Deborah Lyons v. Michael & Associates
2016 U.S. App. LEXIS 10363
| 9th Cir. | 2016Background
- Lyons was sued in Monterey County on Dec. 7, 2011 by Michael & Associates to collect an American Express debt; she lived in San Diego County and did not sign the contract in Monterey.
- Lyons sued Michael & Associates in federal court on Jan. 3, 2013 under the FDCPA, alleging the collection suit was filed in the wrong venue in violation of 15 U.S.C. § 1692i.
- The FDCPA's statute of limitations requires actions be brought “within one year from the date on which the violation occurs.” 15 U.S.C. § 1692k(d).
- Michael & Associates moved to dismiss as time-barred, arguing the limitations period began on the date their collection complaint was filed (Dec. 7, 2011).
- Lyons argued the discovery rule tolled the limitations period and that the one-year period began when she was served with process in mid-January 2012, so her Jan. 3, 2013 federal suit was timely.
- The district court relied on Naas v. Stolman and dismissed; the Ninth Circuit reversed, applying Mangum and holding the discovery rule controls here.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does the FDCPA one-year limitations period begin for an allegedly improper-venue collection lawsuit? | Limitations begins when plaintiff discovers the lawsuit (service) — discovery rule applies. | Limitations begins on the filing date of the collection complaint. | The discovery rule applies; limitations begins when the plaintiff knows or should know of the violation (here, upon service). |
Key Cases Cited
- Mangum v. Action Collection Serv., Inc., 575 F.3d 935 (9th Cir. 2009) (applies federal discovery rule to FDCPA § 1692k(d))
- Naas v. Stolman, 130 F.3d 892 (9th Cir. 1997) (held the violation is the filing of the collection suit; did not consider discovery rule)
- Tourgeman v. Collins Fin. Servs., Inc., 755 F.3d 1109 (9th Cir. 2014) (applies discovery rule to FDCPA claims involving collection letters)
- TRW Inc. v. Andrews, 534 U.S. 19 (2001) (held discovery rule does not apply to Fair Credit Reporting Act; considered but distinguished)