Discovery Sanctions — Attorney’s Fees under Rule 37(b)(5) — Although Phrased in Seemingly Mandatory Terms, Court’s Discretion Is Broad — Excessive Fee Request May Be Denied as “Unjust” — Standard under 12(c) = Summary Judgment

Jones v. Dufek, 2016 U.S. App. LEXIS 13549 (D.C. Cir. July 26, 2016):

Tawanda Jones owed $1,050.29 to Bank of America. Bank of America sold the debt to CACH, LLC. That company hired the Law Office of David Sean Dufek in San Diego, California, to help it collect on the debt. In 2013, Dufek sent Jones the following letter:

   Dear TAWANDA JONES,

This office has been retained to collect the debt owed by you to CACH, LLC.

As of the date of this letter you owe the sum of $1,050.29. Because 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.

You are hereby advised: Unless you, the consumer, notify this office within thirty days after receipt of this notice that you dispute the validity of this debt or any portion thereof, the debt will be assumed to be valid by this office. [*2]  If you, the consumer, notify this office in writing within thirty days after receipt of this notice, that the debt or any portion thereof is disputed, this office will obtain verification of the debt or a copy of a judgment against you and a copy of such verification or judgment will be mailed to you by this office. Upon your written request within thirty days after receipt of this notice this office will provide you with the name and address of the original creditor, if different from the current creditor.

Please remit your payment to: David Sean Dufek

[Address]

If you would like to make a payment online, please visit our website: [website URL]

Please call our office. The toll free number is [telephone number].

Sincerely,

   [Signature]

   Attorney David Sean Dufek

Please be advised that we are acting in our capacity as a debt collector and at this time, no attorney with our law firm has personally reviewed the particular circumstances of your account.

Be advised this is an attempt to collect a debt. Any information obtained will be used for that purpose.

The letter appeared entirely on one sheet of letterhead captioned at the top with the words "Law Office of David Sean Dufek." The text of the letter, [*3]  as well as the disclaimers below the signature block, were in the same readable font and size.

Jones alleges that this letter was deceptive and violated three statutes: the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.; the District of Columbia Consumer Protection Procedures Act, D.C. Code § 28-3901 et seq.; and the District of Columbia Debt Collection Law, D.C. Code § 28-3814 et seq. She relies on different sections of each of these statutes, but there is one basic argument underlying all of her claims: that the letter falsely implies both that Dufek is meaningfully involved with the case as an attorney and that the creditor is threatening to bring a lawsuit to collect the debt. We disagree. The letter does not threaten any legal action, and the prominent disclaimer made clear that Dufek was acting only in his capacity as a debt collector.

***

The district court properly resolved these questions as a matter of law on a motion under Rule 12(c). See Jones, 77 F. Supp. 3d at 137. We agree that no reasonable juror could find the letter deceptive. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986); see also, e.g., Alexander v. City of Chicago, 994 F.2d 333, 336 (7th Cir. 1993) ("[T]he standard courts apply for summary judgment and for judgment on the pleadings 'appears to be identical.'") [*13]  (quoting 5A Charles A. Wright and Arthur R. Miller, Federal Practice and Procedure § 1368 at 530 (1990)). As the Fifth Circuit put it, "There are some letters that, as a matter of law, are not deceptive . . .." Gonzalez, 577 F.3d at 606.

One extraneous matter remains. While their Rule 12(c) motion was awaiting a ruling, the defendants filed a motion for a protective order under Rule 26(c) to stop Jones from issuing "unauthorized discovery requests." A month later, the court denied this motion in a Minute Order. See Minute Order denying Motion to Quash, No. 1:14-cv-00533-RJL (D.D.C. Sept. 7, 2014). In response, Jones moved for attorneys fees under Federal Rule of Civil Procedure 26(c)(3). This rule incorporates Rule 37(a)(5) and states that if the court denies a motion for a protective order, the court "must, after giving an opportunity to be heard, require the movant . . . to pay" the opposing party's expenses and attorney's fees. Rule 37(a)(5) also states that "the court must not order this payment if the motion was substantially justified or other circumstances make an award of expenses unjust." Fed. R. Civ. P. 37(a)(5)(B).

District courts have "considerable discretion" to manage discovery. United States v. Philip Morris Inc., 347 F.3d 951, 955 (D.C. Cir. 2003). In particular, courts "possess broad discretion to impose sanctions for discovery violations under Rule 37." Parsi v. Daioleslam, 778 F.3d 116, 125 (D.C. Cir. 2015). In 1970, Rule 37 was amended and the [*14]  section for awarding attorney's fees was rephrased in mandatory terms -- the court "must" grant attorney's fees under certain conditions and "must not" grant them under others. Fed. R. Civ. P. 37(a)(5)(B). The conditions are fairly vague, particularly the catch-all term that the court must not grant fees if doing so would be "unjust." Id. The advisory committee explained that this amendment did "not significantly narrow the discretion of the court" to award attorney's fees for discovery violations. Fed. R. Civ. P. 37 advisory committee's notes to 1970 amendments; see Marquis v. Chrysler Corp., 577 F.2d 624, 642 (9th Cir. 1978).

The district court did not explicitly deny the motion for attorney's fees. Its failure to award fees may be taken as a denial of the motion. Rule 37(a)(5) states that under certain circumstances, the court "must not order this payment," and that is what the court did. Fed. R. Civ. P. 37(a)(5); see also Fed. R. Civ. P. 52(a)(3). The district court did not abuse its discretion in coming to this decision. Jones's counsel had asked for $29,241 for sixty-five hours of work on this discovery issue.6 The court had discretion to find that this award would be excessive and therefore "unjust." In upholding the district court's refusal to grant Jones's motion, we are mindful that Rule 26(c)(3) is meant to prevent needless litigation and wasteful discovery [*15]  disputes. Requiring still further proceedings in this case would not be consistent with that objective.

6   Jones's counsel initially asked for $22,761 for fifty-six hours of work, but later increased that figure by nearly 30% for the additional nine hours of work required to respond to Dufek's opposition to paying attorney's fees. Compare Motion for Attorney Fees at 8, No. 1:14-cv-00533-RJL (D.D.C. Sept. 15, 2014), ECF No. 28; with Errata Reply to Defendant's Opposition to Motion for Attorney Fees at 7, No. 1:14-cv-00533-RJL (D.D.C. Oct. 14, 2014), ECF No. 31.

Accordingly, we affirm the district court's judgment.

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