The Court of Appeals for the Third Circuit has affirmed a lower court’s ruling awarding the defendant in a Telephone Consumer Protection Act case $286,064.62 in attorney’s fees, costs, and expenses while vacating an additional award of $73,884.07 over collection calls that were made to one of the plaintiffs, who opened a credit card in his wife’s name, but listed his work address and phone number on the credit card application.
A copy of the ruling in the case of Credit One v. Lieberman can be accessed by clicking here.
The consumer allegedly went into default on the credit cards on purpose, in order to induce the debt collection calls from the creditor. The consumer then initiated an arbitration proceeding, which happened to be his seventh “nearly identical” arbitration filing, according to the Court. The husband also had a prior conviction for fraud and there was a recorded call that “suggested” the husband wanted the calls to continue. The arbitrator denied the claim and awarded the creditor $286,064.62 in fees and costs. The creditor then asked a District Court judge to confirm the award and the Liebermans sought to have it vacated. After the award was confirmed, the creditor asked the District Court judge to include attorney’s fees incurred during the District Court proceedings and the judge tacked on the additional $73,884.07.
In their appeal, the Liebermans sought to have the awards vacated. But there was nothing the arbitrator nor the District Court judge did that would require the award to be reversed, the Appeals Court ruled. “The arbitrator’s assessment of the facts leads necessarily to the conclusion that Adam filed the claim in bad faith,” it wrote.
The original agreement between Lieberman and the creditor had an indemnification provision, which stated, “[i]f you provide telephone number(s) for which you are not the subscriber, you understand that you shall indemnify us for any costs and expenses, including reasonable attorneys’ fees, incurred as a result of us contacting or attempting to contact you at the number(s).” This provision doesn’t technically cover the wife, because she did not provide the phone numbers on the application, or the husband, because he did not provide a number for which he not the subscriber. Applying New Jersey’s choice-of-law rules, the Appeals Court ruled the creditor did not show that such fees are authorized under state law.
