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

January 8, 2016 1 comment

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 doing 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 3:  How recent decisions have interpreted the FCRA’s “new” (amended in 2003) statute of limitations

In parts one and two of this exciting three-part series, I tried to establish that: 1) in 2001, the Supreme Court ruled that the FCRA’s then-current statute of limitations began to run when a defendant violated the FCRA and not when the plaintiff discovered the violation; and 2a) Congress appeared to “un-do” that ruling by making amendments in 2003, which 2b) meant, according to several courts, that it started to run not when the plaintiff knew that the defendant was doing something the plaintiff didn’t like, but when the plaintiff knew that the defendant was violating the FCRA.

Things began to change in 2010 and kept going from there.  Let me explain.

First, in 2010 the Supreme Court decided a case that involved the statute of limitations for securities fraud.  Merck & Co. v. Reynolds, 559 U.S. 633 (2010).  The text of that statute of limitations – 28 U.S.C. Sec. 16858(b) – is identical to the FCRA’s statute of limitations at 15 U.S.C. Sec. 1681p.  The Supreme Court held that “‘discovery’ as used in this statute encompasses not only those facts the plaintiff actually knew, but also those facts a reasonably diligent plaintiff would have known. And we evaluate Merck’s claims accordingly.”  Id. at 648.

Next, in 2014 the Fifth Circuit applied the Supreme Court’s reasoning in Merck to an FCRA case.  Mack v. Equable Ascent Fin., L.L.C., 748 F.3d 663 (5th Cir. 2014).  In Mack, the plaintiff claimed that the FCRA’s statute of limitations did not begin to run until he had “become aware of the actual violation of the statutory provision,” which only happened when “he engaged in substantial study and research” of the [FCRA], several months after the plaintiff knew that the defendant had obtained a credit report about him, allegedly without his consent.  Id, at 664.  The Fifth Circuit rejected that position and cited Merck for the proposition that “a limitations period begins to run when a claimant discovers the facts that give rise to a claim and not when a claimant discovers that those facts constitute a legal violation.”  Id. at 665-666.

Finally, a number of courts have followed the Fifth Circuit’s decision in Mack.  See, e.g.Rocheleau v. Elder Living Constr., No. 15-1588, 2016 U.S. App. LEXIS 2732, **6-8 (6th Cir. Feb. 18, 2016); Wirt v. Bon-Ton Stores, Inc., No. 1:14-cv-1755, 2015 U.S. Dist. LEXIS 135694, *13 (M.D. Pa. Oct. 1, 2015); Moore v. Rite Aid Hdqtrs Corp., 2015 U.S. Dist. LEXIS 69747, *25 (E.D. Pa. May 29, 2015).

FCRA plaintiffs, and their counsel, may find it hard to square the Supreme Court’s decision in Merck (that the FCRA’s limitations provision begins to run when the plaintiff discovers facts, not law) with the recent history of the FCRA’s limitations period (a prior Supreme Court decision held the same thing, and Congress thereafter amended the FCRA, perhaps to change it).  However, unless and until the Supreme Court reverses or changes the decision in Merck (which had no dissents), its holding appears to be binding.


 

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