Rotkiske v. Klemm, 589 U.S. (2019)
In a recent decision, the US Supreme Court ruled that a consumer claimant under the federal Fair Debt Collection Practices Act (“FDCPA”) has one year from the alleged violation to file suit. The one-year statute of limitations begins at the time of the alleged wrongful act, even if the consumer is unaware of the purported violation. The court did, however leave the door open for a consumer to bring suit beyond one year if the debt collector fraudulently conceals its actions.
In Rotkiske, a collection firm filed suit against a man who failed to pay his credit card debt. The debt collector attempted to serve the debtor with a copy of the complaint at his former residence. Although the debt collector had reason to believe that the debtor no longer lived at that residence, the debt collector nevertheless caused its process server to serve the current resident. When the debtor failed to respond to the complaint, the collection firm obtained default judgment. Six years later, the debtor learned of the judgment, and he filed suit under the Fair Debt Collection Practices Act. The debt collector successfully moved for dismissal of the lawsuit based on the statute of limitations.
Supreme Court Decision
The court rejected an expansion of the period of time by which a victim of unlawful debt collection practices must file suit. Section 1692k(d) states that a lawsuit “may be brought . . . within one year from the date on which the violation occurs.” The debtor argued that the court should interpret the statute to give a victim one year from the time that he or she learned of the wrongful act to commence litigation. Since Congress enacted statutory limitation periods that begin to run at the time of the wrongful act’s discovery but failed to include such language in the Fair Debt Collection Practices Act, the court refused to create an exception that Congress itself elected not to include.
The ruling is a victory for debt collectors. By drawing a clear line, the decision will help debt collectors better measure their exposure to claims under the FDCPA. The decision sets a definite and measurable time frame for consumers to bring claims under the FDCPA.