Court Opinion

ID: 6326729
Source: CourtListenerOpinion
Date Created: 2022-03-25 00:00:27.042737+00
Date Added: 2024-06-11T09:22:16.051292
License: Public Domain

Case: 19-50397     Document: 00516252490         Page: 1   Date Filed: 03/24/2022

           United States Court of Appeals
                for the Fifth Circuit                                 United States Court of Appeals
                                                                               Fifth Circuit

                                                                             FILED
                                                                        March 24, 2022
                                  No. 19-50397
                                                                        Lyle W. Cayce
                                                                             Clerk
   Joseph Ozmun,

                                         Plaintiff—Appellant - Cross - Appellee,

   Michael J. Wood; Celetha C. Chatman; Community
   Lawyers Group,

                                                  Appellants—Cross - Appellees,

                                     versus

   Portfolio Recovery Associates, L.L.C.; Rausch, Sturm,
   Israel, Enerson; Hornick, L.L.C.,

                                    Defendants—Appellees - Cross - Appellants,

   ------------------------------------------------------------

   Joseph Ozmun,

                                         Plaintiff—Appellant - Cross - Appellee,

   Michael J. Wood; Celetha C. Chatman; Community
   Lawyers Group,

                                                  Appellants—Cross - Appellees,

                                     versus

   Portfolio Recovery Associates, L.L.C.,
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                                    No. 19-50397

                                        Defendant—Appellee - Cross - Appellant,

   ------------------------------------------------------------

   Joseph Ozmun,

                                          Plaintiff—Appellant - Cross - Appellee,

   Michael J. Wood; Celetha C. Chatman; Community
   Lawyers Group,

                                                    Appellants—Cross - Appellees,

                                       versus

   Portfolio Recovery Associates, L.L.C.,

                                        Defendant—Appellee - Cross - Appellant.

                  Appeal from the United States District Court
                       for the Western District of Texas
                        USDC No. 1:16-CV-000940-SS

   Before Owen, Chief Judge, and Dennis, and Haynes, Circuit Judges.
   Per Curiam:*
          This dispute over attorneys’ fees stems from three suits brought by
   Joseph Ozmun (Ozmun) against Portfolio Recovery Associates (PRA) and
   Rausch, Sturm, Israel, Enerson, & Hornick, LLC (RSIEH) (collectively the
   “Debt Collection Defendants”) for violations of the Fair Debt Collection

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.

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   Practices Act1 (FDCPA) and the Texas Fair Debt Collection Practices Act2
   (TFDCPAA). Though the debts involved were relatively small and were
   ultimately settled for less than their value, both parties contest the district
   court’s ruling on the Debt-Collection Defendants’ motion for attorneys’ fees
   under the FDCPA, the TFDCPA, Federal Rule of Civil Procedure 11, and 28
   U.S.C. § 1927.
          Michael J. Wood, Celetha C. Chatman, and the Community Lawyers
   Group (“Wood and Chatman”) were Ozmun’s attorneys in the district court
   and are now parties to this appeal. They allege that district court Judge
   Sparks acted with improper personal hostility toward them throughout the
   proceedings in this and similar cases they had brought on behalf of other
   clients. They claim this animosity led Judge Sparks to erroneously award
   attorneys’ fees against them for their good-faith conduct as Ozmun’s
   counsel. The Debt-Collection Defendants, by contrast, argue that the claims
   in this and the other similar cases were part of a larger fraudulent scheme by
   Wood and Chatman in which they sent intentionally unclear debt dispute
   letters to debt collection agencies on behalf of their clients in order to induce
   the agencies to arguably violate the FCDPA and TFDCPA, allowing Wood
   and Chatman to bring bad-faith claims against the agencies in order to garner
   attorneys’ fees under the fee shifting provisions those statutes provide.
   Accordingly, the Debt-Collection Defendants argue that Judge Sparks did
   not err in awarding attorneys’ fees against Wood and Chatman under the
   FDCPA and the TFDCPA, and in fact erred in not awarding additional
   attorneys’ fees against Wood and Chatman under Rule 11 and § 1927.
   Additionally, Ozmun argues that the district court erred in denying his

          1
              15 U.S.C. § 1692.
          2
              Tex. Fin. Code § 392.202(a).

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   request for attorneys’ fees against the Debt Collection Agencies under the
   FDCPA.
          Because we hold that the district court erred in finding that Wood and
   Chatman acted in bad faith, and thus erred in awarding attorneys’ fees against
   them, we REVERSE IN PART, AFFIRM IN PART, and REMAND
   for further proceedings consistent with this opinion.
                        I. Facts and Procedural History
                               A. The Three Suits
          This matter arises out of three separate suits that were consolidated
   by the district court. In the first case, Ozmun alleged violations of the
   FDCPA and the TFDCPA against the Debt-Collection Defendants.
   Ozmun’s allegations arose from attempts by the Debt-Collection Defendants
   to collect an allegedly defaulted credit card debt from Ozmun (“the First
   Debt”). On May 31, 2016, PRA received a letter from Ozmun (the “First
   Dispute Letter”) that stated in relevant part:
          I am writing to you regarding the account referenced above. I
          refuse to pay this debt. My monthly expenses exceed my
          monthly income; as such there is no reason for you to continue
          contacting me, and the amount you are reporting is not
          accurate either. If my circumstances should change I will be in
          touch.
          Approximately two months after PRA had received the First Dispute
   Letter, PRA reported the First Debt to a credit reporting agency. It did not
   indicate that the debt was disputed.
          PRA—through its attorneys, RSIEH—filed suit against Ozmun in
   Texas state court to collect the First Debt. While the case was pending,
   Ozmun made a payment of $57.00 towards the First Debt. Five months later,
   PRA filed a motion for default judgment in the collection case seeking

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   $2,065.21, the original total debt Ozmun allegedly owed without a deduction
   for the $57.00 he had paid. Ozmun was represented in this action by Wood
   and Chatman, who handled the filings and managed the litigation, and Tyler
   Hickle, a third Community Lawyers Group attorney, with whom Ozmun
   communicated directly.
          Ozmun subsequently filed the first action underlying this appeal in the
   district court (the “First Proceeding”), alleging that the debt collection
   efforts by the Debt-Collection Defendants were in violation of the FDCPA
   because they had reported the debt to a credit reporting agency without
   reporting that the debt had been challenged and because they had failed to
   credit the $57.00 that he had already paid toward that debt they had
   attempted to recover in the state court proceeding. He presented the Debt-
   Collection Defendants with a settlement demand of $6,500. According to
   Ozmun, the Debt-Collection Defendants agreed to the settlement.
   Thereafter, however, PRA informed Ozmun’s counsel that any settlement
   must include a “global release”—a release of any and all claims that Ozmun
   may have against PRA, including all claims that were not raised in the First
   Proceeding. Ozmun filed a motion to enforce the $6,500 settlement without
   the global release provision. The district court denied Ozmun’s motion as
   presenting only “he said/she said:” evidence of a settlement agreement,
   stating in its order that it was “troubling that a $6,500 case is in the United
   States District Court” and bemoaning the costs incurred by the parties’
   lawyers in their efforts to settle the case, noting that the court would
   “ultimately determine costs and perhaps attorney's fees and has a long
   memory.”
          RSIEH then filed for summary judgment on Ozmun’s claims,
   asserting that they were meritless and had been brought in bad faith. The
   district court deferring ruling on the motion pending negotiations between
   the parties, encouraging them to come to a settlement agreement. In its

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   order, the district court “caution[ed] Plaintiff Ozmun that this case could
   warrant sanctions if the only basis for this lawsuit is a technical violation
   involving $57.00 (if any violation at all).” Subsequently, PRA also filed for
   summary judgement, echoing RSIEH’s claims and arguing that Ozmun’s
   dispute of the debt had been fabricated by his attorneys to manufacture a
   lawsuit. PRA also contended that Ozmun had failed to demonstrate any
   actual injury3 resulting from his allegations. Ozmun responded in opposition
   and filed his own cross-motion for summary judgment.
           While the cross motions were pending, Ozmun filed a second and
   third suit against PRA (the “Second Proceeding” and the “Third
   Proceeding,” respectively). In the Second and Third Proceedings, Ozmun
   alleged that PRA had engaged in similar false and misleading credit reporting
   regarding two more of his credit-card debts (the “Second Debt” and the
   “Third Debt,” respectively). Ozmun had sent PRA two additional letters
   disputing the Second and Third Debts (the “Second Dispute Letter” and the
   “Third Dispute Letter,” respectively) with wording essentially identical to
   that contained in the First Dispute Letter. According to Ozmun, PRA also
   reported the Second and Third Debts without disclosing that Ozmun had
   disputed them.
           In the First Proceeding, the district court granted in part and denied
   in part the Debt-Collection Defendants’ pending summary judgment
   motions and denied Ozmun’s cross-motion, determining that, although
   Ozmun lacked standing to pursue his claims under the TFDCPA because he
   did not assert actual damages4 or request injunctive relief, his allegations of

           3
             The TFDCPA requires actual damages when requesting relief other than an
   injunction. Tex. Fin. Cod. § 392.403.
           4
            Ozmun argues that the district court’s finding is contradicted by his deposition
   testimony regarding the damage caused by PRA to his credit score and reputation.

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   misconduct and injury were sufficient for his FDCPA claims to proceed to
   trial. PRA then moved to consolidate the Second and Third Proceedings into
   the First Proceeding, which the district court granted,5 and the Debt-
   Collection Defendants proceeded to file another, joint motion for summary
   judgement in the consolidated cases, raising largely the same arguments as in
   the prior summary judgment motions. The district court again granted the
   motion in part and denied it in part, ruling that Ozmun did not have standing
   to bring his TFDCPA claims but that the issue of damages under the FDCPA
   was a genuine issue of material fact for which a trial was required.
        B. Judge Sparks’ Disciplinary Referral and the Recusal Motion
           While the three consolidated claims were proceeding before him,
   Judge Sparks sent a disciplinary referral letter (the “Disciplinary Referral
   Letter”) to the Admissions and Disciplinary Committee for the Western
   District of Texas (the “Disciplinary Committee”). The stated purpose of
   the letter was to “refer the conduct” of certain attorneys to the Disciplinary
   Committee for review. Judge Sparks named, among others, Wood and
   Chatman as attorneys that he sought to have investigated for potential
   disciplinary action. In the letter Judge Sparks asserted that there was
   evidence that the named attorneys were “involved in a scheme to force
   settlements from debt collectors by abusing the FDCPA.” He contended the
   attorneys were abusing the statute by inducing different clients to send
   identical debt dispute letters to debt collection agencies then filing suits
   alleging violations of the FDCPA based on the debt collectors’ failure to

           5
            On the same day, the district court entered a scheduling order directing Ozmun
   to submit a written settlement offer to the Debt-Collection Defendants and to serve his
   designation of potential witnesses, testifying experts, and proposed exhibits by November
   1, 2017. Ozmun missed this deadline and Appellees moved for sanctions and contempt.
   The district court awarded monetary sanctions of $10,065 jointly against Ozmun and his
   attorneys.

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   acknowledge the disputes when reporting those debts to credit reporting
   agencies. Judge Sparks opined that the language of these letters was “unclear
   on whether a debt is being disputed or not[.]” Wood and Chatman now argue
   that Judge Sparks omitted a “critical point from this accusation[:]” that, in a
   companion case to one of the cases he cited in the Disciplinary Referral
   Letter, another presiding judge had ruled that the same language included in
   the dispute letters was a clear and valid debt dispute and had accordingly
   granted the plaintiff in that case summary judgment on the exact issue. Jones
   v. Portfolio Recovery Associates, LLC, Case No. 1:16-CV-572-RP, 2017 U.S.
   Dist. LEXIS 216568, *10-11 (W.D. Tex. Aug. 16, 2017).
          The Screening Subcommittee of the Disciplinary Committee (the
   “Screening Subcommittee”) ultimately issued findings disagreeing with
   Judge Sparks’ disciplinary referral and finding that the attorneys named
   therein had not acted in bad faith. As of this ruling, the Disciplinary
   Committee has taken no action to discipline Wood or Chatman.
          Also while the consolidated claims in this case were proceeding, Judge
   Sparks entered sanctions against Wood and Chatman in another then-
   pending case, Tejero v. Portfolio Recovery Associates LLC, et al., Case No. 1:16-
   CV-767.3,6 which involved claims against PRA similar to those Ozmun had
   brought. Using much the same language as in his disciplinary referral, Judge
   Sparks ruled in that case that Wood and Chatman were involved in a
   “scheme to force settlements from debt collectors by abusing the FDCPA.”
                            C. Settlement and Attorneys’ Fees
          A week before the trial was due to begin, Ozmun proposed a new
   settlement offer. The Debt-Collection Defendants agreed, and the parties
   filed a joint notice of settlement, setting forth that Ozmun would dismiss his

          6
              On appeal Tejero v. Portfolio Recovery Assocs., L.L.C., 955 F.3d 453 (5th Cir. 2020).

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   FDCPA claims against The Debt-Collection Defendants in exchange for
   $1,250, with both parties reserving the right to file fee applications. After
   tendering a cashier’s check, the Debt-Collection Defendants moved to
   dismiss, and the district court granted the motion, dismissing the suit with
   prejudice.
          The Debt-Collection Defendants then filed a motion for attorneys’
   fees and costs. They argued that Wood and Chatman had acted in bad faith
   throughout the litigation and that The Debt-Collection Defendants were
   therefore entitled to an award of attorney’s fees under the FDCPA’s fee
   shifting provision, § 1692k(a)(3), the TFDCPA’s fee shifting provision,
   § 392.403(c), Rule 11 of the Federal Rules of Civil Procedure, and 28 U.S.C.
   § 1927.7 RSIEH demanded $114,773.03, and PRA $84,732.83. On the same
   day, Ozmun filed a motion for attorneys’ fees asserting that, because he had
   successfully received a settlement in the consolidated cases, he qualified as a
   prevailing party for purposes of the FDCPA’s fee shifting provision and
   therefore he—and not the Debt-Collection Defendants—should recover
   attorneys’ fees under 15 U.S.C. § 1692k(a)(3). Ozmun sought a total of
   $35,461.00.
          The district court denied Ozmun’s request for attorneys’ fees. The
   court found that Ozmun’s TFDCPA claims were brought in bad faith
   because the complaints failed to include sufficient allegations to support
   injunctive relief or actual damages, and that Wood and Chatman had brought
   all the claims in bad faith and for the purpose of harassment. The court stated
   that this “bad faith” made awarding attorneys’ fees to Ozmun inappropriate.

          7
            Rule 11 empowers federal courts to award sanctions under certain circumstances.
   See Fed. R. Civ. P. 11(b). 28 U.S.C. § 1927 allows courts to order any attorney who
   “unreasonably and vexatiously” multiplies the proceedings in a case to pay the costs and
   attorney’s fees incurred by this conduct. 28 U.S.C. § 1927.

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   It then granted in part and denied in part the motion by the Debt-Collection
   Defendants. The court rejected the Debt Collection Defendants’ Rule 11 and
   § 1927 arguments but granted them attorney’s fees under the fee shifting
   provisions of the FDCPA and the TFDCPA. In its order, the district court
   repeated the accusation that Wood and Chatman had “manufactured a case
   by misusing federal and state debt collection statutes . . . in an attempt to
   augment their attorneys’ fees” under the FDCPA and TFDCPA’s fee
   shifting provisions. Thus, the court ordered Wood and Chatman, rather than
   Ozmun, to pay PRA $84,732.83 and RSIEH $78,894.99 in attorneys’ fees.
          Ozmun, Wood, and Chatman now appeal the district court’s order.
   The Debt-Collection Defendants cross-appeal, asserting that the district
   court should also have granted them additional fees under Rule 11 and 28
   U.S.C. § 1927. RSIEH also appeals a reduction in the rate allowed for one of
   its attorneys in the fees the district court did award.
                              II. Standard of Review
          This court reviews a district court's imposition or denial of sanctions,
   including attorneys’ fees, under an abuse of discretion standard. Whitehead
   v. Food Max of Miss., Inc., 332 F.3d 796, 802-03 (5th Cir. 2003).            “In
   evaluating whether the district court abused its discretion to award
   attorneys’ fees, this court reviews the underlying factual findings for clear
   error and the conclusions of law de novo.” Dearmore v. City of Garland, 519
   F.3d 517, 520 (5th Cir. 2008) (citing Energy Mgmt. Corp. v. City of Shreveport,
   467 F.3d 471, 482 (5th Cir. 2006)). A district court abuses its discretion if it:
   (1) relies on clearly erroneous factual findings; (2) relies on erroneous
   conclusions of law; or (3) misapplies the law to the facts. McClure v. Ashcroft,
   335 F.3d 404, 408 (5th Cir. 2003).

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                                          III. Analysis
                                           A. FDCPA
          We address first Wood and Chatman’s argument that the district
   court erred in awarding attorneys’ fees against them personally, as Ozmun’s
   counsel, under § 1692(k)(a)(3). This issue is conclusively resolved in Wood
   and Chatman’s favor by our recent decision in Tejero v. Portfolio Recovery
   Assocs., L.L.C.,8 in which we held that Section 1692k(a)(3) does not
   authorize the award of attorneys’ fees against counsel. 955 F.3d 453 (5th Cir.
   2020) (“Section 1692k(a)(3) says only that ‘the court may award to the
   defendant attorney's fees . . . .’ . . . Unlike 28 U.S.C. § 1927 or Rule 11, there
   is no language that specifically and explicitly permits the courts to depart
   from the common law and make fee awards against lawyers.”). Thus, the
   district court’s erred in awarding attorneys’ fees to the Debt-Collection
   Defendants against Wood and Chatman under FDCPA § 1692(k)(a)(3).
                                          B. TFDCPA
          We next address whether the district court erred in awarding
   attorney’s fees to the Debt-Collection Defendants against Wood and
   Chatman as Ozmun’s counsel under the TFDCPA. Wood and Chatman
   argue that, because the FDCPA’s fee shifting provision cannot be used to
   sanction a plaintiff’s attorneys, the district court also erred in awarding the
   Debt-Collection Defendants attorneys’ fees and costs against Ozmun’s
   attorneys under § 392.403. They argue that § 392.403(c) is almost word-for-
   word identical to the sanctions provision of §1692k(a)(3), and that
   “[i]dentical statutes demand identical interpretations.” We agree.

          8
              Foretold by Evans v. Portfolio Recovery Assocs., LLC, 889 F.3d 337 (7th Cir. 2018).

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           Aside from standard principles of statutory construction, Texas state
   court precedents confirm that the TFDCPA should be construed in the same
   manner as the FDCPA.9 Additionally, Texas state courts routinely discuss
   Texas’ jurisprudence on attorneys’ fees and statutory fee shifting using the
   same reasoning as our court employed in Tejero when discussing the parallel
   federal jurisprudence. For example, our court in Tejero stated that fee
   shifting statutes should be strictly construed against recovery because of the
   long-standing and deeply established nature of the so-called ‘American Rule’
   in which parties bear their own attorney’s fees. See Tejero, 955 F.3d at 462-
   63 (“Because of the common-law origins of the [American Rule], statutes
   that alter it are to be read with a presumption favoring the retention of long-
   established and familiar legal principles. . . . . That a statute is sufficiently
   specific and explicit to authorize one type of fee award does not make it
   sufficiently specific and explicit to authorize another type of fee award.”
   (citing Baker Botts L.L.P. v. ASARCO LLC, 135 S. Ct. 2158, 2164 (2015)
   (internal quotation marks omitted)). Similarly, Texas courts have noted that
   “Texas has long adhered to the American Rule with respect to awards of
   attorney's fees,” Tucker v. Thomas, 419 S.W.3d 292, 295 (Tex. 2013), and
   thus “[a]ny award of fees is limited by the wording of the statute or contract
   that creates an exception to the American Rule.” . JCB, Inc. v. Horsburgh &
   Scott Co., 597 S.W.3d 481, 491 (Tex. 2019), reh'g denied (Oct. 4, 2019).

           9
               See, e.g., In re Eastman, 419 B.R. 711, 731 (Bankr. W.D. Tex. 2009) “[T]he
   structure of the Texas statute is modeled on the federal enactment and so should be
   similarly construed. . .. Stated another way, for the same reasons that the Defendants are
   liable under § 1692e(5) of the FDCPA in the Fifth Circuit, they are liable under
   § 392.301(a)(8)”) (internal citations removed); see also Prophet v. Joan Myers, Myers &
   Assocs., P.C., 645 F.Supp.2d 614, 617 (S.D.Tex.2008) (“... the conduct made unlawful by
   that act is virtually identical to the conduct made unlawful by the FDCPA”). As the district
   court noted in its opinion in this case, “Section 392.403 of the Texas Finance Code is the
   TFDCPA's analogue to § 1692k(a)(3).”

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          We thus hold that the TFDCPA also does not authorize the award of
   attorney’s fees as against a plaintiff’s counsel.
                         C. The Court’s Inherent Power
          Because “[this court] can affirm [the district court] on any ground
   supported by the record,” United States v. Mazkouri, 945 F.3d 293, 307 (5th
   Cir. 2019), the Debt Collection Defendants argue that, even if neither of the
   statutes relied upon by the district court authorized the award of attorneys’
   fees against Wood and Chatman, we should nonetheless hold that all of the
   sanctions were appropriately levied under the court’s inherent power. The
   Debt-Collection Defendants are correct that, in a situation where a party acts
   in bad faith and “neither the statute nor the rules [is] up to the task [of
   sanctioning the conduct], the court may safely rely on its inherent power” to
   assess attorney’s fees. Chambers v. NASCO, Inc., 501 U.S. 32, 50 (1991). As
   we have stated, this is true even where a statute would otherwise govern the
   imposition of attorneys’ fees in the case. Boland Marine Mfg. Co. v. Rihner,
   41 F.3d 997, 1005 (5th Cir. 1995) (quoting Chambers, 501 U.S. 32, 50).
   However, a specific finding that the sanctioned party acted in bad faith is a
   prerequisite for the imposition of such inherent-power sanctions. Dawson v.
   United States, 68 F.3d 886, 895 (5th Cir. 1995).
          In its discussion of the award of attorneys’ fees under FDCPA and
   TFDCPA, the district court found that Chatman and Wood acted in bad faith
   because they “manufactured a case by misusing federal and state debt
   collection statutes” by directing clients to send deliberately misleading debt
   dispute letters. But this finding appears to have been made sua sponte and in
   the absence of any evidence; no party argued or introduced evidence that the
   debt dispute letters Ozmun sent were “deliberately deceptive and
   intentionally confusing” before the district court found they were so.
   Moreover, multiple courts have found identically worded debt dispute letters

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   to be clear and entirely sufficient to dispute a debt under the FDCPA. As this
   court stated in Tejero, which involved an identically worded debt dispute
   letter and in which this court reversed Judge Sparks’ sanctions order against
   the plaintiff’s attorneys for essentially the same conduct as in this case,
          Here, the district court found the Attorney-Appellants
          “intentionally” drafted an unclear dispute letter. The relevant
          part of the letter reads: “My monthly expenses exceed my
          monthly income . . . and the amount you are reporting is not
          accurate either.” Aside from invoking the word “dispute,” we
          struggle to see how a debtor could dispute a debt more clearly
          than by writing, “the amount you are reporting is not
          accurate.”. . . We are not alone on this issue. The Seventh
          Circuit, and every district court within it to have considered
          the matter, has concluded that the phrase “the amount
          reported is not accurate” unambiguously and clearly
          “dispute[s]” a debt—“[t]here is simply no other way to
          interpret this language.”
   Tejero, 955 F.3d at 460-61 (citing Evans v. Portfolio Recovery Assocs., LLC, 889
   F.3d 337, 346 (7th Cir. 2018)); see also Jones v. Portfolio Recovery Associates,
   LLC, Case No. 1:16-CV-572-RP (W.D. Tex. Aug. 16, 2017) (jury verdict of
   $61,000 on nearly identical claims for improper credit reporting).
          The district court also found that Ozmun’s claim under the TFDCPA
   was brought in bad faith because it was not a request for injunctive relief and
   did not plead actual damages. But Ozmun pleaded damage to his credit
   report and reputation, which are cognizable injuries. See Sayles v. Advanced
   Recovery Sys., Inc., 865 F.3d 246 (5th Cir. 2017) (identifying non-monetary
   actual harm caused by failing to credit-report a consumer’s dispute). The
   Tejero court also concluded that that plaintiff had a non-frivolous basis to
   bring his claim under the TDCA even if he lost on that issue on summary
   judgment under essentially the same underlying facts as in this case. To again
   quote this court’s opinion in Tejero:

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          “[I]t’s also possible the district court thought the claims were
          brought for an improper purpose—to drum up business for the
          lawyers and extract attorney’s fees from unsuspecting debt
          collectors. But when a complaint is well grounded in fact and
          warranted by existing law, only under unusual circumstances
          should the filing of papers constitute sanctionable conduct.
          And the inquiry into whether an improper purpose or unusual
          circumstances existed should be based on the objective
          reasonableness of the filing, not subjective suspicion.
   Tejero, 955 F.3d at 460 (internal quotation marks and citations removed); see
   also Nat’l Ass’n of Gov’t Emps., 844 F.2d at 224 (“[P]urely subjective
   elements should not be reintroduced into the determination concerning
   ‘improper purpose.’”); Snow Ingredients, Inc. v. SnoWizard, Inc., 833 F.3d
   512, 528 (5th Cir. 2016) (“An attorney’s conduct is judged under each
   standard with an objective, not a subjective, standard of reasonableness.”).
          Here, as also occurred in Tejero, “the district court denied PRA cross-
   motion for summary judgment on the FDCPA claim—which indicates
   [Appellant’s] position was far from frivolous. In fact, it was so substantial
   that the district court thought it warranted a trial.” Tejero v. Portfolio Recovery
   Assocs., L.L.C., 955 F.3d 453, 459 (5th Cir. 2020) (emphasis original). Thus,
   Ozmun’s claims brought under the TFDCPA were not a “clear misuse of the
   TFDCPA” as the district court stated. They simply failed on summary
   judgment. For these reasons, we hold that the district court erred in finding
   that Wood and Chatman acted in bad faith, and thus we decline to affirm the
   award of attorney’s fees against them under the court’s inherent power.
                          D. Rule 11 and 28 U.S.C. § 1927
          For much the same reasons that we hold the sanctions against Wood
   and Chatman cannot be upheld as an exercise of the district court’s inherent
   power, we hold also that the district court was correct to deny the Debt-
   Collection Defendant’s additional attorneys’ fees under Rule 11 and 28

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                                    No. 19-50397

   U.S.C. § 1927. When not based on factual inaccuracies, Rule 11 permits
   sanctions only upon a specific finding that a filing was made for an improper
   purpose or that the legal contentions are frivolous. Fed. R. Civ. Pro. 11(b).
   Similarly, 28 USC § 1927 requires that a court find that counsel has
   “unreasonably and vexatiously” multiplied the costs of the proceeding. 28
   USC § 1927. Because we hold that there is no evidence that Wood and
   Chatman acted in bad faith, we hold that there is no basis for concluding they
   made filings for an improper purpose, asserted frivolous legal theories, or
   unreasonably and vexatiously multiplied costs. Accordingly, the district
   court was correct to deny attorneys’ fees under these provisions.
                     E. Denial of Attorneys’ fees to Ozmun
          Finally, Ozmun argues that the district court erred in denying his
   request for attorneys’ fees under § 1692k(a)(3). As noted by the district
   court, courts may refuse to award attorneys’ fees requested under
   § 1692k(a)(3) to prevailing plaintiffs where "special circumstances would
   render such an award unjust." Davis v. Credit Bureau of the South, 908 F.3d
   972, 975 (5th Cir. 2018) (per curiam) (quoting Romain v. Walters, 856 F.3d
   402, 407 (5th Cir. 2017)).        The district court found such special
   circumstances to exist given its determination that Ozmun, via his attorneys,
   acted in bad faith. Because we have found that determination to be in error,
   we consider Ozmun’s assertion that the private settlement he ultimately
   received constitutes a “successful action to . . . enforce liability under the
   FDCPA” and that he may thus recover attorneys’ fees from the Debt
   Collection Defendants. 15 U.S.C. § 1692k(a)(3).
          Our circuit has not previously decided whether a private settlement
   renders the action “successful” under § 1692k(a)(3). Here, as in Tejero, the
   district court did not have an opportunity to evaluate this question because it
   erroneously rejected Ozmun’s fee application on the basis of his purportedly

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                                    No. 19-50397

   sanctionable conduct. Now that we have corrected that mistake, we follow
   Tejero’s lead and remand this question for the district court’s consideration
   in the first instance of whether Ozmun is a prevailing party entitled to
   attorneys’ fees under the FDCPA. See Tejero, 955 F.3d at 462-63 (“True,
   private settlements generally do not suffice for fee-shifting statutes like 42
   U.S.C. § 1988(b). But there are textual differences between the FDCPA
   and § 1988(b).”) (internal citations removed); see also Ultra Petroleum Corp.
   v. Ad Hoc Comm. of Unsecured Creditors of Ultra Res., Inc. (In re Ultra
   Petroleum Corp.), 943 F.3d 758, 766 (5th Cir. 2019) (“[W]e are a court of
   review, not of first view.”) (quotation omitted).
                                  V. Conclusion
          For the foregoing reasons, we REVERSE in part, AFFIRM in part,
   and REMAND to the district court for further proceedings consistent with
   this opinion.

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