                                 United States Court of Appeals,

                                        Eleventh Circuit.

                                          No. 97-6963.

   Paul R. ELLIS, Peggy Ann Ellis, on their own and on behalf of all others similarly situated,
Plaintiffs-Appellants,

                                                v.

 GENERAL MOTORS ACCEPTANCE CORPORATION, d.b.a. General Motors Acceptance
Corporation, Defendant-Appellee.

                                         Nov. 13, 1998.

Appeal from the United States District Court for the Northern District of Alabama. (No. 97-P-96-S),
Sam C. Pointer, Jr., Judge.

Before ANDERSON and BARKETT, Circuit Judges, and HILL, Senior Circuit Judge.

       BARKETT, Circuit Judge:

       Plaintiffs Paul and Peggy Ellis ("Ellises") appeal the dismissal of their suit against the

General Motors Acceptance Corporation ("GMAC") alleging violations of the Truth in Lending Act,

15 U.S.C. § 1640(e) (1997) ("TILA"). The district court dismissed the complaint on the grounds

that the statute of limitations had expired and, alternatively, that under 15 U.S.C. § 1641, GMAC

was exempted from liability under TILA. On appeal the Ellises argue that the statute of limitations

was suspended by the doctrine of equitable tolling and that, by writing and signing the contract,

GMAC voluntarily agreed to expanded liability. We find that TILA is subject to equitable tolling

but that GMAC, as an assignee, is not liable for the TILA violations alleged.

                                           Background

       The Ellises' claim derives from their purchase of a 1993 Saturn SL-2 from Royal Oldsmobile

("Royal") on May 22, 1995. At the same time that they bought the car, the Ellises purchased an

extended warranty for an additional $1,195. They financed the car and warranty through a Retail
Installment Contract ("RIC") and the loan was assigned to GMAC simultaneously with the contract's

execution. In the section itemizing the amount financed, the RIC listed $1,195 as being paid to

"Mechanic" for the extended warranty. The Ellises allege that this listed payment constituted

misrepresentation because substantially less than $1,195 was paid to this third party. They claim

that only a small portion of this amount was paid to "Mechanic" and that Royal retained the rest.

The Ellises brought suit against GMAC on January 14, 1997, eighteen months after purchasing the

car and warranty, and the district court subsequently granted GMAC's motion to dismiss the suit for

failure to state a claim. See FED.R.CIV.P. 12(b)(6).

       The Ellises recognize that, under TILA, they had only one year from the time they purchased

the car and warranty to bring an action.1 They argue, however, that because they were prevented

from learning that the total amount paid by Royal to Mechanic was misrepresented on the disclosure

document, equitable tolling applies to suspend the statute of limitations. The Ellises further argue

that, notwithstanding the language of 15 U.S.C. § 1641(a) holding assignees liable under TILA only

for violations apparent on the face of the disclosure statement, GMAC contractually obligated itself

to assume liability for any cause of action that could have been brought against the seller, including

this claim for misrepresentation. Thus, they assert that the district court erred in dismissing their

complaint.

        We review dismissals pursuant to Rule 12(b)(6), de novo, taking all the material allegations

of the complaint as true while liberally construing the complaint in favor of the plaintiff. Roberts

v. Florida Power & Light Co., 146 F.3d 1305, 1307 (11th Cir.1998). A court may dismiss a


   1
    15 U.S.C. § 1640(e) states in relevant part: "[a]ny action under this section may be brought
in any United States district court, or in any other court of competent jurisdiction, within one
year from the date of the occurrence of the violation."

                                                  2
complaint "only if it is clear that no relief could be granted under any set of facts that could be

proved consistent with the allegations." Hishon v. King & Spaulding, 467 U.S. 69, 73, 104 S.Ct.

2229, 81 L.Ed.2d 59 (1984).

                                               Discussion

1. Statute of Limitations

          Because the district court determined that TILA's statute of limitations is jurisdictional and

that its expiration deprived the court of subject matter jurisdiction, we must first address this

threshold issue. When Congress enacts statutes creating public rights or benefits, it can impose time

limits on their availability. These time limits can either completely extinguish the right or simply

bar the remedy for enforcement. In the former case, jurisdiction does not exist because the cause

of action has been totally extinguished. In the latter case, the court continues to have jurisdiction

and has the discretion to consider particular circumstances affecting the ability of a party seeking

review to comply with the time limits, which can be tolled when principles of equity render their

rigid application unfair. See Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 398, 102 S.Ct. 1127,

71 L.Ed.2d 234 (1982); Holmberg v. Armbrecht, 327 U.S. 392, 395-96, 66 S.Ct. 582, 90 L.Ed. 743

(1946).

          "Equitable tolling" is the doctrine under which plaintiffs may sue after the statutory time

period has expired if they have been prevented from doing so due to inequitable circumstances. See

Bailey v. Glover, 88 U.S. (21 Wall.) 342, 347, 22 L.Ed. 636 (1874) (where a party injured by

another's fraudulent conduct "remains in ignorance of it without any fault or want of diligence or

care on his part, the bar of the statute does not begin to run until the fraud is discovered ..."). See

also Osterneck v. E.T. Barwick Indus., 825 F.2d 1521, 1535 (11th Cir.1987), aff'd, Osterneck v.


                                                    3
Ernst & Whinney, 489 U.S. 169, 109 S.Ct. 987, 103 L.Ed.2d 146 (1989) (if third party is in privity,

or a principal-agent relationship with the defendant exists, defendant's approval of the concealment

may be sufficient to toll the statute). Unless Congress states otherwise, equitable tolling should be

read into every federal statute of limitations. Holmberg, 327 U.S. at 394-96, 66 S.Ct. 582.

        In this case, the district court concluded that TILA was a jurisdictional statute and that the

Ellises' claim was therefore time-barred. The Ellises maintain that 15 U.S.C. § 1640(e) is not a

jurisdictional statute but rather a statute of limitations subject to equitable tolling.

        The issue of whether TILA is subject to equitable tolling is one of first impression in this

circuit. Every other circuit that has considered the issue has held that TILA is subject to equitable

tolling. See Ramadan v. Chase Manhattan Corp., 156 F.3d 499 (3rd Cir.1998) (under facts virtually

identical to those here, court found § 1640(e) subject to equitable tolling); Jones v. TransOhio

Savings Ass'n., 747 F.2d 1037, 1041 (6th Cir.1984) (§ 1640(e) subject to equitable tolling); King

v. California, 784 F.2d 910, 914-15 (9th Cir.1986) (accord with TransOhio ); Kerby v. Mortgage

Funding Corp., 992 F.Supp. 787 (D.Md.1998); see also Lawyers Title Ins. Corp. v. Dearborn Title

Corp., 118 F.3d 1157, 1166-67 (7th Cir.1997) (citing King and TransOhio with approval).2



   2
     We note in passing that the D.C. Circuit addressed this issue in dicta in Hardin v. City Title
& Escrow Co., 797 F.2d 1037, 1039-40 & n. 4 (D.C.Cir.1986). Hardin did not involve TILA at
all, but was rather about the limitations provisions of the Real Estate Settlement Procedures Act,
12 U.S.C. § 2601, et. seq.(RESPA). In a digression discussing TILA, the Hardin court opined
that the 1980 amendments to TILA providing a recoupment defense to collection actions brought
more than one year from the date of the violation indicate Congress' intent that TILA be
jurisdictional. See Hardin, 797 F.2d at 1039-40. However, among other things, the Hardin
court assumed that recoupment was always permitted prior to the 1980 amendment, when there
was actually considerable disagreement on this issue. See Kerby 992 F.Supp. at 796-97
(discussing Hardin and listing pre-1980 cases on both sides of the recoupment issue). See also
Lawyers Title Ins. Corp., 118 F.3d at 1166-67 (RESPA case citing reasoning of King and
TransOhio and declining to follow Hardin ).

                                                   4
        GMAC contends, however, that we should not follow the other circuits because our own

precedent in Hill v. Texaco, Inc., 825 F.2d 333 (11th Cir.1987) forecloses a finding that equitable

tolling applies here. We find Hill to be inapposite. Hill did not involve TILA, but rather the

Petroleum Marketing Practices Act ("PMPA"), 15 U.S.C. § 2802(b)(3)(D)(iii). Plaintiff, a Texaco

franchisee, sued Texaco alleging that Texaco had acted in bad faith when offering him right of first

refusal on the sale of his leased property. Texaco had offered to sell Hill the property for $326,000

even though the land had been appraised at $225,000. Hill refused and seventeen months later

Texaco sold the property to a third party for $240,000. Hill then sued, claiming that Texaco's offer

to him was not bona fide and therefore violated the PMPA. Id. at 334. The statute of limitations in

PMPA is one year. Hill filed suit after more than a year had elapsed arguing that, because fraudulent

concealment prevented his learning of the violation until after the statute had tolled, equitable tolling

should apply.

        The Hill court disagreed, recognizing that, while equitable tolling is typically read into

federal statutes of limitation, it cannot apply in the face of contrary congressional intent. Id. "[T]he

basic inquiry is whether congressional purpose is effectuated by tolling the statute of limitations in

given circumstances." Burnett v. New York Central R. Co., 380 U.S. 424, 427, 85 S.Ct. 1050, 13

L.Ed.2d 941 (1965). To determine whether equitable tolling applies, courts "examine the purposes

and policies underlying the limitation provision, the Act itself, and the remedial scheme developed

for the enforcement of the ... Act." Id.




                                                   5
        PMPA has a very specific purpose—protecting franchisees from wrongful termination of

their franchises.3 It begins to run from the time of a specific event of which the claimant would have

certain knowledge, i.e., the termination or nonrenewal of his/her franchise. Although Congress

wished to shield franchisees from unfair business practices by giving them the right of first refusal

on the sale of their leased property, it clearly did not intend to create an indefinite right of action in

the event the franchiser decides at a later date to part with the property at a lower price. See Hill,

825 F.2d at 334 (noting that when Congress enacted PMPA, it was aware of abusive practices by

some oil franchisers yet deliberately chose a short statute of limitations). In light of the statute's

stated purpose and language, the Hill court concluded that PMPA represents a narrow exception to

the general rule that equitable tolling applies to all federal statutes of limitation. See id. at 334-35.

        In this case, we examine TILA, a consumer protection statute which, though possessing a

limitations period similar to PMPA, is remedial in nature and therefore must be construed liberally

in order to best serve Congress' intent. See McGowan v. King, Inc., 569 F.2d 845, 848 (5th Cir.




   3
    15 U.S.C. § 2802(a) of the PMPA states:

                Except as provided in subsection (b) ... and section 2803 of this title, no franchiser
                engaged in the sale, consignment, or distribution of motor fuel in commerce
                may—

                (1) terminate any franchise ... prior to the conclusion of the term, or the expiration
                date, stated in the franchise; or

                (2) fail to renew any franchise relationship (without regard to the date on which
                the relevant franchise was entered into or renewed).

                                                    6
Mar.15, 1978).4 The section of TILA addressing Congressional findings and the statute's declaration

of purpose states in relevant part:

        (a) Informed use of credit

        The Congress finds that economic stabilization would be enhanced and the competition
        among the various financial institutions and other firms ... would be strengthened by the
        informed use of consumer credit. The informed use of credit results from an awareness of
        the cost thereof by consumers. It is the purpose of this subchapter to assure a meaningful
        disclosure of credit terms so that the consumer will be able to compare more readily the
        various credit terms available to him and avoid the uninformed use of credit, and to protect
        the consumer against inaccurate and unfair credit billing and credit card practices.

15 U.S.C. § 1601.

         Despite TILA's clearly remedial purpose, if we were to read its time limit literally,

consumers whose cause of action was fraudulently concealed from them until after a year had passed

could not pursue a cause of action under TILA. That would lead to the anomalous result that a

statute designed to remediate the effects of fraud would instead reward those perpetrators who

concealed their fraud long enough to time-bar their victims' remedy. We cannot believe this was

Congress' intent. Rather, in these circumstances we apply the general rule that equitable tolling

applies to all federal statutes unless the statute states otherwise. Holmberg, 327 U.S. at 394-95, 66

S.Ct. 582. We therefore agree with the Third, Sixth, and Ninth Circuits that the statute of limitations

in TILA is subject to equitable tolling. Consequently, the district court erred in dismissing the

Ellises' claim for lack of jurisdiction.

2. Assignee Liability




   4
   This court adopted as binding precedent the decisions of the former Fifth Circuit prior to
October 1, 1981. Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir.1981) (en banc).

                                                  7
        Although we find that TILA is subject to equitable tolling, thus giving the district court

jurisdiction, we need not reach the question of whether equitable tolling applies to the facts of this

case because we conclude that, as an assignee, GMAC is not liable for the alleged TILA violations.

The Act applies to every consumer credit contract, including those between buyers and sellers as

well as those between buyers and third-party financing agents including mortgage brokers, credit

card companies and the like. In this lawsuit, the seller, Royal, was not sued. Thus, we are

concerned only with whether GMAC, the assignee of the contract between Royal and the Ellises,

is liable under the statute.

        TILA has specifically addressed the liability of assignees under the Act and provides that:

        [e]xcept as otherwise specifically provided in this subchapter, any civil action for a violation
        of this subchapter or proceeding ... which may be brought against a creditor may be
        maintained against any assignee of such creditor only if the violation for which such action
        or proceeding is brought is apparent on the face of the disclosure statement, except where
        the assignment was involuntary.... [A] violation apparent on the face of the disclosure
        statement includes but is not limited to (1) a disclosure which can be determined to be
        incomplete or inaccurate from the face of the disclosure statement or other documents
        assigned, or (2) a disclosure which does not use the terms required to be used by this
        subchapter.

15 U.S.C. § 1641(a). At the same time, in regulations set forth in 16 C.F.R. § 433.2 (1998), the

Federal Trade Commission ("FTC") requires that every consumer credit contract treating the sale

or lease of goods or services contain the following language in bold type:

        NOTICE: ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT
        TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT
        AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO
        OR WITH THE PROCEEDS HEREOF. RECOVERY OF THE DEBTOR SHALL NOT
        EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.

        GMAC was clearly a "holder" of the Ellises' credit contract, which would seem to suggest

that a TILA cause of action could lie against GMAC. GMAC contends, however, that the holder


                                                   8
notice language appears in the contract only because it is required by the FTC and therefore is

subordinate to the statutory limitation of liability set forth in 15 U.S.C. § 1641(a). Consequently,

because the alleged violation was not apparent on the face of the disclosure document, GMAC is

not liable under § 1641(a).

       The Ellises concede that "[r]egulations cannot trump the plain language of statutes." Robbins

v. Bentsen, 41 F.3d 1195, 1198 (7th Cir.1994).5 They maintain, however, that even if § 1641(a)

limits liability, parties can still agree to waive the protections of the statute and assume greater

liability than the law requires. They assert that in this case GMAC's intent to assume greater

liability is manifested by the above quoted language in the contract and argue that this interpretation

is the only way to give any meaning to the language in the contract.

        While it is certainly true that parties can waive statutory protections and assume liabilities

not required by law,6 we cannot conclude that GMAC has done so here. The only evidence of

GMAC's purported intent to relinquish TILA's protections is the language that the FTC mandates

be inserted into every consumer credit contract. See 16 C.F.R. § 433.2. We agree with the Seventh

Circuit in Taylor v. Quality Hyundai, Inc., 150 F.3d 689 (7th Cir.1998) that this holder notice

language is part of the contract by force of law and "must be read in light of other laws that modify



   5
    See Mohasco Corp. v. Silver, 447 U.S. 807, 825, 100 S.Ct. 2486, 65 L.Ed.2d 532 (1980)
(agency interpretation of statute cannot supersede language chosen by Congress); S.J. Groves &
Sons, Co. v. Fulton County, 920 F.2d 752, 764 (11th Cir.1991) (regulations must not be
unauthorized, or inconsistent with the statute that authorizes them); United States v. Gordon,
638 F.2d 886, 888 (5th Cir., Mar.5, 1981) ("Whatever effect [an] agency regulation may have
under other circumstances, it cannot supersede a statute applicable to those present here.").
   6
    See, e.g., Northside Iron & Metal Co., Inc. v. Dobson & Johnson, Inc., 480 F.2d 798, 800
(5th Cir. July 5, 1973) (bank may waive protections offered by statute, but to do so it must
demonstrate voluntary and intentional relinquishment or abandonment of privilege).

                                                  9
its reach." Id. at 693. Adhering to this principle does not render the contract language meaningless.

As the Taylor court recognized, the provision continues to fill a valuable role by reiterating the right

of buyers to withhold payment from sellers or assignees, if the cars they purchased turn out to be

lemons. Taylor. See also Maberry v. Said, 911 F.Supp. 1393, 1402 (D.Kan.1995) ( FTC holder

language permits consumers to defend against a creditor suit for payment of an obligation by raising

a valid claim against the seller as a setoff); Hoffman v. Grossinger Motor Corp., No. 96 C 5362

(N.D.Ill. June 27, 1997). Like Taylor, we conclude that the language required by the FTC regulation

cannot override the express language of TILA in which Congress specifically decided that assignee

creditors will only be liable for TILA violations that are apparent on the face of the disclosure

statement.

       Thus, the language in the contract required by the FTC regulation standing alone does not

suffice to subject GMAC to liability. Although GMAC could contract, as the Ellises suggest, to

assume greater liability than the statute requires, there is no evidence in this case to suggest or

indicate that the insertion of the regulatory language into the contract resulted from bargaining or

agreement by the parties to reflect such a voluntary and intentional assumption of liability.

Accordingly, we conclude that under § 1641(a), GMAC can be liable only for violations that are

apparent on the face of the disclosure statement.

        The Ellises maintain, nonetheless, that the misrepresentation of the warranty cost was

sufficiently "apparent on the face" of the disclosure statement to warrant liability. We find this

contention equally unconvincing. The Ellises argue that since GMAC issued the checks and credits

to "Mechanic" in payment for the warranty and that related loan documents reveal the true cost of

the warranty as well as the amounts paid to the parties, the discrepancy between the amount


                                                  10
supposedly paid to "Mechanic" and the amount actually paid by GMAC reflected a violation

apparent on the face of the documents. Under the Ellises' own argument, however, we would need

to resort to evidence or documents extraneous to the disclosure statement. This the plain language

of the statute forbids us to do. As the Seventh Circuit noted, such an interpretation of TILA would:

"impose a duty of inquiry on financial institutions that serve as assignees. Yet this is the very kind

of duty that the statute precludes, by limiting the required inquiry to defects that can be ascertained

from the face of the documents themselves." Taylor.

       For the foregoing reasons, we hold that the statute of limitations set forth in TILA, 15 U.S.C.

§ 1640(e) is not jurisdictional and therefore may be subject to equitable tolling. However, because

GMAC, as an assignee, is not liable under TILA for the violations alleged here, the district court's

dismissal of the complaint is AFFIRMED.

       HILL, Senior Circuit Judge, specially concurring:

       I concur in the judgment of the panel in that it affirms the dismissal of the complaint by the

district court. I write specially for the following reasons.

       The district court dismissed the complaint on two grounds: (1) that it was time-barred by

the jurisdictional limitation period of Section 1640(e); and, (2) that it failed to state a claim of

assignee liability under Section 1641(a). If the liability of the assignee issue can be affirmed, in my

view, we need not reach the jurisdiction question.

       Let us assume, however, that we must decide the jurisdictional issue of equitable tolling. In

my opinion, we are bound by the precedential authority of Hill v. Texaco, 825 F.2d 333 (1987),

unless and until told otherwise by an en banc panel of this circuit or the Supreme Court of the United

States. Unlike the panel's opinion, I do not read Hill to be "inapposite" to the circumstances here.


                                                  11
       Furthermore, I adhere to the reasoning of Hardin v. City Title & Escrow Co., 797 F.2d 1037,

1039-40 & n. 4 (D.C.Cir.1986), premised upon an analysis of congressional intent surrounding a

1980 amendment to the TILA, that Section 1640(e) is jurisdictional in nature and cannot be

equitably tolled. In short, the TILA is a statute of repose.

       I would affirm on the basis of the judgment of the district court. I think it got it right all the

way.




                                                  12
