The industry’s three major trade groups and the government of the United States each filed amicus briefs with the Supreme Court late last week in Rotkiske v. Klemm, a case that will be heard in October and seek to determine with the one-year statute of limitations to file a claim alleging violations of the Fair Debt Collection Practices Act begins — when the violation occurs or when the individual notices that the violation has occurred.
The government and the trade groups all support the respondent, who is seeking to have an Appeals Court ruling from the Third Circuit affirmed that the statute of limitations should start running when the violation occurs. The legal argument at play here is whether Congress intended to use something known as the discovery rule, which delays the beginning of a limitations period until the plaintiff knew of or should have known of his injury, or the occurrence rule, which is when the actual violation happened, when it enacted the FDCPA.
“The FDCPA’s text unmistakably supplants any pre- sumption in favor of a discovery rule,” the government wrote in its brief. ” … the Court accordingly need not determine whether a general presumption in favor of a discovery rule exists because the FDCPA’s plain language would overcome any such presumption.”
The petitioner had a balance on his credit card that was placed with the respondent for collections. The respondent attempted to sue the petitioner in 2008 but was unable to locate him. The respondent tried again in 2009, and unbeknownst to the petitioner, someone accepted service of the lawsuit on his behalf. The respondent was able to obtain a default judgment, which was discovered when the petitioner applied for a mortgage in 2014.
In June 2015, the petitioner filed suit against the respondent, alleging a violation of the FDCPA. The respondent moved to have the case dismissed because the statute of limitations had expired and the District Court judge granted the motion. That decision was appealed to the Third Circuit, which affirmed the dismissal.
“In reality, Congress knew exactly what it was doing in requiring that a consumer bring a private cause of action under the FDCPA within one year ‘from the date on which the violation occurs,’ ” ACA wrote in its brief “Congress sought to balance the need to protect consumers from real fraud and abuse, against the need to ensure meaningful certainty regarding litigation exposure for well-intentioned participants in the debt collection industry. This statutory limitation is all the more critical when one considers that the debt collection industry is absolutely necessary to consumers, government agencies, and the continued functioning of the U.S. economy.”p