When Does the FDCPA Statute of Limitations Begin to Run? The Circuit Courts Now Disagree.

Rotkiske v. Klemm, 890 F.3d 422 (3d Cir. 2018).  The Fair Debt Collection Practices Act, 15 U.S.C. §1692 et seq. (“FDCPA”), states that an action to enforce liability thereunder may be brought “within one year from the date on which the violation occurs.”  Today, in a unanimous en banc opinion, the Third Circuit, speaking through Judge Hardiman, ruled that that language means what it says, and that the statute of limitations runs from “the date on which the violation occurs.”  In so ruling, the court disagreed with decisions in the Fourth and Ninth Circuits that ruled that the statute begins to run “not when the violation occurs, but when it is discovered.”

The case came to the Third Circuit after the District Court granted a defense motion to dismiss plaintiff’s claim as untimely.  Plaintiff contended that the FDCPA should be read to require a discovery rule, which would have saved the day for plaintiff.  The District Court disagreed, and the Third Circuit affirmed, noting that “statutory interpretation begins with the text,” and that the language of the FDCPA “spoke clearly.”

On appeal, plaintiff argued that the FDCPA was silent about a discovery rule, a contention that Judge Hardiman tersely rejected.  “Congress’s explicit choice of an occurrence rule implicitly excludes a discovery rule.”

Plaintiff also contended that declining to apply a discovery rule would leave consumers without redress for fraudulent or other concealed practices.  Judge Hardiman disagreed, noting that most FDCPA claims involve such things as repetitive telephone calls or mail, of which consumers are well aware.  And to the extent that other improper practices might be concealed, equitable tolling remains available.

The panel declined to follow the Fourth and Ninth Circuit cases because those decisions had not “analyzed the ‘violation occurs’ language of the FDCPA.”  Finally, a prior decision of the Third Circuit, under a different statute, was unpersuasive.  That decision, and others like it, followed a rule of implying a discovery rule absent “a contrary directive from Congress.”  But Judge Hardiman ruled that after TRW Inc. v. Andrews, 534 U.S. 19 (2001), it is no longer appropriate to presume the existence of a discovery rule.  Instead, “we must parse each limitations period using ordinary principles of statutory analysis– beginning with the statutory text and then proceeding to consider its structure and context.”  Here, because the FDCPA “plainly incorporates an occurrence rule,” that ended the matter.

En banc consideration is rare in the Third Circuit.  But even more rare is what happened here.  A panel heard oral argument, but before it could issue a ruling, the full court ordered, sua sponte, rehearing en banc.  The case was then reargued, resulting in today’s decision.