A District Court judge in Ohio has denied a debt collector’s motion for attorney’s fees and costs in a Fair Debt Collection Practices Act case involving the Credit Repair Lawyers of America, ruling that the plaintiff’s claim was “minimally colorable” and did not warrant such an award. The defendant had argued that the lawsuit was meritless and sought reimbursement for legal fees.
The background: The plaintiff filed this lawsuit back in October 2021, alleging that the defendant had violated the FDCPA by falsely reporting that the plaintiff disputed certain debts, even after the plaintiff notified the defendant through her legal representatives that she no longer disputed the debts. The plaintiff claimed that the inaccurate information harmed her credit score and prevented her from obtaining a conventional mortgage, resulting in both financial and emotional damages.
- After engaging in discovery, the plaintiff decided to dismiss her lawsuit in January 2023, citing a desire to avoid the costs of further litigation.
- The defendant opposed the dismissal unless its attorney’s fees and costs were fully covered and requested the court to retain jurisdiction to decide on this matter. While the court dismissed the case in August 2023, it did retain jurisdiction to hear the defendant’s motion for attorney’s fees.
The ruling: In its motion, the defendant argued that the plaintiff’s claims were baseless from the start, highlighting what it viewed as factual inaccuracies uncovered during discovery. The defendant pointed out that the plaintiff had never applied for a mortgage and that her credit report contained numerous other derogatory items unrelated to the alleged misconduct. However, Judge James L. Graham of the District Court for the Southern District of Ohio found that the plaintiff’s claims were at least “minimally colorable” under the FDCPA and rejected the defendant’s argument that the case was meritless.
- Judge Graham noted that the FDCPA prohibits false representations regarding the legal status of debts and that the plaintiff’s claim that the defendant failed to correct disputed information could not be easily dismissed.
- While the defendant argued that the lawsuit was brought in bad faith, the court found no evidence that the plaintiff or her attorneys pursued the case solely for harassment or without any legal grounds.
