A District Court judge in New Jersey has denied a plaintiff’s motion to certify a class in a Fair Debt Collection Practices Act lawsuit, ruling the choice of law provisions in the underlying agreement make it impossible to determine on a class-wide basis which statute of limitations apply to the underlying debt.
The Background: The plaintiff took out a credit card from Target in 2005. In 2009, she defaulted on the account and it was sold to the defendant. In 2015, the defendant sent the plaintiff a letter indicating that the account had been transferred and that legal proceedings may be commenced against her.
- The plaintiff claims the attempt to collect came after the four-year statute of limitations in New Jersey had expired and that the letter made no attempt to communicated this information or the status of the debt.
- The plaintiff filed suit, accusing the defendant of violating the FDCPA by attempting to collect on a time-barred lawsuit without making the proper disclosures, and sought to include anyone else from New Jersey who received similar letters where the statute of limitations had expired.
The Ruling: Under the predominance prong of a class-action lawsuit, a plaintiff must show that questions of law or fact common to class members predominate over any questions affecting individual matters. That is where the plaintiff’s arguments ran into problems for Judge Esther Salas of the District Court for the District of New Jersey.
- Without more evidence, Judge Salas wrote, it is “unclear” whether a four-year or six-year statute of limitations applies to this debt. The four-year statute applies to the sale of goods, but the state also has a six-year statute of limitations that applies to claims about contracts.
- Judge Salas also wrote that it was “not clear” whether all members of the proposed class had standing to sue because the definition of the class says nothing about whether the members of the class did anything as a result of receiving the letters in question.
