{"id":1955,"date":"2020-01-09T19:04:35","date_gmt":"2020-01-09T19:04:35","guid":{"rendered":"https:\/\/albanknews.com\/?p=1955"},"modified":"2020-01-09T19:04:35","modified_gmt":"2020-01-09T19:04:35","slug":"supreme-court-update-for-banking-and-financial-services-professionals-21","status":"publish","type":"post","link":"https:\/\/albanknews.com\/?p=1955","title":{"rendered":"Supreme Court Update for Banking and Financial Services Professionals"},"content":{"rendered":"

by Charles W. Prueter, Waller<\/a><\/em><\/p>\n

The composition of the Supreme Court is a constant, if not primary, focus of political debates in this country. As a New York Times<\/em> editorial put it in February 2012, \u201cthe makeup of the court for the next generation, and thus the law\u2019s direction, are likely to be determined by the 2012 election.\u201d While the same thing was written about 2016 and is now being written about 2020, that prognostication actually turned out not to be true. Indeed, the Court saw no turnover from the start of the 2010 term, when Justice Kagan took the bench, until the latter stages of the 2016 term, when Justice Gorsuch assumed office. Overall, the only changes in the 2010s were Justice Gorsuch replacing the late Justice Scalia, and Justice Kavanaugh replacing Justice Kennedy. Compared to the previous decade, which ushered in four new justices, the 2010s were relatively stable as far the \u201cmakeup of the court\u201d is concerned. (It is not lost on me that the debacle that was the nomination of Judge Garland was anything but stable. Limiting the issue to the actual makeup of the Court, however, stable is a fair description.)<\/p>\n

In any event, the 2010s were marked most prominently by government-power cases and individual-liberty cases. This should not be surprising, as the Supreme Court is vested with supreme judicial power to decide constitutional questions, and the Constitution is fundamentally concerned with government power and individual liberty. For example, in NFIB v. Sebelius <\/em>(2012), the Court held that the Affordable Care Act\u2019s \u201cIndividual Mandate\u201d penalty was a tax for the purposes of the Constitution\u2019s Taxing and Spending Clause and therefore was a valid exercise of Congressional authority. But in Shelby County v. Holder<\/em> (2013), the Court struck down a provision of the Voting Rights Act granting the federal government the authority to \u201cpreclear\u201d new voting rules in certain districts. Perhaps the most famous case of the decade, Obergefell v. Hodges<\/em> (2015), confirmed that the Fourteenth Amendment protects the rights of same-sex couples to marry and thus invalidated state laws prohibiting such marriages. In another liberty-versus-government case, Burwell v. Hobby Lobby Stores<\/em> (2014), the Court held that, under a federal statute known as the Religious Freedom Restoration Act, the government lacked the authority to force employers to pay for certain contraceptives as part of the employees\u2019 insurance plans.<\/p>\n

In the current Term, which now stretches into the new decade, we have yet to see any similarly groundbreaking opinions. Some big ones loom on the horizon, but the Term is still early. As a result, the Supreme Court has issued only a few opinions thus far \u2014\u00a0one of which in particular might be of interest to readers.<\/p>\n

As noted before here at the Update, a federal statute known as the Fair Debt Collection Practices Act (FDCPA) has created a high volume of significant litigation for financial services firms engaged in debt buying, servicing, and collecting. The statute, as its title reflects, generally prohibits abusive, deceptive, and unfair debt collection practices. And creative plaintiffs\u2019 lawyers have generated a great many cases to test what counts as \u201cabusive,\u201d \u201cdeceptive,\u201d or \u201cunfair.\u201d As a result, the Supreme Court has opined on the meaning and scope of the FDCPA repeatedly in recent years. What if a debt collector\u2019s violation of the rules in the FDCPA was the result of a \u201cbona fide error\u201d? May a company collect debts that it has purchased for its own account without being subject to the restrictions of the FDCPA? Does it violate the FDCPA to file a proof of claim in bankruptcy on an old debt?<\/em> These somewhat arcane questions have been answered with varying certitude by the Court, but in all events providing the debt collection industry with additional guidance about how to navigate the web of rules created by the FDCPA.<\/p>\n

But wait, there\u2019s more! One of this Term\u2019s cases centered not on what conduct might violate the FDCPA but instead on a procedural issue: When does the statute of limitations begin to run for a plaintiff who allegedly has been harmed by a violation of the FDCPA? That was the question in Rotkiske v. Klemm<\/em>, No. 18-328, which was decided last month. There, the defendant, a debt-collection company, had sued an individual debtor to collect an unpaid debt and, because the lawsuit was served at the incorrect address, the debtor never appeared in the case. The debt collector consequently secured a default judgment in 2009.<\/p>\n

The debtor then claimed that it was not until 2014 that he discovered the default judgment, when his mortgage application was denied. He then filed suit against the debtor collector in 2015, alleging that the debt collector violated the FDCPA by filing the lawsuit without a lawful basis to collect the debt. (His theory was that the statute of limitations on the collection of the debt under state law had expired when the lawsuit was filed. That would in fact establish a violation of the FDCPA because debt collectors are not permitted to sue to collect \u201cexpired\u201d debts. This case, however, is not about what does and does not constitute a violation.)<\/p>\n

The problem is that the FDCPA has a one-year statute of limitations, meaning that the aggrieved party must file a lawsuit within one year of the alleged violation. To get around that, the debtor argued that the statute of limitations period should only begin to run once an aggrieved party actually \u201cdiscovers\u201d the alleged violation. The Supreme Court rejected this plea, concluding that the plain text of the statute mandates a one-year period from the date of the alleged violation, without any exceptions for debtors who allegedly do not \u201cdiscover\u201d the conduct until after that one-year period. Put simply, one year means one year.<\/p>\n

All in all, this is a good decision for the debt collection industry. Certainty is important for businesses and their compliance efforts. And this decision confirms that debt collectors generally will not be subject to viable lawsuits past the one-year period following any particular debt collection activity.<\/p>\n

\n

Charles W. Prueter<\/a> is an appellate lawyer at Waller Lansden Dortch & Davis, LLP, in Birmingham. He can be reached by email at charles.prueter@wallerlaw.com.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

by Charles W. Prueter, Waller The composition of the Supreme Court is a constant, if not primary, focus of political debates in this country. As a New York Times editorial put it in February 2012, \u201cthe makeup of the court for the next generation, and thus the law\u2019s direction, are likely to be determined by the 2012 election.\u201d While the same thing was written about 2016 and is now being written about 2020, that prognostication actually turned out not to be true. Indeed, the Court saw no turnover from the start of the 2010 term, when Justice Kagan took the […]<\/p>\n","protected":false},"author":1,"featured_media":1151,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[19,25,28,23],"tags":[],"class_list":["post-1955","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-breaking","category-industry-reports","category-legal","category-publications","has_thumb"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/albanknews.com\/wp-content\/uploads\/2018\/03\/scotus-graphic.jpg?fit=100%2C100&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p4Y3P2-vx","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/posts\/1955","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1955"}],"version-history":[{"count":1,"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/posts\/1955\/revisions"}],"predecessor-version":[{"id":1957,"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/posts\/1955\/revisions\/1957"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/media\/1151"}],"wp:attachment":[{"href":"https:\/\/albanknews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1955"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1955"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1955"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}