Ellis Law Group


Ninth Circuit Addresses Discovery Rule
For FDCPA Claims

(The court addressed whether the statute of limitations begins to run upon discovery of an alleged violation or when the alleged violation was purportedly committed.)

The Ninth Circuit appears to be in overdrive this year with respect to published Federal Debt Collection Practices Act (FDCPA) decisions.  Over the last 25 years, the Ninth Circuit has averaged less than one published opinion regarding the FDCPA per year.  Indeed, the Ninth Circuit has not issued a published FDCPA opinion in 10 of the last 25 years.  But this year, the Ninth Circuit has issued four published FDCPA opinions, and there are still months to go until the end of 2009!  This increase seems to be tracking the increase in FDCPA cases being filed in California and around the nation.

The Ninth Circuit issued its most recent FDCPA decision, Mangum v. Action Collection Service, Inc., 1 on August 4, 2009. 

This case is interesting in several respects.  Mangum does not arise from the “normal” claims against collection agencies or collection attorneys regarding collection activity.  The case revolves around Ms. Mangum’s employer, the police department, conducting an investigation as to whether Ms. Mangum had violated department policies relating to moral conduct and professional image by writing bad checks.  The Chief of Police initiated this investigation when he noticed Ms. Mangum’s name appeared on a retail store’s list containing the names of those from whom checks would no longer be accepted.

The police investigation led to a collection agency, and upon request, the agency provided the police department with copies of Ms. Mangum’s bounced checks on December 8, 2004. On December 15, 2004, Ms. Mangum attended an investigative interview and learned for the first time the collection agency had provided copies of her checks.

Within 5 days of the investigative interview, Ms. Mangum hired an attorney regarding the disclosure of her bounced checks. Despite being hired within 5 days of the investigative interview, the attorney failed to file suit until December 14, 2005. Of course, December 14, 2005 was within one year of discovery of the alleged violation, and more than one year from the date of the conduct giving rise to the alleged violation.

Ms. Magnum’s complaint alleged FDCPA and Fair Credit Reporting Act (FCRA) violations, as well as a violation of 42 U.S.C. § 1983 against the debt collector and other governmental agencies. All parties filed motions for summary judgment. Ms. Mangum claimed the debt collector was a consumer reporting agency (and not a furnisher of information) for purposes of the FCRA claims. The Idaho district court dismissed these FCRA claims because the collector was not a consumer reporting agency. After a motion for reconsideration was filed because the initial opinion did not address the § 1983 claims, the § 1983 claims against the collector were dismissed because neither the FCRA nor the FDCPA provided a right that would support a § 1983 claim. The court also dismissed the FDCPA claims as barred by the statute of limitations 2 .

Ms. Mangum appealed to the Ninth Circuit seeking to address the dismissal of the § 1983 action against the city. The Ninth Circuit held since the FCRA and FDCPA claims could not lie against the city, who was not a furnisher of information , a consumer reporting agency, or a debt collector, any rights afforded by those statutory schemes could not support a § 1983 action against the city. The court also noted even if a general, amorphous right to informational privacy would support a § 1983 claim, such right was not infringed by disclosure of the bounced checks. Ms. Mangum “had no reasonable expectation of privacy in the checks she issued and placed in the stream of commerce.” 3 “Simply put, at no point did the information in question become sufficiently personal to merit constitutional protection,” the court stated. 4

Although the § 1983 holding may be of some use to collection agencies and collection law firms, the more interesting part of the opinion involved how to interpret the FDCPA statute of limitations.

The Ninth Circuit wrestled with whether 15 U.S.C. § 1692k(d) created a jurisdictional limitation rather than a statutory limitation. The Ninth Circuit ultimately concluded the heading for § 1692k(d), “Jurisdiction,” did not drive the determination as the heading was not in the original language of the statute, but added by the Office of the Law Revisions Counsel. Furthermore, the legislative history references the limitation provision as a “statute of limitations.” This Ninth Circuit panel concluded that the “presumption that statutory time limits are not jurisdictional has not been rebutted by anything in the language or legislative history of the FDCPA.” 5

The Ninth Circuit also addressed whether the statute of limitations ran from the date of the debt collector’s allegedly violative conduct or from the date of discovery of the alleged violation. The court first noted that the “general federal rule is that ‘a limitations period begins to run when the plaintiff knows or has reason to know of the injury which is the basis for the action.’” 6

The court explained that the Ninth Circuit applied the discovery rule to the FCRA in Andrews v. TRW, Inc. 7 The FCRA’s statute of limitations provisions states that the action must be brought within two years of “the date on which the liability arises.” 8 The court referenced its Andrews decision in support of its position that the discovery rule applied to the FDCPA. Although the court noted that the United States Supreme Court overruled the Ninth Circuit Andrews decision, the Ninth Circuit dismissed this language as dicta, holding that the Andrews Supreme Court opinion was inapplicable to interpreting the FDCPA. 9

Without considering the plain language of the FDCPA, the Ninth Circuit concluded that the discovery rule is applicable under the circumstances of the Mangum case. The Ninth Circuit concluded it was not going as far as its earlier Andrews decision, despite the similarities between the reasoning of the Mangum and Andrews decisions.

Judge O’Scannlain concurred with the various aspects of the majority opinion – except the portion of the opinion regarding the discovery rule’s application to the FDCPA statute of limitations. Judge O’Scannlain felt applying the discovery rule to the FDCPA could not be squared with the plain language of § 1692k(d), which “starts the clock on the ‘date on which the violation occurs’ not the date on which the plaintiff discovers the violation.” 10

Reasonably, Judge O’Scannlain’s analysis began with the language of § 1692k(d), which states in relevant part: “An action to enforce any liability created by [the FDCPA] may be brought … within one year from the date on which the violation occurs.” 11

This language is clearly much stronger and unambiguous when compared against the FCRA language analyzed in the Andrews case. Judge O’Scannlain emphasized the clear and unambiguous language, referring to Webster’s dictionary to explain a “violation” is an infringement or transgression and not the discovery of an infringement or transgression. 12

Judge O’Scannlain concluded that to read an additional element of “discovery” into the statute of limitations provision conflicts with the Ninth Circuit’s decision in Garcia v. Brockway, 13

which held the Fair Housing Act’s (FHA) statute of limitations sets forth the limitations period from the “occurrence or the termination of an alleged discriminatory housing practice.” 14   Just as the plaintiff’s argument in Garcia contradicted the plain and unambiguous FHA statutory language, so does Ms. Mangum’s argument contradict the plain and unambiguous FDCPA statutory language.  Judge O’Scannlain explained, “Garcia resolves this case.” 15

Judge O’Scannlain then explained he was nevertheless required to concur in the result of the majority’s opinion because of precedential Ninth Circuit jurisprudence, even though Judge O’Scannlain believed the jurisprudence to be wrongly decided. 16

Socop-Gonzalez v. I.N.S. created the Ninth Circuit rule that “when a statute of limitations is tolled, the days during a tolled period simply are not counted against the limitations period.” 17  

Since presumably Ms. Mangum could not have known about the violation prior to her investigative interview on December 14th, the week between the conduct and the discovery is tacked onto the end of the limitations period, and Ms. Mangum was timely in filing her FDCPA claims. 18

This mechanical application does not take into consideration whether Ms. Mangum acted diligently after the discovery of the alleged violation, a necessary component to invoke equitable principles, including equitable tolling. 19   And there can be no question Ms. Mangum manifestly failed to act diligently. 20

Judge O’Scannlain also noted the Ninth Circuit stands nearly alone in its permissible attitude towards equitable tolling – a position Judge O’Scannlain refers to as silly.  According to Judge O’Scannlain, before Socop-Gonzalez “no federal court, in any circuit, had ever concluded that it must turn a blind eye to a litigant’s post-discovery lack of diligence.” 21 

Several circuits have also rejected the Ninth Circuit’s permissive “equitable tolling jurisprudence, reasoning persuasively that the plaintiff’s post-discovery lack of diligence should matter.” 22  Judge O’Scannlain argued the Ninth Circuit’s equitable tolling jurisprudence disregards the public policy underlying statutes of limitations of fairness to both parties, including defendants.  Application of equitable tolling in this case produces an undeserved windfall for Ms. Mangum and unwarranted prejudice to the collector. 23

Despite Judge O’Scannlain’s criticism of Socop-Gonzalez, Judge O’Scannlain felt constrained to follow this jurisprudence, and concurred in the result.

Neither the majority opinion nor the special concurrence by Judge O’Scannlain referenced the other Ninth Circuit opinion addressing when the statute of limitations begins to run in an FDCPA case, Naas v. Stolman. 24 

In Naas, the Ninth Circuit held “the statute of limitations began to run on the filing of the complaint” in an FDCPA case in which it was alleged the underlying collection lawsuit gave rise to the alleged FDCPA violation. 25 The Naas court also explained this conclusion was consistent with other circuit courts. 26 The Naas court stated:

These courts reasoned that the purpose of the Act is to regulate the actions of debt collectors; because the mailing date was the debt collector's “last opportunity to comply with the [Act], . . . the mailing of the letters, therefore, triggered section 1692k(d).” In addition, “the date of mailing is a date which may be ‘fixed by objective and visible standards,’ one which is easy to determine, ascertainable by both parties, and may be easily applied.” 27

Although it is interesting the Mangum court apparently ignored this precedent, the more critical question is whether this discovery rule will be applied outside of the limited circumstances in the Mangum case. It appears many if not most circumstances in which an alleged violation arises would fall more readily under the Naas umbrella and other opinions that follow the Naas reasoning. One can never be certain though – there are no guarantees in litigation.

© 2009 ACA International. All Rights Reserved. Reprinted with the express written permission of ACA International.



1. Mangum v. Action Collection Service, Inc., No. 08-35191, 2009 WL 2367157, --- F.3d --- (9th Cir. Aug. 4, 2009).return

2. Id. at *1-2.return

3. Id. at *5-7.return

4. Id. at *6 (citing Ferm v. U.S. Treasury, 194 F.3d 954, 958 (9th Cir. 1999)).  return

5. Id. at *3 (quoting Clark v. Bonded Adjustment Co., 176 F.Supp.2d 1062, 1068 (E.D. Wash. 2001)).return

6. Id. at *3 (quoting Norman-Bloodsaw v. Lawrence Berkeley Lab., 135 F.3d 1260, 1266 (9th Cir. 1998)). return

7. Andrews v. TRW, Inc., 255 F.3d 1063, 1066-67 (9th Cir. 2000).return
8. 15 U.S.C. § 1681p (2006).return

9. The Supreme Court concluded the language of the FCRA and an exception to the statute of limitations based on willful misrepresentation failed “to convince [the U.S. Supreme Court] that Congress intended sub silentio to adopt a general discovery rule in addition to the limited [exception].”  See TRW, Inc. v. Andrews, 534 U.S. 19, 33 (2001).return

10. Mangum, No. 08-35191, 2009 WL 2367157, *7 (9th Cir. Aug. 4, 2009) (emphasis in original).return

11. 15 U.S.C. § 1692k(d) (emphasis added).return

12. Mangum, No. 08-35191, 2009 WL 2367157, *8 (9th Cir. Aug. 4, 2009).return

13. Garcia v. Brockway, 526 F.3d 456, 464 (9th Cir. 2008) (en banc).return
14. 42 U.S.C. § 3613(a)(1)(A) (2006).return

15. Mangum, No. 08-35191, 2009 WL 2367157, *9 (9th Cir. Aug. 4, 2009).return
16. Id. return

17. Socop-Gonzalez v. I.N.S., 272 F.3d 1176, 1195 (9th Cir. 2001)return

18. Mangum, No. 08-35191, 2009 WL 2367157, *9 (9th Cir. Aug. 4, 2009).return

19. See, e.g., Baldwin County Welcome Ctr. v. Brown, 466 U.S. 147, 148 (1984); see also Pace v. DiGuglielmo, 544 U.S. 408, 419 (2005).return

20. Mangum, No. 08-35191, 2009 WL 2367157, *9 (9th Cir. Aug. 4, 2009).return

21. Mangum, No. 08-35191, 2009 WL 2367157, *10 (9th Cir. Aug. 4, 2009).return

22. Id. return

23. Id. at *10-12.return

24. Naas v. Stolman, 130 F.3d 892 (9th Cir. 1997).return

25. Id. at 893; see also Kerr v. Dubowsky,  71 Fed. Appx. 656, 657 (9th Cir. 2003) (unpublished) (concluding §§ 1692e and 1692g claims are dismissed “because he failed to file his suit within one year of Dubowsky's alleged violations”); Thompson v. Eduserve Technologies, Inc. 182 F.3d 927, 1999 WL 313314, *1 (9th Cir. Mar. 22 1999) (unpublished).  return

26. See, e.g., Maloy v. Phillips, 64 F.3d 607, 608 (11th Cir. 1995) (concluding mailing letter constituted alleged violation); Mattson v. U.S. West Comm’ns, 967 F.2d 256, 261 (8th Cir. 1992) (holding same); but see Johnson v. Riddle, 305 F.3d 1107, 1113 (10th Cir. 2002) (finding statute of limitations began to run on the service of the collection lawsuit, not upon filing). return

27. Naas, 130 F.3d at 893 (9th Cir. 1997) (quoting Mattson, 967 F.2d at 261 (8th Cir. 1992)). return

The above article and all articles in this website are not intended to be legal advice. Readers should consult an attorney to determine how the law applies to their particular circumstances. Also, please understand that the law constantly evolves and changes. Certain of the decisions and legal propositions quoted in the above article may be out of date or superseded.

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