Wednesday, May 16, 2018

Creating a Circuit Split Regarding the Fair Debt Collection Practices Act: Rotkiske v. Klemm, --- F.3d ----, 2018 WL 2209120 (3d Cir. May 15, 2018)

By Hon. Judith K. Fitzgerald (Ret.)
Tucker Arensberg, P.C.

The United States Court of Appeals for the Third Circuit issued its opinion in Rotkiske v. Klemm, a unanimous, en banc decision yesterday that creates a clear split with the Fourth and Ninth Circuits.  The Third Circuit ruled that the statute of limitations for FDCPA violations is one year from the date of violation, not from the date of discovery.
Judge Hardiman, writing for the full court, stated: 

This appeal requires us to determine when the statute of limitations begins to run under the Fair Debt Collection Practices Act (FDCPA or Act), 91 Stat. 874, 15 U.S.C. § 1692 et seq. The Act states that “[a]n action to enforce any liability created by this subchapter may be brought in any appropriate United States district court ... within one year from the date on which the violation occurs.” 15 U.S.C. § 1692k(d). The United States Courts of Appeals for the Fourth and Ninth Circuits have held that the time begins to run not when the violation occurs, but when it is discovered. See Lembach v. Bierman, 528 Fed.Appx. 297 (4th Cir. 2013) (per curiam); Mangum v. Action Collection Serv., Inc., 575 F.3d 935 (9th Cir. 2009). We respectfully disagree. In our view, the Act says what it means and means what it says: the statute of limitations runs from “the date on which the violation occurs.” 15 U.S.C. § 1692k(d).

Rotkiske v. Klemm, No. 16-1668, 2018 WL 2209120, at *1 (3d Cir. May 15, 2018)

Saturday, May 12, 2018


By:  Hon. Judith K. Fitzgerald (Ret.)
Tucker Arensberg, P.C.
1500 One PPG Place
Pittsburgh, PA  15222

In an opinion that is informative although not precedential, In re AE Liquidation, Inc., No. 17-1794 (May 4, 2018)(which can be found here), the Court of Appeals for the Third Circuit considered both the ordinary course and the new value defenses to a preference action.  Regarding the ordinary course issue, the appellate court detailed facts of record that established that collection actions taken during the preference period were unilateral pressure tactics that derailed the defense. 

Saturday, May 5, 2018

No Monkeying Around With This Opinion - Naruto v. Slater, No. 16-15469, 2018 WL 1902414 (9th Cir. Apr. 23, 2018)

By Hon. Judith K. Fitzgerald (Ret).
Tucker Arensberg, P.C.
In case you are curious about the extent of animal rights under the law, take a look at this new decision in the Ninth Circuit, Naruto v. Slater, 2018 WL 1902414 (9th Cir. Apr. 23, 2018).  Naruto, an Indonesian macaque, picked up a camera that was left unattended in a reserve by David Slater, a photographer, and took some selfies back in 2011.  The pictures were apparently worthy of publication, so Mr. Slater published them in 2014.  The monkey sued.  Well, actually, the People for the Ethical Treatment of Animals, Inc. (“PETA”) sued as Naruto’s Next Friend, for copyright infringement.  The case worked its way to the Court of Appeals for the Ninth Circuit, where the court framed the issue this way:
We must determine whether a monkey may sue humans, corporations, and companies for damages and injunctive relief arising from claims of copyright infringement. Our court's precedent requires us to conclude that the monkey's claim has standing under Article III of the United States Constitution. Nonetheless, we conclude that this monkey—and all animals, since they are not human—lacks statutory standing under the Copyright Act. We therefore affirm the judgment of the district court.
 Naruto v. Slater, No. 16-15469, 2018 WL 1902414 (9th Cir. Apr. 23, 2018) (footnote omitted).

Friday, April 13, 2018

Better Think Twice Before You Tell Your Debtor Client to Pay You with a Credit Card

Jeffrey N. Schatzman
Schatzman & Schatzman, P.A.
Miami, Florida

If you represent individual debtors and take credit cards for payment of your fees, you might want to re-think that policy.  On March 30, 2018, the Eleventh Circuit Court of Appeals in Cadwell v. Kaufman, Englett & Lynd, PLLC, Case No. 17-10810, reinstated a suit against Kaufman, Englett & Lynd (“KEL”) for violation of 11 U.S.C. Sec. 526(a)(4).   You can find the opinion here.

Requiring Credit Cards Concerns Client

Loyd Cadwell had sought the services of KEL to file a chapter 7 bankruptcy case.  Following the initial meeting, Cadwell entered into a retainer agreement with KEL that provided for KEL to be paid a fee of $1,700.00 to represent Cadwell in the chapter 7 case.  The agreement provided for payments to be made in installments over several months.  Cadwell alleged in his complaint that he was instructed by KEL to make the installment payments by credit card. Cadwell made the initial payment and three additional installments with two different credit cards.  Thereafter, Cadwell terminated the engagement with KEL and sought the services of another firm to assist him with his bankruptcy.

Cadwell’s new attorneys noticed the credit card payments and filed suit on behalf of Cadwell for violation of 11 U.S.C. § 526(a)(4), seeking return of fees paid to KEL and punitive damages of $1 million.  The lawsuit is also proposed as a class action.   

Thursday, March 1, 2018


Hon. Judith K. Fitzgerald (Ret.)
Tucker Arensberg, P.C.
Professor in Practice, University of Pittsburgh School of Law

Once in a while, a Supreme Court opinion crosses my desk that I cannot ignore. Such was the case today. The United States Supreme Court issued its opinion in Merit Management, LP v. FTI Consulting, Inc., a unanimous opinion made more exciting by the fact that it affirmed the Seventh Circuit’s decision regarding the scope of the safe harbor provisions of 11 U.S.C. § 546(e) in a case that arose from a failed harness racing endeavor. (The opinion can be found here). Perhaps even more surprising, the Court interpreted a section of the Bankruptcy Code that led to a split in the circuits using a “plain meaning” approach.