Debt Collection Case Goes to Supreme Court

According to the Associated Press, the Supreme Court announced Friday that it hear an appeal from state officials looking to overturn a lower court decision on whether a debt collector’s use of official Ohio attorney general letterhead violated the FDCPA.

The case in question is Pamela Gillie, et al. (Plaintiff), v. Law Office of Eric A. Jones, LLC, et al. (Defendant). The matter was filed in the U.S. District Court for the Southern District of Ohio in February 2014, with a decision granting the Defendant’s Motions for Summary Judgment, denying the Plaintiff’s Motions for Summary Judgment, denying the Ohio Attorney General’s Motion for Judgment on the Pleadings and Motion for Summary Judgment, and denying as moot the Plaintiff’s Motion to Dismiss for Failure to State a Claim.

Here is the background:

Ohio law allows the Attorney General to “appoint special counsel to represent the state in connection with all claims of whatsoever nature which are certified to the attorney general for collection under any law or which the attorney general is authorized to collect.”

In 2012 the OAG appointed Defendants Eric Jones and Mark Sheriff as special counsel to assist in the collection of debts. Defendant Jones operated the Law Office of Eric A. Jones, L.L.C. Defendant Mark Sheriff worked as a partner at Wiles, Boyle, Burkholder & Bringardner (the Wiles Law Firm). Defendant Sarah Sheriff worked in the collections department of the Wiles Law Firm. Ms. Sheriff was not appointed special counsel but assisted Mr. Sheriff in his collection efforts on behalf of the OAG.

In the spring of 2012, Plaintif Pamela Gillie received a letter from Defendant Eric Jones of The Law Office of Eric A. Jones, LLC. The OAG’s letterhead appeared at the top of the letter, and included the official state seal, the Attorney General’s name, and the Attorney General’s title.

A few months later, Plaintiff Hazel Meadows received a letter from Defendant Sarah Sheriff of the Wiles Law Firm. The OAG’s letterhead appeared at the top of the letter, and included the official state seal next to the heading “Office of the Ohio Attorney General, Collections Enforcement Section.”

On March 5, 2013, the Plaintiffs filed a five-count Complaint against the Defendants, alleging multiple violations of the FDCPA, 15 U.S.C. § 1692 et seq. The Plaintiffs assert that the Defendants’ use of the OAG’s letterhead was false, deceptive, or misleading.

Specifically, the Plaintiffs allege that the Defendants:

1. falsely represented or implied that they are vouched for, bonded by, or affiliated with the State of Ohio in violation of 15 U.S.C. § 1692e(1);
2. used written communications which falsely represented to be a document authorized, issued or approved by the State of Ohio, or created a false impression that the OAG was the source of the letters, authorized the letters, or approved the letters in violation of 15 U.S.C. § 1692e(9);
3. used false representation or deceptive means to collect or attempt to collect debts from the Plaintiffs in violation of 15 U.S.C. § 1692e(10); and
4. used OAG letterhead in violation of 15 U.S.C. § 1692e(14)’s requirement that debt collectors use the “true name” of their business or company.

Shortly after the filing of the Complaint in this case, the Ohio Attorney General filed a Motion to Intervene as Defendant and Counterclaimant. In his counterclaim, the OAG requested a declaratory judgment stating that special counsel’s use of OAG letterhead is not a violation of the FDCPA and that the OAG and State of Ohio are immune from liability under the FDCPA. The Court subsequently granted the OAG’s Motion to Intervene.

After granting the OAG’s Motion, the Court stayed discovery and requested additional briefing on the issue of bifurcating this case. In late 2013, the Court issued a written Opinion and Order, bifurcating the issues of liability and damages and directing the parties to file dispositive motions within 60 days of the Court’s Order. The Plaintiffs filed a Motion to Dismiss the OAG’s Declaratory Judgment Claims, and the parties subsequently filed cross-motions for summary judgment regarding the Defendants’ alleged liability for violations of the FDCPA.

The Plaintiffs placed great weight on special counsel’s use of the OAG letterhead. In their view, the letterhead misled consumers as to the source of the letters in this case. The Court felt this argument ignored special counsel’s statutory and contractual relationship with the OAG. Whether special counsel or the OAG were the source of the letters, special counsel acted on behalf of the OAG to collect debts owed to the State. Any initial confusion that the least sophisticated consumer might experience upon seeing the OAG’s name and letterhead is dispelled by special counsel’s signature in which they identify themselves and their relationship to the OAG.

The Court then concluded that, because the letters in this case are not subject to “more than one reasonable interpretation,” Kistner, 518 F.3d at 441, the Defendants did not violate 15 U.S.C. § 1692e in this case. The Defendants were therefore entitled to summary judgment.

As to the Request for Declaratory Judgment, the Court stated that the general considerations for determining whether to exercise jurisdiction in a declaratory judgment action are whether the judgment “will serve a useful purpose in clarifying and settling the legal relationships in issue” and whether it “will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.” Relying on Grand Trunk Western R.R. v. Consolidated Rail Corp., 746 F.2d 323, 326 (6th Cir. 1984), the Court declined to exercise its jurisdiction over the OAG’s declaratory judgment request.

With respect to the OAG’s request that the Court declare that special counsel’s use of the OAG letterhead does not violate the FDCPA, the Court said it believed that the parties’ motions for summary judgment were better and more effective vehicles for “clarifying and settling the legal relationships in issue” and “afford[ing] relief from the . . . controversy giving rise to the [instant] proceeding.” In ruling on the parties’ motions for summary judgment, the Court was able to address (1) whether special counsel were “debt collectors” under the FDCPA and (2) whether the specific letters sent by special counsel violated the FDCPA. The Court determined therefore that a ruling on the OAG’s declaratory judgment request was, unnecessary given the Court’s holdings as to these issues.