Wednesday, February 27, 2013

consumer - attorney fee award to defendant - FRCivP 54 not displaced by FDCPA



No. 11–1175. Argued November 7, 2012—Decided February 26, 2013

Petitioner Marx filed suit, alleging that General Revenue Corporation (GRC) violated the Fair Debt Collection Practices Act (FDCPA) by harassing and falsely threatening her in order to collect on a debt.The District Court ruled against Marx and awarded GRC costs pur­suant to Federal Rule of Civil Procedure (FRCP) 54(d)(1), which gives district courts discretion to award costs to prevailing defendants“[u]nless a federal statute . . . provides otherwise.” Marx sought tovacate the award, arguing that the court’s discretion under Rule54(d)(1) was displaced by 15 U. S. C. §1692k(a)(3), which provides, inpertinent part, that “[o]n a finding by the court that an action underthis section was brought in bad faith and for the purpose of harass­ment, the court may award to the defendant attorney’s fees reasona­ble in relation to the work expended and costs.” The District Court rejected Marx’s argument. The Tenth Circuit affirmed, in pertinentpart, agreeing that costs are allowed under the Rule and concludingthat nothing in the statute’s text, history, or purpose indicates that itwas meant to displace the Rule.

Held: Section §1692k(a)(3) of FDCPA is not contrary to, and, thus, does not dis­place a district court’s discretion to award costs under, Rule 54(d)(1).Pp. 4–16.

(a) Rule 54(d)(1) gives courts discretion to award costs to prevailing parties, but this discretion can be displaced by a federal statute orFRCP that “provides otherwise,” i.e., is “contrary” to Rule 54(d)(1).Contrary to the argument of Marx and the United States, as amicus, language of the original 1937 version of the Rule does not suggest that any “express provision” for costs should displace Rule 54(d)(1),regardless of whether it is contrary to the Rule. Pp. 4–7.
       (b) Section 1692k(a)(3)’s language and context demonstrate that the provision is not contrary to Rule 54(d)(1). Pp. 7–15.

 (1) GRC argues that since §1692k(a)(3) does not address whether costs may be awarded in an FDCPA case brought in good faith, it does not set forth a standard that is contrary to the Rule and there­fore does not displace the presumption that a court has discretion to award costs. Marx and the United States concede that the statute does not expressly limit a court’s discretion to award costs under the Rule, but argue that it does so by negative implication. They claim that unless §1692k(a)(3) sets forth the exclusive basis on which to award costs, the phrase “and costs” would be superfluous with Rule 54(d)(1). And the United States also argues that §1692k(a)(3)’s more specific cost statute displaces Rule 54(d)(1)’s more general rule. Pp. 7–9.
      (2) The argument of Marx and the United States depends criti­cally on whether §1692k(a)(3)’s allowance of costs creates a negative implication that costs are unavailable in any other circumstances. The expressio unius canon that they invoke does not apply “unless it is fair to suppose that Congress considered the unnamed possibility and meant to say no to it,” Barnhart v. Peabody Coal Co., 537 U. S. 149, 168, and can be overcome by “contrary indications that adopting a particular rule or statute was probably not meant to signal any ex­clusion,” United States v. Vonn, 535 U. S. 55, 65. Here, context indi­cates that Congress did not intend §1692k(a)(3) to foreclose courts from awarding costs under the Rule. First, under the American Rule, each litigant generally pays his own attorney’s fees, but the Court has long recognized that federal courts have inherent power to award attorney’s fees in a narrow set of circumstances, e.g., when a party brings an action in bad faith. The statute is thus best read as codify­ing a court’s pre-existing authority to award both attorney’s fees and costs. Next, §1692k(a)(3)’s second sentence must be understood in light of its first, which provides an award of attorney’s fees and costs, but to prevailing plaintiffs. By adding “and costs” to the second sen­tence, Congress foreclosed the argument that defendants can only re­cover attorney’s fees when plaintiffs bring an action in bad faith and removed any doubt that defendants may recover costs as well as at­torney’s fees in such cases. Finally, §1692k(a)(3)’s language sharply contrasts with that of other statutes in which Congress has placed conditions on awarding costs to prevailing defendants. See, e.g., 28 U. S. C. §1928. Pp. 9–12.

(3) Even assuming that their surplusage argument is correct, the canon against surplusage is not absolute. First, the canon “assists only where a competing interpretation gives effect to every clause and word of a statute.” Microsoft Corp. v. i4i Ltd. Partnership, 564 U. S. ___, ___. Here, no interpretation of §1692k(a)(3) gives effect to every word. Second, redundancy is not unusual in statutes address­ing costs. See, e.g., 12 U. S. C. §2607(d)(5). Finally, the canon is strongest when an interpretation would render superfluous another part of the same statutory scheme. Because §1692k(a)(3) is not partof Rule 54(d)(1), the force of this canon is diminished. Pp. 13–14.
(4) Lastly, contrary to the United States’ claim that specific cost­shifting standards displace general ones, the context of the statuteindicates that Congress was simply confirming the background pre­sumption that courts may award to defendants attorney’s fees and costs when the plaintiff brings an action in bad faith. Because Marx did not bring this suit in bad faith, the specific provision is not appli­cable. Pp. 14–15.

 668 F. 3d 1174, affirmed.
THOMAS, J., delivered the opinion of the Court, in which ROBERTS, C. J., and SCALIA, KENNEDY, GINSBURG, BREYER, and ALITO, JJ., joined. SOTOMAYOR, J., filed a dissenting opinion, in which KAGAN, J., joined