CREDIT ONE BANK, N.A. v. LIEBERMAN
3:21-cv-02923
D.N.J.Apr 12, 2022Background:
- In 2010 Adam Lieberman opened a credit card in his wife Genese Lieberman’s name and signed a Cardholder Agreement containing an arbitration clause and a 2016 indemnification provision covering costs (including attorneys’ fees) if a telephone number provided was not the subscriber’s.
- The Card went into default; Credit One made hundreds of collection calls to the number listed on the account.
- Adam Lieberman initiated arbitration asserting TCPA and state-law harassment claims; Credit One counterclaimed and cross-claimed against Genese for declaratory relief and indemnification.
- The arbitrator dismissed Lieberman’s claims and awarded Credit One attorneys’ fees, costs, and expenses totaling $286,064.62.
- Credit One petitioned to confirm the award in federal court; the Court confirmed the arbitration award on August 4, 2021.
- Credit One then moved to amend the judgment to add $72,685.50 in post-arbitration attorneys’ fees and $1,198.57 in costs (total additional $73,884.07), bringing the amended judgment to $359,948.69; the Liebermans contested the reasonableness of the requested fees.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Cardholder Agreement indemnification covers post-arbitration judicial fees | Credit One: indemnification clause covers costs and reasonable attorneys’ fees for contacting numbers and related proceedings | Liebermans: did not dispute the clause’s applicability | Court: clause applies; award of post-arbitration fees authorized and mirrored arbitrator’s reliance on agreement |
| Whether the requested post-arbitration fees and costs are reasonable | Credit One: provided detailed time entries, rate survey, and discounts showing rates ($410–$545/hr) within market and reductions applied | Liebermans: argued the billed time and charges were excessive/unreasonable | Court: after review found fees and costs reasonable and awarded the full $73,884.07 requested |
| Whether the Court must apply Nevada law (as alternative basis) to award post-arbitration fees | Credit One: Nevada law would support awarding fees for post-arbitration confirmation proceedings | Liebermans: argued against recoverability or reasonableness under applicable law | Court: declined to rely on Nevada law because the contract language alone sufficed to authorize the award |
Key Cases Cited
- Hensley v. Eckerhart, 461 U.S. 424 (1983) (lodestar method: reasonable hours × reasonable rate is the starting point for fee awards)
- Public Interest Research Group of New Jersey, Inc. v. Windall, 51 F.3d 1179 (3d Cir. 1995) (reasonable fee standard: adequate to attract competent counsel without producing windfalls)
- Packard–Bamberger & Co. v. Collier, 167 N.J. 427 (2001) (prevailing party may recover attorneys’ fees only when provided by statute, rule, or contract)
- Innes v. Marzano–Lesnevich, 224 N.J. 584 (2016) (discussion of New Jersey’s American Rule on fee-shifting)
- Kamienski v. State, Dep’t of Treasury, 451 N.J. Super. 499 (App. Div. 2017) (application of American Rule and contractual/ statutory exceptions)
- Local Union No. 1992 v. Okonite Co., 34 F. Supp. 2d 230 (D.N.J. 1998) (discussing lodestar and reasonableness factors for fee awards)