New Jersey Federal Court Holds Individual’s FDCPA Claim Was Tolled While Similar Class Action Was Pending

The United States District Court for the District of New Jersey recently held that an individual’s FDCPA claim was not untimely because the three-year litigation of a class action raising similar claims tolled the limitations period for the individual.  See Williams-Hopkins v. Allied Interstate, LLC, 2020 WL 2731101 (D.N.J. May 26, 2020).  The defendant debt collector sent a collection letter to plaintiff in 2015.  The letter demanded payment of a debt owed since 2006.  In 2019, plaintiff brought this action, alleging that the letter was misleading and violated the FDCPA because it made a “settlement offer” that made “Plaintiff believe[] she had a legal obligation to pay this debt even though the six-year statute of limitations on it had expired.”  Plaintiff also argued that the settlement language overshadowed other disclosures required by the FDCPA.  Defendant filed a motion to dismiss, arguing that plaintiff commenced the case outside the FDCPA’s one-year statute of limitations.  Plaintiff opposed, arguing that a class action filed against defendant in 2016 tolled the limitations period.  Specifically, plaintiff claimed that she was an unnamed member of the putative class but that the named plaintiffs settled the action in 2019 before class certification, at which point she filed this action.

The Court denied the motion to dismiss and found that “at this juncture,” the claim is timely.  The Court found that the letter at issue in this action and the letters at issue in the class action “are in the ‘same or similar form.’”  Although the letters had slightly different language with regard to settlement, “both express the creditor’s openness to ‘settlement’ and invite the debtor to settle, without disclosing that the debt expired. As alleged, both also have the same effect—misleading an unsophisticated debtor into believing that the debt is legally enforceable through inviting settlement.”  Similarly, the Court found that plaintiff’s argument that the settlement language “overshadowed the mandatory disclosure requirements of the FDCPA regarding Plaintiff’s right to dispute the debt” was also tolled even though that claim was not raised in the class action.   “Plaintiff’s overshadowing claim shares a ‘common factual and legal nexus’ with the claim in the class action,” and should be tolled.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Michael Crowley at mcrowley@riker.com, or Anthony Lombardo at alombardo@riker.com.