Third Circuit says FDCPA’s one-year limitations period cannot be extended through a continuing-violation theory for discrete litigation and enforcement activity.

A federal appeals court has narrowed a consumer’s Fair Debt Collection Practices Act claims against a New Jersey collection law firm, holding that later steps to obtain and enforce a default judgment did not revive an otherwise untimely suit based on an allegedly time-barred collection action.

In an unpublished Sept. 25 decision, the U.S. Court of Appeals for the Third Circuit affirmed dismissal of the FDCPA claims in Moore v. Cohn Lifland Pearlman Herrmann & Knopf LLP, et al. The court rejected the consumer’s argument that the firm’s subsequent litigation activity—including obtaining a default judgment, securing a writ of execution and garnishing wages—constituted a continuing violation that extended the statute’s one-year filing deadline.

Auto-loan deficiency dispute

The case arose from a defaulted auto loan. After the vehicle was repossessed and sold, a deficiency remained. The creditor retained the defendant attorney and law firm to bring a collection lawsuit, but the action was filed after the applicable four-year New Jersey limitations period for contracts involving the sale of goods had expired, according to accounts of the decision.

The consumer did not appear in or defend the collection case, including by asserting a statute-of-limitations defense. The law firm obtained a default judgment, then a writ of execution, and garnished the consumer’s wages for three pay periods. The consumer ultimately succeeded in having the judgment and wage execution vacated.

Sixteen months after the collection lawsuit was filed, the consumer sued the law firm and attorney in a proposed class action. The complaint alleged that filing suit on a time-barred obligation violated the FDCPA and also asserted an unjust-enrichment claim tied to the wage garnishments.

No continuing-violation doctrine

The consumer’s timing problem was central. FDCPA actions generally must be brought within one year from the date of the alleged violation. After the original complaint was dismissed as late, the consumer amended it to identify seven collection-related acts that had occurred in the preceding year, including steps associated with the default judgment, writ and garnishment.

On appeal, she argued that the collection lawsuit and later enforcement measures should be treated as one continuing course of unlawful conduct. The Third Circuit disagreed.

The court concluded that the continuing-violation theory—which developed principally in hostile-work-environment litigation—does not apply to FDCPA claims built on discrete collection activities that are independently actionable when they occur. The panel noted that no court had extended the doctrine to FDCPA cases and reasoned that doing so here would expand the theory beyond its proper scope.

That holding means a consumer cannot preserve a claim challenging the filing of a collection suit merely by characterizing later, separate litigation events as a continuation of the original alleged FDCPA violation.

Litigation acts not new FDCPA claims

The Third Circuit also rejected the alternative argument that the firm’s post-complaint activities independently violated the FDCPA.

The court reasoned that treating ordinary litigation and judgment-enforcement steps as new FDCPA violations would conflict with Supreme Court guidance against construing the statute to permit debtors to halt “communications inherent in an ordinary lawsuit” and effectively impede routine judicial proceedings.

As a result, the panel affirmed dismissal of the federal debt-collection claims. The ruling does not endorse collection suits on time-barred debts; rather, it addresses when an FDCPA plaintiff must bring a claim and whether later enforcement actions reset the limitations clock.

Industry implications

For collection law firms, creditors and debt buyers operating within the Third Circuit—which includes Delaware, New Jersey, Pennsylvania and the U.S. Virgin Islands—the decision offers a meaningful limitations defense where an FDCPA complaint is filed more than one year after the challenged collection lawsuit.

Key takeaways include:

• A suit-filing claim accrues when the allegedly improper collection action is filed, not when later judgment-enforcement measures occur.

• Later litigation events are not automatically a continuing FDCPA violation, even if they stem from the same underlying collection case.

• Routine court filings and enforcement measures should not, without more, be treated as standalone FDCPA violations merely because the original collection action is alleged to have been improper.

• Firms should nevertheless maintain controls for limitations review, complaint accuracy, attorney involvement, service, judgment procedures and exemptions in wage or bank-account enforcement.

The decision is also a reminder that limitations defenses serve a different role from merits defenses. A consumer may have a basis to challenge an allegedly stale collection suit, but the FDCPA’s one-year limitations period still requires prompt filing. The Third Circuit’s ruling makes clear that a later default judgment or garnishment will not necessarily give the consumer a new federal claim—or a new limitations period—based solely on the original filing.