Certain Litigation Acts Trigger their own one-year statute of limitations under the FDCPA As its name suggests, the Fair Debt Collection Practices

Certain Litigation Acts Trigger their own one-year statute of limitations under the FDCPA As its name suggests, the Fair Debt Collection Practices

Act seeks to

protect consumers by prohibiting abusive debt collection practices. Among the tools that the FDCPA provides to further this goal are private actions based on violations to the act.

Under the FDCPA there is no “discovery rule”, which means that (absent equitable tolling or other equitable doctrine), the statute of limitations of such actions begins to run on the date on which the alleged FDCPA violation occurs, not the date on which the violation is discovered.

Following other circuits, the U.S. Court of Appeals for the Ninth Circuit recently clarified that each FDCPA violation triggers its own one-year statute of limitations.

In the context of debt collection suits, the Ninth Circuit held that certain discrete litigation acts may constitute independent violations of the FDCPA, which trigger their own one-year statute of limitations.

To determine whether a litigation act constitutes an independent violation of the FDCPA and thus has its own statute of limitations, the court of appeals announced that it will consider (1) whether the act was the debt collector’s last opportunity to comply with the statute and (2) whether the date of the violation is easily ascertainable.

In this case, the district court had dismissed the suit as untimely because more than one-year passed between the date that the debt collection suit was served on the consumer and the date in which the consumer filed the FDCPA actions.

The Ninth Circuit reversed. It concluded that mid-litigation acts could trigger independent violations to the FDCPA, and thus their own one-year statute of limitations. Specifically, it concluded that the allegation related to the filing of an affidavit that attempted to show that the creditor owned the debts in questions meant that the creditor did more than “reaffirm” the original complaint.

Instead, the affidavit presented a new basis—not included in the complaint—to show that the creditor owned the debts. Such discrete event was an independent violation to the FDCPA because it created a “last opportunity to comply” with the act and its filing date was also easily ascertainable.

The court also held that when service occurs before filing (as it did in this case), filing constitutes an independent violation to the FDCPA. On the other hand, the court affirmed the dismissal of the consumer’s actions based on violations to the discharge injunction, finding that there are no independent causes of action, under the FDCPA or otherwise, based on violations to the discharge injunction that can be pursued outside of the bankruptcy court. Instead, the debtor must seek relief for a violation to the discharge injunction in the bankruptcy court through a contempt proceeding.