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Spuhler v. State Collection Services, Inc.

United States District Court, E.D. Wisconsin

May 21, 2019

KYLE SPUHLER AND NICHOLE SPUHLER, on behalf of themselves and all others similarly situated, Plaintiffs,



         Kyle and Nichole Spuhler filed a single count complaint against State Collection Services, Inc. alleging that a debt collection letter sent to them violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq. The Spuhlers alleged that the letter was misleading because it (1) improperly attempted to collect interest on the debt, (2) failed to specify which portion of the amount due was interest as opposed to principle, and (3) failed to indicate that interest was accruing on the amount due. Summary judgment was granted in State Collection's favor as to the first two arguments, and, after a motion for reconsideration was filed, summary judgment was granted in the Spuhlers' favor as to the third argument. The Spuhlers now seek attorneys' fees and costs in the amount of $210, 083.45 in attorneys' fees and $34, 341.35 in costs. State Collection opposes the motion. For the reasons below, the Spuhlers' motion is granted in part and denied in part.

         1. Legal Standard

         Under the FDCPA, a debt collector is liable for “the costs of the action, together with a reasonable attorney's fee as determined by the court.” 15 U.S.C. § 1692k(a)(3); see Tolentino v. Friedman, 46 F.3d 645, 651-52 (7th Cir. 1995). The general rule for calculating attorneys' fee awards under fee shifting statutes is applicable to attorneys' fees awards under the FDCPA. Gastineau v. Wright, 592 F.3d 747, 748-49 (7th Cir. 2010). The starting point for determining reasonable attorneys' fees is the lodestar method, which is calculated by multiplying the No. of hours reasonably expended by the reasonable hourly rate. Pickett v. Sheridan Health Care Center, 664 F.3d 632, 639 (7th Cir. 2011) (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). There is a “strong presumption that the lodestar represents the reasonable fee.” City of Burlington v. Dague, 505 U.S. 557, 562 (1992) (internal citation omitted); Pickett, 664 F.3d at 639. However, once the lodestar is determined, the court may adjust the fee upward or downward based on a variety of factors, the most important of which is the degree of success obtained. Hensley, 461 U.S. at 430 n.3, 436. The other factors to be considered as delineated by the Supreme Court are:

(1) the time and labor required; (2) the novelty and difficulty of the question; (3) the skill requisite to perform the legal service properly; (4) the preclusion of employment by the attorney due to the acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) any time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the plaintiff's attorney; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.

Tolentino, 45 F.3d at 652 (citing Hensley, 461 U.S. at 441). In sum, “[t]he standard is whether the fees are reasonable in relation to the difficulty, stakes, and outcome of the case.” Connolly v. Nat'l Sch. Bus Serv., Inc., 177 F.3d 593, 597 (7th Cir. 1999). The fee applicant bears the burden of “produc[ing] satisfactory evidence-in addition to the attorney's own affidavits-that the requested rates are in line with those prevailing in the community.” Id. (quoting Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984)). If the fee applicant satisfies this burden, the burden shifts to the other party to offer evidence that sets forth “a good reason why a lower rate is essential.” Id. (internal quotation and citations omitted).

         2. Calculation of the Lodestar

         The Spuhlers seek fees for three attorneys and two support staff members. Specifically, they request 234.1 hours at a rate of $350.00/hour (for a total of $81, 935.00) for Attorney Nathan DeLadurantey, 88.4 hours at a rate of $300.00/hour (for a total of $26, 520.00) for Attorney Heidi Miller, 212.90 hours at a rate of $450.00/hour for Attorney Thomas J. Lyons, Jr. (for a total of $95, 803.45), 5.6 hours at a rate of $125.00/hour (for a total of $700.00) for support staff member Ethan Webb, and 41.5 hours at a rate of $125.00/hour (for a total of $5, 125.00) for legal assistant Andrea Weber. (Declaration of Nathan E. DeLadurantey ¶¶ 19-23, Docket # 132; Declaration of Thomas J. Lyons, Jr. ¶ 7, Docket # 131.)

         2.1 Hourly Rate

         While State Collection does not challenge the hourly rate for the two support staff members (Webb and Weber), it challenges the hourly rates of the three attorneys. State Collection argues that the Spuhlers failed to submit any evidence, besides their own affidavits and citations to other cases, in support of the attorneys' claimed hourly rates. (Def.'s Br. at 12-13, Docket # 135.) The Spuhlers responded by providing the United States Consumer Law Attorney Fee Survey Report, last updated 2015-2016, which it argues further supports their requested hourly rates. (Declaration of Thomas J. Lyons, Jr. ¶ 1, Ex. 1, Docket # 138-1.)

         A reasonable hourly rate is:

[O]ne that is “derived from the market rate for the services rendered.” We presume that an attorney's actual billing rate for similar litigation is appropriate to use as the market rate. The fee applicant bears the burden of “produc[ing] satisfactory evidence-in addition to the attorney's own affidavits-that the requested rates are in line with those prevailing in the community.”

Pickett v. Sheridan Health Care Ctr., 664 F.3d 632, 640 (7th Cir. 2011) (internal citations omitted). The court can apply other factors to determine an appropriate rate, such as the lawyer's years of experience. See Houston v. C.G. Sec. Servs., Inc., 820 F.3d 855, 860 (7th Cir. 2016). The party seeking a fee award bears the burden of establishing the market rate for the work; if the lawyers fail to carry that burden, the district court can independently determine the appropriate rate. Montanez v. Simon, 755 F.3d 547, 553 (7th Cir. 2014).

         Again, the Spuhlers state that their counsels' billing rates are as follows: $350.00/hour for Attorney DeLadurantey, a practitioner with approximately thirteen years of experience; $300.00/hour for Attorney Miller, a practitioner with approximately seven years of experience; and $450.00/hour for Attorney Lyons, a practitioner with approximately twenty-five years of experience. (DeLadurantey Decl. ¶ 10; Declaration of Heidi Miller, ¶ 12, Docket # 132-5; Lyons Decl. ¶ 4.) The Spuhlers argue these rates are reasonable, citing to DeLadurantey's declaration in which he states that his private paying clients regularly pay him $350.00/hour and pay Attorney Miller $300.00/hour. (DeLadurantey Decl. ¶¶ 18, 20); Lyons' declaration in which he states that his rate of between $400.00 to $450.00/hour has been approved by multiple courts in other districts (Lyons Decl. ¶ 7); and a case in this district where the court awarded Attorney Miller fees at a rate of $300.00/hour for a default judgment (Docket # 132-5).

         The Spuhlers also point to the Fee Survey, which several courts in this district have recognized as a reliable resource in determining the reasonableness of an attorney's hourly rate, particularly in conjunction with consideration of counsel's experience. See Moreland v. Dorsey Thornton & Assocs., LLC, No. 10-CV-867, 2011 WL 1980282, *3 (E.D. Wis. May 20, 2011) (relying on counsel's website, which lists the attorney profiles, along with the United States Consumer Law Attorney Fee Survey in determining that the requested hourly rate was reasonable); House v. Shapiro & Price, No. 10-CV-842, 2011 WL 1219247 (E.D. Wis. Mar. 30, 2011) (same); Suleski v. Bryant Lafayette & Assocs., No. 09-C-960, 2010 WL 1904968 (E.D. Wis. May 10, 2010) (same). According to the Fee Survey, the median rate for attorneys handling credit rights cases in the Milwaukee area is $350.00/hour. (Docket # 138-1 at 372.)

         Approximately one year ago, a court in this district, considering the same evidence the Spuhlers now put forward, set Attorney DeLadurantey's reasonable rate at $300.00/hour and Attorney Miller's reasonable rate at $220.00/hour. Strohbehn v. Weltman Weinberg & Reis Co. LPA, No. 16-CV-985-JPS, 2018 WL 1997989, at *4 (E.D. Wis. Apr. 27, 2018). In so doing, the court considered the fact that in May 2016, another court in this district found an hourly rate of $300.00 for Attorney DeLadurantey and $250 for Attorney Miller to be reasonable. Id. at *3 (citing Gagliano v. State Collection Serv., No. 14-CV-1512, 2016 WL 2853538, at *2 (E.D. Wis. May 13, 2016)). The Spuhlers attempt to distinguish their case from Gagliano, noting that Gagliano was litigated approximately two years prior to this action and was not a class action. (Pl.'s Br. at 14.) While Gagliano was filed two years prior, Strohbehn was litigated contemporaneously with the Spuhlers' case. While Strohbehn was also not a class action, I agree with the court's analysis in Strohbehn that to “achieve some level of consistency, ” Id. at *4, the rates awarded in Strohbehn are appropriate. Thus, I will set Attorney DeLadurantey's rate at $300.00/hour and set Attorney Miller's rate at $220.00/hour.

         As for Attorney Lyons, even considering the median rate for the Minneapolis area (where he is located), the average rate for an attorney handling credit rights cases is $350.00/hour. (Docket # 138-1 at 280.) A Minnesota court in 2017 noted that Attorney Lyons' rate of $450.00/hour was above the market average for Minnesota and reduced the rate to $350.00/hour. Kuntz v. Messerli & Kramer, No. 16-CV-2676, 2017 WL 3332222, at *2-3 (D. Minn. Aug. 4, 2017). Given the fact Attorney Lyons is a ...

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