We noted earlier the Supreme Court’s review of the Third Circuit’s decision in Rotkiske v. Klemm regarding the statute of limitations for claims under the Fair Debt Collection Practices Act (FDCPA).
Again, this was a case where Kevin Rotkiske failed to pay some $1,200 in credit card debt. His lender referred the debt to Klemm & Associates law firm for collection. When Klemm filed suit to collect, Rotkiske was not personally served, though someone at his former address accepted service. Klemm obtained a default judgment even though Rotkiske was actually unaware of the suit. Some five years later, Rotkiske was denied a mortgage application because of the default judgment. This was the first time he became aware of a potential FDCPA claim. But his claim was well-beyond the FDCPA’s one-year limitations period.
The question became whether the one-year limitations period should begin to run from the time the claimant learns of the violation as opposed to the date of the violation itself. Rotkiske lost at the trial court and appealed. The Third Circuit affirmed, holding that the discovery rule does not apply to toll the FDCPA’s one-year statute of limitations. Notably, the Fourth and Ninth Circuits have held the discovery rule does indeed apply to the FDCPA limitations period, starting the one-year clock when the plaintiff learns of the violation.
Justice Clarence Thomas, writing for a majority, affirmed the Third Circuit (disagreeing with the Fourth and Ninth). Beginning at the language of the FDCPA, Justice Thomas wrote that the statute “unambiguously sets the date of the violation as the event that starts the one-year limitations period.” See 15 U.S.C. § 1692k(d). Thomas cited Justice Scalia, who in 2001 said that the expansive approach to the latent injury or “discovery rule” is a “bad wine of recent vintage.” Every justice save for Justice Ginsburg agreed, and would not read a discovery rule into § 1692k(d), which is not in the text. The opinion leaves open the possibility of an FDCPA claimant invoking an equitable tolling doctrine, which did not apply in Mr. Rotkiske’s case.
This opinion is likely to generate more creative pleading by claimants who are attempting to have the one-year limitations period tolled.
Authored by: John H. Dollarhide