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When District Attorneys Become Bill Collectors2012-11-19 12:00:00 AM
When someone feels threatened, personal fear consumes him and thoughts about the public policy implications at play are among those furthest from his mind. By contrast, when that person is asked to abstractly consider a questionable public policy that may victimize even significant numbers of people (albeit not him), he does not personally suffer. He doesn't typically empathize. He doesn't step into the shoes of the victim.
Step briefly, then, out of your comfort zone, and imagine the following scenario: Times are tough financially, and your family is living hand to mouth. Or perhaps you're simply down on your luck. You write a check to pay your mortgage or credit card bill, or maybe you write checks for both. But unbeknownst to you, your bank account does not contain the necessary funds. Or perhaps you're well aware that you lack the funds on account at the moment when you drop your check(s) in the mail, but you fully expect that checks payable to you will arrive in time to cover the outgoing sums -- a common occurrence. While it is technically a crime to issue a check on insufficient funds, you are likely to find yourself in a "no harm, no foul" situation. Your payee(s) will be paid without repercussion.
Assume, though, that the incoming checks never arrive, or that they do not arrive in time. Now, however unintentionally, you've "bounced" checks to companies that are victimized daily in this way. It hurts the corporate bottom line to lose access to the float, and there's often the cost of a bill collector to factor in, even if a simple dunning letter gets the job done quickly. Accordingly, shareholders, and thus corporate executives, are unsympathetic to bad check writers -- i.e., unsympathetic toward you -- whether you are a member of the underclass or, as is becoming more frequently the case, the middle class.
Imagine now that you and the payee corporation(s) are located in a jurisdiction whose local district attorney has a "Bad Check Restitution Program." Make no mistake, this is not some backwater community -- you're in a major city like Los Angeles, Baltimore or Detroit. Before you are able to pay up, you open your mailbox to find what appears to be a threatening letter from the DA's office. The initial shock of receiving such a letter will likely cause you to panic -- which, clearly, is the precise reason why the corporation referred your name to the district attorney in the first place. Scared out of your wits with paranoia overwhelming you (at least until you read the letter more carefully or consult with an attorney in a position to be more objective), you become obsessed with the fear that you must now deal with a prosecutor's office, not simply a bill collector's form letter.
This may sound borderline Kafkaesque ("How could this happen to me? I'm a law-abiding citizen!"). And yet, The New York Times -- in a September 15, 2012 lead story ("In Prosecutors, Debt Collectors Find a Partner," by Jessica Silver-Greenberg), not an editorial rant about the excessive, arguably abusive use of prosecutorial power over a bad check -- explained that this precise scenario happens daily to hundreds if not thousands of people nationwide as over 300 DAs have adopted the practice. Honest, hard-working citizens are forced to live in the fear that they may actually be carted off to jail, all for a bad check -- maybe even a check that they honestly believed they had sufficient funds to write. Can you not see this happening to you, or at least a loved one?
Check out this link to see the form letter used by the Alameda County district attorney. Its opening sentence says: "You have been accused of violating California Penal Code Section 476a, entitled "Making or Delivering Check With Insufficient Funds." The next sentence describes the potentiality of up to one year in jail upon conviction. Think about how you might react to such a letter. Doesn't a DA essentially abdicate institutional responsibility by sending such a letter without independently analyzing the merits of the individual case?
Let's be clear up front: This piece doesn't seek to challenge those corporations that are repeatedly victimized by bad check writers and who take up districts attorneys on such programs. Rather, this is about the possibility that prosecutors, indeed many honorable prosecutors whose programs are in some instances authorized by legislation, may go off the rails in letting themselves become "collection agents" on behalf of businesses in their communities.
The truth is, skilled attorneys routinely approach prosecutors because they recognize that the mere threat of criminal prosecution will obtain quick restitution from their clients' debtors. They see a simple threat of criminal investigation as a means of avoiding a costly civil litigation. And it often works.
Fortunately, most prosecutors do properly view their role as entirely distinguishable from that of private lawyers or bill collectors; they regard using a criminal complaint solely to accomplish payment of a civil debt as flat-out wrong and would be unwilling to do so. As a result, a prosecutor worth her salt will tell the "complaining" attorney that she simply will not allow her office to be used as a collection agent: A proper answer will sound something along these lines: "You've come to us with a criminal complaint. Understand this: If we see a criminal case here, we will go the whole nine yards, and we won't stop when or because you want us to stop, just because your client is made whole. We don't work for you or your client. We work for the People of the State of _______!"
On the attorney side of the transaction, and even though prosecutors don't usually raise this to the "complaining" lawyer, it happens to be unethical for a lawyer to threaten to file a criminal complaint against their client's debtor for the sole purpose of gaining civil relief for that client. And even though the "complaining" lawyer isn't the one writing the threatening letter, isn't that the precise purpose of the company referring the matter to a bad debt restitution program?
The Times' comment that "the district attorneys are essentially renting out their stationery" may have been a bit sensationalized. Nonetheless, the partnership between the civil "victim" and the prosecutor does seem grossly unwarranted. Many bad checks are the simple result of one's negligent handling of his bank account. To allow a debt collector to initiate, or even just inspire, an accusatory letter from a prosecutor's office without a prosecutor independently assessing the basis to invoke the police power raises fundamental questions of propriety. An October 24, 2012 Times article, "New Federal Rules for Debt Collectors," reported that debt collection agencies will come under the federal supervision of the Consumer Financial Protection Bureau on January 2, 2013. But you don't see consumer protection agencies going after DAs-turned-bill-collectors ... at least not yet.
In some jurisdictions, private citizens are permitted to prosecute misdemeanor offenses where they have fallen victim and where the DA's office has declined to prosecute the case. Should we as a society be putting that kind of power in the hands of the citizenry, even if it is dressed up as an official program of the local DA's office? In a sense, the Supreme Court has weighed in on this option. In 1987, the U.S. Supreme Court in Young v. U.S ex rel. Vuitton et Fils S.A., et al. dealt a deathblow to private lawyers being empowered by the courts to prosecute criminal contempts of trademark injunctions. As the court's majority opinion saw it, "[B]etween the private life of the citizen and the public glare of criminal accusation stands the prosecutor. That state official has the power to employ the full machinery of the state in scrutinizing any given individual. ... [f]orced immersion in a criminal investigation ... is a wrenching disruption of everyday life."
Just as in the "private" prosecutions frowned on in Vuitton, delegating the investigative aspect of the prosecution function to private litigants, as in the case of debt collection programs, is problematic in the extreme. Beyond the ethical and constitutional concerns which the process arguably raises, there is an important public policy question at play: Should prosecutors be permitted to partner with companies to confront citizens with in terrorem dunning letters directly threatening criminal prosecution -- when all that may be at stake is an honest citizen's careless management of his or her checkbook?
Joel Cohen is a partner in the New York office of Stroock & Stroock & Lavan, where he practices white-collar criminal defense law. He also teaches Professional Responsibility at Fordham Law School. The author is a regular columnist for Law.com. The views expressed are his personal opinions.