A. DAVID COPPERTHITE, Magistrate Judge.
Defendant Trident Asset Management has filed a Motion for Sanctions (ECF No. 153) requesting attorneys' fees and costs against Plaintiff pursuant to 15 U.S.C. § 1692k(a)(3) and 15 U.S.C. §1681n(c) and against Plaintiff's counsel pursuant to 28 U.S.C. § 1927. The Defendant also relies on this Court's inherent power to levy sanctions and sets forth the relevant caselaw in support of its motion. Plaintiff responded in what at best can be seen as an attempt to relitigate the granting of summary judgment (ECF No. 149 ["Memorandum Opinion"]) and a re-packaging of her motion to alter or amend judgment (ECF No. 158), sprinkled with a few arguments against sanctions (ECF No. 160). For the reasons set forth below, the Court GRANTS the motion for sanctions.
The Court previously detailed the factual background of this case in the Court's Memorandum Opinion which is incorporated herein. In short, Plaintiff `s daughter, with Plaintiff's knowledge and permission, opened an account for service with Verizon in Plaintiff's name. Plaintiff and/or her daughter failed to pay monies due on the account which fell into arrears in the amount of $189.79, which for reporting purposes was rounded to $190. Verizon closed the account and reported the debt. Despite her knowledge of the debt and its origin, Plaintiff disputed the debt. Defendant conducted the appropriate investigation and verified the amount and the debt owed Verizon thus meeting all the requirements of both the Fair Credit Reporting Act ("FCRA") and Fair Debt Collection Practices Act ("FDCPA").
In discussions with Defendant, Plaintiff along with Thomas Alston, a paralegal who is not an attorney but reportedly is an "assistant" to Plaintiff's counsel, reported that she was the victim of identity fraud and she had no knowledge of the debt. Plaintiff's statement denying the knowledge and alleging identity fraud was captured in her own handwriting in a correspondence with Defendant. Defendant properly noted that the account was in dispute. Plaintiff, along with Thomas Alston, drafted the complaint and conducted several conversations with various Defendants regarding the debt. Plaintiff also filed suit against nine other defendants who eventually settled their claims with Plaintiff or were otherwise dismissed.
Defendant Trident vigorously defended their claim. At deposition, Plaintiff was represented by her counsel. At deposition Plaintiff admitted that the debt was her daughter's and her daughter used Plaintiff's name with her permission and defaulted. Plaintiff at deposition also testified that she did not know whether the amount due or the credit reporting was accurate. Even after this admission in deposition, Plaintiff and her counsel continued litigating this claim. Plaintiff in opposing summary judgment changed her story again and denied her signature on the letter to Defendant and disavowed her knowledge of identity theft. ECF No. 137-1. Plaintiff's counsel in his declaration denied knowledge of the false identity theft report until the time of deposition. As stated previously, these facts are detailed in the Memorandum Opinion with all the proper references in support.
Both the FCRA, 15 U.S.C. § 1861, et seq., and the FDCPA, 15 U.S.C. § 1692, et seq., provide for the sanction of attorney's fees when the non-prevailing party has acted in bad faith. "The term `bad faith,' as it is ordinarily used in the attorney's fee context, requires a showing either that the party subjectively acted in bad faith—knowing that [s]he had no viable claim—or that [s]he filed an action or paper that was frivolous, unreasonable, or without foundation." Alston v. Branch Banking and Trust Co., GJH-15-3100, 2018 WL 4538538 (D.Md. Sept. 20, 2018) (quoting Ryan v. Trans Union Corp., No. 99 C 216, 2001 WL 185182 (N.D.Ill. Feb. 26, 2001)); see also Christianburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978). In considering whether a filing is made in bad faith, the court will focus on the party's mental state at the time of the filing, regardless of whether the filing turned out to be baseless. Letren v. Trans Union, LLC., PX-15-3361, 2017 WL 4098743, at *1, n. 1 (D.Md. Sept. 15, 2017).
In considering a fee award, the Court must consider the twelve factors that the Fourth Circuit set forth in Barber v. Kimbrell's Inc., 577 F.2d 216 (4th Cir. 1978), to the extent that such factors are applicable. Letren, 2017 WL 4098743, at *8. These factors include:
Barber, 577 F.2d at 226 n.28. In this District, Appendix B of the Local Rules of the District of Maryland established the rules and guidelines for determining attorney's fees in cases such as this.
The FCRA and the FDCPA are both designed to protect consumers. The FCRA was enacted to "protect consumer privacy," among other things. United States v. Bormes, 568 U.S. 6, 7 (2012) (first quoting Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52 (2007), then citing 15 U.S.C. § 1681). Specifically, the FCRA's purpose is "to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce . . . which is fair and equitable to the consumer." 15 U.S.C. § 1681(b). Similarly, the FDCPA was enacted "to eliminate abusive debt collection practices, to ensure that debt collectors who abstain from such practices are not competitively disadvantaged, and to promote consistent state action to protect consumers." Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 577 (2010) (citing 15 U.S.C. § 1692(e)). Both statutes provide civil remedies that enable consumers to hold credit reporting agencies ("CRAs") and debt collectors accountable for violations of the Acts. See 15 U.S.C. §§ 1681n-81o, 1692k. Many cases in which plaintiffs bring actions against CRAs and debt collectors under the FCRA and FDCPA are based on genuine violations of the law that can greatly harm consumers. In those cases, the FCRA and FDCPA provide essential relief for unfairly treated consumer plaintiffs. In this case, Plaintiff Miller is not one of the unfairly treated consumers.
As the Court noted in its Memorandum Opinion, there are many troubling aspects to this litigation. When you peel the onion of this case, at its center is a Plaintiff litigant, who happens to be a tenant in a property owned or operated by Thomas Alston. Thomas Alston is no stranger to the United States District Court for the District of Maryland, as noted below. Plaintiff, with or without her daughter, owed a debt to Verizon in the reported amount of $190. Plaintiff falsely alleged, in her own handwriting, that she was a victim of identity fraud. When you set back the clock in this case, the entire claim of Plaintiff aided by Alston rests on fraud. Plaintiff under oath at deposition admitted that the debt was hers, there was no identity fraud, and that she didn't know whether the amount of the debt was accurate or accurately reported, which completely undermined her claim. As this Court stated previously, Plaintiff's fraud is inextricably intertwined with her cause of action. In her Response, Plaintiff argues that she never asserted an identity fraud claim against Defendant. ECF No. 160. While that is technically true, Plaintiff ignores the obvious: that the claims she did assert were all based upon her fraudulent assertions that she was unaware of the debt and that it was a result of identity fraud. Applying a basic "but for" analysis—but for her fraudulent claim that the debt was not hers—this Defendant would never have found itself wrapped up in this litigation.
The troubling aspects of this case do not stop with Plaintiff's fraud upon this Court, a fraud that resulted in settlement of other claims against some Defendants and dismissals against other Defendants. It seems that Thomas Alston, the paralegal who admitted he assisted Plaintiff in her efforts, has possibly run out of relatives. As Judge Hazel of this Court noted, "the Alston family is engaged in, and profiting from, `an enterprise of [FCRA] litigation.'" Alston v. Branch Banking and Trust Co., 2018 WL 4538538, at *3 (quoting Alston v. Creditors Interchange Receivable Mgmt., LLC, DKC-12-1709, 2012 WL 4370124, at *1). As Judge Chasanow also highlighted, "Thomas Alston has filed a number of FCRA cases in this Court, along with `numerous, additional and virtually identical cases, filed by persons who appear to be Mr. Alston's mother, Yvonne Alston, sister, Candace Alston, sister Kimberly Alston, and brother, Jonathan Alston, all of whom use the identical address utilized by Thomas Alston.'" Id. (citing Alston v. Creditor's Interchange, 2012 WL 4370124, at *3). In the instant case, Plaintiff is not a relative but reportedly a tenant of Mr. Alston.
As Judge Messitte of this Court wrote, "but there is more." Alston v. Experian Info. Sols., Inc., PJM-15-3558, 2016 WL 4555056, at *7 (D.Md. Aug. 31, 2016).
Id. at *7-8. Like in Judge Messitte's opinion, the Court here takes judicial notice of Thomas Alston's LinkedIn profile (which is still currently active), in which he holds out:
Thomas Alston, LINKEDIN (Dec. 3, 2019, 5:02 PM), https://www.linkedin.com/in/doctormoney.
In another Alston opinion, Judge Messitte repeated his concerns over the Alston cases and later noted that over forty
Id. at 29.
The troubles don't stop there. Plaintiff's counsel admits that Thomas Alston is "an assistant to Plaintiff's counsel." ECF No. 160 at 8. This Court has the authority to assess attorney's fees against Plaintiff pursuant to 15 U.S.C. § 1692k(a)(3) and 15 U.S.C. § 1681n(c) and against Plaintiff's counsel pursuant to 28 U.S.C. § 1927. This Court also has the inherent authority to order sanctions in the form of attorney's fees when a party has acted in bad faith. Chambers v. NASCO, Inc., 501 U.S. 31 (1991). Rule 11 also allows for sanctions, and notably here, "a law firm must be held jointly responsible for a violation committed by its partner, associate, or employee." FED. R. CIV. P. 11(c)(1). Rule 11 also allows for reasonable attorney's fees and other expenses to be assessed as a sanction. FED. R. CIV. P. 11(c)(4). There has been extensive litigation in this case over nothing more than an actual and properly reported $190 debt that could have been settled with Defendant for one half that amount. Instead, the Plaintiff opportunist with help from Thomas Alston and/or her counsel turned this frivolous, non-existent claim into an attempt to continue the FCRA/FDCPA money making scheme.
All tragedies have a third and final act. For Plaintiff and her counsel, the third act has arrived. It is unfortunate for Defendant that Defendant had to bear the litigation costs along the way. While the Court will decide this motion only as to these facts and this litigation, it would be imprudent to ignore the history concerning Thomas Alston, the paralegal who had in the past advertised, walked, and talked like a licensed member of the Bar, and who helped this Plaintiff with her negotiations with the CRAs and her filings. As in Alston v. Branch Banking & Trust Co., though Plaintiff's complaint was originally filed pro so, "this action appears to have been drafted by an individual with some legal training." Alston v. Branch Banking & Trust Co., GLH-15-3100, 2016 WL 4521651, at *1, n.1 (D.Md. Aug. 26, 2016). As stated above, Judge Hazel noted that "the Alston family is engaged in, and profiting from, `an enterprise of [FCRA] litigation.'" Alston v. Branch Banking and Trust Co., 2018 WL 4538538, at *3 (quoting Alston v. Creditors Interchange, 2012 WL 4370124, at *1). It appears the enterprise has extended outside the family.
It would also be imprudent to ignore the role of counsel in this case, who even after being faced with his client's admission of the debt, the false reporting of identity theft, and her lack of knowledge of whether the reporting was accurate, continued to press this litigation. In a pattern that has repeated itself in other Alston filings, the failure at litigation has resulted in extensive postsummary judgment motions, styled as motions to alter or amend judgment. This post-judgment litigation resulted in even more attorney's fees for Defendant, adding the proverbial insult to injury. The Court's comments are simply based upon the finding that the entire claim of Plaintiff rested upon fraud. See Memorandum Opinion at 17-21. There never was a valid claim under the FDCPA/FCRA. There never was identity theft resulting in a fraudulent debt. What did exist was a valid debt of Plaintiff's that was properly reported to the CRAs and a Defendant charged with collection of that valid debt.
To determine whether the Plaintiff acted in bad faith, the Court will focus on the party's mental state at the time of the filing, regardless of whether the filing turned out to be baseless. Letren v. Trans Union, LLC., 2017 WL 4098743, at *1, n. 1. The Defendants successfully removed this case from Baltimore City Circuit Court (ECF 1). On October 30, 2018, Plaintiff filed an Amended Complaint (ECF No. 35). The pertinent paragraph as to this Defendant reads as follows:
ECF No. 35 at 5, ¶ 19.
It is clear from Plaintiff's complaint that when she filed this Amended Complaint on October 30, 2018, Plaintiff denied knowledge of the debt completely. This paragraph 19 tracks identically paragraph 20 of the removed Complaint. The Court uses the Amended Complaint since it is later in time. The Court has previously denied Plaintiff's relief on the merits of this claim, so the above paragraph is cited here only to evidence Plaintiff's mental state at the time of the filing. See Memorandum Opinion.
On April 16, 2019 under oath on deposition, Plaintiff admitted: (1) that she owed that money "a long time ago," ECF No. 128-1 at 3;
It is also remarkable that during discovery, Plaintiff requested the Court order Defendant's Rule 30(b)(6) witness to travel to Washington D.C. for deposition. ECF No. 96. The Court heard argument from counsel and considered submitted legal support. The Court ruled against Plaintiff and held that the deposition of the 30(b)(6) witness would occur in Georgia, the principal place of business of the witness. ECF No. 97. Plaintiff abandoned the deposition of this critical witness. Failure to depose the 30(b)(6) witness indicates to the Court that either finances were an issue or Plaintiff never intended to proceed to trial in this case. Since a tremendous amount of litigation and costs had already been incurred by Plaintiff, the latter seems more likely than not. Plaintiff had also reached settlement or dismissal with all the other Defendants in this case.
I must now determine whether Plaintiff and/or her counsel have acted in bad faith. As stated previously, "[t]he term `bad faith,' as it is ordinarily used in the attorney's fee context, requires a showing either that the party subjectively acted in bad faith—knowing that [s]he had no viable claim—or that [s]he filed an action or paper that was frivolous, unreasonable, or without foundation." Alston v. Branch Banking & Trust Co., 2018 WL 4538538, at *3 (citing Ryan, 2001 WL 185182, at *5).
Here the evidence is clear that Plaintiff acted in bad faith. Plaintiff's state of mind is clearly discernible. She knew the debt was hers, she filed a false claim of identity theft, and she could not say the amount was not correct or was improperly reported. As I stated in the Memorandum Opinion, Plaintiff never had a valid claim. Plaintiff had knowledge of the debt she incurred with her daughter's default, and Defendant met all its obligations under the FCRA and FDCPA. It appears to be evident to the Court that Plaintiff, along with Thomas Alston—who was an employee "assistant" to counsel—filed these multiple claims against the Defendants in an effort to extract settlements in the same way Thomas Alston and family members had done in the prior cases filed in this Court. The allegations against Defendant were an act of opportunity and had no basis in fact. The action here was "frivolous, unreasonable, [and] without foundation." Id. The fraud was so intermingled with her claims against Defendant that the sanction of attorney's fees is warranted against Plaintiff and against her counsel, who is responsible for Thomas Alston under Rule 11. The Court will consider the responsibility of each individually.
The Court does not take lightly an award of sanctions, nor should it. In this case, over what amounted to an acknowledged $190 properly reported debt, resolvable by an offered $95 payment, the Thomas Alston machine cranked out a litigation effort that has cost Defendant significant attorney's fees. The claim was fraudulent from its inception — when Plaintiff and Alston contacted Defendant by phone regarding the debt, Plaintiff knew she owed the debt and knew why. The claims that followed were just an opportunity to use that fraudulent vehicle to squeeze a settlement from Defendant. The Alston machine was not prepared for litigation and the strong defense asserted by Defendant. After all, nine other defendants in this action either settled or were dismissed. There is a striking resemblance of pleadings and strategies throughout all the Alston filings. Some of the prior Alston cases were pro se but the pleadings are all similar. As other Judges of this Court have noted, those pro se pleadings appear to be drafted by someone with legal experience.
This Court has conducted an analysis of cases filed by Thomas Alston as Plaintiff and related pro se cases that involve Thomas Alston and pleadings that appear to be drafted and filed by Thomas Alston and the Alston machinery.
Jeffrey Styles, Esquire entered an appearance in some of the later cases analyzed below. With the exception of a few recent cases filed by Mr. Styles, he did not enter an appearance until the litigation was underway. In the present case, Mr. Styles did not enter an appearance until the first Motion for Reconsideration was filed. I have included the analysis as part of this Opinion. It serves as insight to the state of mind of Alston at the time of the filing of this complaint. Here Alston's and counsel Jeffrey Styles' state of mind is clearly discernible as well. Alston capitalized on a frivolous claim to pressure settlement from Defendant. The activity in this case is consistent with the activity in the other cases filed by Alston, Alston's family members, and other pro se Plaintiffs with Alston's help. Plaintiff Miller is just another opportunity to attempt a settlement from this Defendant in a frivolous and admittedly fraudulent claim.
Plaintiff's complaint, removed to this Court on August 17, 2018, was filed pro se. The Amended Complaint was also filed pro se on October 30, 2018. ECF No. 35. Both appear to be drafted by someone with legal experience. Plaintiff testified Alston helped her in the beginning of this case. ECF No. 128-1 at 4. The pleadings are identical to prior Alston filings. Mr. Styles did not enter his appearance until the Motion for Reconsideration (ECF No. 48) was filed on December 12, 2018.
So, the question for the Court is when did Alston or Styles know of the fraudulent nature of Plaintiff's claim. While the Court may never know the true answer, it is indisputable that counsel knew at the time of Plaintiff's deposition. In answering this question, the Court looks to the Declaration of Thomas Alston (ECF No. 160-2) and the Declaration of Jeffrey Styles (ECF No. 160-5) filed in support of Plaintiff's Opposition to Sanctions. At the latest, by the evidence before the Court, Alston and Styles knew of the fraud and the frivolous claim at the time of Plaintiff's deposition when she admitted to it, thus evidencing their state of mind. Mr. Styles stated he did not become aware of the identity theft dispute until the deposition on April 16, 2019, ECF No. 160-5 at 1, and Thomas Alston, his paralegal, attended the deposition with Plaintiff even though he was asked to leave the room. Alston stated he assisted Plaintiff with her credit report and drafting of a dispute letter. ECF No. 160-2 at 3. This was before Styles was retained by Plaintiff in December 2018. ECF No. 160-5 at 1. Once again, the issue of Alston providing unlicensed legal services arises by his own admissions. ECF 160-2 at 3 ("I assisted [Plaintiff] in the drafting a dispute letter to Equifax."). From his own declaration, he was providing legal advice to Plaintiff before he introduced Plaintiff to Jeffrey Styles. See id.
Thomas Alston provided a deposition in another case on September 5, 2018. See Best v. Federal National Mortgage Assoc., GJH-17-314, ECF No. 60-4. In his deposition he was asked about his employment relationship in general. Id. at 6. He described his employment as "contract work" for which he did not receive a W-2. Id. at 6-7. When asked about his participation in the preparation of documents and the legal preparation of the Best case, Alston was very vague and stated he could not remember if he prepared certain documents and whether he provided templates to the Plaintiff in that case. Id. at 9-10. In fact, Alston appeared to be vague and evasive in almost all his responses. In the Best case, he denied being an employee of and receiving a W-2 from Mr. Styles, but stated he was more of an "independent contractor" with him. Id. at 7. The Court understands that Alston's role in the Best case is not dispositive of his role here, but we have the declarations of Alston and Styles in this case that clearly state Alston was acting as a paralegal for Jeffrey Styles. While we cannot determine exactly when that relationship began, we know for sure that Alston was acting in that capacity before December 2018 and well before the time of Plaintiff's deposition. From his own admissions and Plaintiff's deposition, Alston was providing unlicensed legal advice and support to Plaintiff which predates the Complaint. See ECF Nos. 128-1, 160-2.
In their Declarations, Alston and Styles state they were unaware Plaintiff had falsely claimed she was a victim of identity theft and were unaware of the frivolous nature of the claim prior to the deposition. However, despite being confronted with the fraudulent and frivolous claim and Plaintiff's admission that she had in fact incurred the debt and that she could not say whether it was accurate or accurately reported in order to sustain her complaint, counsel decided to press on with this litigation. Therefore, the Court finds that Jeffrey Styles, who is responsible for paralegal "assistant" Thomas Alston as well, shall pay attorney's fees incurred after the April 16, 2019, deposition of Plaintiff and until this litigation has concluded. Md. Rule 19-305.3.
For the foregoing reasons, the Court GRANTS the motion for sanctions and awards attorney's fees to Defendant to be paid by Plaintiff Denise Miller.
The Court further GRANTS the motion for sanctions and awards attorney's fees to Defendant to be paid by Jeffrey Styles, Esquire, jointly and severally with Plaintiff Miller, incurred from April 17, 2019 until this litigation concludes.
The Court ORDERS Defendant to submit a fee petition of reasonable attorney's fees consistent with this Court's Opinion and in compliance with Appendix B of the Local Rules of the District Court of Maryland for consideration by this Court within 14 days of this opinion. A separate ORDER will follow.
