The period within which a party may file a claim alleging a law violation is called a statute of limitations period. The statute of limitations on Fair Debt Collections Practices Act (FDCPA) claims has long been understood to be one year from the date on which the violation occurs. See, 15 U.S.C. § 1692k(d).  In contrast, some statutes of limitation begin when the injured person actually discovers the law violation.

In the matter of Rotkiske v. Klemm, 890 F.3d 422 (3d Cir. May 15, 2018) plaintiff Rotkiske argued the statute of limitations on his FDCPA claim should have started on the day he discovered the FDCPA violation. In contrast, the defendant debt collector argued the date of occurrence is the date which starts the running of the statute of limitations on FDCPA claims. Both the district court and the Third Circuit Court of appeals ruled in favor of the debt collection firm and held the discovery rule does not apply to the one-year limitations period under the FDCPA.

Refusing to accept the Third Circuit’s decision, Rotkiske appealed the matter to the U.S. Supreme Court. The case is now pending review. On July 18, 2019, RMAI filed an Amicus Curia brief explaining a court cannot choose between the two methods when calculating the statute of limitations on FDCPA claims. Congress, when enacting the FDCPA, made this choice for the courts by specifically stating the one-year statute of limitations begins on the date the alleged violation occurred. On this same day, the Consumer Financial Protection Bureau also filed an Amicus Curia brief on this matter. Like RMAI, the government’s amicus brief argues the “discovery rule” does not apply and that the one-year limitations period begins to run when the violation occurs. See the full text of the CFPB’s brief.

This case is extremely significant. If the Supreme Court does not rule in favor of the defendant, the flood gates of litigation will open on FDCPA claims based on the discovery rule. The decision would have a material adverse impact on RMAI members by breathing new life into old, stale claims and the cost of doing business along with the cost of defense will most certainly sky rocket.

This Alert is intended for Members of RMAI and is for informational purposes only; it is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.