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Friday, June 14, 2024 | Back issues
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High Court Takes Up|Debt Collection Case

(CN) - The Supreme Court agreed to hear a case centered on whether private lawyers appointed by a state attorney general to collect debts can use the attorney general's official letterhead.

The underlying case hinges on whether special counsel - those appointed by attorney generals to collect a debt owed to the state - are state "officers" under federal law.

Pamela Gillie and Hazel Meadows sued two law firms - the Law Office of Eric Jones and Wiles, Boyle, Burkholder & Bringarder - in 2013, claiming they violated the Fair Debt Collection Practices Act, or FDCPA, by using misleading ways to collect debt that Gillie and Meadows owed to the state of Ohio.

The Ohio attorney general interevened in the case, saying that the law firms' use of attorney general letterhead was authorized and was not a misrepresentation.

A Southern Ohio District Court ruled in favor of the law firms, finding that special counsel are officers of the state and are specifically exempt from FDCPA rules. It also held that, even if special counsel were considered debt collectors, use of state attorney general letterhead was not "false, deceptive or misleading."

However, a divided Sixth Circuit vacated the lower court's decision in May and remanded the case back to the lower.

Judge Eric Clay found that a jury could consider use of the state letterhead to be a violation of the FDCPA.

"Whether or not the use of the letterhead by special counsel was compelled by the [Ohio Attorney General], a jury could reasonably find that special counsel's use of the letterhead is confusing," Clay wrote for the majority. "We recognize the importance of a state's ability to collect on its own accounts, but once it has assigned debts to an independent, third-party debt collector, the federal rules apply."

Judge Jeffrey Sutton dissented, finding the law firms' use of state letterhead allowable.

"The stationary, which the attorney general requires each special counsel to use, accurately describes the relevant legal realities - that the law firm acts as an agent of the attorney general and stands in the shoes of the attorney general in collecting money owed to the state," Sutton wrote. (Emphasis in original.)

In July, the Sixth Circuit denied petitions for an en banc hearing.

The U.S. Supreme Court granted the law firms' petition for review on Friday. Per its custom, the high court did not comment on its decision to hear the case.

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