Thursday, July 14, 2016

Lyons v. Michael & Assocs. (9th Cir. - June 8, 2016)

I'm not sure how anyone could reasonably disagree with Judge Nguyen's opinion here.

The Fair Debt Collection Practices Act says that you can't file a debt collection lawsuit in the wrong forum.  Defendant did so.  That filing transpired on Date X, but the debtor only learned about it on Date Y, which was the date on which she was served with this improperly-filed lawsuit.

When does the statute of limitations start running?  Date X or Date Y?

Prior Ninth Circuit precedent on the point is a little unclear and contradictory.  But Judge Nguyen's opinion definitively holds that the limitations period starts on Date Y -- the date the plaintiff found out about the lawsuit (via service), not merely the date it was filed.

That seems obviously right to me.  The Discovery Rule.  Spot on.

The district court held to the contrary, but its decision in that regard is (IMHO) what happens when you read appellate court decisions too broadly.

I understand why the district court erred.  It thought the Ninth Circuit had answered the question -- maybe not in an actual "holding," but nonetheless in language that's clear.  And it didn't want to be reversed.

But sometimes, faced with unclear precedent, the right thing to do is to do the right thing.  The better rule is the one that starts the limitations period on the date the violation was discovered.

And that's in fact, the rule the Ninth Circuit articulates here.