NEW ORLEANS (Legal Newsline) -- The U.S. Court of Appeals for the Fifth Circuit, in a ruling earlier this month, sided with a debt collection agency in a lawsuit filed against it for alleged violations of the Fair Debt Collection Practices Act.

Plaintiff Emily Wagner appealed to the Fifth Circuit after the U.S. District Court for the Middle District of Louisiana dismissed the case.

In its April 5 ruling, the Fifth Circuit upheld the lower court's judgment.

Wagner sued Franklin Collection Service, Equifax Credit Information Services Inc. and BellSouth Telecommunications Inc. over a billing dispute.

In particular, Wagner alleged that BellSouth billed her for two unauthorized phone services.

She did not pay the bills, and BellSouth referred the two unpaid accounts to collection agencies, including Franklin, which attempted to collect on the debt.

Franklin then reported the two accounts to Equifax, which reported the accounts as adverse notations.

Wagner filed her suit in August 2007, claiming inter alia that BellSouth violated the Louisiana Unfair Trade Practices Act, or LUTPA, for its alleged reassignment of unauthorized accounts to collection agencies; that Franklin violated a section of the FDCPA for supplying an incorrect date of first delinquency to Equifax on the second of the unauthorized accounts; and that Equifax violated a section of the Fair Credit Reporting Act, or FCRA, for failing to use reasonable procedures to ensure maximum possible accuracy in her credit file.

The district court ruled that Wagner's claim against BellSouth was prescribed under LUTPA's statute of limitations.

LUTPA requires that a claim be brought within "one year... from the time of the transaction or act which gave rise to this right of action."

The lower court concluded that the LUTPA claim against BellSouth was prescribed because Wagner did not allege any specific improper acts of BellSouth that occurred after Aug. 21, 2006, which was one year before the filing of her complaint.

The Fifth Circuit, in its per curiam opinion, agreed.

"The record shows that the last undisputed act by BellSouth was in June 2005 when the company stopped sending bills to Wagner for her two unpaid accounts," the three-judge panel wrote. "This is well before the limitations period."

The district court also ruled that Wagner's claim against Franklin had prescribed under the FDCPA's statute of limitations.

The FDCPA requires that a claim be brought "within one year from the date on which the violation occurs."

Franklin provided evidence that the date of its alleged violation was June 26, 2006, when the agency reported the second of Wagner's unauthorized BellSouth accounts to credit bureaus.

Wagner provided no allegations or evidence to dispute this date. Instead, she argued that under the discovery rule, the limitations period should not begin to run until Sept. 16, 2006, because that is when she learned that Franklin was reporting the second of her BellSouth accounts with an erroneous date of first delinquency.

"We agree with the district court that the discovery rule does not apply here. As the district court noted, the record shows that well before the limitations period, Wagner had seen Franklin repeatedly listed in adverse notations on her credit reports, she had received two collection notices from Franklin following a dispute letter she sent to the agency, and by her own allegations she was harassed and intimidated by numerous bill collectors," the Fifth Circuit wrote.

"This evidence shows that at the very least Wagner had constructive knowledge that Franklin was in violation of the FDCPA."

The Fifth Circuit also agreed with the lower court that Wagner cannot prevail on her FCRA claim against Equifax.

"Wagner has made no allegations and provided no evidence of damages she suffered from the credit line reduction, and thus under Smith (v. Santander Consumer USA Inc.) she has no viable economic damages claim," it wrote.

"As for her emotional distress, an FCRA plaintiff seeking emotional distress damages is required to present 'evidence of genuine injury, such as the evidence of the injured party's conduct and the observations of others,' and to demonstrate 'a degree of specificity which may include corroborating testimony or medical or psychological evidence in support of the damage award.'

"Wagner has presented no evidence of injury beyond her own conclusory assertions about emotional distress, which are insufficient to support an emotional damages award."

From Legal Newsline: Reach Jessica Karmasek by email at

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