Source: http://www.insidearm.com/news/00044782-supreme-court-agrees-review-another-major/
Timestamp: 2019-04-25 22:10:25+00:00

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On February 25, the Supreme Court agreed to hear another major case under the Fair Debt Collection Practices Act. The case is an appeal of the Third Circuit’s decision in Rotkiske v. Klemm, 890 F.3d 422 (3d Cir. 2018), where that court held that the FDCPA’s one-year statute of limitations is not subject to enlargement by the “discovery rule.” Under the discovery rule, a court-made doctrine, the statute of limitations for certain claims does not begin to run until a plaintiff becomes aware of the injury giving rise to the claim. The Third Circuit’s Rotkiske decision is at odds with decisions in the Fourth and Ninth Circuits.
The FDCPA’s statute of limitations states that a lawsuit may be filed “within one year from the date on which the violation occurs.” 15 U.S.C. § 1692k(d).
In the Rotkiske case, plaintiff Kevin Rotkiske’s credit card debt was referred for collection to Klemm & Associates. Klemm sued on the debt in 2008 and attempted to serve Rotkiske at a prior address. There, an individual unknown to Rotkiske accepted service on his behalf. Klemm eventually withdrew its lawsuit after being unable to locate Rotkiske personally. In January 2009, Klemm filed a second lawsuit and, again, someone at Rotkiske’s former address accepted service on behalf of Rotkiske. This time, Klemm did not withdraw the suit and eventually obtained a default judgment. Rotkiske, according to his FDCPA complaint, only learned about the suit and the judgment when he applied for a mortgage loan in September 2014.
On June 29, 2015—within a year of learning about the default judgment against him, but many years after the judgment was obtained—Rotkiske filed his FDCPA claim alleging that Klemm improperly obtained a default judgment on a debt. In the district court, when confronted with Klemm’s argument that the claim was barred by the statute of limitations, Rotkiske argued the FDCPA is subject to the discovery rule, which “delays the beginning of a limitations period until the plaintiff knew of or should have known of his injury.” Rotkiske v. Klemm, No. 15-3638, 2016 WL 1021140, at *3 (E.D. Pa. Mar. 15, 2016). Under Rotkiske’s theory, the one-year limitations period did not begin to run until September 2014, making his lawsuit timely.
[The] one-year limitations period begins to run when a would-be defendant violates the FDCPA, not when a potential plaintiff discovers or should have discovered the violation.
In agreeing to review the case, the Supreme Court appears determined to resolve the existing split of authority among different courts and to bring uniformity to the application of the FDCPA’s limitations period. The high court has considered application of the “discovery rule” before, most notably in a 2001 decision involving the Fair Credit Reporting Act. In that case, TRW, Inc. v. Andrews, 534 U.S. 19, the court reversed a Ninth Circuit decision that broadly applied the discovery rule without examining the “text and structure” of the statute. The court instead held that the discovery rule, if it is to be invoked at all, must be supported by the overall statutory scheme and must not render Congress’s carefully chosen words superfluous or otherwise insignificant.
The decision to review the Third Circuit’s Rotkiske decision adds another FDCPA case to the high court’s docket. The court is currently considering whether the FDCPA applies to non-judicial foreclosures in Obduskey v. McCarthy & Holthus LLP. That case was argued on January 7 and a decision is expected before the court recesses for the summer in late June.
On the same day it granted review in the Rotkiske case, the Supreme Court denied a request to review the Second Circuit’s decision in Huebner v. Midland Credit Mgmt., Inc., 897 F.3d 42 (2d Cir. 2018). That “triple-whammy” request for review, as previously covered by InsideARM, sought clarity on a variety of FDCPA issues.
The Rotkiske case will very likely be among the first cases argued in the Supreme Court’s next term, beginning in October. The case is Rotkiske v. Klemm, No. 18-328.
Mark E. Rooney is the principal and founder of The Rooney Firm PLLC, a Washington, DC-based law firm representing debt collectors and other companies in litigation and compliance matters relating primarily to the FDCPA, TCPA, and FCRA. He is the co-chair of the American Bar Association’s FDCPA & TCPA litigation subcommittee and the publisher and editor of the website FDCPABulletin.com.

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