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U.S. Supreme Court Finds General Discovery Rule Inapplicable to the SOL for FDCPA Violations

Posted on: January 16th, 2020

By: Nicole L. Graham

In Klemm v. Rotkiske, No. 18-328, 589 U.S. ____ (2019), the United State Supreme Court unanimously agreed there is no blanket discovery rule that, as a matter of statutory interpretation, applies to all cases arising under the Fair Debt Collection Practices Act (“FDCPA”).  The majority held that the plain text of 15 U.S.C. §1692k(d) unambiguously states the date of the violation starts the clock on the one-year limitations period.  The Court declined Rotkiske’s request to read into the statute a provision that limitations period begins to run on the date on which the violation occurs or the date of discovery of such violation.  Justice Thomas, writing for the majority, found it clear from the face of the text that “[t]he FDCPA limitations period begins to run from the date the alleged FDCPA violation actually happened.”  Accordingly, the limitations period for an FDCPA claim arising from the filing of a collection action complaint begins to run from the date the action is filed and not from the date the debtor is served the complaint.  Similarly, the limitations period for an FDCPA claim based on a debt collection notice begins to run from the date of the notice and not from the date the notice is received.

The Court did, however, leave the door open to the possible application of an equitable “fraud-specific discovery rule.”  The Court declined to decide whether the text of 15 U.S.C. §1692k(d) permits the application of equitable doctrines because Rotkiske failed to preserve the issue before the Third Circuit and failed to raise the issue in his petition for certiorari.

Justice Sotomayor issued a concurring opinion to note that the Court’s decision does not prevent parties from invoking an equitable “fraud-specific discovery rule.”  Justice Ginsburg, the lone dissenter, felt Rotkiske preserved the equitable “fraud-specific discovery rule” argument in his petition for certiorari, and found the allegations of the complaint should suffice under the equitable “fraud-specific discovery rule” to permit adjudication of Rotkiske’s claim on the merits.

Because the question of the applicability of equitable exceptions to the FDCPA’s statute of limitations remains unresolved, it would not be surprising to see the issue before the Supreme Court again soon.

If you have any questions or would like more information, please contact Nicole Graham at [email protected].

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