Opinion ID: 781045
Heading Depth: 2
Heading Rank: 3

Heading: UC & S's Attempt to Collect Attorneys' Fees

Text: 61 Plaintiff also argues that because the FDCPA makes it illegal to attempt to collect an amount not expressly authorized by the agreement creating the debt or permitted by law, 15 U.S.C. § 1692f(1), the filing of the state court complaint by UC & S seeking $323.63 in attorneys' fees violates the FDCPA. While plaintiff does not dispute that the credit card agreement here provided for payment of attorneys' fees, he contends that Ohio law prohibits collection of attorneys' fees in any consumer contract of adhesion and that the contingent 20% fee sought by UC & S was to be shared with NAN, in violation of New York's professional ethics rules. Thus, plaintiff's argument goes, the fees UC & S sought to collect cannot be said to be authorized by the agreement or by law. 62 As an initial matter, we conclude that plaintiff has waived the argument that the collection of attorneys' fees is barred by Ohio law. Miller did not allege in the complaint that attempting to collect attorneys' fees under a contract of adhesion violates Ohio law, nor did he raise this issue in opposition to the motion to dismiss or at oral argument. Significantly, plaintiff also never sought to amend the complaint to assert this claim. Accordingly, he cannot now rely on it as a basis for his FDCPA claim. See Caiola v. Citibank, N.A., 295 F.3d 312, 327 (2d Cir.2002) ([W]e generally do not consider arguments not raised below..). 63 Defendants maintain that plaintiff lacks standing to pursue this claim because it is undisputed that plaintiff never paid any attorneys' fees to either UC & S or NAN, as the underlying lawsuit initiated by UC & S was settled with different counsel. Accordingly, defendants argue that plaintiff did not suffer any identifiable injury. The FDCPA provides for liability for attempting to collect an unlawful debt, however, and permits the recovery of statutory damages up to $1,000 in the absence of actual damages. Thus, courts have held that actual damages are not required for standing under the FDCPA. See, e.g., Keele v. Wexler, 149 F.3d 589, 594 (7th Cir.1998) ([T]he plaintiff who admittedly owes a legitimate debt has standing to sue if the Act is violated by an unprincipled debt collector.); Baker v. G.C. Servs. Corp., 677 F.2d 775, 777 (9th Cir.1982) (same); cf. Gambardella v. G. Fox & Co., 716 F.2d 104, 108 n. 4 (2d Cir.1983) (noting that [i]t is well settled ... that proof of actual deception or damages is unnecessary to a recovery of statutory damages under the Truth in Lending Act). Accordingly, we join those courts and hold that the fact that plaintiff did not ever pay any attorneys' fees to NAN does not necessarily suggest that he was not injured for purposes of his FDCPA claim, if he can show that UC & S attempted to collect money in violation of the FDCPA. 64 We therefore turn to the dispositive question before us: whether the fees sought to be collected were not permitted by the contract or by law. Miller argues that the $323.63 sought by UC & S in the verified complaint was not an amount permitted by law because UC & S intended to share some portion of the fee with NAN in violation of state ethics rules. We find no support for plaintiff's position that an attorney violates the FDCPA by attempting to collect a facially reasonable fee—consistent with the terms of the underlying agreement—with the intent later to use the money in some otherwise prohibited manner. 6 65 Miller also argues even if a violation of state professional ethics rules does not give rise to a private right of action, it is evidence that defendants violated the FDCPA, noting that many of the express prohibitions of the FDCPA involve conduct that would also be a violation of a lawyer's ethical standards. Appellant's Br. at 30. Even if this is true, however, plaintiff's cause of action under § 1692f(1) requires a showing that defendants attempted to collect an amount not expressly permitted either by the agreement creating the debt or by law. In other words, plaintiff states a claim only if the $323.63 sought by UC & S in the state court complaint was not permitted by the Lord & Taylor agreement or by law. Thus, the cases cited by plaintiff where courts have considered certain conduct that violates professional ethics rules as also deceptive or misleading in violation of the FDCPA's prohibition of the use of false, deceptive or misleading representation[s], 15 U.S.C. § 1692e, or as violative of other FDCPA provisions, are inapposite. See Appellant's Br. at 31; Appellant's Reply Br. at 12-13. 66 In summary, plaintiff challenges not the reasonableness of the fee itself but rather what UC & S later intended to do with its fee. The district court correctly found that plaintiff failed to state a claim in that the amount UC & S sought to collect was permitted by the agreement and was not prohibited by law. 7