The U.S. Supreme Court recently ruled that an action under the FDCPA must be brought within one year from the date when the alleged violation occurred, not when such violation is discovered.
The petitioner failed to pay his credit card debt and the credit card company referred the debt to the respondent, who in March 2008, sued the petitioner to collect the outstanding debt. The petitioner no longer lived at the address where the respondent attempted service and an individual, who did not match the petitioner’s description, accepted service. The respondent later withdrew the suit, which it refiled in January 2009. The respondent attempted service at the same address and someone other than the petitioner accepted service. The respondent obtained a default judgment.
The petitioner claims that he was unaware of the 2009 debt collection suit until September 2014, when he was denied a mortgage loan because of the default judgment against him. In June 2015, the petitioner brought suit against the respondent under the FDCPA. In addition, the petitioner’s amended complaint alleged that he was entitled to equitable tolling because the respondent “purposely served process in a manner that ensured that he would not receive service.” The respondent moved to dismiss the suit as barred by 15 U. S. C. §1692k(d), the FDCPA’s statute of limitations.
The district court dismissed the action, holding that the Ninth Circuit’s “discovery rule” (presumption that statute of limitations period begins to run on the day the plaintiff knew or should have known about the FDCPA violation) did not apply to 15 U. S. C. §1692k(d). On appeal, the Third Circuit affirmed the district court’s decision but “expressly rejected the Ninth Circuit’s approach, stating that there is no default presumption that all federal limitation periods run from the date of discovery.”
Due to the conflict between the Courts of Appeals, the U.S. Supreme Court granted review on the applicability of the “discovery rule” to the FDCPA’s statute of limitations. According to the U.S. Supreme Court, the petitioner’s arguments “implicate two distinct concepts—the application of a general discovery rule as a principle of statutory interpretation and the application of a fraud-specific discovery rule as an equitable doctrine.” The U.S. Supreme Court rejected the first concept and ruled that, based on the plain meaning of 15 U. S. C. §1692k(d), the statute of limitations begins to run once the alleged FDCPA violation occurs. In addition, on the second concept, the U.S. Supreme Court concluded that the petitioner failed to preserve it before the Third Circuit and also failed to raise it in his petition for certiorari. The Court, therefore, held that the petitioner cannot rely on this equitable doctrine to excuse an otherwise untimely filing.