Appeals Court Overturns Dismissal of FDCPA Suit On Grounds it was Time-Barred

Every time the Fair Debt Collection Practices Act is violated a separate statute of limitations clock starts running, the Fourth Circuit Court of Appeals ruled yesterday, overturning a lower court’s dismissal of a suit for ruling that subsequent violations of the FDCPA were of the “same type” as the original which occurred outside of the one-year statute of limitations.

A copy of the ruling in the case of Bender v. Elmore & Throop, P.C., can be accessed by clicking here.

The underlying situation in this case involved a disputed debt allegedly owed to a homeowner’s association. The defendant was hired to try and collect on the debt, which the plaintiffs claimed to have paid. During the course of the next two years, a number of exchanges between the plaintiff, the homeowner’s association, and the defendant were had, including several where the plaintiff requested that the defendant cease communications. Those requests were not followed, according to court documents.

The plaintiffs filed suit, alleging the defendant violated the FDCPA by engaging in unfair or unconscionable debt collection practices and for communicating with the plaintiff after a written request to cease communications had been made.

A District Court judge granted the defendant’s motion to dismiss, ruling that the statute of limitations started running from the date of the first violation and that later violations of the same type do not re-start the statute of limitations clock. So even though some of the challenged communications did occur within the one-year period before the plaintiffs filed their lawsuit, the judge ruled the entire complaint was time-barred.

But the Fourth Circuit of Appeals saw it differently. There is nothing in the FDCPA that “suggests” similar violations should be grouped together, the Appeals Court wrote, instead pointing out that the contrary is actually true — separate violations occur every time an improper communication, threat, or misrepresentation is made.

“Under the district court’s approach, so long as a debtor does not initiate suit within one year of the first violation, a debt collector would be permitted to violate the FDCPA with regard to that debt indefinitely and with impunity,” the Appeals Court wrote, noting it was joining the Seventh and Eighth Circuits in adopting this doctrine. “No matter how frequent or abusive such collection efforts might become, the debtor would be left entirely without a remedy simply because the debtor did not timely pursue the first violation. As the statutory text makes clear, Congress did not intend such a result.”

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