A District Court judge in Tennessee has adopted a magistrate judge’s recommendations to dismiss a Fair Debt Collection Practices Act lawsuit as time-barred and to compel arbitration of the consumer’s remaining claims against the lender that issued her credit card.
The background: The plaintiff, representing herself, sued a lender and the law firm it retained to collect a past-due credit card balance, alleging violations of the FDCPA related to debt validation, a collection affidavit, and the overall collection effort.
- Two years ago, the lender sued the plaintiff, serving her with an affidavit from an employee attesting to the debt. The plaintiff moved in that case to compel arbitration.
- A little more than a month after being served, the plaintiff acknowledged receiving validation information from the collector but asserted it was insufficient to verify the debt. The next day, the collector responded that it considered the information a complete verification.
- Last September, roughly 14 months later, the plaintiff filed suit in federal court, claiming the collector’s validation was inadequate, the affidavit was false and robo-signed, and both defendants used unfair and deceptive means to collect. She also alleged the lender had securitized its receivables and no longer owned the debt.
- The law firm moved to dismiss and the lender moved to compel arbitration under the card agreement.
The ruling: Judge William L. Campbell Jr. of the District Court for the Middle District of Tennessee overruled every objection, holding that the plaintiff’s validation and affidavit claims accrued when the alleged violations occurred, not when she later researched the FDCPA and concluded the validation was legally deficient. Because the one-year limitations period had run before she filed suit, those claims against the collector were dismissed with prejudice.
- The judge rejected the plaintiff’s argument that a liberal reading of her 25-page complaint and more than 200 pages of exhibits should have saved her claims, calling the objection too general to warrant review. Her remaining claims against the collector, alleging unfair and unconscionable practices and harassment, were dismissed for failing to plead enough facts.
- On arbitration, the plaintiff’s main objection was that the lender waived its right to arbitrate by suing her in state court. Judge Campbell noted she had claimed to have relied on “brief statements” about waiver before the magistrate judge, but found that “she did not so much as hint at waiver” in her opposition brief, and that arguments raised for the first time in objections are waived.
- Even so, the judge observed that the card agreement itself said the lender “won’t initiate arbitration to collect a debt from you unless you chose to arbitrate or to assert a Claim against us,” meaning the lender was required to sue in state court. Coupled with the plaintiff’s own motion to compel arbitration in that case, the judge found it “exceedingly unlikely” a waiver argument would have succeeded.
- The plaintiff’s objection that she could not afford arbitration fared no better. The judge noted she conceded the Supreme Court has never held FDCPA claims non-arbitrable, that she was “apparently unconcerning with the cost of arbitration” when she invoked the clause in state court, and that she paid the federal filing fee in full.
