United States Court of Appeals, District of Columbia Circuit
February 7, 2017
Appeals from the United States District Court for the
District of Columbia (No. 1:13-cv-01995)
Dennis argued the cause and filed the briefs for
S. Canter argued the cause and filed the briefs for
Before: Henderson, Circuit Judge, and Edwards and Sentelle,
Senior Circuit Judges.
Edwards, Senior Circuit Judge
order to pursue a Master's degree in Computer Graphics,
Demetra Baylor ("Appellant") took out six student
loans. Several years after her graduation, Mitchell
Rubenstein & Associates, P.C. ("Appellee") came
calling to collect. At the heart of this case are a number of
inconsistencies in letters that Appellee sent Appellant over
the course of several months regarding her loans and the
amounts that she owed on them, as well as Appellee's
failure to direct all of its communications to
Appellant's attorney after she retained counsel. In
response, Appellant filed suit on December 17, 2013, alleging
that Appellee had violated the Fair Debt Collection Practices
Act ("FDCPA"), the District of Columbia Consumer
Protections Procedures Act ("CPPA"), and the
District of Columbia Debt Collection Law ("DCDCL"),
statutes which target abusive debt collection and improper
trade practices. See 15 U.S.C. § 1692(e); D.C.
Code §§ 28-3904, -3814.
the course of the next few years, the parties engaged in what
the District Court termed a "particularly striking
expenditure of effort and resources, " generating
"excessive, repetitive, and unnecessarily sharp
pleadings." Order, Dkt. No. 41, at 2. Nonetheless, all
of Appellant's statutory claims were eventually resolved.
Appellant accepted Appellee's offer of judgment regarding
her FDCPA claim and the District Court, with the aid of a
Magistrate Judge, determined the attorney's fees to which
she was entitled for this success. Appellee, meanwhile,
prevailed in its Motion to Dismiss all of Appellant's
CPPA claims and some of her DCDCL claims, the remainder of
which were rejected when the District Court subsequently
granted Appellee's Motion for Summary Judgment.
number of orders from this
"clutter[ed]…docket" are challenged on
appeal. Id. First, the parties dispute the
District Court's decision to adopt a Magistrate
Judge's recommendation that Appellant receive
approximately twenty percent of the attorney's fees that
she requested. Second, Appellant asserts that the
District Court erred in finding that Appellee's conduct
does not fall within the aegis of the CPPA. Third,
Appellant also contends that the District Court abused its
discretion in failing to credit her objections to a different
Magistrate Judge's denial of her Motion to Compel the
disclosure of communications between Appellee and an agent of
Appellant's creditor on the grounds that these documents
were protected by attorney-client privilege. Appellant
additionally disputes the District Court's refusal to
award her attorney's fees for her efforts in litigating
this issue. Finally, Appellant argues that the
District Court improperly granted Appellee's Motion for
Summary Judgment on her DCDCL claims. On this last point,
Appellant contends that the District Court failed to
appropriately account for evidence demonstrating that
Appellee had "willfully violated" the DCDCL and was
therefore subject to liability under the statute.
not reach the question of whether the District Court abused
its discretion in awarding Appellant only a percentage of the
attorney's fees she sought in connection with her FDCPA
claim. In addressing this issue, the District Court relied on
the standard set forth in Local Civil Rule 72.2 in finding
that the Magistrate Judge's proposed disposition was not
"clearly erroneous or contrary to law." This was
error. Federal Rules of Civil Procedure 54(d)(2)(D) and
72(b)(3) foreclose the District Court from using a
"clearly erroneous or contrary to law" standard
when evaluating a Magistrate Judge's proposed disposition
of a fee request. The correct standard of review is de
novo. We therefore reverse and remand to allow the trial
judge to reconsider this matter in the first instance
applying de novo review to assess the
Magistrate Judge's recommendation. We affirm all of the
remaining Orders challenged on appeal.
February 21, 2013, Appellee, a law firm whose primary focus
is the recovery of consumer debts, sent the first of several
letters to Appellant notifying her that her account, which
had been assigned file number R80465, "ha[d] been
referred to [its] office for collection." Complaint,
Dkt. No. 1, Ex. E; see Answer, Dkt. No. 28, at 2. It
listed the creditor for her debt as Arrowood Indemnity
Company and stated that she currently owed $26, 471.07,
though cautioned that, "[b]ecause of interest, late
charges and other charges that may vary from day to day, the
amount due on the day you pay may be greater."
Complaint, Dkt. No. 1, Ex. E. Following a request
for more information regarding both the ownership and amount
of this debt from Appellant, Appellee sent a second letter.
It provided a new total for the amount that Appellant owed,
$31, 268, a slight reformulation of the name of
Appellant's creditor, Arrowood Indemnity Company/Tuition
Guard, and identified her original creditor as Citibank
(South Dakota) N.A. Complaint, Dkt. No. 1, Ex. D; Baylor
v. Mitchell Rubenstein & Assocs., P.C., 55 F.Supp.3d
43, 46 (D.D.C. 2014).
retained counsel, who contacted Appellee regarding the
provenance of this debt and advised that any "future
communication regarding this matter should be directed to
[her] firm" rather than to Appellant. Complaint, Dkt.
No. 1, Ex. B. The parties then entered into settlement
negotiations, during which Appellant informed Appellee that
she had additional outstanding loans not referenced in its
second letter. Appellee's client referred these new loans
to Appellee so that Appellant could settle all of her debt at
once. See Baylor v. Mitchell Rubenstein & Assocs.,
P.C., 174 F.Supp.3d 146, 150 (D.D.C. 2016);
Appellee's Statement of Undisputed Facts, Dkt. No. 96
⁋⁋ 12-13. On August 22, 2013, Appellee sent
another letter to Appellant's home, albeit addressed to
her attorney, regarding this second set of loans. Complaint,
Dkt. No. 1, Ex. A. It provided a new file number for this
debt, R83798, which totaled $27, 459.48, and noted that her
creditor was Tuitionguard Arrowood Indemnity. Id.
After Appellant's counsel requested additional
information regarding these loans, Appellee stated that
Appellant owed "$27, 459.48 plus interest from 10/21/11
at the rate of 3.75% until paid" and listed
Tuitionguard/Arrowood Indemnity and Student Loan Corp. as the
creditor and original creditor, respectively, of this debt.
Complaint, Dkt. No. 1, Ex. C.
December 17, 2013, Appellant filed suit in the District
Court. She claimed that the inconsistencies in the
communications she had received from Appellee, including,
most notably, the variance in the "character and
amount" of Appellant's alleged debt and the
creditors associated with these loans, as well as
Appellee's failure to direct all of its communications to
Appellant's counsel after she had retained legal
representation, constituted violations of both the FDCPA and
CPPA. Complaint, Joint Appendix ("JA") 26-28,
31-33. She also asserted that these actions were proof that
Appellee had both violated various provisions of the DCDCL
and "knowingly maintained policies, practices and
procedures that were intentionally and willfully
inadequate" to meet its obligations under this statute.
Id. at 29-31.
moved to dismiss the Complaint. However, while this motion
was pending, Appellee extended, and Appellant accepted, an
offer of judgment regarding her FDCPA claims. See Baylor
v. Mitchell Rubenstein & Assocs., P.C., 77 F.Supp.3d
113, 115 (D.D.C. 2015). A judgment was then entered "in
the amount of $1, 001.00 plus costs and expenses together
with reasonable attorney fees for all claims under the
[FDCPA]" by the Clerk of Court. Id. Appellant
thereafter filed a motion seeking $155, 700 in attorney's
fees for 346 hours of work at a rate of $450 an hour.
Id. She was later permitted to amend her requested
fees due to subsequent filings in this case. Id. at
District Court referred this request to a Magistrate Judge
pursuant to Local Civil Rule 72.2. After reviewing the
matter, the Magistrate Judge recommended that the hours
included in Appellant's initial fee request be reduced by
85% because they were significantly higher than reasonable.
Baylor v. Mitchell Rubenstein & Assocs., P.C.,
2014 WL 7014280, at *4 (D.D.C. Oct. 24, 2014). She found that
certain tasks were not eligible for attorney's fees under
the statute; some of the hours requested were expended on
Appellant's unsuccessful state law claims or occurred
after Appellant had already accepted Appellee's offer of
judgment; and Appellant's counsel had failed to
"heed the Court's admonition" to moderate the
tenor of her filings. Id. at *4-5. The Magistrate
Judge also determined that a 50% reduction should be applied
to Appellant's additional request for fees because
Appellant had "again engaged in the tactics against
which the Court cautioned, thus expending considerable
unproductive activity." Id. at *5. The District
Court reviewed the Magistrate Judge's Report and
Recommendation to determine if it was "clearly erroneous
or contrary to law" and, after determining that it was
not, adopted it in its entirety. Baylor, 77
F.Supp.3d at 124.
2014, the District Court granted Appellee's Motion to
Dismiss all of Appellant's claims under the CPPA and some
of her DCDCL claims. Following a contentious discovery
process, in which the District Court affirmed a Magistrate
Judge's Memorandum Opinion granting in part and denying
in part Appellant's Motion to Compel production of
certain communications between Appellee and an agent of its
client, Appellant's creditor, Appellee filed a Motion for
Summary Judgment and Appellant filed a cross-Motion for
Partial Summary Judgment. The District Court granted the
former and denied the latter.
Standard of Review
court reviews de novo the District Court's
decision to grant a motion to dismiss or motion for summary
judgment and the "legal question" of whether it
"improperly applied [a local rule] in place of the
standards prescribed by [the Federal Rules of Civil
Procedure]." Winston & Strawn, LLP v.
McLean, 843 F.3d 503, 506 (D.C. Cir. 2016); see
Nat'l Wildlife Fed'n v. Browner, 127 F.3d 1126,
1128 (D.C. Cir. 1997). We will, however, generally review
discovery orders only for abuse of discretion, unless the
District Court applied the wrong legal standard. United
States v. Deloitte LLP, 610 F.3d 129, 134 (D.C. Cir.
Appellant's Fee Request
Civil Rule 72.2(a) permits the District Court to refer
"any pretrial motion or matter, " with the
exception of certain motions and petitions set forth in Local
Civil Rule 72.3, to a Magistrate Judge. If any party files
written objections to a Magistrate Judge's ruling on such
a matter, the District Court "may modify or set aside
any portion of [the] order … found to be clearly
erroneous or contrary to law." Local Civil Rule 72.2(c).
Because Local Civil Rule 72.3 makes no specific mention of
motions for attorney's fees, the District Court assumed
that a Magistrate Judge's recommendation on a fee award
could be reviewed according to the deferential "clearly
erroneous or contrary to law" standard. This was error.
Rule of Civil Procedure 54(d)(2)(D) states that a court
"may refer a motion for attorney's fees to a
magistrate judge under Rule 72(b) as if it were a dispositive
pretrial matter, " a process which requires that a
district judge "determine de novo any part of the
magistrate judge's disposition that has been properly
objected to, " Fed.R.Civ.P. 72(b)(3). The permissive
language of Rule 54(d)(2)(D), specifically its use of the
word "may, " appears to have led the District Court
to believe that referral via Local Civil Rule 72.2, with its
attendant "clearly erroneous or contrary to law"
standard of review, provided a legitimate alternative to the
de novo review standard set forth in Federal Rules
of Civil Procedure 54(d)(2)(D) and 72(b)(3). See
Baylor, 77 F.Supp.3d at 117 & n.2. This was not an
unreasonable mistake, but it was a mistake.
Federal Magistrates Act permits district courts to draw upon
the assistance of Magistrate Judges to resolve "any
pretrial matter pending before the court." 28 U.S.C.
§ 636(b)(1)(A). The power vested in Magistrate Judges to
dispose of issues referred to them under this provision
depends upon the type of motion at issue. 28 U.S.C. §
636(b)(1)(A) lists eight pretrial motions, including motions
for summary judgement and injunctive relief, for which
Magistrate Judges may only provide "proposed findings of
fact and recommendations for the disposition [of the
matter]." Id. § 636(b)(1)(B). These
recommendations must be reviewed de novo by a
district court judge if properly objected to by one of the
parties. See id. § 636(b)(1)(C). For all other
pretrial motions, Magistrate Judges are permitted to
"hear and determine" the matter, and a district
court will only set aside their order where it has been shown
that it is "clearly erroneous or contrary to law."
Id. § 636(b)(1)(A); see Phinney v.
Wentworth Douglas Hosp., 199 F.3d 1, 5-6 (1st Cir.
differentiation between the degree of authority a Magistrate
Judge is permitted to wield over certain motions, and the
standard of review which must be applied to the judge's
proposed resolution of such matters, is rooted in
"[c]onstitutional concerns, " specifically the
"possible . . . objection that only an article III judge
may ultimately determine the litigation." 12 Charles
Alan Wright et al., Federal Practice and Procedure §
3068.2, p. 367 (3d ed. 2014); see PowerShare, Inc. v.
Syntel, Inc., 597 F.3d 10, 13 (1st Cir. 2010).
Rule 72 was promulgated to "implement the legislative
mandate of Section 636(b)(1), " it retained §
631(b)(1)'s basic structure - dividing pretrial motions
between issues that a Magistrate Judge could determine and
those for which the judge could simply provide
recommendations for consideration by the district court. 12
Charles Alan Wright et al., Federal Practice and Procedure
§ 3068, p. 351 (3d ed. 2014). It adopted a slightly
different organizing principle, however. Rather than relying
on § 636(b)(1)(A)'s list of eight motions to
identify the pretrial matters that a Magistrate Judge could
not "determine, " Rule 72 distinguished between
motions that were "not dispositive of a party's
claim or defense" and those that were. Fed.R.Civ.P.
72(a)-(b); see 12 Charles
Wright et al., Federal Practice and Procedure § 3068.2,
p. 366 (3d ed. 2014). Nondispositive matters would be
referred to a Magistrate Judge pursuant to Rule 72(a) and a
district court would be required to "consider timely
objections and modify or set aside any part of [an order
issued following such a referral] that [was] clearly
erroneous or [was] contrary to law." Dispositive
motions, meanwhile, would be referred to a Magistrate Judge
via Rule 72(b) and the district court would be required to
"determine de novo any part of [a] magistrate
judge's [recommendation] that ha[d] been properly
objected to." Fed.R.Civ.P. 72(b)(3).
spite of the legal significance of the distinction between
dispositive and nondispositive motions it is not immediately
apparent from the text of Rule 72 how, precisely, to
determine whether a particular type of motion should be
deemed to be "dispositive of a party's claim."
While most courts agree that the eight motions set forth in
§ 636(b)(1)(A) are "dispositive, " this list
has largely been deemed to be illustrative of the matters
that could fall within the scope of Rule 72(b), rather than
exhaustive. See Phinney, 199 F.3d at 5-6; Massey
v. City of Ferndale, 7 F.3d 506, 508 (6th Cir. 1993).
to the promulgation of Rule 54(d)(2)(D), therefore, courts
lacked any specific guidance regarding whether Magistrate
Judges had the authority to provide a determination regarding
a request for attorney's fees as if it was a
nondispositive motion or were instead permitted only to
provide a recommendation regarding the disposition of such
matters. Faced with this uncertainty, three circuits held
that motions for attorney's fees should be treated as
dispositive motions and thus subject to de novo
review by a district court judge if properly objected to.
See Massey, 7 F.3d at 509-10; Estate of Conners
by Meredith v. O'Connor, 6 F.3d 656, 659 (9th Cir.
1993); Ins. Co. of N. Am. v. Bath, 968 F.2d 20, 1992
WL 113746, at *2 (10th Cir. 1992) (Order and Judgment). Two
of these courts also held that Magistrate Judges lacked the
authority to "determine" a fee request because it
was a "post-dismissal motion" and Rule 72, by its
terms, applies only to "pretrial matters."
Massey, 7 F.3d at 510 (quoting Bennett v. Gen.
Caster Serv. of N. Gordon Co., 976 F.2d 995, 998 n.5
(6th Cir. 1992)); see Estate of Conners by Meredith,
6 F.3d at 659 n.2.
54(d)(2)(D) thus took effect at a time when it was by no
means certain what, if any, authority Magistrate Judges could
wield when evaluating motions for attorney's fees and the
degree of oversight district courts were required to provide
over such matters. Its purpose, as described by the
accompanying Advisory Committee Note, was to
"eliminate any controversy" regarding a
court's ability to treat "motions for attorneys'
fees . . . as the equivalent of a dispositive pretrial matter
that can be referred to a magistrate judge." Advisory
Comm. Notes 1993 Amend. The statutory and legal backdrop
against which this amendment took place make clear that this
Rule was not intended to permit courts to rely upon the
standards and procedures associated with dispositive motions
in addition to those for nondispositive motions.
Indeed, providing district courts with the ability to
alternate between these different standards would be anathema
to the constitutional concerns that underlie the structure of
§ 636(b)(1) and Rule 72. Rather, Rule 54(d)(2)(D)
provided that if a district court wished to refer a motion
for attorney's fees to a Magistrate Judge it could do so
pursuant to the procedures laid out in Rule 72(b), which
include a requirement that the district court review a
Magistrate Judge's recommendation regarding a fee award
de novo if properly objected to. Thus, in context,
it is clear that Rule 54(d)(2)(D)'s use of the permissive
verb "may" refers to the permissive nature of the
district judge's authority to refer the case to a
magistrate, with no effect on the standard of review to be
applied if the reference is made.
no response that Local Civil Rule 72.2 provides an
"alternative" to Rule 54(d). Baylor, 77
F.Supp.3d at 117 n.2. While Rule 54(d)(2)(D) permits courts
to establish by local rule "special procedures to
resolve fee-related issues without extensive evidentiary
hearings, " there is no indication this language was
intended to loosen the standard that should be applied to a
Magistrate Judge's recommendation after such hearings
have been conducted. Therefore, because district courts may
not "circumvent the Federal Rules of Civil Procedure by
implementing local rules or 'procedures' which do not
afford parties rights that they are afforded under the
Federal Rules, " we join a number of our sister circuits
in requiring that motions for attorney's fees be reviewed
de novo if referred to a Magistrate Judge and
properly objected to. Jackson v. Finnegan, Henderson,
Farabow, Garrett & Dunner, 101 F.3d 145, 151 n.4
(D.C. Cir. 1996) (quoting Brown v. Crawford Cty.,
960 F.2d 1002, 1008 (11th Cir. 1992)); see McCombs v.
Meijer, Inc., 395 F.3d 346, 360 (6th Cir. 2005);
ClearOne Commc'ns, Inc. v. Bowers, 509
F.App'x 798, 804- 05 (10th Cir. 2013); McConnell v.
ABC-Amega, Inc., 338 F.App'x 24, 26 (2d Cir. 2009);
cf. Rajaratnam v. Moyer, 47 F.3d 922, 924 &
nn.5, 8 (7th Cir. 1995) (finding that motion for
attorney's fees referred via 28 U.S.C. § 636(b)(3)
required de novo review). To the extent that Local
Civil Rule 72.2 can be understood to suggest anything to the
contrary, it is overruled.
we find that the District Court applied the wrong standard
when reviewing the Magistrate Judge's Report and
Recommendation, we will not reach the parties' claims
that the District Court erred in adopting the Magistrate
Judge's proposal to award Appellant approximately twenty
percent of her requested attorney's fees. Instead, we
remand this matter to the District Court so that it can
review the Magistrate Judge's Report and Recommendation
anew, and de novo.
Appellant's CPPA Claims
contends that the District Court erred in dismissing her
claim that Appellee's conduct violated the CPPA, which
creates an "enforceable right to truthful information
from merchants about consumer goods and services that are or
would be purchased, leased, or received in the District of
Columbia." D.C. Code § 28-3901(c). We disagree.
"In answering questions involving the proper
interpretation of D.C. statutes, [we rely] on the
construction of these laws by the D.C. Court of
Appeals." Poole v. Kelly, 954 F.2d 760, 761
(D.C. Cir. 1992) (per curiam). The D.C. Court of Appeals'