Tejero v. Portfolio Recovery Associates, LLC, No. 20-50543 (5th Cir. 2021)Annotate this Case
The Fifth Circuit held that a private settlement does not constitute a "successful action to enforce . . . liability" under the fee-shifting provision of the Fair Debt Collection Practices Act (FDCPA). The court affirmed the district court's denial of attorney's fees in this case, concluding that the district court did not commit reversible error in refusing plaintiff's fee application under the FDCPA. The court explained 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. In this case, plaintiff settled before his lawsuit reached any end result, let alone a favorable one. Furthermore, by settling, Portfolio Recovery avoided a formal legal command or decree from plaintiff's lawsuit. The court stated that plaintiff's alternative interpretation requires rewriting the FDCPA's fee-shifting provision.
The court also concluded that, at most, plaintiff's FDCPA suit was the catalyst that spurred Portfolio Recovery to settle. Therefore, the catalyst theory does not make plaintiff's action a successful one under 15 U.S.C. 1692k(a)(3) and thus plaintiff is not entitled to fees.