California federal district court grants motion to dismiss for Simmonds & Narita’s debt buyer client on putative class action claims brought under the FDCPA and Rosenthal Act regarding allegedly time-barred debt
The plaintiff alleged that the debt buyer violated the FDCPA and the Rosenthal Act arising out of a letter sent to the plaintiff offering options on repaying a debt. The letter stated that “[t]he law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it.” The U.S. District Court for the Central District of California granted defendant’s motion to dismiss.
The court held the FDCPA and Rosenthal Act claims failed as a matter of law for two reasons. First, the court rejected Plaintiff’s contention that “the Letter is materially deceptive as it fails to disclose that the previously-lapsed statute of limitations to file a lawsuit to collect the debt could recommence upon payment by Plaintiff.” Because the statutory period had already run on Plaintiff's debt, payment could not “revive [the] cause of action” on that debt, under state law. Second, the court explained that the defendant was required to include the “will not sue” language due to a consent decree it had entered into with the Consumer Financial Protection Bureau, and thus the safe harbor of 15 U.S.C. § 1692k(e) applied.