On August 16, the U.S. SNDY dismissed as time-barred a student loan debt class-action brought against student loan trusts, servicing agents and a law firm. The suit, brought by a class of New York residents holding student loan debt, alleged defendants collected student loan debt without proper documentation. Plaintiffs brought three sets of claims: FDCPA claims against the servicing agents and law firm defendants, New York State General Business Law (GBL) § 349 claims against all defendants, and Judiciary Law (JL) § 487 claims against the law firm defendant.

However, the court found that all the plaintiffs’ claims were time-barred. The FDCPA claims have a one-year limitations period, GBL claims have a three-year limitations period, and JL claims have a six-year limitations period. Based on injury and violation dates, the plaintiffs’ FDCPA, GBL and JL claims expired in 2015, 2017 and 2020, respectively. In addition, although equitable tolling did apply to plaintiffs’ FDCPA and GBL claims, the extraordinary circumstances warranting such tolling ended shortly after September 18, 2017, when the CFPB released a report describing the defendants’ conduct. As such, even with equitable tolling, the plaintiffs’ claims were time-barred.

On the same day, in the CFPB’s case against several of the same defendants alleging similar conduct, defendants filed a petition for certiorari with U.S. Supreme Court (covered previously in InfoBytes here and here) requesting that the Court review the following questions: (i) when should an enforcement action that is initiated by an agency head unconstitutionally insulated from removal be dismissed to remedy that separation-of-powers violation?; and (ii) whether passive securitization vehicles used to acquire and pool consumer loans are “covered persons” because they “engage[] in offering or providing a consumer financial product or service” under the CFPA.