In re: United States Department of Education, No. 21-71108 (9th Cir. 2022)
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The "borrower defense" cancellation of federal student loans is allowed in certain cases of school misconduct, 20 U.S.C. 1087e(h). After DeVos became the Secretary of the Department of Education, the Department used a new methodology to decide borrower defense claims. The Department was preliminarily enjoined from using that methodology. From June 2018-December 2019, the Department issued no borrower defense decisions. Individuals with pending applications sued. The parties negotiated a proposed settlement that included an 18-month deadline to resolve outstanding claims. Before the class fairness hearing, the Department sent out form letters denying borrower defense applications at a rate of 89.8%. The district court denied final approval of the settlement and ordered updated written discovery. Plaintiffs took four depositions of Department officials and received about 2,500 documents. In 2021, after DeVos resigned as secretary, the district court authorized class counsel to take her deposition. Plaintiffs then served a subpoena for a nonparty deposition on DeVos under FRCP 45.
The Ninth Circuit quashed the subpoena. Compelling the testimony of a cabinet secretary about the actions she took as a leader in the executive branch is allowable only in extraordinary circumstances. The party seeking the deposition must demonstrate agency bad faith and that the information sought from the secretary is essential to the case and cannot be obtained in any other way. There was no indication that DeVos held information that was essential to the case or that it was otherwise unobtainable.
Court Description: Writ of Mandamus / Subpoena. The panel granted in part, and denied in part, petitions for a writ of mandamus brought by former U.S. Secretary of Education Elisabeth DeVos, the current Secretary of Education, and the U.S. Department of Education seeking to direct the U.S. District Court for the Northern District of California to quash a subpoena for the deposition of former Secretary DeVos and to transfer the subpoena motion back to the Southern District of Florida. The case arose out of a lawsuit alleging that the Department of Education unlawfully delayed making decisions on student loans during DeVos’s tenure as Secretary of Education. The panel denied the request for a writ of mandamus ordering the district court to transfer the subpoena motion to the Southern District of Florida. The panel held that it did not have jurisdiction to review the procedural or substantive propriety of the Florida court’s transfer order. Here, 4 IN RE U.S. DEPARTMENT OF EDUCATION however, the panel was not asked to review the propriety of the Florida court’s transfer order, but rather its jurisdiction to enter such an order. The panel held that it did have jurisdiction to review the Florida court’s jurisdiction to enter the order. The magistrate judge had jurisdiction to issue the transfer order where the transfer order was nondispositive. Jurisdiction remained even though the Florida district court did not review objections to the magistrate judge’s transfer order. Applying the Bauman factors for granting a writ of mandamus, the panel declined to issue a writ of mandamus on this jurisdictional issue because there was no error, any alleged error was unlikely to often be repeated, there was no prejudice, and there was no new or important issue at stake. Turning to the writ of mandamus to quash the subpoena for DeVos’s deposition, the panel applied separation of powers principles, and held that extraordinary circumstances sufficient to justify the taking of a cabinet secretary’s deposition exist when the party seeking the deposition can demonstrate: (1) a showing of agency bad faith; (2) the information sought from the secretary is essential to the case; and (3) the information sought from the secretary cannot be obtained in any other way. First, the Department’s bad faith was apparent to the district court, and the panel saw no reason to question the finding. The Department, during the process of negotiating a settlement, sent out many application denials in unreasoned form letters despite having previously claimed that the eighteen-month delay in deciding the applications were due, in part, to the time-intensive process of considered decision-making. Second, the district court erred in allowing DeVos’s deposition because the information sought from DeVos, IN RE U.S. DEPARTMENT OF EDUCATION 5 while perhaps relevant, was not essential to the claims alleged by plaintiffs. Plaintiffs did not satisfy the second prong of the required three-prong showing necessary to establish extraordinary circumstances. Third, the panel held that there was no indication that DeVos held information that was essential to plaintiffs’ case or that it was otherwise unobtainable. Accordingly, the district court clearly erred in denying the motion to quash the subpoena to take the deposition of DeVos. The panel held that its reasoning applied even though DeVos was no longer serving as the Secretary. The panel noted that the other Bauman factors, besides clear error, supported the issuance of the mandate. Dissenting, Judge Paez disagreed with the majority for two principal reasons. First, the district court did not clearly err because no court of appeals has addressed the “extraordinary circumstances” requirement in the context of a former cabinet secretary who no longer has greater duties and time constraints, and is otherwise protected by the deliberative process privilege. Second, the district court did not err at all because the majority’s new standard amounted to mere distinctions without any meaningful difference and the majority provided no support for rejecting the district court’s holistic assessment of the record. Judge Paez would deny the government’s petition for a writ of mandamus. He concurred with the majority’s holding denying the writ of mandamus concerning transfer of the subpoena motion back to the Southern District of Florida. 6 IN RE U.S. DEPARTMENT OF EDUCATION
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