Opinion analysis: Justices reject claim that special outside counsel mislead borrowers when they send collection letters on attorney general letterhead

Monday brought us the results of the Justices encounter with the Fair Debt Collection Practices Act (FDCPA). The Courts opinion in Sheriff v. Gillie displays a Court dubious about the readiness of lower courts to see deception in what would pass for routine correspondence in a conventional business environment. The Courts blithe rejection of the holding that the letters in this case were actionably misleading sends a strong message that courts of appeals should be a little more cautious about drawing such conclusions so readily.

The case involves collections by special counsel, lawyers Ohio has hired to collect debts owed to the state. The case is before the Court because the letters that these special counsel routinely send to collect those debts use the Ohio attorney generals letterhead rather than the letterhead of their own law firms. The court of appeals concluded that the use of the attorney generals letterhead by the outside collection lawyers violated the FDCPA, and the Court accepted Ohios plea for review.

Every now and then a case comes along in which the argument tells us all we could hope to know about the Courts perspective on a matter. This is one of those cases. Ohios petition sought review of two separate questions: whether the special counsel are entirely exempt from the FDCPA (on the theory that they are officers of the state) and whether the use of letterhead was misleading. It would surprise nobody familiar with the argument to learn that the Justices skipped over the first question to reject the complaint that anything about the letters was misleading.

At the argument, the Justices pressed counsel for the plaintiffs repeatedly on why there is anything the least bit misleading about the use of the official letterhead. The basic problem, in the words of Justice Ruth Bader Ginsburgs opinion for a unanimous Court, is that the letterhead conveys on whose authority special counsel writes to the debtor. It is hard to see anything maleficent about creating that perception for a letter sent to collect a debt owed to the state, using the letterhead that the attorney general requires, and explaining the role played by the person signing the letter.

At the oral argument, Ginsburg extracted a concession from E. Joshua Rosenkranz, representing Pamela Gillie, that it would be permissible to send a letter that stated in bold-face type that the attorney writes AS SPECIAL COUNSEL TO THE ATTORNEY GENERAL WHO HAS AUTHORIZED US TO COLLECT A DEBT YOU OWE TO THE STATE. Ginsburgs succinct opinion for a unanimous Court starts from the position that it would make scant sense to rank as unlawful use of a letterhead conveying the very same message. The opinion treated it as almost self-evident that [s]pecial counsel create no false impression in doing just what they have been instructed to do.

Three points from the opinion warrant further notice. The first, internal to the law of the FDCPA, is the Courts treatment of the specter of consumer confusion that the court of appeals drew from evidence that debtors had made telephone calls to the attorney general asking whether letters of this sort were authentic. The Court rejected out of hand the idea that those calls justified any complaint about the letters:

[T]he Sixth Circuit overlooked that the Attorney Generals prompt and invariable answer to those inquiries was yes. To the extent that consumers may be concerned that the letters are a scam, the solution is for special counsel to say more, not less, about their role as agents of the Attorney General. Special counsels use of the Attorney Generals letterhead, furthermore, encourages consumers to use official channels to ensure the legitimacy of the letters, assuaging the very concern the Sixth Circuit identified.

It is my strong impression that the view of the court of appeals that the letters were misleading for purposes of the FDCPA is well within the range of typical treatment of that statute by the courts of appeals. The Courts perception that the letters were not even in the ballpark of a violation well might shift the mindset of courts of appeals in FDCPA cases over a broad range of factual settings.

The second is a broader doctrinal note. Although the Court skipped over the question whether the special counsels relation to the state renders them entirely exempt from the FDCPA, the opinion did note a federalism concern in the matter — that collection of these debts is such a sovereign function of the state that the Court should be wary of needlessly constru[ing] federal law in a manner that interferes with States arrangements for conducting their own governments. It strikes me as notable that this statement passed without comment in an opinion for a unanimous Court. The opinion was analytically complete without the comment, and nothing about the tone suggests a concern that the case was so close that it needed a buttressing clear statement rule of any kind. So the appearance of the comment suggests that Ohios presence in fact was in the forefront of the Courts deliberations.

The third, and probably the most interesting, is the high regard Ginsburgs opinion suggests for Judge Jeffrey Sutton, who dissented from the Sixth Circuits decision. Her opinion not only quoted twice from his dissent in her summary of the procedural history, but also relied upon that dissent repeatedly in its substantive analysis of the merits: four extended quotations in the eight paragraphs of the opinions substantive analysis. Indeed, putting to the side citations to internal case materials and applicable statutes, the substantive part of the opinion includes more citations to Suttons dissenting opinions than to all other sources combined!

PLAIN LANGUAGE: Ohio hired attorneys to collect past-due debts (medical expenses, tuition payments, and the like). Ohios attorney general required those attorneys to use the attorney generals letterhead for the collection letters. The Court decided that it was not misleading for the attorneys, who work at private law firms, to send letters on the attorney generals letterhead, largely because the attorney general authorized the attorneys to use the official attorney general letterhead.