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Experts Discuss Supreme Court's Ruling in Midland Funding, LLC v. Johnson and Its Implications on Debt Collection Practices

Date: 
Wednesday, May 17, 2017
Issue: 

The U.S. Supreme Court on May 15, 2017, ruled (5-3) in the case of Midland Funding, LLC v. Johnson (No. 16-348) that filing a claim barred by the statute of limitations does not violate the federal Fair Debt Collection Practices Act because it is not false, deceptive, or misleading.

Audio: 
 
Speakers: 

Craig Goldblatt of WilmerHale (Washington, D.C.) is an experienced bankruptcy litigator, with a focus on complex bankruptcy disputes and bankruptcy appeals. The core of his practice has been protecting the interests of secured creditors, financial institutions and insurance companies in bankruptcy-related disputes.

Thad O. Bartholow is a partner with the Dallas law firm of Kellett & Bartholow PLLC. In addition to consumer bankruptcy, Bartholow’s practice focuses on individual and class-action litigation on behalf of consumer debtors in state, federal and bankruptcy courts.

Moderator: 

ABI Editor-at-Large Bill Rochelle provides his authoritative take on legal developments affecting bankruptcy practice in ABI’s Rochelle’s Daily Wire. Rochelle published for Bloomberg every day from 2007-15, and prior to his second career in journalism, he practiced bankruptcy law for 35 years.

Background: 

The U.S. Supreme Court on May 15, 2017, ruled (5-3) in the case of Midland Funding, LLC v. Johnson, No. 16-348, that filing a claim barred by the statute of limitations does not violate the federal Fair Debt Collection Practices Act because it is not false, deceptive, or misleading. The Supreme Court had granted certiorari to review a decision from the Eleventh Circuit holding that the filing of a stale claim violates the FDCPA. The case involved a proof of claim filed by a debt collector where the statute of limitations “had long since run,” Justice Breyer said. Writing for the majority, he said that filing stale claims was neither false, deceptive, nor misleading, in part because the state in which the case had initially been filed, as with most states, provides that “a creditor has a right to payment of a debt even after the limitations period has expired.” Writing for the dissent, Justice Sotomayor said that filing a stale claim is unfair and unconscionable, and stated that “[d]ebt collectors do not file these claims in good faith; they file them hoping and expecting the bankruptcy system will fail.”