Halzack Watkins v. Educational Credit Management Corporation, No. 2:2009cv00472 - Document 26 (E.D. Va. 2010)
Court Description: MEMORANDUM OPINION Granting Defendant's 16 Motion to Dismiss; the Complaint is Dismissed without Prejudice for failure to allege facts sufficient to show subject matter jurisdiction. Signed by District Judge Mark S. Davis and filed on 6/17/10. (lwoo)
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FILED IN THE UNITED STATES DISTRICT COUR* FOR THE EASTERN DISTRICT OP VIRGIN3JA ¢ .« « _ ' ' Norfolk Division CLERK, U.S. DISTRICT COURT NORFOLK VA REBECCA L. HALZACK WATKINS, Plaintiff, v. Action No. EDUCATIONAL CREDIT 2:09CV472 MANAGEMENT CORPORATION, Defendant. MEMORANDUM OPINION Rebecca accounting, Management U.S.C. § Halzack and declaratory Corp. 1095a Watkins ("Plaintiff") judgment ("Defendant") and of her based right to seeks against an injunction, Educational Credit on alleged violations constitutional due of 20 process. This matter is before the Court on Defendant's Motion to Dismiss. (Docket No. finding 16.) oral The motion has been fully briefed, argument to be unnecessary, I. and the Court, now GRANTS Defendant's Background Motion to Dismiss. A. In order to The Higher Education Act promote Education Act of 1965, access to higher education, 20 U.S.C. ffl 1001 et sea. pHEA"), Secretary of Education with administering various loan programs. federal As part education loans of these programs, to students the tasks the federal private Higher student lenders make that are guaranteed by public and private non-profit federal government. 588, 590 and agencies and See College Loan Corp. (4th Cir. 2005). into default, loss guaranty y. SLM Corp.. on provide one of collection notice these to defaulted the the 396 F.3d efforts the lender for its against including garnishment of the borrower's wages. wages by When such a federal education loan goes the guaranty agency reimburses commences reinsured loans, borrower. 20 the the borrower, Prior to garnishing loan U.S.C. guarantor must § 1095a(a)(2). Additionally, the borrower is entitled to a hearing conducted by an individual not controlled by the guaranty agency. 20 U.S.C. § 1095a(a)(5),(b). B. Factual History1 Plaintiff enrolled at Cooper Career Institute, an education institution then located in Virginia Beach, Virginia, on August 13, 2002. To obtain funding for her living expenses while attending school, Plaintiff Promissory Note. signed a $2,000 Defendant was Federal Stafford Loan Master the designated guarantor of the loan. Plaintiff graduated from Cooper Career Institute in September of 2003. When her first loan payment became due in March of 2004, 'The facts recited here are drawn from the allegations set forth in the Complaint and are assumed for the purpose of deciding the motion currently before the Court. However, the facts recited here are not factual findings for any purpose other than consideration of the instant motion. Plaintiff was $2,000 as informed that the amount she had believed. she owed was $8,000, Plaintiff attempted to obtain not from Cooper Career Institute her financial aid records for evidence that she had only received $2,000 in loan disbursements. But Cooper Career Institute was no longer in operation, and its administrators had forwarded Plaintiff's financial aid records Council of Higher Education for safekeeping. State Council of Higher Education informed to the State Unfortunately, Plaintiff that the her financial aid records are missing. On November 13, 2008, Defendant mailed to Plaintiff a Notice Prior to Wage Withholding, which warned that Defendant intended to garnish Plaintiff's wages because Plaintiff was in default on the loan. However, because Defendant sent the Notice to an address at which Plaintiff had not lived since 1996, Plaintiff did not receive the Notice. On January 27, 2009, Plaintiff's employer informed Plaintiff that her wages were subject to garnishment and accordingly began to withhold from her paychecks 15% of her net salary. In response, Plaintiff sent a Request for Hearing or Exemption to Defendant on March 6, 2009, in which concerning the garnishment. form listed categories selected two: that she requested a telephone The Request for Hearing or Exemption for garnishment objections, the amount extreme financial hardship, hearing of the garnishment and Plaintiff resulted in an and that she believed that the amount of the loan was unenforceable. In an accompanying statement, she explained that she had authorized a loan in the amount of $2,000, not the $8,000 claimed by Defendant. On April 16, 2009, the United States Department of Education issued a decision in response to Plaintiff's petition. With regard to her claim that the garnishment resulted in an extreme financial hardship, the Department of Education responded that because she had not completed a Statement of Financial requested, an oral contention that Department of hearing she had Education was only Status, denied. As authorized responded that a she as had been to Plaintiff's $2,000 had loan, not documented payments that Plaintiff made to Defendant. the properly Finally, the Department of Education concluded that because Plaintiff's Request for Hearing was untimely, it would instruct Defendant to continue garnishment of her wages.2 C. On September Complaint 24, Procedural History 2009, Plaintiff filed against Defendant alleging that in this the process Court a described above violated the HEA and violated Plaintiff's property rights without due process of law, in violation of the Fifth Amendment of the United States Constitution. Plaintiff seeks an injunction 2Because the Complaint does not seek review of the Department of Educations's administrative ruling, the Court makes no judgment as to the justifications for or clarity of the Department of Educations's stated reasons for its ruling. 4 suspending the wage withholding order, an accounting to determine the correct loan balance, and a declaratory judgment that Plaintiff is entitled to a hearing before wages are withheld from her salary. Defendant has responded with a Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(1), claiming that the Court does not have subject matter jurisdiction over the Complaint. III. A party may move Standard of Review to dismiss an action for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(l). asserting if jurisdiction such "has the jurisdiction exists." (4th Cir. 1999) . a motion burden is of filed, proving the party that subject matter Evans v. B.F. Perkins Co.. 166 F.3d 642, 647 When considering a motion to dismiss pursuant to Rule 12(b) (1), a court "may consider evidence outside the pleadings without converting the proceeding to one for summary judgment." Id^ (internal citation omitted). facts are not in dispute and When "the material jurisdictional the moving party is entitled to prevail as a matter of law," the moving party's motion to dismiss should be granted. Id^ {internal citation omitted). If, as here, the defendant makes a facial challenge to the claim's invocation of subject matter jurisdiction, attempted the "facts alleged in the complaint are taken as true." Kerns v. United st-.af.as. 585 F.3d 187, 192 (4th Cir. 2009). IV. Discussion Plaintiff claims two bases for subject matter jurisdiction: 20 U.S.C. § 1095a (the HEA) States Constitution. below, neither and the Fifth Amendment to the United (Compl. 1 3, Docket No. jurisdictional basis is 1.) As discussed supported by the facts alleged in the Complaint. A. HEA Claim Plaintiff asserts that Defendant violated the provisions of the HEA. (Compl. 91 32.) However, the HEA does not grant Plaintiff a right of action to bring such claim. The HEA's comprehensive remedial scheme makes the Secretary of Education responsible for enforcing compliance with the HEA and does not create a private right of action to sue any party other than the Secretary of Education. See 20 U.S.C. § 1082(a)(2)(expressly conferring private right of action to sue Secretary of Education). every court to consider the issue ... Indeed, "nearly has determined that there is no express or implied private right of action to enforce any of the HEA's provisions," other than against the Secretary of Education. McCullouah v. PNH Rank, inn.. 298 F.3d 1217, 1221 (11th Cir. 2002) (holding that the HEA does not grant private right of action to sue parties College Loan Com. . To the Education's extent actions other than the Secretary of Education); 396 F.3d at 598 that in Plaintiff this matter, (accord). contests the Department she may bring a of complaint against the Secretary of Education pursuant to 20 U.S.C. § 1082 (a) (2) or may seek review of its administrative ruling pursuant to the Administrative Procedures Act, 5 U.S.C. § 706(2). However, the HEA does not support the invocation of the Court's jurisdiction over Plaintiff's HEA claim against Defendant, and therefore the HEA Claim is DISMISSED WITHOUT PREJUDICE. B. Plaintiff next Due Process Claim asserts that "this process" has Plaintiff of her property without due process of law, of the Fifth claim fails A Amendment. (Compl. g[ 31, 33) in violation However, Plaintiff's to properly state the basis for federal jurisdiction. complaint must allege facts sufficient to show 1219 (4th Cir. 1982). in her complaint "general each element of standing. 555, 561 (1992). suffered an traceable to These "injury in fact;" 697 the plaintiff has the burden to factual Luian v. elements the As standing to bring a claim is necessary to federal jurisdiction, assert that Bain, federal court has jurisdiction over the claim. Adams v. F.2d 1213, deprived allegations" supporting Defenders of Wildlife. are: 2) 1) that the challenged action of that the 504 U.S. the plaintiff injury the defendant, is has "fairly and not the result of the independent action of some third party not before the court;" and 3) that there is a likelihood that "redressed by a favorable decision." Kentucky Welfare Rights Orcr. . 426 Id. U.S. the injury will be (quoting Simon v. 26, 41-42 (1976)). Eastern Here, Plaintiff has not stated facts element of standing, Defendant's i.e. conduct. Instead, that the second that the injury is fairly traceable to performed by Defendant and by Complaint claims to support after a recitation the Department "this process" of actions of Education, the has violated due process. Such a vague assertion does nothing to describe how the alleged injury is traceable to Defendant's challenged conduct. In fact, Plaintiff has not even specified what conduct she is challenging. In order to assert a due process claim against Defendant, Plaintiff must identify a specific action performed by Defendant that allegedly violates her right to due process. See e.g. Nelson v. Diversified 863 Md. Collection Serva.. 961 F. Supp. (D. 1997) (considering plaintiff's claim that federal student loan guarantor violated due process by not garnishing plaintiff's wages). providing proper notice before Therefore, Plaintiff's due process Claim is DISMISSED WITHOUT PREJUDICE. In conclusion, the Complaint WITHOUT PREJUDICE for failure (Docket to allege No. 1) is DISMISSED facts sufficient to show subject matter jurisdiction. IT IS SO ORDERED. is Mark S. Davis UNITED STATES DISTRICT JUDGE Norfolk, June n Virginia , 2010
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