No. 15-338

In THE

Supreme Court of the United States________________

MARK J. SHERIFF, ET AL.,Petitioners,

v.

PAMELA GILLIE AND HAZEL MEADOWS,Respondents.

________________

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT

OF APPEALS FOR THE SIXTH CIRCUIT

_________________________________________________

BRIEF FOR THE NHS CONSUMER LAW CENTERAS AMICUS CURIAE IN SUPPORT OF

RESPONDENTS_________________________________________________

MARK WISEMAN

NHS CONSUMER LAW

CENTER

5700 Broadway AvenueCleveland, OH 44127(216) 458-4663mwiseman@nhscleveland.org

Steven G. BradburyCounsel of Record

Deborah Kemi MartinShriram HaridDECHERT LLP1900 K Street, NWWashington, DC 20006-1110(202) 261-3483steven.bradbury@dechert.com

Counsel for the Amicus Curiae

i

QUESTION PRESENTED

Are the collections special counsel “officers” ofthe State within the meaning of the Fair DebtCollection Practices Act (“FDCPA”), 15 U.S.C.1692a(6)(C)?

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TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ...................................... i

TABLE OF AUTHORITIES .................................... iv

INTEREST OF AMICUS CURIAE .......................... 1

INTRODUCTION AND SUMMARY OFARGUMENT....................................................... 2

ARGUMENT ............................................................. 5

I. The Collections Special Counsel AreOrdinary Outside Debt Collectors Subjectto the FDCPA ..................................................... 5

A. The Collections Special CounselCollect Debts on Behalf of EntitiesPublic and Private ....................................... 5

B. The Collections Special Counsel’sDebt Collection Practices AreIdentical to Those of Outside DebtCollectors...................................................... 7

1. The Collections Special CounselFile Misleading Notices and AssertLiens Against Assets Exempt as aMatter of Law………………… ................. 7

2. The Collections Special CounselLevy Extremely High Fees withQuestionable StatutoryAuthorization………...... ........................ 10

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II. Construing the Collections SpecialCounsel as “Officers” of the State WouldCreate Perverse Incentives and FacilitateOther Harms..................................................... 15

CONCLUSION........................................................ 19

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TABLE OF AUTHORITIES

Page(s)FEDERAL CASES

Bradley v. Franklin Collection Serv. Inc.,739 F.3d 606 (11th Cir. 2014).............................10

Harvey v. Great Seneca Fin. Corp.,453 F.3d 324 (6th Cir. 2006).................................2

STATE CASES

Client Security Fund of Ohio v. Broschak,No. 12CVH-09-11545, Magistrate Decisionon Damages (Franklin Cty. C.P. Ohio Civ.Div. Nov. 15, 2013), aff’d, No. 12 CVH-09-11545, Judgment Entry (Franklin Cty.C.P. Ohio Civ. Div. Feb. 4, 2014)......10, 11, 12, 13

Columbus City School District v. Hunter,No. 14CVH-8323, Magistrate Decision(Franklin Cty. C.P. Ohio Civ. Div. Jan. 28),aff’d, No. 14CVH-8323, Judgment Entryand Notice of Final, Appealable Order(Franklin Cty. C.P. Ohio Civ. Div. Mar. 5,2015). .......................................................12, 13, 14

FEDERAL STATUTES

15 U.S.C. § 1692 et seq. .............................................2

15 U.S.C. § 1692 ...................................................2, 15

15 U.S.C. § 1692a(6)...............................................3, 5

15 U.S.C. § 1692a(6)(C)..............................................3

42 U.S.C. § 1396p(b)(2) ..............................................7

vPage(s)

STATE STATUTES

OHIO REV. CODE ANN. § 109.08 ....................11, 12, 13

OHIO REV. CODE ANN. § 109.081 ..............................11

OHIO REV. CODE ANN. § 124.01 ..................................6

OHIO REV. CODE ANN. § 131.02 ................................13

OHIO REV. CODE ANN. § 131.02(A) ...........................11

OHIO REV. CODE ANN. § 3517.092 ..............................6

OHIO REV. CODE ANN. § 5162.21(C)(1)(a) ..................8

OHIO REV. CODE ANN. § 5301.252 ..............................8

OHIO REV. CODE ANN. § 5301.252(A) .....................8, 9

OHIO REV. CODE ANN. § 5301.252(A)(1)(b).................9

LEGISLATIVE MATERIALS

S. Rep. No. 95-382 (1977), reprinted in 1977U.S.C.C.A.N. 1695 ..............................................10

OTHER AUTHORITIES

Debt Collection, Jones Law Group, LLC,http://tinyurl.com/hg8kjcp (last visited Feb.25, 2016) ................................................................5

Julie Carr Smyth, Ohio Attorney GeneralMike DeWine’s Vetting of Law FirmsUndocumented, ASSOCIATED PRESS (June,26, 2014), http://tinyurl.com/jk3cb9b .................17

viPage(s)

Laura A. Bischoff, Vendors Gave Big toDeWine, GOP: Ohio AG Denies PoliticsPlayed a Role in Awarding LucrativeCollections Contracts, DAYTON DAILY NEWS

(Jul. 19, 2014, 12:00 AM),http://tinyurl.com/zs4sono ........................6, 17, 18

No. 15-0078598, Affidavit of Fact Relating toTitle (Jul. 28, 2015)...............................................8

Ohio State Bar Association, Lawyer Ethicsand Discipline, http://tinyurl.com/z5tu49m(last visited Feb. 25, 2016). ................................16

Request for Qualifications for CollectionsSpecial Counsel, Ohio Attorney General’sOffice, http://tinyurl.com/zczoxdx (lastvisited Feb. 25, 2015)............................................6

Rule 8.4 of Ohio Rules of Professional Conducthttp://tinyurl.com/ltw3y9p (last visited Feb.25, 2016) ..............................................................16

INTEREST OF THE AMICUS CURIAE1

The NHS Consumer Law Center was launchedin 2012 by the Neighborhood Housing Services ofGreater Cleveland (the “NHSGC”), a not-for-profitorganization committed to helping the citizens ofOhio, in particular those with low-to-moderateincomes, achieve the dream of home ownership. TheNHSGC offers consumers and families in Ohio arange of programs and services, including financialcapability counseling, foreclosure assistance, pre-loan reverse mortgage counseling, and various otherforms of related assistance.

To further the NHSGC’s broader aim ofempowering Ohio consumers, the NHS ConsumerLaw Center provides these consumers with theinformation they need to make informed andfinancially responsible decisions en route to homeownership. Among other measures, the NHSConsumer Law Center runs public awarenesscampaigns, disseminates educational materials,hosts blogs dedicated to consumer issues, andconducts seminars on the legal rights of consumersand debtors.

One of the Consumer Law Center’s principalaims is to help consumers avoid predatory, abusive,

1 Pursuant to Supreme Court Rule 37.3, counsel of recordof all parties received timely notice of amicus NHS ConsumerLaw Center’s intent to file this brief and have consented to itsfiling. No counsel for a party authored this brief in whole or inpart and no person or entity other than the amicus or itscounsel made a monetary contribution intended to fund thebrief’s preparation or submission.

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or fraudulent debt collection practices. The FDCPA,15 U.S.C. § 1692 et seq., has long been a bulwarkagainst such practices. Conceived to “eliminateabusive debt collection practices by debt collectors”and “promote consistent State action to protectconsumers against debt collection abuses,” theFDCPA proscribes a range of deceptive and unfairpractices by “debt collectors.” 15 U.S.C. § 1692.

The Ohio Attorney General advances animplausible reading of the term “debt collector” thatthreatens to eviscerate the FDCPA and hurtconsumers, including the Consumer Law Center’sclients. The Attorney General hopes to exempt thecollections special counsel—ordinary third-partydebt collectors who have been known to engage inabusive practices—from FDCPA coverage simplybecause they have entered into contractualagreements with the Attorney General. If thisdangerous interpretation of the FDCPA wereadopted, it would threaten to perpetuate furtherabuse in Ohio—and potentially across the country.As part of its responsibility to its clients and infurtherance of its mission, the NHS Consumer LawCenter has an interest in fighting this erosion ofconsumer and debtor rights.

INTRODUCTION AND SUMMARY OFARGUMENT

Congress enacted the FDCPA to protect “theleast sophisticated consumer” from a range of“abusive … debt collection practices by many debtcollectors.” See Harvey v. Great Seneca Fin. Corp.,

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453 F.3d 324, 329 (6th Cir. 2006). This case presentsan opportunity to ensure that vulnerable consumersin Ohio continue to enjoy the protections of theFDCPA, as Congress intended, and that the purposeof the statute is not undermined by a misguidedinterpretation of the term “officer” that bears littlerelation to the reality on the ground in Ohio.

The Office of the Ohio Attorney General (the“Attorney General”) and other Petitioners argue thatcertain private debt collectors, known as the“collections special counsel,” should be exempt fromthe FDCPA’s restrictions because they are not “debtcollectors” within the meaning of the statute. In soarguing, the Attorney General cites section1692a(6)(C), which exempts from the scope of theFDCPA “any officer or employee of . . . any State tothe extent collecting or attempting to collect anydebt is in the performance of his official duties.”This provision is inapposite, however.

Many of the collections special counsel collectdebts for a host of entities, both public and private,on a regular basis. Far from being officers of thestate, they are ordinary debt collectors impelled bythe profit motive and engaged in the business ofcollections for any client with whom they have acontractual relationship. In short, they are the exactclass of persons whose conduct the FDCPA is meantto regulate. See 15 U.S.C. § 1692a(6) (explainingthat “debt collector” includes anyone “who regularlycollects or attempts to collect, directly or indirectly,debts owed or due or asserted to be owed or dueanother.”) The Sixth Circuit correctly recognizedthis fact. See, e.g., Pet. App. 29, 42, 43 (“Special

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counsel are, simply, as their contract with theAttorney General states, independent contractors.”).

Not only are the collections special counselvirtually indistinguishable from run-of-the-mill debtcollectors in their day-to-day business, but also themethods they employ in conducting this business aresimilar to those of other independent contractors inthe collections business. Indeed, the collectionsspecial counsel have been found to engage inFDCPA-proscribed tactics such as seeking paymentsfrom consumers who do not owe any debt, sendingfalse debt collection notices misrepresenting theamounts and legal basis of debts owed, pursuingassets exempt from debt collection, and levyingusurious fees on the basis of statutoryinterpretations that courts have found to be withoutmerit.

Congress did not intend consumers confrontedwith such abusive practices to be without theprotections afforded by the FDCPA. Indeed, rulingthat the collections special counsel are “officers” ofthe State would risk perpetuating and worseningthese types of abuses. Moreover, such a ruling couldfoster greater lawlessness in the debt collectionarena by encouraging the expansion of Ohio’s specialcounsel program, both nationally and to non-attorneys. The unsophisticated consumers Congressintended to protect in Ohio and beyond deservebetter.

The Court should affirm the decision of theCourt of Appeals.

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ARGUMENT

I. The Collections Special Counsel Are OrdinaryOutside Debt Collectors Subject to the FDCPA

A. The Collections Special Counsel CollectDebts on Behalf of Entities Public andPrivate

The FDCPA defines a “debt collector” as anyone“who regularly collects or attempts to collect, directlyor indirectly, debts owed or due or asserted to beowed or due another.” 15 U.S.C. § 1692a(6). Thecollections special counsel fall squarely within thisdefinition and regularly enter into contracts withprivate entities to collect debts on their behalf. Forinstance, the website for the firm of petitioner EricA. Jones states that the firm provides “high-quality,professional legal services focused on debt collectionand related legal issues.” Debt Collection, JonesLaw Group, LLC, http://tinyurl.com/hg8kjcp (lastvisited Feb. 25, 2016). Indeed, the firm touts its debtcollection experience, stating “[w]e are the preferredattorney-managed debt recovery solution for asignificant number of businesses and organizationsin Ohio. Our firm represents business owners,entrepreneurs, debt buyers, and other clients whoneed to recover money owed to them through thelegal process.” Id.

Furthermore, in his Request for Qualificationsfor Special Counsel, the Attorney Generalacknowledges that the collections special counsel areinvolved in the general business of debt collectionand finds this desirable, explaining that “[i]n

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particular, the Attorney General seeks attorneyswith experience in general collections, the securingof judgments, and post-judgment enforcement, alongwith those who have experience representingcreditors in bankruptcy matters.” Request forQualifications for Collections Special Counsel, OhioAttorney General’s Office, http://tinyurl.com/zczoxdx(last visited Feb. 25, 2016); see, e.g., JA 210.2

In short, the collections special counsel aremerely lawyers who pursue debt, whether public orprivate. Inasmuch as they are not officers of theprivate companies with which they enter intocontracts of fixed duration to collect debt in return

2 There are indications that financial concerns maymodulate the preference for experience that the Request forQualifications would suggest. The Dayton Daily Newsspotlighted one notable instance in which a politicallyconnected contributor with no prior debt collection experiencebeat out more experienced debt collection firms. Laura A.Bischoff, Vendors Gave Big to DeWine, GOP: Ohio AG DeniesPolitics Played a Role in Awarding Lucrative CollectionsContracts, DAYTON DAILY NEWS (Jul. 19, 2014, 12:00 AM),http://tinyurl.com/zs4sono. The paper reported that, in April2012, CELCO Ltd., a debt collection firm that had been formedtwo days before the Attorney General issued Requests forQualifications, edged out a number of firms that had decades ofexperience, national footprints, and licenses to collect outsideOhio. Id. The Dayton Daily News reported that the founder ofCELCO Ltd. and his relatives had contributed $35,000 to theOhio Republican Party and $23,000 to the Summit CountyGOP, which in turn donated $405,500 to the Attorney General’scampaign between 2010 and 2014. Id. Significantly, Ohio lawprohibits a “state elected officer” from “accept[ing] acontribution” from a “state employee” he appoints, where theterm “state employee” is defined broadly to cover “any personholding a position subject to appointment . . . by an appointingofficer. OHIO REV. CODE ANN. §§ 124.01, 3517.092.

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for lucrative commissions, they should not bedeemed officers of the state for which they renderidentical contract-based services.

B. The Collections Special Counsel’s DebtCollection Practices Are Identical to Those ofOutside Debt Collectors

The collections special counsel have been knownto employ the same tactics and dishonest methods ofdebt collection used by run-of-the mill third-partydebt collectors. Medicaid estate recovery andstudent loan debt claims are just two areas repletewith examples of egregious behavior by thecollections special counsel.

1. The Collections Special Counsel FileMisleading Notices and Assert LiensAgainst Assets Exempt as a Matter of Law

In keeping with federal statutes, Ohio’s MedicaidEstate Recovery program allows the state to seekrepayment for the cost of Medicaid benefits after theMedicaid recipient is deceased. Under both the stateand federal statutes authorizing liens against anestate to recoup Medicaid benefits after the recipientis deceased, the state can seek recovery only afterthe recipient’s surviving spouse has died. Indeed,the federal statute states that “[a]ny adjustment orrecovery … may be made only after the death of theindividual’s surviving spouse,” among otherrestrictions. See 42 U.S.C. § 1396p(b)(2). Mirroringthe federal statute, Ohio’s statute authorizingrecovery of Medicaid benefits from estates providesthat, “[n]o adjustment or recovery may be made …

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from a permanently institutionalized individual’sestate or on the sale of property of a permanentlyinstitutionalized individual that is subject to a lien… while either of the following are alive: (a) Thespouse of the permanently institutionalizedindividual or individual.” OHIO REV. CODE ANN.§5162.21(C)(1)(a).

Despite this clear statutory limitation, thecollections special counsel have been known to fileAffidavits of Fact Relating to Title under OHIO REV.CODE ANN.§ 5301.252 against residences owned bythe spouses of deceased Medicaid recipients whilethese spouses are still alive. See, e.g., No. 15-0078598, Affidavit of Fact Relating to Title (Jul. 28,2015). These practices occur despite the fact thatOhio law provides that Affidavits of Fact Relating toTitle are appropriate only for “facts relating to thematters … that may affect the title to real estate inthis state.” OHIO REV. CODE ANN. § 5301.252(A).These Affidavits can have the effect of putting acloud on the title of the residences in question. Atthe very least, they can induce the seniors whoreceive them to pay amounts they absolutely do notowe under the law. The collections special counselhave also sent notices to spouses falsely stating thatthe Medicaid claims are deferred until the spousesno longer reside at the residence, rather than untilthe spouse’s death. Id. at 1. Some of these noticeshave also falsely stated that the Medicaid claimswould become enforceable “upon the attempted saleor transfer of the property.” Id. These statementshave no basis in the law and are, in fact, untrue.

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Furthermore, the collections special counselseeking payment of Medicaid recovery amounts havepursued assets that are exempt from recovery as amatter of law. The Ohio Medicaid estate recoverystatute provides that any applicable lien attachesonly to property that the Medicaid recipient ownedat the time of death. See id. § 5162.21(A)(1)(b)(defining “estate” as “[a]ny other real and personalproperty and other assets in which an individual hadany legal title or interest at the time of death (to theextent of the interest).”). Nonetheless, thecollections special counsel seeking to recoverMedicaid benefits after recipients’ deaths have beenknown to file Affidavits of Fact against assets ownedsolely by the spouses of the Medicaid recipients atthe time of the recipients’ death.

Apart from the fact that the collections specialcounsel have been known to misstate the law inthese Affidavits and proceed against assets fromwhich the state cannot seek collection, there is also acoercive element to their conduct that mirrors that ofrun-of-the-mill debt collectors. In some cases, theelderly spouses have learned of the Affidavitswrongly filed against their assets only shortly beforeclosing on sales of these assets. The high pressuresetting of a closing, in which there is little time tospare for a challenge and the parties are anxious,increases the likelihood that the spouses will pay infull or settle these baseless claims. Title examinershave also required claims to be paid from theproceeds of sales in order for closings to proceed.The fact that these Affidavits are accompanied byletters printed on the Attorney General’s letterhead

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only adds to the intimidation and further confusespeople as to the veracity of debt.

These coercive and misleading practices are theexact types of tactics that outside debt collectorshave long used and that the FDCPA was meant toaddress. See generally S. Rep. No. 95-382 (1977),reprinted in 1977 U.S.C.C.A.N. 1695.

2. The Collections Special Counsel LevyExtremely High Fees with QuestionableStatutory Authorization

The collections special counsel have been knownto charge extremely high fees on top of the principalof the debts being collected. For instance, in ClientSecurity Fund of Ohio v. Broschak, the collectionfees assessed were almost equal to the principal—$22,433.90 on a principal of $28,500.00. See No.12CVH-09-11545, Magistrate’s Decision on Damages(Franklin Cty. C.P. Ohio Civ. Div. Nov. 15, 2013),aff’d No. 12CVH-09-11545, Judgment Entry(Franklin Cty. C.P. Ohio Civ. Div. Feb. 4, 2014).There was no attempt to relate the fees to any costsof collection and the fees were assessed as anarbitrary percentage of the principal. See id. at 2;see also Bradley v. Franklin Collection Serv., Inc.,739 F.3d 606, 609 (11th Cir. 2014) (holding that debtcollectors may not under the FDCPA “charge[ ] thedebtor a collection fee based on a percentage of theprincipal balance of the debt due rather than theactual cost of collection.”).

Section 131.02(A) of the Ohio Revised Codeprovides generally for the collection of amounts due

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to the state. Among other things, the statuteauthorizes the state to certify to the AttorneyGeneral the amounts outstanding so that theAttorney General can collect the debts. Id. Inaddition, the statute permits the Attorney Generalto “assess the collection cost to the amount certifiedin such manner and amount as prescribed by theattorney general.” Id. It is noteworthy that“collection costs,” i.e., the amounts the AttorneyGeneral spends to collect the debt, are what isauthorized. This provision is meant to compensatefor actual costs incurred and there is noauthorization of punitive or usurious fees. Anotherprovision that the collections special counsel tend tocite in support of their extraordinary fees is section109.081 of the Ohio Revised Code, which providesthat “[u]p to eleven per cent of all amounts collectedby the attorney general, whether by employees oragents of the attorney general or by special counsel… shall be paid into the state treasury to the creditof the attorney general claims fund[.]” The plainlanguage of this section makes clear that what isauthorized is for a portion of the amounts collectedto be deposited into the fund created. Thepercentage authorized is not meant to be added ontop of the principal. Nonetheless, the collectionsspecial counsel have seized upon both sections109.08 and 131.02(A) as justification for their fees,despite the fact that courts have ruled those feesexcessive and not authorized by these sections.

In Broschak, the court denied the collectionsspecial counsel’s attempt to levy what would haveamounted to an almost 80 percent fee as “collectioncosts” and attorneys’ fees. Rejecting the collections

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special counsel’s attempt to rely on section 109.08,the court explained that “[t]here is nothing in R.C.109.08 that entitles Plaintiff or the Attorney Generalto an award from this Court of attorneys’ feesagainst Defendant or collection costs representingthe fees to be paid to special counsel.” 12CVH-09-11545, Magistrate’s Decision at 14. The courtfurther explained that the percentage authorized bysection 109.08 was to come out of, not on top of, theprincipal of the debt: “Instead special counsel,pursuant to R.C. 109.08, is to be paid from the fundscollected by them from the claims that are certified,which in this case amount to $28,500.00 incompensatory damages.” Id. The court also rejectedthe collections special counsel’s reliance on section131.02, again pointing out that the collection costsauthorized by that section were to come out of theprincipal, not to be added on top of the principal. Id.at 15. Accordingly, the court denied almost all of thefees that the collections special counsel had soughtand allowed only $2,850.00 to be taken out of the$28,500.00 owed and paid to the Attorney General,not the special counsel. Id. at 15-16.

Similarly, in Columbus City School District v.Hunter, the court denied the collection specialcounsel’s attempt to unilaterally levy attorneys’ feesdisguised as collection costs. No. 14CVH-8323,Magistrate’s Decision (Franklin Cty. C.P. Ohio Civ.Div. Jan. 28), aff’d No. 14CVH-8323, JudgmentEntry & Notice of Final, Appealable Order (FranklinCty. C.P. Ohio Civ. Div. Mar. 5, 2015). The courtruled that “R.C. 109.08 does not provide any supportfor Plaintiff’s claim for collection costs that are, infact, as Plaintiff admits on pages 2 and 3 of its brief,

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the attorney’s fees of special counsel…” Rejectingthe collections special counsel’s invocation of Section109.08 and implicit reliance on section 131.02, thecourt ruled that “R.C. 109.08 makes clear thatspecial counsel is to be paid for their services fromthe funds collected by them on behalf of their client,not as part of a separate award by the Court orcollection costs sought under another provision of therevised code.” Magistrate’s Decision at 6.

Although the individuals targeted in Broschakand Hunter were able to challenge and overturnthese excessive fees, it is not difficult to imagine thatmany more individuals in their position merelysuffer the injury and pay instead of undertaking theexpense and difficulty of litigation. Even whenchallenged in court, the collections special counselhave been known to appear in court relying on falseor misleading affidavits. For instance, the Broschakcourt noted that “[n]either the complaint nor any ofits attachments, however, provide any explanationas to how or why Plaintiff is entitled to the claimedcollection costs or how such costs were calculated orincurred. Moreover, the affidavit provided insupport of the motion for default does not provideany basis for Plaintiff’s claimed entitlement to thecollection costs.” See 12CVH-09-11545, Magistrate’sDecision at 2. In Hunter, the court pointed out that“[n]o explanation was given by Mr. Yono or byPlaintiff in its brief, exhibits and affidavits as to howthe claimed collection costs of $3,218.81 wascalculated….” No. 14CVH-8323,Magistrate’sDecision at 5. The collections special counsel evenattempted to assess statutory interest with no basis.Id. at 4 (noting that “no explanation was given by

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Mr. Yono [the assistant attorney general] at thehearing or by Plaintiff in its brief, exhibits andaffidavits as to how the $2,192.08 in claimedstatutory interest was calculated.” Neither thecollections special counsel nor the assistant attorneygeneral were able to explain the fees when called totestify in court. Id. If the collections special counselare engaging in such tactics in court before counseland learned judges, one can only imagine the anticsthey employ outside the courts to induce laypeople topay egregious fees.3

In keeping with their status as common debtcollectors, the collections special counsel have beenfound to misrepresent debts, inflate debts withdubious fees, waylay unsuspecting people who do noteven owe debts, and even time the individuals’discovery of the debt in such a way as to createpressure and limit the opportunity to challenge theseamounts. Their use of the Attorney General’sletterhead should not insulate their actions ordistract from the fact that they are merely hiredhands for whom the state is a client like any other.They are not officers.

3 Considering the sharp rebuke that the collections specialcounsel’s fees have drawn and the Attorney General’s stancethat they are his officers, one might expect the AttorneyGeneral to rein them in on this matter. We have not found anyevidence that this has occurred, however.

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II. Construing the Collections Special Counsel as“Officers” of the State Would Create PerverseIncentives and Facilitate Other Harms

As the FDCPA acknowledges, “[t]here isabundant evidence of the use of abusive, deceptive,and unfair debt collection practices by many debtcollectors. Abusive debt collection practicescontribute to the number of personal bankruptcies,to marital instability, to the loss of jobs, and toinvasions of individual privacy.” 15 U.S.C. § 1692.The FDCPA was enacted to “eliminate abusive debtcollection practices by debt collectors” and combatthose harms. Id. To exempt the collections specialcounsel from the obligations imposed on “debtcollectors” would be to risk undercutting theFDCPA’s core objectives.

Specifically, finding that the collections specialcounsel are officers would risk giving them carteblanche to continue to engage in the abusivepractices outlined above and proscribed by theFDCPA. Already, even with the possibility ofliability under the FDCPA looming over them, thecollections special counsel have been found to utilizedishonest tactics. Removing the FDCPA as a checkon their actions could prove disastrous andincentivize worse behavior. Indeed, construingspecial counsel as “officers” would allow them toengage in a litany of proscribed practices whencollecting debts on behalf of the state that they mustrefrain from when collecting debts on behalf of theirprivate clients. There is no principled reason specialcounsel should, for example, be permitted to makefalse representations to debtors about the character,

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amount, or legal status of their debts merely becausethe debt in question is owed to a public entity.

Of equal concern is that exempting thecollections special counsel from the FDCPA wouldencourage the expansion of the program to non-attorney debt collectors. Until now, the AttorneyGeneral has relied on licensed attorneys only toserve as special counsel. See Pet. App. 24. Qualifiedattorneys are bound by Ohio’s Rules of ProfessionalConduct, rules enforced by the Supreme Court ofOhio. See Ohio State Bar Association, LawyerEthics and Discipline, http://tinyurl.com/z5tu49m(last visited Feb. 25, 2016). The Rules “prohibitlawyers from engaging in conduct involving moralturpitude, fraud, deceit, dishonesty ormisrepresentation,” conduct “prejudicial to theadministration of justice,” or “any other conduct thatadversely reflects on the lawyer’s fitness to practicelaw.” Id.; Rule 8.4 of Ohio Rules of ProfessionalConduct, http://tinyurl.com/ltw3y9p (last visited Feb.25, 2016). While reason exists to doubt that thecollections special counsel heed these restrictions,non-attorney debt collectors are not subject to any ofthese ethical constraints.

Although, until now, the Office of the AttorneyGeneral has entered into retention agreements withattorneys only, there is no reason the Office couldnot enter into comparable contractual arrangementswith non-attorney debt collectors. The latter maynot be positioned to sue debtors on behalf of thestate, but they are equipped to perform the otherdebt collection functions assumed by special counsel.If the Attorney General’s expansive interpretation of

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the term “officer” is adopted, non-attorneys incontractual relationships with the Attorney Generalwould be similarly shielded from liability under theFDCPA—and simultaneously unencumbered by theethical obligations of attorney debt collectors.4

4 News reports have suggested that the Office of theAttorney General may not be a meaningful source of regulationof the collections special counsel’s conduct.

In 2014, certain news organizations began exploring theAttorney General’s selection process for the collections specialcounsel and relationship with those selected. After anextensive investigation, the Dayton Daily News concluded that“[i]n doling out lucrative collections contracts, Ohio AttorneyGeneral Mike DeWine passed over more experienced vendors infavor of a friend’s new collections agency” and that “[h]iscampaign and the state Republican Party received hundreds ofthousands of dollars in campaign donations from collectors asthey sought work from the state.” Laura A. Bischoff, VendorsGave Big to DeWine, GOP: Ohio AG Denies Politics Played aRole in Awarding Lucrative Collections Contracts, DAYTON

DAILY NEWS (Jul. 19, 2014, 12:00 AM),http://tinyurl.com/zs4sono. The Associated Press also reachedsome disturbing conclusions about the selection process, findingthat the Attorney General’s “selection process for hiring outsidelaw firms has gone essentially undocumented” and that a“public records request by the AP turned up no judges’ notes,scoring sheets, email exchanges on firms' qualifications orrecommendations made to” the Attorney General. Julie CarrSmyth, Ohio Attorney General Mike DeWine’s Vetting of LawFirms Undocumented, ASSOCIATED PRESS (Jun. 26, 2014),http://tinyurl.com/jk3cb9b.

The news reports also indicated that, even after selection,the lack of transparency persisted and money continued tochange hands. The Dayton Daily News noted an apparent“nexus between how much debt collectors earn and the size oftheir contributions.” Laura A. Bischoff, Vendors Gave Big to

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Finally, as the brief submitted by no less thanseven other states’ attorneys general as amici curiaeindicates, this case may have implications forconsumers and debtors nationwide. If this Courtexempts the Ohio special counsel program from theanti-deception provisions of the FDCPA, there isevery reason to believe that states across the countrywould move to adopt comparable debt collectionprograms. The national expansion of such programswould risk profoundly undermining the purposes ofthe FDCPA, potentially triggering a proliferation ofabusive practices by debt collectors with theimprimatur and protection of states’ attorneysgeneral, thereby compromising consumer and debtorrights throughout the country.

DeWine, GOP: Ohio AG Denies Politics Played a Role inAwarding Lucrative Collections Contracts, DAYTON DAILY

NEWS (Jul. 19, 2014, 12:00 AM), http://tinyurl.com/zs4sono.The newspaper also reported that, between 2010 and when itpublished its findings, the collections special counsel whocontributed in excess of $10,000 received an average of$796,500 in debt collection income between 2011 and 2013,while those contributing under $10,000 received an average of$192,000 during that period. Id. In total, the newspaper foundthat the Attorney General’s 119 collections special counsel—including their law firms and family members—contributed$1.38 million to the campaigns of the Attorney General, hisson, and the Ohio Republican Party. Id.

At a minimum, these allegations raise questions about thenature of the Attorney General’s relationship with thecollections special counsel and the rationale behind theAttorney General’s preferred interpretation of the FDCPA.

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CONCLUSION

For the foregoing reasons, amicus NHSConsumer Law Center urges the Court to affirm thejudgment of the Court of Appeals and hold that thecollections special counsel are “debt collectors” underthe FDCPA.

Respectfully submitted,

Steven G. BradburyCounsel of Record

Deborah Kemi MartinShriram HaridDECHERT LLP1900 K Street, NWWashington, DC 20006-1110(202) 261-3483steven.bradbury@dechert.com

Date: March 2, 2016