By Lisa Soronen
Sheriff v. Gillie is the kind of case U.S. Supreme Court justices must dream about deciding, especially when the court is short a justice: straightforward, noncontroversial, and easy to agree on.
Special counsel, retained to collect debt owed to the state on behalf of the attorney general, does not violate the Fair Debt Collection Practices Act (FDCPA) when they use AG letterhead to communicate with debtors. The Supreme Court’s opinion in Sheriff v. Gillie, written by Justice Ruth Bader Ginsburg, is unanimous.
An amicus brief filed by Michigan and 11 other states supporting Ohio cites a recent study concluding that all 50 states use “private collection agencies to some degree and ‘at some point in the process.’ ”
Ohio law authorizes the state attorney general to hire special counsel to collect the state’s debt on behalf of the attorney general. The attorney general requires special counsel to use attorney general letterhead when communicating with debtors. The FDCPA prohibits debt collectors from engaging in false, deceptive, or misleading communications.
Debtors sued two special counsel claiming that the special counsel violated the FDCPA by sending collection notices on the letterhead of Ohio Attorney General Mike DeWine rather than the letterhead of their private law firms.
The court first assumed that special counsel aren’t officers of the state exempt from the FDCPA. The court then concluded that special counsel using attorney general letterhead to communicate with debtors doesn’t violate the FDCPA.
The debtors acknowledge that it would not be false and misleading instead of using attorney general letterhead for special counsel to say, “We write to you as special counsel to the [A]ttorney [G]eneral who has authorized us to collect a debt you owe to [the state or an instrumentality thereof].”
To this the court responded: “[i]f that representation is accurate, i.e., not “false . . . or misleading,” it would make scant sense to rank as unlawful use of a letterhead conveying the very same message, particularly in view of the inclusion of special counsel’s separate contact information and the conspicuous notation that the letter is sent by a debt collector.”
Near the end of its opinion the court gave a nod to federalism noting that debt collection is a “core sovereign function.” According to the court, there is no reason to construe federal law to interfere with how states decide to collect debt.
Lisa Soronen is the executive director of the State and Local Legal Center and writes frequently for the NCSL blog about the U.S. Supreme Court.