EDUARDO C. ROBRENO, District Judge.
This case raises the question of whether a lawyer, who is not admitted to practice in the Eastern District of Pennsylvania ("E.D. Pa."), generally or pro hac vice, may recover attorney's fees as a "consulting" attorney, under a fee-shifting statute, for work performed in a case in the E.D. Pa. in which his client was the prevailing party. The answer is that, under the circumstances of this case, he may not.
Plaintiff Jen Gsell ("Plaintiff") filed a one-count complaint against Defendant Rubin & Yates, LLC ("Defendant"), a debt collection firm doing business in Pennsylvania. Plaintiff asserts that during a February 2013 collection call, Defendant communicated information to third parties regarding a debt owed by Plaintiff, used false, deceptive, or misleading representations or means in connection with the collection of a debt, and threatened to take legal action where no such action was actually intended, all in violation of the federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692 ("FDCPA"). See Complaint ¶¶ 14-17, ECF No. 1.
Plaintiff asserts no actual damages caused by Defendant's FDCPA violations. However, the FDCPA provides for an award of up to $1,000.00 in civil damages for a plaintiff suing a debt collector for statutory violations, exclusive of any actual damages sustained. See 15 U.S.C. § 1692k(a)(2). In addition to $1,000.00 in statutory damages, Plaintiff seeks $2,690.10 in attorney's fees and $400.00 in costs. See 15 U.S.C. § 1692k(a)(3) (providing for an award of reasonable attorney's fees and costs to a prevailing party in a successful FDCPA enforcement action).
The underlying action resulted in a default judgment being entered against Defendant, as Defendant, although properly served and thus aware of the Complaint, chose not to respond.
Plaintiff is ostensibly represented by Jason Rettig, Esq., a solo practitioner admitted to practice in both Pennsylvania and the E.D. Pa. Plaintiff's motion for attorney's fees reveals that Ryan Lee, Esq., a California-based attorney admitted to the state bars of California and Arizona but not Pennsylvania or the E.D. Pa., performed substantial work in this case on behalf of Plaintiff. Mr. Lee is an associate of Krohn & Moss, Ltd., a national law firm which specializes in bringing FDCPA and similar consumer actions in different jurisdictions throughout the country.
On March 29, 2013, Mr. Lee prepared a pre-litigation demand, billing .2 hours, and Mr. Rettig reviewed and approved this demand, billing .1 hour. Id.
On September 20, 2013, a Krohn & Moss paralegal prepared the Complaint for filing, and the Complaint was filed on September 30, 2013. Id. Service on Defendant was carried out by a process server on October 17, 2013. Id.
On December 4, 2013, Mr. Lee prepared a "Request for Entry of Default," billing .6 hours, and Mr. Rettig reviewed and approved this request, billing .2 hours. Id. On February 12, 2014, Mr. Lee drafted a second request for entry of default, which Mr. Rettig again reviewed and approved, each apparently billing .2 hours. Id.
On February 28, 2014, Mr. Lee spent 1 hour preparing a Motion for Default Judgment, which Mr. Rettig spent .3 hours reviewing and approving. Id.
Plaintiff's motion for attorney's fees is limited to the described work performed between February 18, 2013, and February 28, 2014, and thus seeks recovery for work performed by:
See Statement of Services 4. Plaintiff thus seeks recovery of $2,960.10 in attorney's fees, plus $400.00 for costs incurred in filing and service of the Complaint, for a total of $3,360.10.
The Court has a duty to maintain the integrity of proceedings and the confidence of the public. These obligations cannot be upheld without a means of restricting admission to practice to individuals who are familiar with and are committed to the ethical and procedural standards required of officers of the Court. See Tolchin v. Supreme Court of N.J., 111 F.3d 1099, 1110-11 (1997) (upholding a New Jersey state rule mandating that attorneys practicing in the state maintain a "bona fide" office, noting that state courts "have a substantial interest in assuring the availability of and overseeing attorneys practicing within their borders"); see also Leis v. Flynt, 439 U.S. 438, 445 n. 5, 99 S.Ct. 698, 58 L.Ed.2d 717 (1979) (recognizing, in a case upholding a state court's right to restrict pro hac vice admission of out-of-state attorneys, the "traditional authority of state courts to control who may be admitted to practice before them"); Goldfarb v. Va. State Bar, 421 U.S. 773, 792, 95 S.Ct. 2004, 44 L.Ed.2d 572 (1975) ("The interest of the States in regulating lawyers is especially great since lawyers are essential to the primary governmental function of administering justice, and have historically been `officers of the courts.'").
Local rules of civil procedure, placing limitations on admission to practice within a district, are enacted by a district court in
The E.D. Pa.'s Local Rules of Civil Procedure specifically provide that an attorney may be admitted to practice before the District Court for the Eastern District of Pennsylvania, where that individual is a member of good standing of the bar for the Supreme Court of Pennsylvania, and upon motion of an existing member of the E.D. Pa. bar. See Local R. Civ. P. 83.5. Mr. Lee does not contend that he is a member of the Pennsylvania bar and therefore he is not eligible for general admission under this provision of the Local Rules.
Participation in litigation before the District Court by attorneys who are not admitted to practice in Pennsylvania
Local R. Civ. P. 83.5.2(b) (emphasis added).
Plaintiff concedes that Mr. Lee has failed to obtain admission within the E.D. Pa., in either a general or pro hac vice capacity.
Bilazzo v. Portfolio Recovery Assoc., 876 F.Supp.2d 452 (D.N.J.2012), like the present
In Bilazzo, Judge Hillman applied a five-factor test to decide whether the out-of-state attorneys had acted in a permissible "consulting" role, or had actively participated in the case in violation of the local rules. See id. at 464. Generally, a non-admitted attorney performs the role of "consulting" attorney when the attorney:
Id. at 464.
Applying these factors, Judge Hillman concluded that the nature of work done by the out-of state attorneys "far exceeded" the type of conduct permitted by non-admitted "consulting" attorneys, and therefore that the out-of-state attorneys had violated the District of New Jersey's Local Rule 101.1(c). Specifically, the court noted that the out-of-state attorneys incurred 81% of the billable hours incurred, compared to local counsel's 19%, id. at 465, that the out-of-state attorneys "engaged in substantial and direct contact with the client, through client consults, interviews and correspondence," id. at 466, that they "engaged in significant contact with opposing
After finding that the out-of-state attorneys had actually served as lead counsel, rather than in a "consulting" role, the district court in Bilazzo reduced the attorney's fees granted to the FDCPA plaintiff, as a sanction for the attorneys' failure to obtain pro hac vice admission. Fees were not denied entirely, based on the court's concern for the mandatory nature of a fee award under FDCPA § 1692(a)(3), as well as the fact that it found insufficient evidence to warrant a finding that counsel had purposefully violated the applicable local rules. Bilazzo, 876 F.Supp.2d at 468. However, the court also noted that the particular attorneys involved (from Krohn & Moss, the law firm also involved in this case) were on notice of their obligation to obtain pro hac vice admission in the future. Id. at 468 n. 10.
Other courts, outside the Third Circuit, have also addressed when a non-admitted "consulting" attorney may be entitled to recover attorney's fees. For instance, in Winterrowd v. American General Annuity Ins., 556 F.3d 815 (9th Cir.2009), the Ninth Circuit considered whether an out-of-state attorney who provided assistance to lead counsel could recover attorney's fees, despite his failure to obtain pro hac vice admission. There, plaintiffs in an action raised in the Central District of California sought attorney's fees in part for work completed by an Oregon attorney who was not admitted to practice in California or before the Central District of California. This out-of-state attorney's role was limited to "advising [California lead counsel]," "reviewing pleadings," and "minimal, non-exclusive contact with the client." Winterrowd, 556 F.3d at 823-24. The Ninth Circuit found relevant that the out-of-state attorney had remained within a permissible "litigation support" or consulting capacity because these limited contributions to the case "did not rise to the level of `appearing' before the district court," and thus his fees were recoverable. Id. at 824.
The Ninth Circuit reasoned that recovery for an out-of-state consultant's services was no different than recovery for the work of paralegals, database managers, legal support, summer associates, and even attorneys who have yet to pass the bar. Id. at 823 (citing Dietrich Corp. v. King Resources, Co., 596 F.2d 422, 426 (10th Cir.1979); Spanos v. Skouras Theatres Corp., 364 F.2d 161, 169 (2d Cir.1966)). In all of these circumstances, the fees are still recoverable on the theory that an admitted attorney has "vouched" for the work of the supporting actors and "acted as a filter" between the supporting contributors and the court. Winterrowd, 556 F.3d at 824-25 (citing Dietrich, 596 F.2d at 426).
In Spanos v. Skouras Theatres Corp., a suit between a legal consultant and a former client regarding the apportionment of an attorney's fees award, the Second Circuit noted the distinction between an out-of-state "consulting" attorney, for whom recovery for legal services might be allowable without admission to the local bar, and a non-admitted attorney acting as lead counsel. Spanos, 364 F.2d at 165. The court suggested that perhaps this "consulting" role was defined by the degree of supervision from lead counsel and direct interaction with a client. Id. at 165, 167. The Second Circuit found that the non-admitted attorney in that case was not a mere consultant, as he "was not operating under the supervision or control of the other [admitted] attorneys." Id. at 167. Accordingly, the Second Circuit held that the non-admitted attorney was obligated to obtain pro hac vice admission to practice before the district court; due to his failure
More recently, in Krapf v. Nationwide Credit Inc., the Central District of California considered whether attorney's fees could be awarded for the work of an out-of-state attorney who was not admitted pro hac vice, but whose contribution to a pending case was purportedly limited to "litigation support." Civ. No. 09-00711, 2010 WL 4261444 at *2 (C.D.Cal. Oct. 21, 2010). The district court found that the out-of-state attorney had maintained a consulting role, as he "recorded a modest number of hours compared with [in-state counsel]," he did not have contact with the plaintiff client or opposing counsel, his work product was "filtered through" local counsel, and his role was limited to "reviewing motions, preparing memos, and discussing trial strategy with [local] counsel." Id. at *3. Because the out-of-state attorney's role was that of a consultant and did not rise to the level of an "appearance," the court found that the attorney was not required to obtain pro hac vice admission, and that the cost of his services was recoverable as part of an award for attorney's fees. Id.
From the various decisions considering whether an out-of-state attorney occupied the sort of "consulting" role that would allow for an award of attorney's fees despite the attorney's failure to seek pro hace vice admission in the local court, a consistent list of relevant factors emerges. The weight that each factor commands necessarily depends on the facts of the underlying case.
Where an out-of-state attorney's participation was limited to that of a consultant whose services are compensable despite lack of pro hac vice admission, that attorney likely:
Having identified the factors that tend to define a "consulting" attorney, the Court will proceed to evaluate the record to determine whether Mr. Lee, the out-of-state attorney for whose services Plaintiff seeks to recover attorney's fees, may be considered a "consulting" attorney.
In the pending case, the Statement of Services provided by Plaintiff records that Mr. Lee was the sole attorney to actually speak with Plaintiff. See Statement
The second factor to consider, contact with opposing counsel, does not weigh for or against finding Mr. Lee to be a "consulting" attorney, as Defendant has defaulted in the case and inter-counsel contact did not occur.
As to the third factor, submissions to the Court, several of Plaintiff's submissions to the Court, including two motions for default and the pending motion for default judgment, refer to Krohn & Moss attorneys as Plaintiff's counsel. See Mot. Entry Default 1, ECF No. 3 (requesting, on behalf of "Plaintiff ... through attorneys, KROHN & MOSS, LTD.," that the Court direct the Clerk of Court to enter a default against Defendant); 2nd Mot. Entry Default 1, ECF No. 5; Am. Mot. Default J. 1, ECF No 9 ("NOW COMES Plaintiff ... by and through her attorneys, KROHN & MOSS, LTD...."). While Mr. Lee did not sign any of Plaintiff's submissions to the Court, it was Mr. Lee who prepared them. The third factor thus weighs in favor of finding that Mr. Lee occupied more than a "consulting" role.
As to the fourth factor, a review of Plaintiff's statement of services indicates that Mr. Lee completed his work in the case independently of Mr. Rettig, which included initial consultation with the client, organization of the facts of the case, and composition of most, if not all, of the materials submitted to the Court in the case, including the complaint. These facts support the conclusion that Mr. Lee's role was not limited to internal research and advice to Mr. Rettig and that Mr. Lee was the apparent pilot guiding the course of the litigation. While Mr. Rettig nominally signed the pleadings, there is no evidence that Mr. Rettig acted as a "filter" insuring compliance with the Local Rules.
Finally, the number of hours that Mr. Lee recorded in this case, 6.3 hours (86%)
On balance, the Court thus finds that Mr. Lee "actively participated" in the case, rising well above what could be attributed to a "consulting" attorney, and therefore he may not excuse his failure to obtain pro hac vice admission as required by Local Rule 83.5.2(b) on this ground.
Having determined that Mr. Lee was in violation of E.D. Pa. Local Rule 83.5.2(b) by failing to obtain pro hac vice admission in this case, the Court must next determine what attorney's fees, if any, may be awarded for Mr. Lee's participation in this case.
The FDCPA mandates, in the event of a successful enforcement action, the award of "the costs of the action, together with a reasonable attorney's fee as determined by the Court." 15 U.S.C. § 1692k(a)(3).
In light of Mr. Lee's willful violation of Local Rule 83.5.2(b), the Court concludes that Mr. Lee is not eligible to receive attorney's fees in this case.
The Court finds that because Mr. Lee was not admitted to practice in Pennsylvania or the E.D. Pa. and yet actively participated in the case without obtaining pro hac vice admission, Mr. Lee violated Local Rule 83.5.2(b) and therefore may not receive attorney's fees.
The Court will approve an award of attorney's fees for services rendered by Mr. Rettig, who, in essence, acted as local counsel in this case. Additionally, the costs associated with filing the action will be granted pursuant to 15 U.S.C. § 1692k(a)(3).
An appropriate order and entry of judgment follow.
Within the District of New Jersey, an out-of-state attorney, not eligible for general admission under Rule 101.1(b), "may, in the discretion of the Court, on motion [for pro hac vice admission], be permitted to appear and participate in a particular case." D.N.J. Local Rule 101.1(c). Likewise, in the E.D. Pa., "an attorney who is not a member of the bar of this court shall not actively participate" in proceedings before the Court without securing pro hac vice admission. E.D. Pa. Local Rule 83.5.2(b).
On December 5, 2013, Plaintiff first filed a "Motion for Clerk's Entry of Default," which was submitted directly to the Court (ECF No. 3), and which the Court denied on December 12, 2013 (ECF No. 4). In a footnote to that order, the Court instructed Plaintiff to submit any requests for default against Defendant directly to the Clerk of Court.
In spite of the Court's instruction, Plaintiff filed a "Second Motion for Clerk's Entry of Default" on December 19, 2013 (ECF No. 5), which included the same request for the Court to order the Clerk of Court to enter default against Defendant. The Court again denied this request on January 7, 2014 (ECF No. 6), directing Plaintiff's counsel to refer to the Clerk's Office's procedural handbook for the proper procedure for requesting an entry of default from the Clerk's office.
Finally, on February 12, 2014, Plaintiff filed a request for default directly to the Clerk of Court (ECF No. 8), which was granted the same day.
