The Superior Court of New Jersey Appellate Division has reversed a previous dismissal of a class-action Fair Debt Collections Practices Act claim that accused the defendant used misleading debt-collection form letters, which threatened negative credit reporting despite the debts already being reported.
The Background: The original complaint was filed in federal court on the last permissible day under the FDCPA’s one-year statute of limitations. However, a federal court denied class certification and later dismissed the case, citing a lack of subject-matter jurisdiction following the U.S. Supreme Court’s decision in TransUnion LLC v. Ramirez. This decision emphasized the necessity of concrete harm for Article III standing, which the plaintiffs lacked.
- The plaintiffs then refiled the case in state court. The state court judge also dismissed the case, ruling the suit was untimely filed under the one-year statute of limitations for FDCPA claims. The court did allow individual claims to proceed on equitable tolling principles. The plaintiffs appealed, arguing the state court judge applied the wrong forum tolling principles to its claims.
The Ruling: The state appellate court highlighted that the plaintiffs had timely filed their class claims initially and that the delay in refiling was due to ongoing federal litigation. It emphasized that equitable tolling should apply in this case, given the plaintiffs’ diligence in pursuing their claims. The court noted that plaintiffs could not have anticipated the change in jurisdictional requirements brought by the Ramirez decision and acted promptly once the federal case was dismissed.
- The ruling means that the class-action claims will now proceed in state court, potentially affecting over 11,000 New Jersey consumers who received similar debt-collection letters from the defendant.
- “Again, the purported class is composed of 11,212 accountholders in the State of New Jersey who received form collection letters from defendants between May 17, 2017, and January 7, 2019,” the Appeals Court wrote. “The matter was filed in federal court on May 17, 2018, the last date of the original statute of limitations. The denial of class certification by the federal court on July 7, 2021, would not have resulted in an extension of the relevant statute of limitations on plaintiffs’ class claims to July 7, 2022.”
