Tejero v. Portfolio Recovery Assoc, 993 F.3d 393

Luis Tejero sued Portfolio Recovery Associates (PRA) under the FDCPA and parallel Texas law for unlawful debt-collection practices; the district court found triable issues and scheduled a trial.
Before trial the parties privately settled: PRA disclaimed liability, agreed to pay Tejero $1,000 and to forgive about $2,100 in debt.
After the settlement, the district court sanctioned Tejero and his attorneys, reported them to the court’s disciplinary committee, and ordered costs/fees—findings the Fifth Circuit later reversed as an abuse of discretion.
The Fifth Circuit remanded for the district court to determine whether Tejero’s favorable settlement entitled him to attorney’s fees under 15 U.S.C. § 1692k(a)(3).
On remand the district court denied Tejero’s fee application, concluding a private settlement did not constitute a “successful action to enforce … liability” under the FDCPA; Tejero appealed.
This appeal asks whether a private settlement (or a settlement that merely resulted from the lawsuit) qualifies as a “successful action to enforce the foregoing liability” meriting fee-shifting under § 1692k(a)(3), and whether the catalyst theory applies.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a private settlement qualifies as a “successful action to enforce the foregoing liability” under 15 U.S.C. § 1692k(a)(3)	Tejero: settlement that yields statutory damages is a favorable end result; thus his action was "successful" and fees follow	PRA: fee-shifting requires a judicially sanctioned outcome from the lawsuit (judgment or consent decree); a private settlement that disclaims liability and avoids judicial decree does not qualify	Held: No. “Successful action to enforce … liability” requires judicial relief from the lawsuit; private settlement without judicial imprimatur does not qualify for fees
Whether the catalyst theory (lawsuit caused defendant to change conduct) suffices to award fees under § 1692k(a)(3)	Tejero: settlement was produced by the lawsuit, so the lawsuit was the catalyst and should entitle him to fees	PRA: Buckhannon and its progeny reject the catalyst theory for similar fee provisions; fee awards require judicially sanctioned relief that alters legal relationship	Held: No. The catalyst theory does not apply; § 1692k(a)(3) should be interpreted consistently with “prevailing party” precedents like Buckhannon

Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Hum. Res., 532 U.S. 598 (2001) (private settlements without judicial imprimatur do not make a party a prevailing party; rejects catalyst theory)
Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010) (explains American Rule and that fee-shifting depends on statutory text)
Tejero v. Portfolio Recovery Assocs., L.L.C., 955 F.3d 453 (5th Cir. 2020) (prior Fifth Circuit decision reversing sanctions and remanding fee issue)
Gram v. Bank of La., 691 F.2d 728 (5th Cir. 1982) (pre-Buckhannon precedent treating favorable settlements as compensable under "successful action")
Marx v. General Revenue Corp., 568 U.S. 371 (2013) (discusses similarity of fee-shifting phrases and their interchangeable treatment)
Ruckelshaus v. Sierra Club, 463 U.S. 680 (1983) (similar attorney-fee provisions should be interpreted pari passu)
Crabill v. Trans Union L.L.C., 259 F.3d 662 (7th Cir. 2001) (equates “successful action” with “prevailing party” in FCRA context)
Energy Mgmt. Corp. v. City of Shreveport, 467 F.3d 471 (5th Cir. 2006) (describes need for judicial relief that materially alters parties’ legal relationship for fee awards)