Castro v. Collecto, Inc.
634 F.3d 779
5th Cir.2011Background
- Castro, a Texas resident, received collection letters from Collecto (d/b/a Collection Company of America) for a Sprint PCS debt.
- The letters were sent on behalf of U.S. Asset Management, Inc., asserting collection of a cellular debt that was delinquent for more than two but less than four years.
- The district court certified a Texas-address class for those who received similar letters during a specified period and held that Texas law governed the limitations period.
- The district court initially held § 415(a) two-year limitations applied to carriers’ charges and preempted state law, but later dismissed on that basis after reconsideration.
- Castro appealed, arguing Texas’s four-year limitations applied and that § 415(a) did not preempt state limitations for non-tariffed charges; the Fifth Circuit affirmed the dismissal on those grounds.
- The court’s ultimate holding: Texas’s four-year statute of limitations applies to the debts, and § 415(a) does not preempt state limitations for non-tariffed charges; no threat to sue on time-barred debts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Texas’s four-year limit governs the actions | Castro argues Texas four-year period applies | Defendants contend § 415(a) two-year limit applies | Texas four-year limit applies |
| Whether § 415(a) preempts state limitations | § 415(a) should preempt state limits for these debts | § 415(a) preemption is not clearly established for non-tariffed charges | § 415(a) does not preempt the Texas four-year limit |
| Whether the term “lawful charges” is ambiguous enough to preclude preemption | “Lawful charges” includes non-tariffed charges | “Lawful charges” likely refers to tariffed charges | Meaning of “lawful charges” is ambiguous; no preemption based on § 415(a) for non-tariffed charges |
Key Cases Cited
- Wyeth v. Levine, 555 U.S. 555 (U.S. 2009) (premption analysis and states’ police powers guidance)
- AT&T Co. v. Cent. Office Tel., Inc., 524 U.S. 214 (U.S. 1998) (filed-rate/tariff framework context)
- Boomer v. AT&T Corp., 309 F.3d 404 (7th Cir. 2002) (uniform rates/terms argument in preemption)