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WASHINGTON � The 9th U.S. Circuit Court of Appeals on Feb. 6 ruled that a private California debt collector is not immune from suit for overly aggressive tactics even when it is working on behalf of local prosecutors.� The court’s decision, which rejected a claim of sovereign immunity by American Corrective Counseling Services Inc. (ACCS), a so-called “check diversion” company, came in a class action challenging arrangements under which local prosecutors rent their name and authority to private debt collectors, who use threats of criminal prosecution or jail to coerce people who have written bad checks to pay various fees. The fees are then split between the debt collectors and the prosecutors. In Del Campo v. ACCS, No. 03-02691, California consumers, represented by Public Citizen of Washington, and Paul Arons of the Law Office of Paul Arons in Friday Harbor, Wash., claim that ACCS’s threats of prosecution violated their rights under state and federal consumer protection laws. A lower court had ruled in 2006 that the company did not have sovereign immunity – a protection given to branches of state government. ACCS appealed and the case was argued before the 9th Circuit in San Francisco in September. In rejecting the company’s claim of sovereign immunity, the court characterized sovereign immunity as “strong medicine” that should be carefully limited, especially in the case of private corporations that are not accountable to the public. The court called the argument that a private company could enjoy state sovereign immunity a “category error,” like “inquiring into the gender of a rock or into which day of the week is reptilian.”�� ACCS has insisted throughout the litigation that it is not a debt collector and is therefore not covered by federal law protecting consumers from abusive collection practices. But in its ruling, the court described ACCS’s practices as “debt collection rather than law enforcement.”� “In an era of increasing privatization of public functions� -� from private prisons to Blackwater in Iraq� -� this decision is an important reminder that private contractors will be held accountable by the courts,” said Public Citizen’s Deepak Gupta, who argued the case. “They can’t simply hide behind the cloak of government authority.” The case will now go back to the district level so the court can decide the merits of the suit.

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