Rotkiske v. Klemm

Whether the “discovery rule” applies to toll the one (1) year statute of limitations under the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692, et seq., as the Fourth and Ninth Circuits have held but the Third Circuit (sua sponte en banc) has held contrarily.

Petitioner Kevin Rotkiske’s credit card debt was referred to Respondent, Klemm & Associates, et al. (“Klemm”), by his bank for collection. Klemm initiated a suit in 2008 attempting service at an incorrect address. Unable to locate him, Klemm withdrew its suit. It re-filed the suit in 2009 attempting service at the same address. An unrelated, incorrect addressee accepted service on behalf of and unbeknownst to Petitioner, who found out about the judgment when he applied for a mortgage in 2014. Petitioner instituted the action below claiming that the judgment violated the discovery rule which says that the limitations period does not begin until the plaintiff knew or should have known of his injury. Respondents moved to dismiss claiming that the suit violated the one-year statute of limitations for FDCPA violations. The District Court found in favor of Respondent, holding that the statutory language is sufficiently clear that the limitations period runs from the Defendant’s last opportunity to comply with the statute, not upon Petitioner’s discovery of the violation. The Third Circuit, in conflict with the Fourth and Ninth Circuits, found that the statutory language was clear and unambiguous; the statute of limitations runs from the date of the violation. The Supreme Court granted certiorari to decide whether the “discovery rule” applies to toll the one (1) year statute of limitations under the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692, et seq., as the Fourth and Ninth Circuits have held, or whether the Third Circuit contray approach is appropriate. Petitioner argues that the discovery rule does apply to violations of the FDCPA. Petitioner cites TRW, Inc., v. Andrews, 534 U.S. 19 (2001), where the Supreme Court held that the FCRA’s embedded statute of limitations precluded application of the discovery rule, arguing that since the FDCPA has no embedded statute of limitations the discovery rule may be applied.