Opinion ID: 77879
Heading Depth: 2
Heading Rank: 2

Heading: accs

Text: In the present case, the statutory language and the language of the contract between ACCS and the SAO both specifically state that ACCS is an independent contractor, not an agent. The district court, however, relying upon Shands, concluded that ACCS was, in fact, acting as an agent of the SAO in sending the letters that form the basis of the claims. The district court also rested its ruling upon the contract provisions that describe ACCS's work in the daily management of all clerical and accounting functions related to the bad check program, and the SAO's responsibility to assist and direct ACCS with planning and development of polices, procedures, and other matters. The deposition evidence from the SAO liaison to ACCS, Janet Diebler, the Executive Director of the SAO, Daniel Pearlman, and the present supervisor of county court prosecutors, Assistant State Attorney Gary O'Nolan, reveals that clerical review only is done by the SAO before the file goes to ACCS, and attorney review is performed after the bad check is returned if diversion is not completed. Although the allegedly unlawful form collection letters are sent after review and approval by the SAO, with content partially specified by Fla. Stat. § 832.08(3), there is no supervision by the SAO during ACCS's collection efforts of communications regarding the bad check amount and related fees. These communications are the subject of this action under the FDCPA. Defendants/Appellees assert that as in Shands, they are merely administrators of the SAO's bad check program. However, ACCS fails to meet each element of the Shands test. First, in this case, state law and the contract define ACCS as an independent contractor, and not an agent. Florida statutes make a distinction between independent contractor and agent. Compare Fla. Stat. § 30.24(2)(b) with Fla. Stat. § 766.1115. Thus, if the Legislature intended operators of bad check diversion programs to be considered agents, it could have so stated in its statutory scheme and called the operators agents, instead of independent contractors, as it instead chose to do. Indeed, to the contrary, the specific language in the contract prohibits ACCS from acting as an agent of the SAO. [3] Recently, this Court concluded in the related context of a military contractor that status as a common law agent is necessary but not sufficient to obtain derivative immunity under the government's Feres doctrine immunity. McMahon v. Presidential Airways, Inc., 502 F.3d 1331 (11th Cir.2007) (U.S. Supreme Court Feres doctrine precludes government liability for service-related injuries to soldiers). Although the constitutional underpinnings of Eleventh Amendment jurisprudence are distinct from the history of Feres doctrine case law, the McMahon opinion's discussion of derivative immunity and agency bears mention in the context of the present case. Here, ACCS cannot show that it is a common law agent because of the contractual and statutory language governing the bad check program. As to the element of control over ACCS, we note that the SAO does have some control over the content of the letters, as long as ACCS uses the previously approved form letters. However, the SAO exercises no other control over the day-to-day activities of ACCS with regard to the collection efforts under the Program. As to the ability to end ACCS's services, because the contract requires cause for termination prior to the completion of repeating three-year terms, such control is limited. Hinson v. Edmond, 192 F.3d 1342, 1346-47 (11th Cir.1999) (concluding that prison health care director employed by contractor not eligible for qualified immunity for § 1983 claim where County could not hire or fire contractor employees). [4] As to the third Shands element of state funding and liability, ACCS does not receive any funding from the State of Florida. Defendant argues that because ACCS is compensated from revenues of the Program, and part of those revenues would belong to the SAO, that ACCS is a state-funded entity. At oral argument and in its Supplemental Letter Authority, ACCS asserts that because all funds paid by Program participants are made payable to the Twentieth Judicial Circuit, Plaintiffs are essentially seeking a disgorgement of these funds, part of which would be paid to the SAO. However, the depositions of the SAO employees, including the Executive Director who acts as a chief financial officer, as well as ACCS's Supplemental Letter Authority, confirm that the bank account set up to receive payments under the Program is controlled by ACCS, which acts as a fiduciary in disbursing funds by checks signed by ACCS's President to victims, the SAO, and itself. The record does not reflect that the collected funds, as they sit in that account, are state property. Even if part of those funds were considered state property, it is undisputed that ACCS is not paid by state revenues. The Supreme Court has stated that the proper focus is not on the use of profits, but rather whether the State is obligated to bear and pay any resulting indebtedness if the program's expenditures exceed its receipts. Hess v. Port Authority Trans-Hudson Corp., 513 U.S. 30, 51, n. 21, 115 S.Ct. 394, 406, 130 L.Ed.2d 245 (1994) (rejecting immunity over an agency that consumes no state revenues but contributes to the State's wealth). In this case, the clear terms of the contract indicate that no indebtedness could ever occur  ACCS is paid only when it successfully collects on a bad check. Moreover, as Shands and other Eleventh Circuit cases have noted, the most important factor in determining immunity is who is responsible for judgments against the entity. Manders v. Lee, 338 F.3d 1304, 1325 (11th Cir.2003) ( en banc ). The ACCS contract specifically indemnifies the SAO, except for sole negligence of SAO employees. Defendants speculate that there could be circumstances under this provision in which they are not required to indemnify the SAO, in which case the State of Florida would be responsible for a judgment. However, in this action the only claims asserted are against ACCS and its principals for the content of its communications with bad check writers. Though the SAO approved the communications in form, the actions allegedly in violation of the law cannot be due to the sole negligence of the SAO, a non-party to this litigation. Thus, a money judgment in this case against ACCS would not impose any liability upon the SAO. United States ex rel. Barron v. Deloitte & Touche, LLP, 381 F.3d 438, 440, n. 7 (5th Cir.2004) (immunity rejected for contractor who processed claims and distributed Medicaid funds for the State of Texas based on indemnity language of contract). A related consideration to financial liability is legal liability. Regents of the University of California v. Doe, 519 U.S. 425, 430-31, 117 S.Ct. 900, 137 L.Ed.2d 55 (1997). If a state agency is legally liable for a judgment but indemnified by a non-state entity, then Eleventh Amendment immunity would still apply. However, in this case, the SAO is not being sued. It cannot have legal liability in this action. Defendant also argues that under Shands, an alternative finding of interference with the administration of government programs leads to Eleventh Amendment immunity. Shands, 208 F.3d at 1311, citing Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 101, n. 11, 104 S.Ct. 900, 908, 79 L.Ed.2d 67 (1984). However, neither decision elaborates on the standards to evaluate what extent of interference triggers Eleventh Amendment immunity. ACCS asserts that forcing it to change its SAO-approved letters would interfere with the SAO Program. Plaintiffs assert that ACCS can comply with both the contract and the FDCPA even if the language of the letters were changed. In Shands, the Court concluded that issuing a declaratory judgment interpreting the State's obligations regarding covered services under the state health plan in favor of Shands Hospital would impermissibly intrude upon future administration of the state program because payments from state funds would increase. In the present case, a finding that ACCS is covered by the FDCPA would not affect state funds, as previously explained above. This action does not impede the SAO's prosecutorial decisions regarding bad check writers  rather, it is the conduct of ACCS and the content of the communications sent to Plaintiffs that are alleged to violate federal law. The existence of the bad check diversion program is also not challenged. If imposition of FDCPA requirements over ACCS interferes with the independent contractor's ability to successfully collect on bad checks, then ACCS can make a business decision not to continue with the contract. The SAO in turn can run the program in-house, as it did prior to contracting with ACCS. The standard for Eleventh Amendment immunity has never been held to apply simply because an independent contractor performs some government function. Rather, under the factors described above, in this action ACCS is not entitled to Eleventh Amendment immunity.