Entitlement to attorneys' fees under FDUTPA.

• Author: Federbush, David J.
• Position: Florida Deceptive and Unfair Trade Practices Act

Florida's Deceptive and Unfair Trade Practices Act, F.S. [section]501.201 et seq., is a potentially powerful tool to redress unfair and deceptive trade practices as well as unfair methods of competition. However, uncertainty over the thrust of its provision permitting recovery of reasonable attorneys' fees by the prevailing party poses a problem for potential plaintiffs and their attorneys in evaluating whether to assert a FDUTPA claim.

Prior to an amendment in 1994, FDUTPA provided for the mandatory award of reasonable attorneys' fees to the prevailing party. Plaintiffs thus faced an unambiguous exposure to fees incurred by successful defendants, (1) inevitably providing a substantial disincentive to the assertion of all but the clearest of FDUTPA claims. The statute was amended in 1994 (2) to provide that the award of fees to the prevailing party was no longer mandatory, but rather discretionary. However, there appears to be no case law construing the fee provision in its current form.

In the author's anecdotal personal experience, numerous attorneys who would otherwise be inclined to assert FDUTPA claims still refrain from doing so in light of continuing uncertainty over the circumstances in which their clients might be exposed to fee-shifting. These members of the bar include antitrust attorneys representing corporate clients as well as attorneys representing individual consumers or contemplating the assertion of consumer classwide claims. Furthermore, the discretionary nature of the provision is a caution with respect to "projecting the potential upside or downside of a potential case. Both plaintiffs' and defense counsel face the issue of what to inform their clients about the likelihood of fee shifting. The statute thus invites a comprehensive search for guidance and standards to govern the award of fees.

The Statutory Provisions

FDUTPA currently provides, at [section]521.2105:

In any civil litigation resulting from an act or practice involving a violation of this part... the prevailing party, after judgment in the trial court and exhaustion of all appeals, if any, may receive his or her reasonable attorneys' fees and costs from the nonprevailing party....

The trial judge may award the prevailing party the sum of reasonable costs in the action plus a reasonable legal fee for the hours actually spent on the case as sworn to in an affidavit.

On its face, the current provision does not set forth differing standards for plaintiffs and defendants. If those standards are the same, prevailing plaintiffs would still face a significant disincentive to filing suit.

There is essentially no legislative history pertaining to the change, one of a number of consumer protection measures contained in the same bill, other than a statement in the Journal of the Senate characterizing it as "providing for discretionary award of attorneys' fees to the prevailing party in an action for an unfair and deceptive trade practice." (3)

Related Public Policy Enforcement Precedent

Other relevant precedent, however, strongly suggests that prevailing plaintiffs should generally be awarded attorneys' fees, while prevailing defendants should be awarded such fees only when plaintiff's FDUTPA claim is frivolous or groundless.

In Standard Guaranty Insurance Co. v. Quanstrom, 555 So. 2d 828 (Fla. 1990), the Florida Supreme Court addressed whether use of a contingency fee multiplier is mandatory or discretionary in setting a reasonable attorney's fee to be awarded to a prevailing insured under F.S. [section]627.428 (judgment against insurer under an insurance contract). The court, as part of its analysis, found it appropriate to place attorneys' fee cases into the following three categories: (1) public policy enforcement cases; (2) tort and contract claims; and (3) family law, eminent domain, and estate and trust matters.... The first category relates to public policy enforcement cases, which led to the development of the lodestar approach. These cases generally present discrimination, environmental, and consumer protection issues. As noted, the primary purpose of these fee-authorizing statutes is to encourage individual citizens to bring civil actions to enforce statutory policy.

555 So. 2d at 833.

The court then provided two examples of cases in category (1): a discrimination case, Blanchard v. Bergeron, 489 U.S. 87 (1989), and, in fact, a FDUTPA case, La Ferney v. Scott Smith Oldsmobile, Inc., 410 So. 2d 534, 536 (Fla. 5th DCA 1982). La Ferney upheld an attorneys' fee award that exceeded the actual damages awarded to the plaintiff. The Florida Supreme Court quoted the Fifth DCA's reasoning that

[t]he Florida Deceptive Trade Practices Act depends for enforcement on its "enforcing authority" and the injured consumers. If, because of the small sums involved, consumers cannot recover in full their attorney fees, they will quickly determine it is too costly and too great a hassle to file suit, and individual enforcement of this act will fail. The First District Court of Appeal said in Marshall v. W. & L. Enterprises Corp., 560 So. 2d 1147, 1148 (Fla. 1st DCA 1978): "The obvious purpose of the 'little FTC Act' is to make consumers whole for losses caused by fraudulent consumer practices.... These aims are not served if attorney fees are not included in the protection." [555 So. 2d at 834-35]

Florida's highest court thus deems individual FDUTPA enforcement actions to have a public policy vindicating purpose akin to that of the civil rights antidiscrimination statutes. Accord, Cohen v. Office Depot, 204 F.3d 1069, 1082 (11th Cir. 2000). We can therefore look to attorneys' fee precedent under antidiscrimination law for guidance as to how to interpret [section]501.2105.

Prevailing Plaintiffs

Blanchard was a case alleging violations of 42 U.S.C. [section]1983. The applicable attorneys' fee statute, 42 U.S.C. [section]1988, provides: "In any action or proceeding to enforce a provision of [double section]1981, 1982, 1983, 1985, and 1986 of this title.., or Title VI of the Civil Rights Act of 1964, the court, in its discretion, may allow the prevailing party, other than the...