Two Ohio law firms did not use illegal tactics when they mailed debt collection letters on stationery bearing the name of Ohio’s attorney general, according to a unanimous Supreme Court ruling Monday.
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 by using misleading ways to collect debt owed to the state of Ohio.
Ohio Attorney General Mike DeWine’s office intervened in the case, arguing that the law firms' use of attorney general letterhead was authorized and was not a misrepresentation.The Supreme Court agreed Monday that the use of official letterhead to collect money owed to state agencies did not violate the FDCPA.
A federal appeals court had ruled 2-1 that the letterhead was deceptive and could inappropriately influence consumers' decisions. But the Supreme Court disagreed.
Justice Ruth Bader Ginsburg wrote that the fact some outside lawyers perform work for the attorney general's office means the letters are not misleading. She noted that the Ohio attorney general required these lawyers to use his letterhead, so they were not creating a false impression.
Consumer protection groups had argued that using the letterhead is an unseemly way to mislead consumers and made it more likely people would be scared into paying debts. Ginsburg rejected that argument, writing that none of the letters in question threatened anyone with civil or criminal penalties.
Michigan and 11 other states supported Ohio's position. In a brief to the court, the states argued that a finding against Ohio would undermine the flexibility of state attorneys general to delegate powers to outside lawyers. The states said debt collection firms are not simply independent contractors but are authorized to stand in place of the Ohio attorney general for collection purposes.
Originally, 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 collectors, use of state attorney general letterhead was not "false, deceptive or misleading.”
A divided Sixth Circuit vacated the lower court's decision last year and remanded the case.
Sixth Circuit Judge Eric Clay had 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.”
Sixth Circuit Judge Jeffrey Sutton dissented, finding the law firms' use of state letterhead allowable.
"The stationery, 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.
The Supreme Court granted the law firms' petition for review in December. The high court heard arguments from both sides in March. The law firms could not immediately be reached for comment Monday.