Judicial debt collection trial needs sunshine, not secrecy

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Legendary United States Supreme Court Justice Louis Brandeis once observed, “Sunlight is said to be the best disinfectant.

Brandeis wasn’t talking about the daily cleaning of the house. He expressed concern about the importance of transparency in eradicating or preventing corruption or abuse in the operation of any program, organization or government entity.

He was particularly bothered by what he called “the wickedness of people who protect wrongdoers and pass them off (or at least allow them to pass themselves off) as honest men.”

If he were alive today, the learned judge of a century ago could prescribe a healthy dose of sunshine for a legal dispute that my friend, investigative journalist Clark Kauffman, uncovered last week at the Iowa Capital Dispatch.

The Iowa Judicial Branch entered into a contract in 2010 with a national law firm in Austin, Texas called Linebarger Googan Blair & Sampson LLP. The company was hired to collect unpaid fines and fees for the state court system.

The contract provided that the state would receive 75% of the sums collected and that the law firm would receive 25% of the sums collected.

In 2020, Iowa Legal Aid, a nonprofit law firm that represents low-income Iowans in certain types of legal disputes, sued the Linebarger firm. The lawsuit shed light on Linebarger’s debt collection tactics, including allegations that the company used threats of contempt actions and the possible revocation of people’s driver’s licenses if they failed to pay. their fines and court costs.

The lawsuit also alleged that when Linebarger sent collection notices to the Iowans, it inflated their debt — what the company called their court-ordered obligation — by 25%. This had the effect of increasing the law firm’s revenue in Iowa, as its share of each collection was calculated from a larger base amount.

Before Linebarger’s contract ended in January 2021, the law firm collected $58.6 million for the Iowa government in fines and legal costs. The company’s compensation for his work was $12 million, Kauffman reported.

A dose of sunshine from Judge Brandeis is needed in this case, as Linebarger and Iowa Legal Aid agreed to settle the lawsuit last September with an important, but very troubling take: they agreed to keep the terms of their settlement agreement secret. .

Confidentiality was enforced by the agreement, even though it was mainstream Iowa and Iowa businesses that were subjected to Linebarger’s collection tactics that Iowa Legal Aid said were illegal. , and even though Linebarger had access to these Iowa because of its contract with some branch of the state government. , the judiciary of Iowa.

The Iowa court system was not a party to the lawsuit. Otherwise, an Iowa law banning secret settlements by state or local governments would have opened Judge Brandeis’ window and let the public see what the parties agreed on.

Linebarger and Iowa Legal Aid are still bickering in federal court over the legal fees Iowa Legal Aid wants to reimburse for the lawsuit. This matter could end up in the hands of the federal judge if the two parties do not settle this themselves.

Linebarger says the lawsuit has no merit. The firm says its work on behalf of the Iowa judiciary was not covered by federal and state debt collection laws because the firm believes that fines and court costs are not legally considered a debt.

Alexander Vincent Kornya, director of litigation for Iowa Legal Aid, told Kauffman that the lawsuit is about liability and whether private law firms that collect debts for the government are beyond the reach of laws on collection of debts.

“We believed they were responsible when we filed the case, that they violated the law, and we still believe that,” he told Kauffman.

Kornya said the issues in the lawsuit go beyond unpaid fines and also focus on indigent defense costs.

Poor people who cannot afford private attorneys when charged with a crime must rely on court-appointed attorneys or public defenders to represent them. In Iowa, Kornya said, a person is charged for their indigent defense even if they are found not guilty.

The poor face significant consequences if they do not pay these fees for court-appointed lawyers. They may be denied the expungement of their case from their criminal record, or they may have their tax refunds withdrawn and applied to the debt.

Kornya said Iowa Legal Aid serves thousands of Iowans each year, free of charge, with civil law matters. The lawsuit aimed to reduce “the number of people in crisis who come through our doors and who cannot meet the necessities of life because they are subject to unjustified and without legal basis threats of imprisonment, revocation of permits and other sanctions”.

And that is why the full sun has to fall on this settlement agreement.

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