Panico v. Portfolio Recovery Associates, LLC, No. 16-3852 (3d Cir. 2018)Annotate this Case
Panico, a New Jersey resident, incurred substantial debt on an MBNA credit card, which qualifie as “debt” under the Fair Debt Collection Practices Act, 15 U.S.C. 1692a(5). MBNA assigned the rights to the debt to PRA, a debt collector. PRA’s collection efforts failed. In 2014, more than three but fewer than six years after the cause of action accrued, PRA sued. New Jersey’s statute of limitations barred collection ofsuch debts after six years; Delaware’s statute proscribed collection of such debts after three years. The credit agreement provided for application of “the laws of ... Delaware, without regard to its conflict of laws principles, and by any applicable federal laws.” PRA agreed to a stipulated dismissal. In 2015, Panico filed a putative class action under the FDCPA, arguing that PRA had sought to collect on a time-barred debt. The district court granted PRA summary judgment, finding that a Delaware tolling statute prevented the Delaware statute of limitations from running as to a party residing outside that state during the credit relationship, default, collections attempts, and ensuing litigation. The Third Circuit reversed. Delaware’s tolling statute has been interpreted as abrogating its statute of limitations only as to defendants not otherwise subject to service of process; it was not intended to export the state’s tolling statute into out-of-state forums and to substantially limit the application of the Delaware statute of limitations.