Zelman to be reasonable. In reaching this conclusion, the Court gives no weight to the opinions set forth in Mr. Pinilis' letter. As Defendants note, Mr. Pinilis does not provide the bases for his opinion that the hourly rates requested by Messrs. Marcus and Zelman are “consistent with those charged by other lawyers, with similar experience, in the general community.” (Letter from William J. Pinilis to Hon. Tonianne J. Bongiovanni of 3/14/2018 at 2). Without any reference to fee surveys of rates charged by attorneys with similar experience in New Jersey or an analysis of similar fee applications in this District or other evidence, Mr. Pinilis' conclusions about the reasonableness of the requested hourly rates are unpersuasive.[2]Nevertheless, the Court finds that Messrs. Marcus and Zelman have adequately supported their requested rates by reference to their experience, years of practice, the 2015-2016 United States Consumer Law Attorney Fee Survey Report (the “CLA Report”) and the fees they have been awarded in other FDCPA cases in this District. As set forth in their declarations, Mr. Marcus has been practicing law in New Jersey for 8 years and Mr. Zelman for 5. Both Messrs. Marcus and Zelman focus their practice on consumer protection law. Indeed, collectively in the District of New Jersey alone, Messrs. Marcus and Zelman have pursued at least 296 FDCPA cases.

         Further, in two recent cases in this District, the Court determined that hourly rates requested by Messrs. Marcus and Zelman similar to those requested here were reasonable. Specifically, in Town & Country Jewelers, LLC v. Meadowbrook Insurance Group, Inc., Civil Action No. 15- 2519 (PGS), the Court approved and found reasonable Mr. Marcus' requested hourly rate of $450.00 per hour and Mr. Zelman's requested hourly rate of $350.00 per hour. Similarly, in Truglio v. CBE Group, Inc., Civil Action No. 15-3813 (TJB), the Court approved and found reasonable Mr. Marcus' requested hourly rate of $450.00 per hour and Mr. Zelman's requested hourly rate of $350.00 per hour. While the Court acknowledges that Messrs. Marcus and Zelman's fee petitions in those cases were unopposed, that does not alter the fact that the Court determined that the hourly rates requested were appropriate. In addition, while the Court in Beneli approved a fee petition that yielded Messrs. Marcus and Zelman an effective blended hourly rate of $251 per hour, the Court specifically declined “to rule on whether Counsel's $425/hour and $350/hour fees are ...


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