Wilson v. Navient/ECMC Student Loan Providers

Filing 25

MEMORANDUM OPINION. Signed by Judge Virginia Emerson Hopkins on 2/13/2018. (JLC)

FILED
2018 Feb-13 PM 12:17
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
EASTERN DIVISION
FREDDIE WILSON,
Plaintiff,
v.
NAVIENT/ ECMC STUDENT
LOAN PROVIDERS
Defendant.

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Case No.: 1:17-CV-02012-VEH

MEMORANDUM OPINION
I.

INTRODUCTION AND PROCEDURAL HISTORY
This is a civil action which was filed on December 1, 2017, by the Plaintiff,

Freddie Wilson, against the Defendant, Navient/ECMC Student Loan Providers
(“Navient”). (Doc. 1). In the original Complaint, the Plaintiff alleged that Navient
sent him a notice that his student loan account was “in collections and the collections
fees was [sic] asses[ed] at $6,281.98 and there was another fee associated with this
account in the amount of $1,880.75.” (Doc. 1 at 2). The letter also stated that the
Plaintiff’s account was “in arrears to the tune of four years and . . . is in collections.”
(Doc. 1-1 at 2). The Plaintiff also alleged that
the defendant[] failed to follow the laws enacted by Congress and
properly serve and call the plaintiff as required by law and once it failed

to follow the law the defendant did not have the right to charge the
plaintiff.”
(Doc. 1 at 2). Wilson then claimed that the Defendant was liable for deprivation of
his Constitutional right to due process (Count One); “deceptive trade practices”
(Count Two); and defamation (Count Three).
The Plaintiff also sought to proceed in forma pauperis (“IFP”), and continues
to do so. (Docs. 5, 10). When, as here, an IFP affidavit is sufficient on its face to
demonstrate economic eligibility for IFP status, the court must “first docket the case
and then proceed to the question of whether the asserted claim is frivolous.”1
Martinez v. Kristi Kleaners, Inc., 364 F.3d 1305, 1307 (11th Cir. 2004) (quoting
Watson v. Ault, 525 F.2d 886, 891 (11th Cir. 1976)). “An issue is frivolous when it
appears that ‘the legal theories are indisputably meritless.’” Ghee v. Retailers Nat.
Bank, 271 F. App’x 858, 859 (11th Cir. 2008) (quoting Carroll v. Gross, 984 F.2d
392, 393 (11th Cir. 1993)). In other words, an IFP action is frivolous “if it is without

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Pursuant to 28 U.S.C. § 1915(e)(2)(B)(i) a court may dismiss an action that is filed in
forma pauperis if the court finds that the action is “frivolous or malicious.” See also, Martinez v.
Kristi Kleaners, Inc., 364 F.3d 1305, 1306 n.1 (11th Cir. 2004) (“Despite the statute’s use of the
phrase ‘prisoner possesses,’ the affidavit requirement applies to all persons requesting leave to
proceed IFP.”); see also Haynes v. Scott, 116 F.3d 137, 140 (5th Cir. 1997) (“We agree with the
analysis of the Sixth Circuit and hold that the affidavit requirement of section 1915(a)(1) applies
to all persons applying to proceed i.f.p.”); Hayes v. United States, 76 Fed. Cl. 762, 763 n.1
(2007) (“Although the language of the statute, by alternating between ‘person’ and ‘prisoner,’
immediately raises the issue of whether it applies to all persons or only to prisoners, courts
generally accept that it applies to all persons.”).
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arguable merit either in law or fact .... [A]rguable means capable of being
convincingly argued.” Id. at 859-60 (citing Bilal v. Driver, 251 F.3d 1346, 1349 (11th
Cir. 2001), and Sun v. Forrester, 939 F.2d 924, 925 (11th Cir. 1991)) (internal
quotations and citations omitted).
The Court conducted a frivolity review and dismissed Count One with
prejudice. (Doc. 16 at 8). It also noted that “[t]he Complaint, as currently pleaded,
is deficient because jurisdiction [under 28 U.S.C. § 1332] is unclear” because:
the Plaintiff alleges only that he is a “resident” of the state of Alabama.
Furthermore,
[a] prisoner’s place of incarceration does not establish
citizenship. Polakoff v. Henderson, 370 F.Supp. 690, 693
(N.D.Ga.), aff'd, 488 F.2d 977 (5th Cir.1974). A prisoner's
citizenship is determined by his domicile prior to
incarceration. Polakoff, 370 F.Supp. at 693; Denlinger v.
Brennan, 87 F.3d 214, 216 (7th Cir.1996) (“A forcible
change in a person's state of residence does not alter his
domicile; hence the domicile of [a] prisoner before he was
imprisoned is presumed to remain his domicile while he is
in prison.”); Lima v. Diaz, No. 95–734–CIV–T–17B, 1995
WL 75922, at *1 (M.D.Fla. Dec.18, 1995).
Jones v. Law Firm of Hill & Ponton, 141 F. Supp. 2d 1349, 1355–56
(M.D. Fla. 2001) (Presnell, J.). Absent an allegation by the Plaintiff that
he is a citizen of any state, jurisdiction has not been properly pleaded
and this Court cannot determine whether it has jurisdiction. The
Plaintiff will be allowed to amend his Complaint to plead his
citizenship. Thereafter, the Court will reassess whether it has
jurisdiction pursuant to 28 U.S.C. § 1332.

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(Doc. 16 at 5-6) (footnote omitted) (emphasis in original). The Court also ordered the
Plaintiff to file an amendment to his Complaint “which states the Plaintiff’s state of
citizenship.” (Doc. 16 at 8).
Even though the Plaintiff alleged jurisdiction based on diversity of citizenship,
the court concluded that his claims likely “aris[e] under the . . . laws . . . of the United
States,” making jurisdiction proper under 28 U.S.C. § 1331. (Doc. 16 at 7-8). The
Court ordered the Plaintiff to file and amendment to his Complaint which states:
1) the exact federal laws and/or regulations which the Defendant
violated; and 2) how the Defendant violated each law and/or regulation,
including: a) the specific conduct which was in violation of the law
and/or regulation; b) the names of the person or persons who engaged
in the conduct described; and 3) the specific date or dates on which each
instance of the conduct occurred. Furthermore, the amendment must
state: 1) whether his student loan account is actually in arrears; 2) the
date, if any, that it first became in arrears; and 3) the date when any
complained of actions by the Defendant occurred.
(Doc. 16 at 8). The Plaintiff was also warned:
Should the Plaintiff fail to provide this amendment by February 2,
2018, his case will be subject to being dismissed without prejudice
pursuant to Rule 41(b) of the Federal Rules of Civil Procedure for
failure to prosecute and/or for failure to comply with this Court’s
orders.
(Doc. 16 at 8-9) (emphasis in original).
On January 11, 2018, instead of filing an “amendment” to his Complaint as
ordered, the Plaintiff filed an “Amended Complaint,” which is now the operative
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pleading in this case. (Doc. 19). See, Krinsk v. SunTrust Banks, Inc., 654 F.3d 1194,
1202 (11th Cir. 2011) (“‘an amended complaint supersedes the initial complaint and
becomes the operative pleading in the case’”) (quoting Lowery v. Ala. Power Co., 483
F.3d 1184, 1219 (11th Cir.2007)). In the Amended Complaint, the Plaintiff continues
to allege that jurisdiction is appropriate pursuant to 28 U.S.C. § 1332.2 However, the
Plaintiff still only alleges that he “resides” in the state of Alabama, and does not
allege his state citizenship. (Doc. 19 at 1). The Plaintiff has also filed an affidavit in
support of his claim that there is diversity in this case. (Doc. 21). Nowhere in that
affidavit does he state his state of citizenship or establish were he was domiciled prior
to becoming incarcerated. Although he does state that he “has no intention on
returning to the Tampa Area . . . where he was convicted” (doc. 21 at 2), that alone
does not establish that he was domiciled there prior to his incarceration. Regardless,
most of the Plaintiff’s claims in his Amended Complaint arise out of alleged
violations of federal regulations, issued pursuant to a federal statute, so the Court
deems that jurisdiction is actually based on 28 U.S.C. § 1331, and 28 U.S.C. § 1367
(supplemental jurisdiction).
The Amended Complaint alleges that

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As with his original Complaint, the Plaintiff does not actually cite the statute, but he is
clearly asserting jurisdiction based upon it.
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4. On the date of September 17, 2017[,] [t] plaintiff Freddie Wilson
received a letter from the defendant . . . and pursuant to the letter that the
plaintiff Freddie Wilson received at the Talladega Prison Camp it read
as follows:
“ECMC is the current holder of the defaulted federal
student loan, disbursed for educational expenses. This loan
was disbursed on September 14, 2007, in the amount of
$14,628.14[.]”
5. The defendant in this case never once prior to the notice that the
plaintiff received on or about the date of September 20, 2017 attempted
to call the plaintiff via his case manager or counselor and explain to him
that there is outstanding balance being due and owing to this company.
(Doc. 19 at 1-2). In Counts One through Four the Plaintiff alleges that the Defendant
violated several federal regulations. In Count five, the Plaintiff alleges that the
Defendant violated Nevada Revised Statute 598.0915.
II.

ANALYSIS
Count Five will be dismissed as there are no allegations in the Amended

Complaint which plausibly allege that the Defendant was bound to comply with the
requirements of any statute from the state of Nevada.
Counts One through Four allege violations of the following federal regulations:
34 C.F.R. § 682.410(b)(6); 34 C.F.R. § 682.410(b)(5)(ii); 34 C.F.R. §
682.410(b)(6)(ii); and 34 C.F.R. § 682.410(5)(iv)(b). These regulations are enacted

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pursuant to the Higher Education Act of 1965. 28 U.S.C. § 1001, et seq. The Eleventh
Circuit has explained:
Congress enacted the Higher Education Act of 1965 to address the
pressing need to provide financial assistance to students in higher
education. Title IV of the HEA authorizes the Secretary of Education to
administer several federal student loan and grant programs, including
the Federal Family Education Loan Program (the Stafford Loan
Program), federal PLUS loans, federal consolidation loans, and federal
Perkins loans. Under these programs, lenders make guaranteed loans
under favorable terms to students and their parents, and these loans are
guaranteed by guaranty agencies and ultimately by the federal
government.
Because the United States guarantees these loans, the Secretary
of Education has an interest in protecting the United States against the
risk of unreasonable loss by ensuring that lenders employ due diligence
in the collection of these loans. 20 U.S.C. § 1078(c)(2)(A). The HEA
authorizes the Secretary of Education to promulgate regulations to carry
out the purposes of these programs, and these regulations apply to
third-party debt collectors . . . that attempt to collect loans on behalf of
lenders and guaranty agencies. See, e.g., 20 U.S.C. § 1078–3(d)(4); 20
U.S.C. § 1082(a)(1). It comes as no surprise that the Secretary has issued
several regulations that articulate the standards for diligent collection of
student loans. See 34 C.F.R. § 682.410; 34 C.F.R. § 682.411. For
example, after a borrower misses a payment, the lender must send at
least one written notice or collection letter to the borrower within 15
days that notifies the borrower of the delinquency. 34 C.F.R. §
682.411(c). If the debtor is still delinquent after 15 days, the lender must
send four collection letters to the borrower and make four diligent
efforts to contact the borrower by telephone; one telephone contact must
occur on or before the 90th day of delinquency, one must occur after the
90th day of delinquency, and at least two of the collection letters must
warn the borrower that if the loan is not paid, the default will be
reported to all national credit bureaus. 34 C.F.R. § 682.411(d). These are
just a few of the due diligence standards promulgated by the Secretary
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of Education, and they serve as a guide for lenders, guaranty agencies,
and third-party debt collectors engaged in pre-litigation collection
efforts.
***
[T]he HEA expressly empowers only the Secretary of
Education—not debtors—with the authority to enforce the HEA and
rectify HEA violations. 20 U.S.C. §§ 1070(b), 1071, 1082, 1094. It is
well-settled that the HEA does not expressly provide debtors with a
private right of action. McCulloch v. PNC Bank Inc., 298 F.3d 1217,
1221 (11th Cir.2002) (listing cases that found no express private right
of action under the HEA); Parks Sch. of Business, Inc. v. Symington, 51
F.3d 1480, 1484 (9th Cir.1995) (“There is no express right of action
under the HEA except for suits brought by or against the Secretary of
Education.”). And this court recently joined several other circuits when
it concluded that the enactment of the HEA did not create an implied
private right of action. McCulloch, 298 F.3d at 1224–25.
Cliff v. Payco Gen. Am. Credits, Inc., 363 F.3d 1113, 1122–23 (11th Cir. 2004); see
also, Bennett v. Premiere Credit of N. Am., LLC, 504 F. App'x 872, 875 (11th Cir.
2013) (“‘[i]t is well-settled that the HEA does not expressly provide debtors with a
private right of action.’”) (quoting Cliff, 363 F.3d at 1123). Since the Plaintiff has no
private right of action under the HEA, his claims for violations of the regulations
issued pursuant thereto fail as a matter of law. Counts One through Four are due to
be dismissed.
As noted above, the Amended Complaint is now the operative pleading in this
case. It does not contain the claims for “deceptive trade practices” or “defamation of

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character” which were present in the original Complaint. (Doc. 1 at 2-3) (Counts Two
and Three of the Original Complaint). Accordingly, the court need not address the
viability of those claims. Regardless, those claims lack merit as well, since the
Plaintiff does not explain in his original Complaint which law the Defendant
allegedly violated so as to constitute “deceptive trade practices.” Furthermore, neither
the original Complaint nor the Amended Complaint plausibly alleges facts which
demonstrate that the Defendant defamed the Plaintiff.3
III.

CONCLUSION
Based on the foregoing, the Motion To Proceed In Forma Pauperis will be

DENIED, and this case will be DISMISSED as frivolous pursuant to 28 U.S.C. §

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Generally, the Federal Rules of Civil Procedure require only that the complaint provide
“a short and plain statement of the claim showing that the pleader is entitled to relief.” FED. R.
CIV. P. 8(a). However, a complaint must “state a claim to relief that is plausible on its face.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (“Twombly”). A claim has facial plausibility
“when the plaintiff pleads factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citing Twombly, 550 U.S. at 556) (“Iqbal”). That is, the complaint must include enough
facts “to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555 (citation
and footnote omitted). Pleadings that contain nothing more than “a formulaic recitation of the
elements of a cause of action” do not meet Rule 8 standards, nor do pleadings suffice that are
based merely upon “labels or conclusions” or “naked assertion[s]” without supporting factual
allegations. Id. at 555, 557 (citation omitted). Once a claim has been stated adequately, however,
“it may be supported by showing any set of facts consistent with the allegations in the
complaint.” Id. at 563 (citation omitted). Further, when ruling on a motion to dismiss, a court
must “take the factual allegations in the complaint as true and construe them in the light most
favorable to the plaintiff.” Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008) (citing
Glover v. Liggett Group, Inc., 459 F.3d 1304, 1308 (11th Cir. 2006)).
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1915(e)(2)(B)(i). A Final Order will be entered.
DONE and ORDERED this 13th day of February, 2018.

VIRGINIA EMERSON HOPKINS
United States District Judge

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