A plaintiff who loses a lawsuit brought under the federal Fair Debt Collections Practices Act is not liable for the defendant’s court costs except in the unusual circumstance that the trial court finds the plaintiff sued in bad faith and for purposes of harassment. Normally, a party who loses a lawsuit is liable for the winning party’s court costs. Recoverable costs may include items such as filing fees, jury fees, and court reporter’s fees. In Rouse v. Law Offices of Rory Clark, the Ninth Circuit Court of Appeal held that normal rule does not apply in Fair Debt Collections Practices Act (“FDCPA”) cases.
In Rouse, the plaintiff’s FDCPA claim was tried before a jury. The jury rendered a verdict for the defendants. There was no finding that the lawsuit was brought in bad faith or for purposes of harassment. Applying the normal rule, the trial court awarded the successful defendants their court costs.
On appeal, the Ninth Circuit held that defendants were not entitled to their court costs. The Rouse court’s decision was premised on several considerations, including the language of the FDCPA as well as the purpose of the Act. The court noted that the normal rule regarding recovery of costs expressly stated that any federal statute governing court costs would control over the general rule. The court then noted that the FDCPA provides that if the court finds that the lawsuit was brought in bad faith and for purposes of harassment, the court may award the defendant its attorney’s fees and costs. Thus, the court reasoned, that absent a finding of bad faith and intent to harass, the court was without authority to order the plaintiff to pay the defendant’s costs. The Rouse court further reasoned that since the purpose of the FDCPA is to protect consumers, insulating a consumer from potential liability for court costs would be consistent with the purpose of the statute. In sum, the prevailing defendant in a FDCPA lawsuit will normally have to bear its own costs.