Solicitor General to participate in SCOTUS oral argument in FDCPA case

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On March 29, 2016, the U.S. Supreme Court will hear oral argument in a Fair Debt Collection Practices Act case in which the CFPB joined the Solicitor General in filing an amicus brief in support of the plaintiffs. The court granted the SG’s motion to participate in the oral argument.

The plaintiffs in Sheriff v. Gillie had received debt collection letters signed by individuals who purported to be special counsel hired by the Ohio Attorney General (OAG). The letters included the OAG’s letterhead and state seal. The plaintiffs sued the attorneys and their law firms, alleging that use of the OAG letterhead created a false impression that the letters were sent by the OAG in violation of the FDCPA provision that prohibits the false representation that a document was issued by a state official. They also alleged that the letters violated the FDCPA provision that prohibits the use of a name other than the “true name” of the debt collector’s business or company. The OAG intervened in support of the defendants.

The district court granted summary judgment to the defendants, holding that Ohio’s special counsel are excluded from the FDCPA’s definition of “debt collector” as officers of the state. It also concluded that even if special counsel were debt collectors, their use of the OAG letterhead did not violate the FDCPA because the letters accurately reflected their role as special counsel appointed by the OAG to collect debts owed to the state.

The Sixth Circuit reversed, holding that the special counsel did not qualify for the FDCPA’s state officer exemption which defines an “officer” to include “any person authorized by law to perform the duties of the office.” The court found that the Ohio statutes authorizing the appointment of special counsel to collect debts owed the state did not authorize special counsel to fulfill the duties of any office and only established the framework under which the OAG within his discretion could delegate the collection of debts to a third party collector. On the merits of the FDCPA claim, the court concluded that the letters would violate the FDCPA if they contained a representation that had the tendency to confuse the least sophisticated consumer but concluded that the letters, when read as a whole, may have clarified any confusion for the least sophisticated consumer resulting from the letterhead. The Sixth Circuit remanded the case for the issue to be decided by a jury.

The plaintiffs’ certiorari petition presented two questions: whether (1) special counsel appointed by the OAG to collect debts owed the state are “officers” excluded from the FDCPA’s definition of “debt collector,” and (2) special counsel’s use of the OAG letterhead violated the FDCPA. In their amicus brief, the SG and CFPB argue that the special counsel did not qualify for the FDCPA’s state officer exemption because they do not occupy any state “office” and do not exercise any portion of the state’s sovereignty. Instead, their duties are defined by contracts that designate the special counsel to be independent contractors. They also argue that whether the letters violated the FDCPA should be judged from the perspective of “the least sophisticated consumer” and, because a reasonable jury could conclude that the letters violated the FDCPA, the Sixth Circuit correctly reversed the district court’s grant of summary judgment for the defendants.

The Michigan Attorney General, joined by the AGs of 11 other states, filed an amicus brief in support of the defendants and Ohio AG. It is unusual for state AGs to be on the opposite side from the CFPB and consumer advocacy groups. While the Michigan and Ohio AGs are Republicans, two of the AGs who joined the amicus brief are Democrats.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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