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Attorneys’ fees don’t come easy under FCRA

FCRA includes a provision for recovery of attorneys fees, but as the defendant in Perri v. Diversified Adjustment Serv. learned, proving bad faith or harassment is not easy.  2018 U.S. Dist. LEXIS 213612 (D. Az. Dec. 19, 2018).

FCRA states at 15 U.S.C. § 1681n(c):

(c)  Attorney’s fees. Upon a finding by the court that an unsuccessful pleading, motion, or other paper filed in connection with an action under this section was filed in bad faith or for purposes of harassment, the court shall award to the prevailing party attorney’s fees reasonable in relation to the work expended in responding to the pleading, motion, or other paper.

In Perri, the United States District Court for the District of Arizona dismissed the pro se plaintiff’s FCRA claims due to plaintiff’s failure to comply with the Court’s orders or otherwise prosecute the action.  Defendant then filed a motion for attorneys’ fees based on plaintiff’s alleged bad faith and harassment.  The Court was not impressed.

First, defendant argued that plaintiff was acting in bad faith because he disobeyed several court orders, including failing to attend the Rule 16 conference.  The Court shrugged this off, pointing out that this failure to prosecute was the reason the claims were already dismissed. Also, attorneys’ fees under § 1681n(c) may be awarded based on an action filed in bad faith, not for misconduct of the parties during the pendency of the action.

Second, defendant argued that the action was frivolous.  In somewhat circular reasoning, the Court responded that, because the plaintiff never prosecuted his claims, it cannot conclude that the action was filed in bad faith.  The Court simply did not know enough about the allegations to know whether they were frivolous.

Third, defendant argued that the complaint included no facts, and therefore must have been filed for purposes of harassment.  Again, the Court sided with plaintiff, noting  that “the Court cannot infer bad faith or harassment from the lack of such information in a pro se Plaintiff’s pleadings.”

In summary, plaintiff filed a complaint with no facts, and then failed to prosecute his claims in any meaningful way.  Still, the Court concluded that defendant failed to show that plaintiff filed any document in bad faith or for purposes of harassment, and therefore attorneys’ fees were not warranted under FCRA’s attorneys’ fee provision.

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