Supreme Court to Resolve Split in Fair Debt Collection Practices Act Statute of Limitations Issue

The United States Supreme Court recently granted certiorari in a Third Circuit Court of Appeals decision to resolve the split in the circuits regarding an important statutory interpretation of the Fair Debt Collection Practices Act (FDCPA). The question is whether the statute of limitations in a FDCPA case starts when the alleged violation occurred (known as the “occurrence rule”) or when the consumer discovers the alleged violation (known as the “discovery rule”).

The Ninth Circuit held that the one-year limitations period in 15 U.S.C.S. § 1692k(d), part of the FDCPA, began to run when the would-be defendant violated the FDCPA, not when a debtor discovered or should have discovered the violation because the text of the statute stated that it ran from the date the violation occurred. That court affirmed the district court’s judgment.

However, Judge Thomas Hardiman wrote in his Third Circuit opinion of Rotkiske v. Klemm that the appeal required the Court to determine when the statute of limitations begins to run under the Fair Debt Collection Practices Act (FDCPA), and that the Act states that “[a]n action to enforce any liability created by this subchapter may be brought in any appropriate United States district court . . . within one year from the date on which the violation occurs.” Judge Hardiman noted that the United States Courts of Appeals for the Fourth and Ninth Circuits have held that the time begins to run not when the violation occurs, but when it is discovered. However, the Third Circuit disagreed, finding that the FDCPA, in its view, “says what it means and means what it says”: the statute of limitations runs from “the date on which the violation occurs.”