Holding: Statute of limitations begins to run when the alleged FDCPA violation occurs, not when the violation is discovered.

Rotkiske v. Klemm, 18-328 (US Supreme Court, Dec. 10, 2019) The Fair Debt Collection Practices Act (FDCPA) authorizes private civil actions against debt collectors who engage in certain prohibited practices. An FDCPA action must be brought “within one year from the date on which the violation occurs.” 15 U. S. C. §1692k(d). Respondent Klemm & Associates (Klemm) sued petitioner Rotkiske to collect an unpaid debt and attempted service at an address where Rotkiske no longer lived. An individual other than Rotkiske accepted service. Rotkiske failed to respond to the summons, and Klemm obtained a default judgment in 2009. Rotkiske claims that he first learned of this judgment in 2014 when his mortgage application was denied. He then filed suit against Klemm, alleging that Klemm violated the FDCPA by contacting him without lawful ability to collect. Klemm moved to dismiss the action as barred by the FDCPA’s one-year statute of limitations. As relevant here, Rotkiske argued for the application of a “discovery rule” to delay the beginning of the limitations period until the date that he knew or should have known of the alleged FDCPA violation. Relying on the statute’s plain language, the District Court rejected Rotkiske’s approach and dismissed the action. The Third Circuit affirmed.

Held: Absent the application of an equitable doctrine, §1692k(d)’s statute of limitations begins to run when the alleged FDCPA violation occurs, not when the violation is discovered.

statute of limitations


bankruptcyFor decades collection companies (and some creditors) have ignored the law because they knew no one was watching.  If their bad acts were discovered, they merely close the door (perhaps pay a large fine, but far less than what they earned) and start a new business with the same immoral attitude about collecting debts.  Then Consumer Financial Protection Bureau (www.CFPB.gov) was established.  Unfortunately, the Consumer Financial Protection Bureau was gutted by Mr. Trump, but I am certain that under the next administration the organization will return to its original goal of protecting consumers.
This case shows the tide is somewhat changing and we can only hope that momentum continues.

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Diane L. Drain

Diane L. Drain, bankruptcy attorney, retired law professor, mentor and community spokesperson.

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