Citations
- 37 F. Supp. 3d 928
Full opinion text
OPINION AND ORDER
JAMES L. GRAHAM, District Judge.
This matter is before the Court on the parties’ Cross-Motions for Summary Judgment (docs. 47-51, 70). The Plaintiffs commenced the instant action against certain attorneys and their law offices that the Ohio Attorney General (OAG) has appointed to act as special counsel to collect debts owed to the State of Ohio. The Plaintiffs are Ohio residents who received at least one debt-collection letter written on the OAG’s official letterheád from the Defendants. The Plaintiffs allege that the Defendants’ use of the OAG’s letterhead in their collections communications violates the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seg., and seek to represent a class of similarly situated consumers. For the following reasons, the Court: GRANTS the Defendants’ Motions for Summary Judgment (docs. 47 & 51); DENIES the Plaintiffs’ Motions for Summary Judgment (docs. 48-50); DENIES the OAG’s Motion for Judgment on the Pleadings (doc. 46) and Motion for Summary Judgment (doc. 70); and DENIES AS MOOT the Plaintiffs Motion to Dismiss for Failure to State a Claim' (doc. 41).
I. Background
The Attorney General is Ohio’s chief law enforcement officer. O.R.C. § 109.02. Pursuant to Ohio law, the OAG is charged with collecting debts owed to state entities. O.R.C. § 131.02. To assist him with his collection efforts, the OAG “may 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.” O.R.C. § 109.08. Once appointed, special counsel execute standardized contracts with the OAG. OAG Counterclaim at ¶ 11, doc. 5. These contracts require, inter alia, special counsel to use official OAG letterhead for all collection activities. Id. at ¶¶ 8, 22.
In 2012, the OAG appointed Defendants Eric Jones and Mark Sheriff as special counsel to assist in the collection of debts pursuant to O.R.C. § 109.08. Defendant Jones operated the Law Office of Eric A. Jones, L.L.C. Defendant Mark Sheriff worked as a partner at Wiles, Boyle, Burk-holder & 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, Plaintiff Pamela Gillie received a letter from Defendant Eric Jones of The Law Office of Eric A. Jones, LLC. Def. Jones’s Letter, doc. 48-2. The OAG’s letterhead appeared at the top of the letter. Id. It included the official state seal, ‘ the Attorney General’s name, and the Attorney General’s title. Id. The letter stated, “Dear Sir/Madam, You have chosen to ignore repeated attempts to resolving [sic] the referenced ... medical claim. If you cannot make immediate full payment call Denise Hall at Eric. A Jones, L.L.C., ... at my office to make arrangements to páy this debt.” Id. The letter further explained that it was a communication from a debt collector and that the letter was an attempt to collect a debt. Id. In the signature block, Defendant Jones signed his name, noted that he was “Outside Counsel for the Attorney General’s Office,” and provided contact information at which he could be reached. Id. The letter further instructed Gillie to send payment to the Law Office of Erie A. Jones, L.L.C., and provided means of paying the debt discussed in the body of the letter. Id.
Later that summer, Plaintiff Hazel Meadows received a letter from Defendant Sarah Sheriff of the Wiles Law Firm. Def. Sheriffs Letter, doc. 48-4. The OAG’s letterhead appeared at the top of the letter. Id. It included the official state seal next to the heading “Office of the Ohio Attorney General, Collections Enforcement Section.” Id. The letter stated, “Sir/Madam: Per your request, this is a letter with the current balance owed for your University of Akron loan that has been placed with the Ohio Attorney General. Feel free to contact me ... should you have any further questions.” Id. Defendant Sarah Sheriff signed the letter, included the name and address of her law firm, and noted that she, was “Special Counsel to the Attorney General for the State of Ohio.” Id.
On March 5, 2013, the Plaintiffs filed a five-count Complaint (doc. 1) 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(l);
(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.
Compl. at 15-19, doc. 1.
Shortly after the filing of the Complaint in this case, the Ohio Attorney General filed a Motion to Intervene as Defendant and Counterclaimant (doc. 3). In his counterclaim, the OAG requests 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. OAG’s Answer at 22, doc. 5. 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 (doc. 42) 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 (doc. 41). The parties subsequently filed cross-motions for summary judgment (doc. 47-51, 70) regarding the Defendants’ alleged liability for violations of the FDCPA. The Court held an oral hearing on the parties’ cross-motions for summary judgment on June 10, 2014. The matter is now fully briefed and ripe for resolution.
II. Standard of Review
Under Federal Rule of Civil Procedure 56, summary judgment is proper if the evidentiary material in the record shows that there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.Civ.P. 56(a); see Longaberger Co. v. Kolt, 586 F.3d 459, 465 (6th Cir.2009). The moving party bears the burden of proving the absence of genuine issues of material fact and its entitlement to judgment as a matter of law, which may be accomplished by demonstrating that the nonmoving party lacks evidence to support an essential element of its case on which it would bear the burden of proof at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Walton v. Ford Motor Co., 424 F.3d 481, 485 (6th Cir.2005).
The “mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see also Longaberger, 586 F.3d at 465. “Only disputed material facts, those ‘that might affect the outcome of the suit under the governing law,’ will preclude summary judgment.” Daugherty v. Sajar Plastics, Inc., 544 F.3d 696, 702 (6th Cir.2008) (quoting Anderson, 477 U.S. at 248, 106 S.Ct. 2505). Accordingly, the nonmoving party must present “significant probative evidence” to demonstrate that “there is [more than] some metaphysical doubt as to the material facts.” Moore v. Philip Morris Cos., Inc., 8 F.3d 335, 340 (6th Cir. 1993).
A district court considering a motion for summary judgment may not weigh evidence or make credibility determinations. Daugherty, 544 F.3d at 702; Adams v. Metiva, 31 F.3d 375, 379 (6th Cir.1994). Rather, in reviewing a motion for summary judgment, a court must determine whether “the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson, 477 U.S. at 251-52, 106 S.Ct. 2505. The evidence, all facts, and any inferences that may permissibly be drawn from the facts must be viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 456, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992). However, “[t]he mere existence of a scintilla of evidence in support of the plaintiffs position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252, 106 S.Ct. 2505; see Dominguez v. Corr. Med. Servs., 555 F.3d 543, 549 (6th Cir.2009).
III. Cross-Motions for Summary Judgment
“The Fair Debt Collection Practices Act is an extraordinarily broad statute.” Frey v. Gangwish, 970 F.2d 1516, 1521 (6th Cir.1992). Its purpose is to “to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.” 15 U.S.C. § 1692(e). To that end, the Act prohibits debt collectors from making “false, deceptive, or misleading communications in connection with the collection of any debt.” 15 U.S.C. § 1692e.
Here, the Plaintiffs maintain that the Defendants’ use of the OAG letterhead was false, deceptive, or misleading in violation of § 1692e. In order to establish a claim under § 1692e: (1) the plaintiff must be a “consumer” as defined by the Act; (2) the “debt” must arise out of transactions which are “primarily for personal, family or household purposes”; (3) the defendant must be a “debt collector” as defined by the Act; and (4) the defendant must have violated § 1692e’s prohibitions. Wallace v. Wash. Mut. Bank, F.A., 683 F.3d 323, 326 (6th Cir.2012). Here, the parties contest the third and fourth elements. The Court addresses each of these elements in turn.
A. Are special counsel “debt collectors” under the FDCPA ?
The FDCPA applies to entities who are considered “debt collectors.” Montgomery v. Huntington Bank, 346 F.3d 693, 698 (6th Cir.2003). The term “debt collector” is defined by the Act as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts , to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). However, the FDCPA specifically excludes “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” from the definition of “debt collector.” 15 U.S.C. § 1692a(6)(C).
The Plaintiffs argue that § 1692a(6)(C)’s exception does not apply to special counsel because they are independent contractors, rather than government officers or employees. According to the Plaintiffs, special counsel executed Retention Agreements with the OAG that explicitly state that special counsel are independent contractors and not government employees or officers. To support their argument, the Plaintiffs cite numerous cases concluding that independent contractors are not covered by § 1692a(6)(C)’s exception.
In contrast, special counsel insist that they are appointed pursuant to statute and are therefore government officers or employees that fall within § 1692a(6)(C)’s exception. Consequently, they conclude that they are not debt collectors and therefore not subject to the FDCPA.
The case law addressing § 1692a(6)(C) is sparse. On the one hand, courts readily apply § 1692a(6)(C)’s exception to individuals that are clearly government officers or employees. See, e.g., Al-Sharif v. United States, 296 Fed.Appx. 740, 742 (11th Cir.2008) (applying § 1692a(6)(C)’s exception to IRS agents); Streater v. Cox, No. 07-11163, 2008 WL 564884, at *3 (E.D.Mich. Feb. 28, 2008) (applying § 1692a(6)(C)’s exception to Michigan Assistant Attorney Generals); Masterson v. Meade Cnty. Fiscal Court, et al., 489 F.Supp.2d 740, 757-58 (W.D.Ky.2007) (applying § 1692a(6)(C)’s exception to county officials). On the other hand, courts generally do not apply § 1692a(6)(C)’s exception to private individuals and entities in a purely contractual relationship with the government. See, e.g., Pollice v. Nat’l Tax Funding, 225 F.3d 379, 406 (3d Cir. 2000) (holding that § 1692a(6)(C) applies only to state “officers” or “employees” and that it “does not extend to those who are merely in a contractual relationship with the government”); Brannan v. United Student Aid Funds, Inc., 94 F.3d 1260, 1263 (9th Cir.1996) (§ 1692a(6)(C) “applies only to an individual government official or employee who collects debts as part of his government employment responsibilities. USA Funds is a private nonprofit organization with a government contract; it is not a government agency or employee.”); Piper v. Portnoff Law Assoc., 274 F.Supp.2d 681, 683 (E.D.Pa.2003) (finding that law firm contractually bound to collect debts on behalf of municipality did not fall within FDCPA exception for government officers); Gradisher v. Check Enforcement Unit, Inc., 133 F.Supp.2d 988, 992 (W.D.Mich.2001) (“[A]n independent contractor is not entitled to an exemption to the FDCPA ... [I]f the legislature had intended to allow independent contractors, rather than just government agencies and employees, to escape liability under the FDCPA, it could have explicitly stated as much.”).
The facts of this casé are distinct from the cases cited above. Here, special counsel are appointed pursuant to Ohio statute but are also in a contractual relationship with the OAG. To establish whether special counsel are “debt collectors” under the FDCPA, the Court must determine whether special counsel are an “officer or employee,” 15 U.S.C. § 1692a(6)(C), of the State of Ohio.