In a decision contrary to the holdings of two other circuit courts, the United States Court of Appeals for the Third Circuit recently affirmed a district court’s decision and held that a plaintiff’s claim under the Fair Debt Collection Practices Act (“FDCPA”) was time barred because he brought his action more than one year after the violation occurred, despite the fact that he brought it within one year of discovering it. See Rotkiske v. Klemm, 2018 WL 2209120 (3d Cir. May 15, 2018). In the case, defendant sued plaintiff over an unpaid credit card debt in 2009. Although plaintiff had changed addresses, defendant served someone at his former address who accepted service on plaintiff’s behalf, and defendant obtained a default judgment. Plaintiff discovered the judgment years later when applying for a mortgage and, within a year, filed an action claiming that defendant’s collection efforts violated the FDCPA. The district court dismissed the action, holding that the FDCPA’s one-year statute of limitations barred the claims. Plaintiff appealed, arguing that the FDCPA incorporates a discovery rule that delays the limitations period from running until plaintiff discovers or should have discovered the violation.
On appeal, the Third Circuit affirmed the lower court’s decision. Although it acknowledged that the Fourth and Ninth Circuits had applied a discovery rule to the FDCPA’s statute of limitations, it nonetheless held that “the Act says what it means and means what it says: the statute of limitations runs from ‘the date on which the violation occurs.’” Contra Lembach v. Bierman, 528 Fed. Appx. 297 (4th Cir. 2013) (per curiam); Mangum v. Action Collection Serv., Inc., 575 F.3d 935 (9th Cir. 2009). The Court also acknowledged previous decisions in which it applied a discovery rule to federal statutes, but held that the Supreme Court’s decision in TRW Inc. v. Andrews, 534 U.S. 19, 28 (2001) “counsels in favor of reconsidering our earlier practice of presuming that federal statutes of limitations include an implied discovery rule.” Finally, the Court held that its decision did not undermine the doctrine of equitable tolling in situations involving “fraudulent, misleading, or self-concealing” conduct, but that plaintiff failed to raise the tolling issue on appeal.