On May 15, 2018, the Third Circuit broke away from the Fourth and Ninth Circuits on the question of when the Fair Debt Collection Practices Act (FDCPA) statute of limitations begins to run. In Rotkiske v. Klemm, No. 16-1668, 2018 WL 2209120 (3d Cir. 2018), the Third Circuit decided it begins to run on the date of the defendant’s violation, not the date that the plaintiff discovers - or should have discovered - the violation. 

Read the decision here

Factual and Procedural Background 

The decision does a very good job of clearly and efficiently describing what happened in this case: 

The relevant facts are undisputed. Appellant Kevin Rotkiske accumulated credit card debt between 2003 and 2005, which his bank referred to Klemm & Associates (Klemm) for collection. Klemm sued for payment in March 2008 and attempted service at an address where Rotkiske no longer lived, but eventually withdrew its suit when it was unable to locate him. Klemm gave it another shot, this time in January 2009, refiling/attempting service at the same address they had tried before. Unbeknownst to Rotkiske, somebody at that residence accepted service on his behalf, and Klemm obtained a default judgment for around $1,500. Rotkiske discovered the judgment when he applied for a mortgage in September 2014. 

Rotiske filed suit against Klemm, alleging that Klemm’s actions violated the FDCPA. Klemm moved to dismiss based on the grounds that the statute of limitations for the FDCPA claim has expired. The district court agreed with Klemm. Rotiske appealed. A panel of Third Circuit judges affirmed the distrit court’s opinion, and the court sua sponte (on its own accord) ordered an en banc (by the full court) rehearing of the matter. 

The Decision 

The ultimate issue before the Third Circuit was whether the FDCPA statute of limitations began running when the violation occurred or when the plaintiff discovered or should have discovered the violation. The Third Circuit considered this a matter of statutory interpretation.  

The court discussed the two prevailing theories on the trigger point for the statute of limitations: the occurrence rule and the discovery rule. The occurrence rule dictates that the statute of limitations begins to run on the date that the injury actually occurred. The discovery rule, on the other hand, takes into consideration that a plaintiff, despite due diligence, may not know a violation occurred until much later. For this reason, the discovery rule begins the running of the statute of limitations on the date that the plaintiff discovered or should have discovered the violation. 

It is in the legislature’s control whether to include a trigger for the start of the statute of limitations. General principles of statutory interpretation require that the courts first look to the plain meaning of the statute. Turning to section 1692k (d) of the FDCPA, the court found that Congress very clearly intended the occurrence rule to dictate the statute of limitations due to the very clear language used (“[a]n action to enforce any liability created by this subchapter may be brought in any appropriate United States district court ... within one year from the date on which the violation occurs.” (Emphasis added.)). 

Rotiske attempted to argue that the discovery rule should apply none the less, but this was to no avail. The court cited the U.S. Supreme Court’s reasoning in TRW Inc. v. Andrews, 534 U.S. 19, 28, 122 S.Ct. 441, 151 L.Ed.2d 339 (2001), where the Court found that Congress may implicitly provide that the discovery rule does not apply where the legislature spells out a more restrictive rule. The Third Circuit found this to be the case with the FDCPA.

The Third Circuit referenced the opposite findings in the Fourth and Ninth Circuits, but found those two Circuits to be in the wrong. The court noted that the Fourth Circuit did not look to the actual text of the statute when making its interpretation and that the Ninth Circuit took the TRW ruling as “food for thought” (despite TRW being a ruling from the highest court in the United States). 

The court likewise dismisses Rotiske’s argument that a prior Third Circuit case, Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380 (3d Cir. 1994), found that in general the discovery rule applied in a Title VII case despite the statute saying otherwise. The Third Circuit recognized that its ruling in Oshiver cannot be reconciled with the U.S. Supreme Court’s more recent decision in TRW and thus found that Oshiver does not apply. 

Ultimately, the Third Circuit en banc affirmed the decision and found that the FDCPA follows the occurrence rule. 


With a circuit split on the issue, this may be a case ripe for review by the U.S. Supreme Court. Whether or not the Supreme Court would hear the case is a different story, as first a petition for writ of certiorari (a request to the Supreme Court to hear the case) would need to be filed and then the Supreme Court would need to accept the case, which rarely happens.  

Unless that happens, debt collectors who collect nationwide will need to be aware of the circuit split when analyzing their legal risks. 

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