Opinion ID: 381256
Heading Depth: 2
Heading Rank: 5

Heading: attorneys' fees and other costs

Text: 76 Section 130(a)(3) allows the recovery, in the case of any successful action to enforce . . . (the Act, of) the costs of the action, together with a reasonable attorney's fee as determined by the court. 15 U.S.C. § 1640(a)(3) (1976) (emphasis added). There is no provision for the recovery of attorneys' fees by lenders who successfully defend actions brought under the Act. The court below awarded $18,150.05 of the $21,452.25 attorneys' fees the Postows sought as representatives of the class but denied the recovery of $1,731.09 in deposition costs, expert witness fees and miscellaneous expenses. 77 Oriental challenges the attorneys' fee award on two principal grounds: (1) Section 130's allowance of attorneys' fees for successful borrowers but not creditors is an unconstitutional denial of due process and equal protection, both on its face and as applied here; and (2) the class should not be awarded attorneys' fees for time spent on Count I, the issue on which Oriental was awarded summary judgment. 34 As discussed below, we reject each of Oriental's arguments and affirm the lower court's award of attorneys' fees. We also reject the Postows' objections to the district court's denial of the recovery of expert witness fees and miscellaneous costs, and affirm those actions of the court as well, but we remand for the determination and possible award of deposition fees. 78 The district court ruled correctly that the creditor/debtor relationship at issue here involves no fundamental interest of creditors in securing their debts, and the statute does not create a suspect classification of lenders that can only be upheld in the face of a compelling governmental interest. See United States v. Kras, 409 U.S. 434, 445-46, 93 S.Ct. 631, 637-38, 34 L.Ed.2d 626 (1973). Thus, only a rational justification need exist for the Act's distinction between successful borrower and lender litigants. 35 79 The legislation at issue here was specifically designed by Congress to be enforced through private citizen suits. See 1973 Senate Report at 14; McGowan v. Credit Center of North Jackson, Inc., 546 F.2d 73, 77 (5th Cir. 1977); Sosa v. Fite, 498 F.2d 114, 121 (5th Cir. 1974). The district court correctly relied upon Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978), and Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed. 141 (1975), in concluding that the interest in such private enforcement constitutes a rational basis for a legislative distinction to be drawn between attorneys' fee awards to successful plaintiffs but not successful defendants. 80 The district court also correctly rejected Oriental's argument that the award of attorneys' fees to the Postows should be reduced because they were unsuccessful as to Count I. The Postows argued in Count I that Oriental's requirement of owners' title insurance was illegal, but they did not indeed under the Act they could not attack that requirement directly. The Act only requires the disclosure of lending costs to borrowers; it neither prohibits nor allows charges of any kind. 81 Thus, the gravamen of the Postows' complaint in Count I was not that Oriental required owners' title insurance but rather that Oriental failed properly to disclose that requirement to them. 36 Count II of their complaint similarly alleged a violation of the Act's disclosure requirements regarding charges for six types of closing costs the Postows learned of only at settlement. 37 82 Oriental attempts to argue that two separate injuries were alleged here, relying, inter alia, on the fact that the Postows chose to describe their assertions in separate counts. In fact, this lawsuit was but a single action within the meaning of § 130(a)(3). It was, in substance, a claim that Oriental failed to properly disclose required charges, in a single transaction, leading to a single injury (the inability to shop around for better terms) and resulting in a right to a single recovery. Indeed, § 130(g) of the Act makes explicit the plaintiffs' limitation to a single claim for recovery, no matter how varied the violations: 83 The multiple failure to disclose to any person any information required under this part . . . of this subchapter (which includes § 129) to be disclosed in connection with a single account under an open end consumer credit plan, other single consumer credit sale, consumer loan, consumer lease, or other extension of consumer credit, shall entitle the person to a single recovery under this section . . . . 84 15 U.S.C. § 1640(g) (1976) (emphasis supplied). 85 In this case, Counts I and II alleged multiple failure(s) to disclose costs but these multiple failures gave rise to grounds only for a single action alleging a right to recover statutory damages. As the district court noted, had the Postows prevailed on Count I, they could not have been more successful in their pursuit of damages then they were on the basis of Count II. We therefore conclude that the district court did not err in awarding reasonable attorneys' fees based on the time spent litigating Count I as well as Count II. 38 86 We note that the only other court of appeals to have addressed this issue agrees with our conclusion, although on different grounds. In McGowan, supra, the court of appeals vacated and remanded a district court decision which substantially reduced a request for attorneys' fees in a Truth-in-Lending case because the plaintiff's attorney had been successful 'in only one minor charge.'  We agree with the Fifth Circuit's conclusion in McGowan that the enforcement of this Act should not be so restricted, because of its purpose: 87 The Congressional goals underlying the Truth-in-Lending Act include the creation of a system of private attorneys general to aid in effective enforcement of the Act. Sosa v. Fite, 498 F.2d 114, 121 (5th Cir. 1974); Thomas v. Myers-Dickson Furniture Co., 479 F.2d 740, 748 (5th Cir. 1973). The reduction of an award of attorney's fees from the amount sought solely because the plaintiff was successful on only one of the several charges would be inconsistent with the Congressional policy of implementing enforcement of the Truth-in-Lending Act. See Sellers v. Wollman, 510 F.2d 119 (5th Cir. 1975). 88 Id.