WASHINGTON (Legal Newsline) - The U.S. Supreme Court has been asked to decide whether special counsel appointed by Ohio Attorney General Mike DeWine violated federal law by using the attorney general’s letterhead in sending debt collection notices.
In October, the defendants in the case -- the Law Office of Eric A. Jones LLC, attorney Eric A. Jones, law firm Wiles Boyle Burkholder & Bringardner Co. LPA, attorneys Mark Jeffrey Sheriff and Sarah Sheriff -- along with DeWine, who intervened in the case, filed a petition with the Supreme Court for a writ of certiorari, or review.
The defendants petitioned the nation’s high court following the U.S. Court of Appeals for the Sixth Circuit’s May 8 decision in favor of the plaintiffs.
The plaintiffs allege the attorneys violated the Fair Debt Collection Practices Act, or FDCPA, by using DeWine’s letterhead. Using the letterhead, they claim, was false, deceptive or misleading.
In May 2012, plaintiff Pamela Gillie was engaged in bankruptcy proceedings when she received a debt collection letter from Jones. The letter was written on the attorney general’s letterhead, which included both an image of the state seal and DeWine’s name in large font at the top of the page.
In July 2012, plaintiff Hazel Meadows received a similar letter from Sarah Sheriff, who was an attorney with Wiles Law Firm at the time, over a current student loan balance owed.
Gillie and Meadows filed suit in the U.S. District Court for the Southern District of Ohio in March 2013. Soon after, DeWine moved to intervene as a defendant and counterclaimant, in an effort to shield the attorneys from liability.
Judge James L. Graham granted the attorney general’s motion, and then granted summary judgment in favor of the defendants.
Graham first held that special counsel are not “debt collectors” within the meaning of the FDCPA because they are officers of the State of Ohio, and state officers are explicitly exempt from FDCPA coverage.
The judge concluded that, even if special counsel did fall within the definition of a “debt collector,” use of attorney general letterhead was not a false, deceptive or misleading communication in violation of the federal law.
The plaintiffs appealed to the Sixth Circuit.
The appeals court ruled, 2-1, that the attorneys were not “authorized by law” to collect debts, only authorized by their contracts with the attorney general.
“The Attorney General suggests that a fair reading of ‘authorized by law’ means simply that it was lawful for the Attorney General to direct that [s]pecial [c]ounsel perform duties of the Attorney General’s office,” Judge Eric Clay wrote for the majority. “This interpretation is obviously flawed. The Attorney General has numerous duties, many of which are lawfully delegated by necessity to his staff at the OAG, not all of whom are officers.
“A narrower reading of the Attorney General’s interpretation could be that only those delegations that are specifically contemplated by statute qualify as being authorized by law. However, as explained above, only an actual delegation (not one that is merely contemplated) falls within the ordinary meaning of the word ‘authorized.’ We are left only with the Attorney General’s contracting authority to support the Attorney General’s position.”
Clay continued, “But the phrase ‘authorized by law’ cannot be construed so as to include all duties and responsibilities entrusted by contract to an independent contractor. To hold otherwise would invite a preposterous result -- bestowing officer status under the Dictionary Act on every independent contractor working on behalf of a state. This cannot be the case.”
As a result, the Sixth Circuit found that a jury could reasonably find the use of DeWine’s letterhead by the defendants deceptive, misleading and false, in violation of the FDCPA.
“Intimidation is at the heart of this case,” Clay wrote. “There is no compelling reason for special counsel to use the OAG letterhead, other than to misrepresent their authority and place pressure on those individuals receiving the letters.
“The Attorney General insists that any sense of urgency (i.e. intimidation) that is created by the letters is permissible because the State has special authority that a regular creditor does not. This putative authority is not cited in any brief. The Attorney General mentioned at oral argument the power to garnish wages and to withhold lottery winnings. However, these powers are precisely those powers that are granted to all creditors after they have received a judgment against the debtor.”
The defendants, and others, want the Supreme Court to decide who is exempt from liability for deceptive debt collection claims.
In an amicus brief to the high court in support of the defendants, Michigan, along with seven other states, argues the Sixth Circuit’s “overly narrow” interpretation of the definition of “officer” violates the clear-statement rule.
“This canon protects against the erosion of state authority -- and the concomitant dilution of each individual’s ability to influence public policy -- without a clear congressional directive,” Michigan Attorney General Bill Schuette wrote, along with the attorneys general of Arkansas, Colorado, Kansas, Mississippi, North Dakota, Oklahoma and Tennessee.
“Because the Act’s definition of ‘officer’ does not plainly exclude private contractors who are carrying out state sovereign duties under the authority of state statute, the decision below encroaches on States’ flexibility to determine how to best govern themselves and thus warrants review.”
The appeals court’s opinion also undermines their authority, the attorneys general argue.
“They must have the flexibility to delegate their powers to outside counsel and duly designated deputies. And they are entitled to applicable exemptions such as the state-officer exemption under the FDCPA,” they wrote.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.