United States: Missouri Federal Court Finds FDCPA's Limitations Period Is Jurisdictional And Rejects Credit Reporting Claims Against Debt Collector

On July 14, the U.S. District Court for the Eastern District of Missouri granted United Collection Bureau's motion for summary judgment in an individual action brought under the Fair Debt Collection Practices Act.  Troutman Sanders served as counsel for UCB in this matter.  See Martin v. United Collection Bureau, Inc., No. 4:14cv804-JAR, 2015 U.S. Dist. LEXIS 91017 (E.D. Mo. July 14, 2015).  In this mixed-identity case, Plaintiff Joseph Martin alleged that UCB had placed on his credit report a medical collection account belonging to another individual with the same first and last name, different middle name, and similar Social Security number.  The complaint lodged claims under FDCPA Section 1692e, 1692g, and 1692c(b) for alleged improper debt collection via reporting of the account on Martin's credit report.

The facts showed, however, that UCB never reported the account as applicable to Plaintiff, never attempted to collect any debt from Plaintiff, and never had any communications with Plaintiff except to issue an Automated Universal Dataform to remove the misapplied tradeline in 2013 at Plaintiff's request.  Moreover, UCB only reported information about the account to consumer reporting agencies once in 2009 and closed the account later that year.  Plaintiff only discovered the tradeline on his credit report when he allegedly applied for a bank loan in 2013.

The Court's summary judgment ruling rejected Plaintiff's arguments that his claims were not time-barred by the FDCPA's one-year statute of limitations as set forth in 15 U.S.C. § 1692k(d).  Following the Eighth Circuit's decision in Mattson v. U.S. West Communications, Inc., 967 F.2d 259 (8th Cir. 1992), the Court held that "all of the conduct that Plaintiff alleges violated the FDCPA, i.e., the initial reporting, failure to send a validation notice, and communication with the CRAs, occurred more than one year before he brought this action.  Thus Plaintiff's FDCPA claims are barred by the one-year statute of limitations."  Moreover, "[b]ecause the FDCPA's statute of limitations is deemed jurisdictional in the Eighth Circuit" via Mattson, the Court found that "the limitation period is not subject to a general discovery rule and the Court does not address Plaintiff's equitable tolling argument."

Yet, despite the untimely nature of Plaintiff's claims, the Court also held that his claims failed on the merits:

• 15 U.S.C. § 1692e – According to the Court, Plaintiff never established a necessary element of his claim – that he was the object of collection activity or that UCB engaged in an act or omission prohibited by the FDCPA – and so UCB had no liability under § 1692e.
• 15 U.S.C. § 1692c(b) – The court held that UCB's communication with the CRAs in 2013 to delete the tradeline fell under the exception embodied in this section for communications done at the consumer's request.  Thus, Plaintiff's claim failed as a matter of law.
• 15 U.S.C. § 1692g – The court held that credit reporting does not qualify as an initial communication with a consumer.  Therefore, Plaintiff's claim pursuant to the validation-notice provision of the FDCPA failed as a matter of law as well.

Ultimately, the Martin decision is a significant win for debt collectors on the discrete issue of jurisdictional tolling in the Eighth Circuit, as well as a vindication of certain industry defenses against mixed-file allegations involving collection via credit reporting.

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