FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DEBORAH A. LYONS, No. 13-56657
Plaintiff-Appellant,
D.C. No.
v. 3:13-cv-0011-LAB-KSC
MICHAEL & ASSOCIATES;
ATTORNEY LINA, OPINION
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of California
Larry A. Burns, District Judge, Presiding
Argued and Submitted December 10, 2015
Pasadena, California
Filed June 8, 2016
Before: Stephen Reinhardt, Carlos F. Lucero*,
and Jacqueline H. Nguyen, Circuit Judges.
Opinion by Judge Nguyen
*
The Honorable Carlos F. Lucero, Circuit Judge for the U.S. Court of
Appeals for the Tenth Circuit, sitting by designation.
2 LYONS V. MICHAEL & ASSOCS.
SUMMARY**
Fair Debt Collection Practices Act
The panel reversed the district court’s dismissal as time-
barred of a complaint under the Fair Debt Collection
Practices Act.
The plaintiff alleged that the defendants were debt
collectors who violated the FDCPA when they sued her in the
wrong judicial district to collect a debt that had been
transferred to them. The panel held that the discovery rule
applies in an FDCPA action. Accordingly, the one-year
statute of limitations began to run when the defendants served
the plaintiff with process, rather than on the date the debt
collection action was filed.
COUNSEL
Richard J. Rubin (argued), Santa Fe, New Mexico; Robert L.
Hyde and Joshua Swigart, Hyde & Swigart, San Diego,
California, for Plaintiff-Appellant.
Lisa D. Dubowski (argued) and Christina L. Rymsza,
Michael & Associates, PC, Thousand Oaks, California, for
Defendants-Appellees.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
LYONS V. MICHAEL & ASSOCS. 3
OPINION
NGUYEN, Circuit Judge:
Deborah Lyons appeals the district court’s dismissal of
her case against Lina Michaels and Michael & Associates on
the ground that it was time-barred. Lyons alleges that the
defendants are debt collectors who violated the Fair Debt
Collection Practices Act (“FDCPA”) when they sued her in
the wrong judicial district to collect a debt that had been
transferred to them. The district court concluded that the
FDCPA’s one-year statute of limitations began to run on the
date that the debt collection action was filed, and because
Lyons failed to bring this case within one year of that date,
her claim is time-barred. Relying on Naas v. Stolman,
130 F.3d 892 (1997), the district court rejected Lyons’
argument that, under the discovery rule, her complaint was
timely filed within one year of the date that the defendants
served her with process, which is when she first learned of the
collection action. Instead of Naas, the district court should
have applied Mangum v. Action Collection Service, Inc.,
575 F.3d 935 (9th Cir. 2009). In that case, we held that the
discovery rule applies in an FDCPA action. We therefore
reverse and remand.
BACKGROUND
On January 3, 2013, Lyons filed this lawsuit in the district
court for the Southern District of California against Lina
Michaels1 and Michael & Associates (collectively, “Michael
& Associates”). According to Lyons’ complaint, Michael &
Associates are debt collectors who violated the FDCPA when
1
Named in the complaint as “Attorney Lina.”
4 LYONS V. MICHAEL & ASSOCS.
they filed a lawsuit against her on December 7, 2011, in
Monterey County, California, to collect on a debt that she
owed to American Express, which had been transferred to
them. The FDCPA requires debt collectors who take legal
action to collect a debt unrelated to an interest in real property
to file in the judicial district where the consumer (1) “signed
the contract sued upon,” or (2) “resides at the commencement
of the action.” 15 U.S.C. § 1692i. Lyons alleges that
Michael & Associates violated these provisions of the
FDCPA because she did not enter into a contract with
America Express in Monterey County and, during the
relevant time period, she resided in San Diego County,
California. In short, she claims that Michael & Associates
sued her in the wrong county.
Michael & Associates moved to dismiss the complaint on
the ground that it was not filed “within one year from the date
on which the violation occurs” as the FDCPA requires—that
is, within one year from December 7, 2011, the date they filed
the debt collection action against her. 15 U.S.C. § 1692k(d).
Lyons does not dispute that her action was filed more than
one year after she was sued by Michael & Associates. She
nevertheless argues that her complaint was timely because
she did not know or have reason to know about the collection
case against her until mid-January of 2012, when she was
served with process. According to Lyons, the FDCPA statute
of limitation is tolled by the discovery rule.
Citing Naas v. Stolman, the district court dismissed
Lyons’ case as time-barred. In Naas, a panel of this court
suggested that an FDCPA “violation occurs” when the debt
collection action is filed. 130 F.3d at 893. The district court
recognized some tension between Naas and a subsequent
case, Mangum v. Action Collection Service, Inc.—which
LYONS V. MICHAEL & ASSOCS. 5
applied the “discovery rule” to an FDCPA action without
mentioning Naas, 575 F.3d at 941—but ultimately decided
that Naas controls the outcome of this case. This appeal
followed.
JURISDICTION & STANDARD OF REVIEW
We have jurisdiction under 28 U.S.C. § 1291. We review
de novo the dismissal of a complaint on the basis of a statute
of limitations. Cholla Ready Mix, Inc. v. Civish, 382 F.3d
969, 973 (9th Cir. 2004).
DISCUSSION
A claim under the FDCPA must be brought “within one
year from the date on which the violation occurs.” 15 U.S.C.
§ 1692k(d). The question is which date controls.
A.
We start our analysis with Mangum, which is almost
directly on point. In that case, the plaintiff alleged that debt
collection agencies violated the FDCPA by wrongfully
disclosing her debt information to an outside party, and that
her complaint was timely because she filed it within one year
of the date that she learned of the disclosure. 575 F.3d at
937–39. The question that we had to decide was “whether
commencement of the one year [statute of limitations] period
was delayed by the discovery rule.” Id. at 940. We
recognized that
[I]n general, the discovery rule applies to
statutes of limitations in federal litigation, that
is, “[f]ederal law determines when the
6 LYONS V. MICHAEL & ASSOCS.
limitations period begins to run, and the
general federal rule is that ‘a limitations
period begins to run when the plaintiff knows
or has reason to know of the injury which is
the basis of the action.”’
Id. (second alteration in original) (quoting Norman-Bloodsaw
v. Lawrence Berkeley Lab., 135 F.3d 1260, 1266 (9th Cir.
1998)). We considered whether the statutory language and
legislative history of the FDCPA, or the Supreme Court’s
then-recent guidance in TRW Inc. v. Andrews, 534 U.S. 19
(2001), in which the Court held that the discovery rule does
not apply to the Fair Credit Reporting Act, compelled us to
reach a different conclusion. See Mangum, 575 F.3d at
939–41. Concluding that they did not, we applied the
discovery rule and held that Mangum’s complaint was timely
because the statute of limitations only began to run when she
first knew (or should have known) that her information had
been wrongfully disclosed. Id. at 941.
Following Mangum, we also applied the discovery rule
where the alleged FDCPA violation involved debt collection
letters. See Tourgeman v. Collins Fin. Servs., Inc., 755 F.3d
1109, 1118 n.5 (9th Cir. 2014) (“The district court
appropriately concluded that ‘the first time that [Tourgeman]
reasonably could have become aware of the allegedly false
and misleading representations in Defendants’ letters was
when his father was served with summons and complaint in
the state court lawsuit in October 2007,’ after which litigation
discovery revealed the existence of the collection letters.”).
Here, Lyons alleges that Michael & Associates violated
the FDCPA by filing a collection lawsuit against her in
Monterey County, a location where she neither lived nor
LYONS V. MICHAEL & ASSOCS. 7
“signed the contract sued upon.” See 15 U.S.C. § 1692i. The
fact that the alleged violation was the wrongful filing of a
debt collection action—rather than the wrongful disclosure of
information to third parties as in Mangum, or a violation in
debt collection letters as in Tourgeman—makes no difference
to our analysis. We therefore hold that the discovery rule
applies equally regardless of the nature of the FDCPA
violation alleged by a plaintiff. In this case, Lyons argues
that she first learned of the collection action when she
received service of process, and that she had no reason to
suspect that she had been sued in Monterey County, a venue
that is considerably distant from her residence in the San
Diego County. Michael & Associates do not contend
otherwise, instead contesting only the date on which the
statute of limitations was triggered. Applying the discovery
rule to the undisputed facts, we find that Lyons’ complaint
was timely-filed.
We reject the suggestion by Michael & Associates to
apply the discovery rule narrowly to only certain FDCPA
claims, depending on the nature of the violation alleged by a
plaintiff. Applying the discovery rule to some FDCPA claims
but not others would be out of step with our general approach
to the discovery rule, and would threaten to capriciously limit
the broad, remedial scope of the FDCPA. See Tourgeman,
755 F.3d at 1118 (“In addition, ‘[b]ecause the FDCPA . . . is
a remedial statute, it should be construed liberally in favor of
the consumer.’”) (quoting Clark v. Capital Credit &
Collection Servs., Inc., 460 F.3d 1162, 1176 (9th Cir. 2006));
see also Donohue v. Quick Collect, Inc., 592 F.3d 1027,
1033–34 (9th Cir. 2010).
8 LYONS V. MICHAEL & ASSOCS.
B.
We next address Naas v. Stolman, a case relied on by the
district court to conclude that the statute of limitations begins
to run on the date the underlying debt collection action was
filed. 130 F.3d at 893. Naas, however, does not dictate the
result here. In that case, the question of whether the
discovery rule applies to FDCPA cases was never presented
to nor addressed by our court.
In Naas, the plaintiffs were sued in a state court debt
collection action for unpaid hospital bills. After the debt
collector successfully obtained judgment, the plaintiffs
appealed to the Appellate Department of the California
Superior Court, which eventually affirmed the judgment. Six
months before the state Appellate Department ruled,
however, the plaintiffs filed a federal lawsuit claiming
FDCPA violations. At the time of filing, the parties had been
litigating the debt collection action for more than two years.
The district court dismissed the federal lawsuit as time-
barred. On appeal, the plaintiffs argued that the complaint
was timely because it was filed within one year of the date the
state Appellate Department affirmed the judgment against
them. Id. We disagreed, stating that the appellate court
judgment date could not possibly be the “date on which the
violation occurs” under the plain language of 15 U.S.C.
§ 1692k(d). If the plaintiffs were correct, “then their federal
action would have been premature, as it was brought six
months before that judgment.” Id. (“The alleged violation of
the Act was not a reviewing court judgment, but the bringing
of the suit itself. . . . We hold that the statute of limitations
began to run on the filing of the complaint in the Municipal
Court.”).
LYONS V. MICHAEL & ASSOCS. 9
Notably, the discovery of the debt collection suit is
entirely absent from our analysis in Naas: the plaintiffs did
not argue for a later start date based on when they were
served with process, and, perhaps for obvious reasons, there
is no indication that the affirmance of the judgment was the
first time the plaintiffs learned of the defendants’ debt
collection efforts. See id. at 892–93. Simply put, Naas
answered a different question than the one posed by the
parties here. That the court in Naas was not considering
application of the discovery rule is further illustrated by the
fact Naas relied in part on cases involving the mailing of debt
collection letters, but as we recently held in Tourgeman, the
discovery rule applies in such matters too. 755 F.3d at 1118
n.5.
Moreover, factual differences between this case and Naas
also confirm that the discovery rule should apply here.
Naas’s conclusion—that the limitations period is triggered by
the filing of the collection action—is based in part on the
assumption that the filing date is “easily ascertainable.” 130
F.3d at 893. But that is less obvious where, as here, the
collection lawsuit is alleged to have been filed in an improper
venue far from where the plaintiff actually lived. Indeed, the
discovery rule seems particularly apropos where the very
nature of the deficiency alleged increases the likelihood that
the filing date would not be “easily ascertainable” to the
debtor absent some other form of notice, such as service of
process.2
2
We decline to adopt Michael & Associates’ suggestion to apply
Mangum where service on the collection lawsuit was improper, and apply
Naas where it was proper. It is unclear why, if Naas is best read a true
exception to Mangum’s general application of the discovery rule, proper
service would be an appropriate boundary line. To concede that improper
10 LYONS V. MICHAEL & ASSOCS.
Naas thus stands for the proposition that, under the
FDCPA, the injury which forms the basis of the action is the
filing of the underlying collection lawsuit. When confronted
for the first time in Mangum with the question of whether the
discovery rule should apply to that same statute of limitations
provision, we answered in the affirmative. Of course,
Mangum does not foreclose the possibility that the statute of
limitations could begin on the filing date where the alleged
FDCPA violation is a collection lawsuit (that is, “when the
violation occurs”), but it allows plaintiffs to demonstrate that
it does not.
While Mangum did not involve the filing of a collection
lawsuit, we see no reason to limit our conclusion that the
discovery rule applies to 15 U.S.C. § 1692k(d) to its
particular facts. Such a holding would read Naas too broadly
and Mangum too narrowly. We therefore conclude that the
district court should have applied Mangum’s holding that the
discovery rule applies to FDCPA claims.
CONCLUSION
“[I]n general, the discovery rule applies to statutes of
limitations in federal litigation . . . .” Mangum, 575 F.3d at
940. We follow Mangum in expressly applying that general
rule to 15 U.S.C. § 1692k(d) where the alleged FDCPA
violation is the filing of a collection lawsuit. Applying the
service dictates application of the discovery rule is to concede that the
discovery date is relevant and that the filing date, on its own, may be
insufficient.
LYONS V. MICHAEL & ASSOCS. 11
discovery rule to the undisputed facts here, we find that
Lyons’ complaint was timely. We therefore reverse and
remand for proceedings consistent with this opinion.
REVERSED AND REMANDED.