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A Summary of FDCPA Cases Pending at the Supreme Court

Normally, the lower courts see all the action when it comes to the Fair Debt Collection Practices Act. But lately the Supreme Court has been the center of attention. Here’s a rundown of recent activity and pending cases.

Obduskey v. McCarthy & Holthus LLP, No. 17-1307.  Decision pending. Issue:

Whether the Fair Debt Collection Practices Act applies to non-judicial foreclosure proceedings.

After attending oral argument in this case I wrote extensively about the issues and competing views for the Mortgage Bankers Association’s Insights publication.  At bottom, the issue is whether the FDCPA applies to non-judicial foreclosure efforts, which seek to enforce a security instrument without collecting money.  The case is fully briefed, was argued on January 7, and the court is expected to issue its decision some time before adjourning around late June. 

Rotkiske v. Klemm, No. 18-328. Petition pending. Issue:

Whether the “discovery rule” applies to toll the one-year statute of limitations under the FDCPA, as the Fourth and Ninth Circuits have held but the Third Circuit has held contrarily.

This is an appeal of the Third Circuit’s en banc decision in Rotkiske v. Klemm, 890 F.3d 422 (3d Cir. 2018), holding that the FDCPA’s one-year statute of limitations is not subject to enlargement by the “discovery rule.” The discovery rule, a court-made doctrine, states that the statute of limitations for certain claims does not begin to run until a plaintiff becomes aware of the injury supporting a cause of action.

The petition has been briefed and the matter was distributed for consideration at the justices’ February 15 conference, without a decision, then recirculated for the upcoming February 22 conference.

Maxwell & Morgan, P.C. v. McNair, No. 18-729.   Petition pending. The issue presented in this case from the Ninth Circuit is: 

Whether the FDCPA applies to foreclosure activity that does not seek payment of money from a  consumer.

Similar to the Obduskey case, this case centers on application of the FDCPA in the foreclosure context.  Unlike Obduskey, at issue here are judicial foreclosures—albeit judicial foreclosures where the creditor only seeks to enforce the security interest and does not seek a deficiency judgment.  In this sense, such a judicial foreclosure is akin to a non-judicial foreclosure (where the collection of any deficiency, if allowed at all, must be addressed through an entirely separate process). 

The petition was filed on December 5, and briefing on the petition is complete as of February 15. The relevant briefs are available on the SCOTUSBlog case page.     

Huebner v. Midland Credit Mgmt., No. 18-991.  Petition pending. This omnibus petition seeks to address a number of different FDCPA issues arising out of the Second Circuit’s decision in Huebner v. Midland Credit Mgmt., Inc., 897 F.3d 42 (2d Cir. 2018).  The petition seeks clarity on the process used by consumers to dispute a debt, including the effect of different forms (oral versus written) of consumer notice of a dispute; whether debt collectors must treat a debt as disputed if they “know or should know” that a consumer disputes a debt; and whether a consumer must provide grounds for disputing a debt.   

Petitioners also seek to reconcile the “unsophisticated consumer” and “least sophisticated consumer” tests employed in different federal circuits, and to determine whether the applicable test is a question of law or fact. 

The petition was filed on December 17; on February 4, Midland waived its right to respond.  The petition is scheduled for distribution to the Court’s members for consideration at their February 22 conference.

Mark RooneyFDCPA