Yesterday, the Ninth Circuit Court of Appeals decided a dispute over the statute of limitations defense under the Fair Debt Collection Practices Act (FDCPA).
Read the full opinion in Lyons v Michael & Associates.
The facts of the case were straightforward: in 2011 a debt collector sued a consumer in a wrong judicial district, in violation of the FDCPA. In 2013, the consumer filed an FDCPA complaint against the collector. The FDCPA complaint was filed more than a year after the collector filed its suit, but less than a year after the consumer was served with the suit.
FDCPA Statute of Limitations
At trial, the collector raised the statute of limitations defense. The statute of limitations generally requires consumers to file FDCPA complaints against collectors within a year after the law was violated.
On appeal, the Ninth Circuit Court of Appeals held that the discovery rule applies to the FDCPA statute of limitations defense.
The Discovery Rule
Under the discovery rule, the statute of limitations does not begin to run until a consumer knows or has reason to know that a violation occurred. Because the consumer was first served with the collector’s suit within a year before she filed her FDCPA complaint, the collector’s statute of limitations defense failed.