Supreme Court Addresses Discovery Rule for FDCPA Statute of Limitations

The Supreme Court this morning decided Rotkiske v. Klemm, No. 18-328, holding that absent the application of an equitable doctrine, the FDCPA’s statute of limitations begins to run on the date on which the alleged FDCPA violation occurs, not the date on which the violation is discovered.

The question in Rotkiske was whether a discovery rule applies to the FDCPA’s statute of limitations, which provides that actions must be brought “within one year from the date on which the violation occurs,” 15 U.S.C. § 1692k(d). Stating that “the phrase ‘discovery rule’ has no generally accepted meaning,” the Court addressed two concepts—“the application of a general discovery rule as a principle of statutory interpretation and the application of a fraud-specific discovery rule as an equitable doctrine.”

With respect to the first concept, the Court held that there is no general discovery rule that applies to all FDCPA cases, refusing to read such a discovery rule into language it considered unambiguous. With respect to the second, the Court recognized that it has applied an equity-based discovery rule in fraud cases.  The Court stated, however, that the petitioner could not rely on that equitable doctrine because he had failed to preserve the issue in the court of appeals or raise it in his petition for certiorari. The Court therefore affirmed the court of appeals, which had held that the action was untimely.

Justice Sotomayor filed a concurrence, emphasizing that the Court has long recognized and applied an equitable, fraud-specific discovery rule, and that “[n]othing in today’s decision prevents parties from invoking that well-settled doctrine.” 

Justice Ginsburg dissented, disagreeing with the majority about whether the petitioner preserved an argument based on a fraud-based discovery rule and explaining that, in her view, his complaint fell comfortably within the doctrine.

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