Private attorneys acting as special counsel to Ohio’s Attorney General for general debt-collecting purposes are not state officers under the Fair Debt Collection Practices Act, according to the Consumer Financial Protection Bureau. In an amicus curiae brief filed with the Supreme Court in Sheriff v. Gillie, the CFPB argues that the attorneys actually are debt collectors who are subject to the FDCPA’s requirements.
The FDCPA applies only to debt collectors, and the act’s definition of “debt collector” includes an explicit exception for “any officer or employee of the United States or any State to the extent that collecting or attempting to collect any debt is in the performance of his official duties . . .” (15 U.S.C. §1692a(7)(C)). A federal district court judge decided that, as special attorneys general, the private attorneys were officers of the state who enjoyed the protection of that exception.
The U.S. Court of Appeals for the Sixth Circuit disagreed, relying on a combination of state law and the FDCPA to determine that the attorneys were not state officials. According to the panel majority, the attorneys did not meet the Dictionary Act definition of "officer," which was the definition to be used because the word was not defined by the FDCPA. Under Ohio law, the attorneys were independent contractors, and independent contractors cannot be officers. Finally, if applied to the private attorneys, the FDCPA would not violate principles of federalism because it would not be an attempt to regulate the state or challenge the structure of the state’s government. The act would apply only to debt collectors, who were third parties.
CFPB arguments. The bureau argues that the special counsel are not state officers because they do not hold any state office and do not exercise any part of the state’s sovereignty. Their authority is derived strictly from contracts with the state’s attorney general, and those contracts explicitly declare them to be independent contractors.
The purpose of the FDCPA is to control the practices of third-party debt collectors, the bureau notes. Exempting private attorneys who are acting to collect debts on behalf of a state government would undermine that purpose.
The CFPB adds that the appellate court was correct in saying that the application of the FDCPA to the private attorneys would not intrude on the state’s sovereignty. Ohio can use its own employees or officers to collect debts without being affected by the act. Only third parties acting for the state would be affected, and there was no Supreme Court precedent for the proposition that federal regulation of a state’s independent contractors intruded on the state’s sovereignty.
Letter head issues. The brief also supports the appellate court decision that the collection letters sent by the attorneys could have contained misrepresentations. The letters used the attorney general’s letterhead but were signed by the private attorneys as “Outside Counsel for the Attorney General’s Office” or as “Special Counsel to the Attorney General.” The consumers claimed that this created a false impression about who sent the letters.
The CFPB argues in its brief that whether the letters were false, deceptive, or misleading was to be judged according to the perspective of an unsophisticated consumer. According to the CFPB, a reasonable jury could decide that an unsophisticated consumer could be misled into believing that the attorneys were employees of the attorney general, so the suit should not be dismissed.
The case is No. 15-388.
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