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Recently, the Supreme Court of the United States granted certiorari in the matter of Rotkiske v. Klemm. At issue is whether the discovery rule tolls the statute of limitations under the Fair Debt Collections Practices Act (FDCPA). The controversy is centered on the FDCPA statutory text, “the date on which the violation occurs,” 15 U.S.C. § 1692k(d), and whether such language governs in a dispute or the discovery rule tolls the statute of limitations. The discovery rule holds that the statute of limitations begins when the plaintiff knew or should have known of the facts giving rise to his legal claim. In granting certiorari, the Supreme Court weighs in on a split between the Third Circuit and the Fourth and Ninth Circuits.
Background
The plaintiff-petitioner’s claim arises from a debt collection action that dates back to 2008. The defendant, a third-party debt collector, initially filed suit but failed to properly serve the plaintiff because the defendant attempted service at an address where the plaintiff no longer resided. The defendant later withdrew the suit and refiled in 2009. Unbeknownst to the plaintiff, however, someone who resided at his former address accepted service of the second complaint filed in 2009. After failing to appear to defend himself, the debt collector later obtained a default judgment against the plaintiff. A lien was placed on the plaintiff’s credit report. Years later, upon discovering the lien, the plaintiff sued in the Eastern District of Pennsylvania, alleging that the default judgment was obtained in violation of the FDCPA. The defendant filed a motion to dismiss. In his response, the plaintiff argued that the discovery rule should have tolled the statute of limitations, or, alternatively, that the court should equitably toll the limitations period. The district court eventually dismissed the suit finding that the statutory language controlled, i.e., the limitations period starts “from the date on which the violation occurs.” 15 U.S.C. § 1692k(d). On appeal, the plaintiff challenged only the district court’s holding on the discovery rule issue. After a panel hearing but before issuing an opinion, the Third Circuit ordered an en banc hearing.
A Circuit Split: Third Circuit v. Fourth and Ninth Circuits
The Third Circuit’s en banc opinion affirmed the district court’s holding that the FDCPA’s statutory plain language controlled. Judge Hardiman, writing for the court, relied on TRW Inc. v. Andrews, where the Supreme Court explained that courts must begin statutory analyses by analyzing the text itself and then consider context and structure. See 534 U.S. 19, 28 (2001). Judge Hardiman further noted that the Court in TRW recognized that Congress may “implicitly” exclude a broader discovery rule by “explicitly” including a narrower one. 534 U.S. at 28. Stated differently, the narrow plain language Congress included in the FDCPA (“the date on which the violation occurs”) controlled because it clearly foreclosed the possibility of a broader general...
