Fourth Circuit Affirms Waiver of Arbitration in Time-Barred Debt Collection Suit: Roper v. Oliphant Financial

In a recent unpublished but instructive decision, the Fourth Circuit in Roper v. Oliphant Financial, LLC, No. 24-1933 (4th Cir. July 23, 2025), affirmed the District of Maryland’s denial of a debt buyer’s motion to compel arbitration. The case serves as a critical reminder for consumer protection lawyers litigating time-barred debt claims: initiating collection litigation in state court can waive any contractual right to compel arbitration, even when the loan agreement includes a broad arbitration clause.

Background: A Common Collection Playbook Gone Wrong

The plaintiff, Thelma Roper, filed a class action against Oliphant Financial and Stillman P.C. under federal and Maryland consumer protection statutes. Her central allegation? The defendants systematically filed state court collection lawsuits after the Maryland statute of limitations had expired.

Roper had defaulted on a personal loan originated by Oliphant’s predecessor-in-interest. Oliphant sued her in Maryland state court, but the case was dismissed as time-barred. Roper then brought a putative class action in federal court, targeting a pattern of abusive collection litigation on stale debts.

Oliphant and Stillman responded with a motion to compel arbitration, pointing to an arbitration clause in the original loan contract. The district court denied that motion, holding that the defendants had waived their arbitration rights by previously initiating state court litigation on the same claims.

The Fourth Circuit’s Analysis: Litigation = Waiver

On appeal, the Fourth Circuit reviewed the denial de novo, applying the two-part test set out in Morgan v. Sundance, Inc., 596 U.S. 411 (2022):

1. Did the party seeking arbitration know of the right to arbitrate?
2. Did the party act inconsistently with that right?

The panel also relied on Cain v. Midland Funding, LLC, 156 A.3d 807 (Md. 2017), which held that filing a lawsuit on arbitrable claims waives the right to compel arbitration under Maryland law—especially where the court action and the arbitration demand involve “interrelated” claims forming “one basic issue.”

Here, the court found that the claims Roper sought to litigate, including those under the Fair Debt Collection Practices Act (FDCPA) and Maryland Consumer Debt Collection Act (MCDCA), were inextricably tied to Oliphant’s state court filing. Even though defendants argued that some challenged conduct (like demand letters) occurred pre-litigation, the Fourth Circuit found that Roper’s claims arose solely from lawsuits filed beyond the limitations period.

The class definition was crucial: it expressly limited class membership to consumers who were sued, not merely contacted or induced to pay on time-barred debts.

• Litigation Waiver is Alive and Well Post-Morgan. The Fourth Circuit continues to enforce waiver of arbitration rights where creditors initiate judicial proceedings, particularly in consumer debt matters.
• Maryland Law Supports a Broad View of “Same Claims.” Under Cain, if the facts in court and arbitration are part of a single dispute, waiver applies—even if different legal theories are involved.
• Class Definitions Matter. The court emphasized that the class was limited to those sued beyond the statute of limitations, thereby avoiding any ambiguity regarding overlapping claims.
• Strategic Implications: If you’re litigating time-barred debt cases, especially involving mass filings by debt buyers or collection firms, scrutinize whether those defendants have previously invoked judicial processes. Arbitration clauses are not bulletproof when preceded by aggressive litigation tactics.

While Roper is unpublished, it lends persuasive weight to existing Maryland and Fourth Circuit authority that governs collection actors who exploit the system, litigating only when it suits them, then invoking arbitration when challenged. 

Consumer protection lawyers should feel confident in opposing arbitration in similar contexts where state court filings are made first.