Huertas v. Galaxy Asset Management, 2011 WL 1361568 (3d Cir. April 11, 2011). It may seem strange that someone can lawfully try to collect a debt even after the statute of limitations has expired, when the debt is no longer lawfully enforceable. To a layman, such as the pro se appellant in this case (a relatively rare example of a precedential Third Circuit opinion with a pro se plaintiff), it was incomprehensible. But the Third Circuit affirmed a decision by Judge Kugler to dismiss the complaint. The opinion was unusual in that it was designated precedential but issued per curiam instead of being signed by its author. The panel (Judges Barry, Jordan and Garth) held that such a “debt obligation is not extinguished by the expiration of the statute of limitations, even though the debt is ultimately unenforceable in a court of law.”
As a result, plaintiff’s claim under the Fair Debt Collection Practices Act (“FDCPA”) failed. The panel stated that “the majority of courts have held that when the expiration of the statute of limitations does not invalidate a debt, but merely renders it unenforceable, the FDCPA permits a debt collector to seek voluntary repayment of the time-barred debt so long as the debt collector does not initiate or threaten legal action in connection with its debt collection efforts.” The court reviewed the debt collector’s letter to plaintiff and found that, even under the “least sophisticated consumer” standard applicable to FDCPA cases in the Third Circuit, no one could have understood the letter to threaten litigation, explicitly or implicitly.
Plaintiffs’ other claims likewise could not stand. His claim under the Fair Credit Reporting Act was deficient because that statute allows distribution of a consumer report to an entity that intends to use the information in connection with collection on an account of that consumer. That was what happened here. Plaintiff’s claim under the New Jersey Consumer Fraud Act failed because that claim was not based on the “marketing or sale of merchandise or services to him.” The panel also saw no basis for plaintiff’s claims under RICO or for breach of the duty of good faith and fair dealing.