Home > Uncategorized > The FCRA’s statute of limitations: an update (Part 1 of 3)

The FCRA’s statute of limitations: an update (Part 1 of 3)

November 6, 2015

A few years back, I wrote a post which stated that district courts in the Ninth Circuit were interpreting the FCRA’s “new” statute of limitations in a plaintiff-friendly way.

Since then, courts in other jurisdictions have interpreted the FCRA’s statute of limitations differently, which suggests that it is time for my prior post to be updated.  I’m going to do the update in three parts:  1) how the old FCRA statute of limitations worked; 2) how it was revised in 2003, and how these revisions led at least some courts to read the statute in a plaintiff-friendly way in 2009 and 2010; and 3) how decisions since then interpreted the “new” (amended in 2003) statute.

Part I:  How the old FCRA statute of limitations worked.

Prior to 2003, the FCRA’s statute of limitations provision at 15 U.S.C. Sec. 1681p stated that:

An action to enforce any liability created under [the Act] may be brought . . . within two years from the date on which the liability arises, except that where a defendant has materially and willfully misrepresented any information required under [the Act] to be disclosed to an individual and the information so misrepresented is material to the establishment of the defendant’s liability to that individual under [the Act], the action may be brought at any time within two years after discovery by the individual of the misrepresentation.

That version of the statute said that plaintiffs typically had to file an FCRA lawsuit “within two years from the date on which the liability arises.”  The Supreme Court addressed that version of the statute in TRW Inc. v. Andrews, 534 U.S. 19 (2001).

In Andrews, the plaintiff contended that Experian (then known as TRW) provided credit reports about her to four lenders; that Experian did this when it knew or should have known that an impostor was using her social security number, last name, and first initial to apply for credit from those lenders; and that Experian thus violated the FCRA’s anti-identity theft provision at Sec. 1681e(a).  Experian’s reports were created on four separate occasions (July 25, 1994; September 27, 1994; October 28, 1994; January 3, 1995); the plaintiff discovered this on May 31, 1995; and she filed suit on “October 21, 1996, almost 17 months after she discovered the Impostor’s fraudulent conduct and more than two years after TRW’s first two disclosures.”  Id. at 24-25.

The question presented was whether the FCRA’s two-year statute of limitations began to run on the date of each report (in which case her claims as to the first two reports were time-barred) or on the date that she discovered what had happened (in which case her claims were timely as to all four reports).

The Supreme Court took the case because the Ninth Circuit had answered the question one way, and the Third, Seventh, Tenth, and Eleventh Circuits had answered it another way.  Predictably, the Supreme Court found that the Ninth Circuit’s interpretation was wrong.

The Ninth Circuit “appl[ied] what it considered to be the ‘general federal rule . . . that a federal statute of limitations begins to run when a party knows or has reason to know that she was injured.'”  Id. at 26.  The Supreme Court disagreed that any such rule applied to the FCRA, because “The most natural reading of Sec. 1681p is that Congress implicitly excluded a general discovery rule by explicitly including a more limited one.”  Id. at 28.  Specifically:

[I]ncorporating a general discovery rule into Sec. 1681p would not merely supplement the explicit exception contrary to Congress’ apparent intent; it would in practical effect render that exception entirely superfluous in all but the most unusual circumstances. A consumer will generally not discover the tortious conduct alleged here — the improper disclosure of her credit history to a potential user — until she requests her file from a credit reporting agency. If the agency responds by concealing the offending disclosure, both a generally applicable discovery rule and the misrepresentation exception would operate to toll the statute of limitations until the concealment is revealed. Once triggered, the statute of limitations would run under either for two years from the discovery date. In this paradigmatic setting, then, the misrepresentation exception would have no work to do.

Id. at 29.

In summary, under the “old” or pre-2003 version of the FCRA’s statute of limitations, the two-year period for FCRA claims began to run on the date that a defendant engaged in some conduct that violated the FCRA.  The only exception to this was when a defendant “materially and willfully misrepresented” information that:  1) it was obligated to provide to plaintiff; and 2) would have put plaintiff on notice that the defendant had violated the FCRA.


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