In the case of Ozmun v. Portfolio Recovery Associates the Fifth Circuit considered whether the district court erred in denying FDCPA consumer plaintiff request for attorney’s fees under 15 U.S.C. § 1692k(a)(3). Under Section 1692k(a)(3), “the costs of the action, together with a reasonable attorney's fee as determined by the court” may be awarded in a “successful action to enforce” liability against a debt collector who fails to comply with the statute. 15 U.S.C. § 1692k(a), (a)(3). However, “on a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney’s fees reasonable in relation to the work expended and costs.” The district court found that Ozmun’s counsel had acted in bad faith and refused to award attorney’s fees. The Fifth Circuit “found that determination to be in error.”
Before the appellate court, Ozmun argued that the private settlement he ultimately received was a successful action under the statute and that he may recover attorney’s fees from the Defendants. The Fifth Circuit “has not previously decided whether a private settlement renders an action ‘successful’ under § 1692k(a)(3).” Not being a court of first view, the Fifth Circuit remanded that question to this Court for determination. In its opinion for this matter, the Fifth Circuit cited to its decision in Tejero v. Portfolio Recovery Assocs., L.L.C., in which the court addressed an attorney’s fees dispute involving Wood and Chatman in a debt collection case. 955 F.3d 453 (5th Cir. 2020). There, the Fifth Circuit remanded the same question to the district court for determination, and the district court denied attorney’s fees. On a subsequent appeal, the Fifth Circuit affirmed, explaining that a ‘“successful action to enforce the foregoing liability’ means a lawsuit that generates a favorable end result compelling accountability and legal compliance with a formal command or decree under the FDCPA.” Tejero v. Portfolio Recovery Assocs., L.L.C., 993 F.3d 393, 396 (5th Cir. 2021).
The Fifth Circuit also rejected appellant’s “catalyst theory” that a plaintiff succeeds ‘“if it achieves the desired result because the lawsuit brought about a voluntary change in the defendant’s conduct.”’ Because a settlement does not qualify a litigant as a prevailing party, the Fifth Circuit concluded that a settlement does not qualify as a successful action. This Court will follow suit and find that Ozmun—having reached a private settlement that did not entail judicial relief—is not entitled to an award of attorney’s fees under Section 1692k(a)(3).
III. CONCLUSION IT IS ORDERED that opinion relating to attorney’s fees, (Dkt. 177), is VACATED IN PART. The opinion is vacated other than the Court’s finding that Ozmun was not entitled to attorney’s fees under Rule 11 and 28 U.S.C. § 1927, which was affirmed by the Fifth Circuit. Additionally, and for the reasons set out in this order, Ozmun’s remaining request for attorney’s fees, (see Dkt. 151), under 15 U.S.C. § 1692k(a)(3) is DENIED.
SIGNED on May 23, 2023 by ROBERT PITMAN, UNITED STATES DISTRICT JUDGE