In their suit asserting claims under the Real Estate Settlement Procedures Act, the plaintiff-borrowers alleged sufficient facts against the defendant-lenders to merit relief from the one-year limitations period under the tolling doctrine of fraudulent concealment. The district court erred in holding otherwise.
RESPA’s statute of limitations is subject to fraudulent-concealment tolling; it does not contain a jurisdictional bar rendering such equitable tolling categorically unavailable. Like other circuits, the court concludes that the statute’s limitations provision is non-jurisdictional because the provision uses the non-mandatory term “may.” It is therefore far more permissive than several limitations provisions that have been held amenable to equitable tolling. Congress didn’t intend to allow entities that conceal their unlawful kickback schemes and other RESPA violations to reap the benefit of the statute of limitations as a defense.
The district court didn’t apply the proper test in holding that the plaintiffs failed to adequately allege their entitlement to equitable tolling. Contrary to the district court’s reasoning, the U.S. Supreme Court’s 2016 decision in Menominee Indian Tribe of Wisconsin v. United States dealt with a different tolling doctrine, so it didn’t abrogate this court’s long-standing three-step test for determining whether a plaintiff is entitled to relief from a limitations period based on fraudulent concealment.
In this case, the plaintiffs have alleged with particularity several tricks or contrivances that the lenders used to conceal an alleged unlawful kickback scheme. Taking their facts as true at this stage, they also exercised due diligence to uncover the facts supporting their claims and yet failed to uncover such facts within the limitations period.
Reversed and remanded.