Case No. 18-328 | 3d Cir.
Preview by Boseul (Jenny) Jeong, Online Editor
In this case, the Court is asked to answer a statutory interpretation question. A recent Third Circuit decision created a circuit split on whether the “discovery rule” applies to toll the one-year statute of limitations under the Fair Debt Collection Practices Act (“FDCPA”). The petitioner is arguing that a “’discovery rule’—an equitable doctrine, which either delays the commencement of, or suspends the running of, the applicable statute of limitations—applies to the FDCPA.” Brief for Petitioner at 13, Rotkiske v. Klemm, No. 18-328 (U.S. filed May 13, 2019).
The respondent, a third-party debt collector, commenced an action in 2009 which resulted in a default judgement against the petitioner. The petitioner alleges that he was unaware of this judgement. According to him, he found out about the judgement in September 2014 and filed a timely lawsuit in June 2015. According to the text of the FDCPA, the lawsuit must be filed “within one year from the date on which the violation occurs.” 15 U.S.C. § 1692k(d) (2018). The petitioner argues the statute of limitations should run from the date of discovery (“discovery rule”) and the respondent argues that it should run from the date of occurrence (“occurrence rule”).
The petitioner argues that adopting the “discovery rule” is consistent with the purpose of the FDCPA which was enacted to “‘eliminate’ widespread misconduct by third-party debt collectors” and protect “blamelessly ignorant” debtors. Brief for Petitioner at 11, Rotkiske v. Klemm, No. 18-328 (U.S. filed May 13, 2019). Additionally, the Court had released decisions where it allowed the statute of limitations to run at the time of discovery for equity reasons around the time of the FDCPA enactment. The petitioner argues that this would have alerted the legislatures and they would have taken that into account in drafting the statute.
On the contrary, the respondent focuses on the plain text of the statute (which states the “occurrence rule”) and the purpose of the statute of limitations. He emphasized the societal benefits of timely debt collection. He additionally made a distinction between the “discovery rule” and “equitable tolling.” He noted that albeit their effects are the same, they are different concepts and with different standards. Furthermore, the petitioner only raised a question of the “discovery rule,” not equitable tolling, and thus waived the argument. The respondent also cast doubts on the petitioner’s alleged unawareness of the default judgement.
We shall see how the Court will interpret this statute.