U.S. Supreme Court Holds FDCPA Not Violated By Proof of Claim on Time-Barred Debt

In a 5-3 decision handed down on May 15, the Supreme Court of the United States held that the federal Fair Debt Collection Practices Act (FDCPA) is not violated when a debt collector files a proof of claim for a debt subject to the bar of an expired limitations period. The decision:

  • held that the filing of such a proof of claim is not false, misleading, deceptive or unconscionable in violation of sections 1692e or f of the FDCPA;
  • found that claims under the bankruptcy code need not be capable of being “enforceable” in a civil lawsuit; and,
  • does not preclude application of the FDCPA to bankruptcy litigation.

The opinion was authored by Justice Stephen Breyer, and joined by Chief Justice John Roberts and Justices Clarence Thomas, Anthony Kennedy and Samuel Alito.

The decision involved Midland Funding, LLC. The company sought review by the Supreme Court of an adverse decision it had received from the Eleventh Circuit Court of Appeals. A copy of the decision in Midland Funding, LLC v. Johnson is available here.

As outside counsel to RMA International, I led a team of attorneys who authored a friend of the court brief on behalf of RMA (formerly DBA International) in support of Midland. A copy of the brief is available here. The Supreme Court’s opinion cites to two earlier decisions that were obtained by me and discussed in RMA’s friend of the court brief. RMA’s briefing argued that claims need not be “enforceable” to allow creditors to file a proof of claim, as the Supreme Court held in its decision.

The Federal Trade Commission and the Consumer Financial Protection Bureau, in their joint friend of the court brief mentioned RMA, its certification program and its standards concerning collection of “time-barred” debt.

Many cases were stayed across the country (including cases before the Third and Fifth Circuit Courts of Appeals) awaiting today’s decision. This decision should resolve many of them.

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Donald Maurice provides counsel to the financial services industry, successfully litigating matters in the state and federal courts in individual and class actions. He has successfully argued before the Third, Fourth and Eighth Circuit U.S. Courts of Appeals, and has represented the financial services industry before several courts including as counsel for amicus curiae before the United States Supreme Court. He counsels clients in regulatory actions before the CFPB, and other federal and state regulators and in the development and testing of debt collection compliance systems. Don is peer-rated AV by Martindale-Hubbell, the worldwide guide to lawyers. In addition to being a frequent speaker and author on consumer financial services law, he serves as outside counsel to RMA International, on the governing Board of Regents of the American College of Consumer Financial Services Lawyers and on the Governing Committee of the Conference on Consumer Finance Law. From 2014 to 2017, he chaired the ABA's Bankruptcy and Debt Collection Subcommittee.