The Issue: Unfair Limitations on Consumer Protections by the Courts
People who are victims of consumer fraud must often seek relief from the courts. Idaho lawmakers have developed a consumer protection statute designed to protect consumers in these types of situations. One feature of this law is that it requires businesses who have violated the law to pay the consumer’s attorney’s fees and costs. This is called “fee shifting.”
Idaho court have recognized that the purpose of this fee shifting law “is to compensate a prevailing plaintiff [ie: a consumer] for the costs of bringing an action under the Act” and “to provide attorneys with an incentive for representing litigants who assert publicly favored claims.” Nalen v. Jenkins, 113 Idaho 79, 83, 741 P.2d 366, 370 (Idaho. App. 1987).
However, some courts in Idaho have created attorney fee restrictions that run contrary to these purposes. They do this my implementing attorney fee schedules that substantially limit the attorney’s fees that can be awarded. I recently sent a letter to the court administrative judge in Ada County to address this issue. I have copied the text of the letter below. You can also view a copy of the actual letter: 180507 ltr to Ada county admin judge
The Letter
Dear Judge Moody:
I am writing as a concerned citizen and attorney in Idaho. I have recently been informed that the Ada County Magistrate Division has implemented a schedule of Attorney’s Fees that sets forth the amount of fees that will be awarded based on the principal amount of a default judgment. A copy of this schedule is enclosed and I will refer to this schedule as the “Attorney Fee Schedule” in this correspondence. I believe this practice is not consistent with the Idaho Rules of Civil Procedure and may harm citizens by failing to fully reimburse them for attorney’s fees incurred.
Idaho R. Civ. P 54(e)(3) identifies twelve factors that the court “must consider . . . in determining the amount of [attorney’s] fees.” (emphasis added). These factors are listed as factors (A) through (L). The amount obtained in the judgment, factor (H), is only one of these twelve factors. However, the Attorney Fee Schedule is based solely on this one factor. As such, a magistrate judge who awards attorney’s fees based on this schedule, without considering the remaining factors, has failed to follow the requirements of this Rule.
This may also be an ethical shortcoming. For instance, the Idaho Bar Committee on Ethics and Professional Responsibility has found that “an award of fees is intended by the court to benefit the client rather than the lawyer.” See Idaho Bar Formal Ethics Opinion No. 124, at 2. When a court fails to award the reasonable fees based on all factors in Rule 54(e)(3), it may be putting the burden of these fees on the client rather than the party who has consented to a judgment through default. This benefits only the defaulting party.
If excessive attorney’s fees are a concern, that concern can be addressed by an examination of the relevant factors. Moreover, the amount of attorney’s fees that can be awarded though a default judgment is already capped in two ways by Rule 54(e)(4)(B):
… the amount of attorney fees in the event of default must be included in the prayer for relief in the complaint and the award must not exceed the amount in the prayer. An award of attorney fees under Idaho Code section 12-120 in default judgments where the defendant has not appeared must not exceed the amount of the judgment for the claim, exclusive of costs. (emphasis added).
There is no need, or authority, to apply more restrictive caps on the award of attorney’s fees. By virtue of Rule 54, the defaulting party has already been made aware of the amount of fees being requested and has elected to conceded to the award by defaulting.
I request that the court or Magistrate Commission consider the issues raised above. It is my belief that the magistrate division should be instructed that they must carefully evaluate all factors under Rule 54(e)(3) when determining the amount of attorney’s fees to be awarded in a default judgment. Alternatively, in the event the court continues to apply the Attorney’s Fee Schedule, a local rule should be published so that citizens and attorneys are aware that attorney’s fees may be capped and a rule should be implemented that will allow attorneys to request fees in excess of the cap on behalf of their clients.
Sincerely,
Leland K. Faux
Update
This issue has been resolved. The Ada County Administrative Judge has informed me that the fee schedule had not been relied upon and will no longer be used. Read more Details.