Supreme Court to Settle Spat on Debt-Collection Lawsuits

WASHINGTON (CN) – The Supreme Court agreed Monday to decide if it is the date of a violation or the date of discovery that starts the clock to bring a federal complaint against a debt collector.

Kevin Rotkiske initiated the case here in September 2015, about nine months after his mortgage application revealed that there had been a default judgment against Rotkiske in place for 10-year-old credit card debt.

Debt collector Klemm & Associates first sued Rotkiske for payment in March 2008 but withdrew the suit when it was unable to locate him and tried again in January 2009. Though it attempted service at an address where Rotkiske had not lived for years — the same address where it could not find Rotkiske in 2008 — this time somebody at that residence accepted service on Rotkiske’s behalf, and Klemm obtained a $1,500 default judgment. 

When Rotkiske sued in the Eastern District of Pennsylvania for violations of the Fair Debt Collection Practices Act, a federal judge dismissed the suit under the statute of limitations.

The court found that the one-year statute of limitations for Rotkiske to sue began not when Rotkiske discovered the violation but when Klemm had its last opportunity to comply with the law.

The Third Circuit considered the case en banc in 2018 and sided unanimously with Klemm, prompting Rotkiske to petition for a writ of certiorari.

Represented by Matthew Weisberg of Morton, Pennsylvania, Rotkiske notes that the ruling against him contravened the findings of the Fourth and Ninth Circuits about what triggers the discovery rule.

Per its custom, the Supreme Court did not issue any statement in taking up the case today. Rotkiske’s is the only case granted cert this morning in an order list with dozens of denied cases.

Klemm is represented by Jones Day in Washington and by the Louisville, Kentucky, firm Fenton & McGarvey.

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