3rd Circuit Holds FDCPA Statute of Limitations Not Subject to Discovery Rule

The en banc Third Circuit recently held that the statute of limitations for an FDCPA claim begins to run on the date that an injury under the Act occurs, and not on the date the aggrieved party knew or should have known of the injury, rejecting the “discovery rule” that some other circuits have adopted.

The appeal arose from a claim that the appellee’s collection efforts, which allegedly included multiple attempts to serve the appellant at an address where the appellant no longer lived, allowing a person at the address to accept service on behalf of the appellant without appellant’s knowledge, and obtaining a default judgment against the appellant for $1,500 (also unbeknownst to appellant), violated the FDCPA.

After oral argument before a three-judge panel, the full Third Circuit reheard the appeal en banc on its own initiative, and held, based on an analysis of the statutory text, that the FDCPA’s statute of limitations begins to run on a defendant’s last opportunity to comply with the statute, rather than upon the defendant’s discovery of a violation.  The court thus disagreed with both the Fourth and Ninth Circuits, which have held that the time to file an FDCPA claim begins to run not when the violation occurs, but when it is discovered.

The court emphasized in its opinion that its holding does nothing to undermine the doctrine of equitable tolling, which was not at issue in the appeal.

The Third Circuit’s en banc opinion can be found here.