Pettaway v. Department of Education

Filing 31

MEMORANDUM OPINION. Signed by District Judge Henry E. Hudson on 01/30/2015. Copy mailed to Pro Se Appellant. (jsmi, )

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division

SONYA D. PETTAWAY,

Appellant,
Civil Action No. 3:13cv241-HEH
UNITED STATES DEPARTMENT

OF EDUCATION,

Appellee.
MEMORANDUM OPINION

This matter is before the Court on pro se Appellant Sonya D. Pettaway's "Motion
to Dismiss for Lack of Subject Matter Jurisdiction" filed on January 23, 2015 (ECF No.

30), requesting that the August 8, 2013 judgment ofthis Court be vacated.1 Given the
procedural posture of this case and the relief requested in the motion, the Court will
construe Pettaway's filing as a Motion for Relief from Judgment, pursuant to Rule 60(b)
of the Federal Rules of Civil Procedure.2
For the reasons that follow, the Court DENIES Pettaway's motion.
1This Court, as required, construes pleadings filed by pro se litigants liberally. See Erickson v. Pardus, 551 U.S.
89,94, 127 S. Ct. 2197, 167 L. Ed. 2d 1081 (2007). Pettaway filed a "Motion to Dismiss for Lack of Subject Matter
Jurisdiction" pursuant to Fed. R. Civ. P. 12(b)(1), requesting "that the defendant's] complaint be ... dismissed."
(Pettaway Mot. to Dismiss 4.) Because this case, initiated by Pettawayas the Appellant-Plaintiff, was previously
dismissed, and the outcome was not favorable to Pettway, the Court assumes that the post-judgment motion seeks to
vacate the judgment. Based on this request, Pettaway also seeks the return of all payments she made to the
Department of Education after the date the Social Security Administration confirmed her total disability.

2The Federal Rules of Civil Procedure provide two (2) vehicles for requesting reconsideration of a court's prior
decision. Parties may bring a motion to alter or amend a judgment under Fed. R. Civ. P. 59(e) ("Rule 59(e)"), or a
motion for relief from judgment under Fed. R. Civ. P. 60(b) ("Rule 60(b)"). A Rule 59(e) motion must be filed
withintwenty-eight (28) days after entry of judgment, and that time period may not be extended. See Fed. R. Civ. P.
6(b)(2). Thus, if a post-judgment motion requesting reconsideration of, or relief from, a district court's final
judgment or order is filed within the 28-day period, it is properly construed as a Rule 59(e) motion; and if filed
outside that 28-day period, it is properly construed as a Rule 60(b) motion. Katyle v. Penn Nat'IGaming, Inc., 637
F.3d 462, 470 n.4 (4th Cir. 2011); see also United States v. Winestock, 340 F.3d 200, 203 (4th Cir. 2003).

I.

BACKGROUND

Pettaway's case initially reached this Court on appeal from the United States

Bankruptcy Court (the "Bankruptcy Court"). During her Chapter 7 bankruptcy
proceedings, Pettaway sought discharge of a student loan debt owed to the United States

Department of Education based on "undue hardship," which was denied. Pettaway
appealed to this Court, challenging—as applicable here—the Bankruptcy Court's
consideration of how she spent her Social Security Disability Income—namely,

gambling—in determining that Pettway had not met the "undue hardship" standard for a
discharge because she had not made a good faith attempt to pay her student loans. This
Court affirmed the decision of the Bankruptcy Court by Memorandum Opinion and Order

entered August 8, 2013. (ECF Nos. 15, 16.) Pettaway appealed the August 8,2013
Order to the United States Court of Appeals for the Fourth Circuit (the "Fourth Circuit"),
which affirmed this Court's determination that the Bankruptcy Court did not err in

considering Pettaway's use of her Social Security Disability funds when declining to
discharge her student loans (USCA Op. & J., March 31,2014, ECF Nos. 25, 26).
Apparently dissatisfied with the outcome of her appeal to the Fourth Circuit,
Pettaway filed the instant motion, arguing that this Court lacked subject matter

jurisdiction to rule on matters pertaining to an award of Social Security Disability
Income, and consequently, the judgment must be vacated. Pettway is correct that courts
may raise the issue of subject matterjurisdiction at any time—even after entry of a final

judgment, seeArbaugh v. Y&HCorp., 546 U.S. 500, 506 (2006); however, her assertion
that this Court lacked subject matter jurisdiction is incorrect.

II.

LEGAL STANDARD

Rule 60(b) of the Federal Rules of Civil Procedurepermits a party to seek relief

"from a final judgment, order, or proceeding." Fed. R. Civ. P. 60(b). In pursuing such

relief, the moving party must first "make a showing of timeliness, a meritorious defense,
a lack of unfair prejudice to the opposing party, and exceptional circumstances." Werner
v. Carbo, 731 F.2d 204, 206-07 (4th Cir. 1984). Next, the movant must satisfy one of

the six (6) grounds for reliefenumerated in Rule 60(b). Id. at 207. Under subsection (4)
of Rule 60(b), a district court may relieve a party from a final judgment or order that is
void. Fed. R. Civ. P. 60(b)(4). A judgment may be vacated as "void" under Rule

60(b)(4) only if the rendering court (1) lacked personal jurisdiction, (2) lacked subject

matter jurisdiction, or (3) acted in a manner inconsistent with due process of law. Wendt
v. Leonard, 431 F.3d 410, 412 (4th Cir. 2005).

The Fourth Circuit narrowly construes the concept of a "void" judgment. Id. "[A]

lack of subject matterjurisdiction will not always render a final judgment 'void' under
Rule 60(b)(4). Only when the jurisdictional error is 'egregious' will courts treat the

judgment as void." Id. at 413 (citation omitted). When deciding whether a judgment is
void for lack of subject matter jurisdiction, courts must look for the "rare instance of a

clear usurpation of power." Id. (quotation marks and citation omitted). "A courtplainly
usurpsjurisdiction only when there is a total want of jurisdiction and no arguable basis on
which it could have rested a finding that it had jurisdiction." Id. (quotation marks and
citation omitted).

III.

DISCUSSION3

Pettaway argues that this Court, and by extension the Bankruptcy Court, exceeded
jurisdictional authority when considering her use of her Social Security Disability Income
as a factor in assessing undue hardship. In support of her argument, Pettaway misapplies

thejudicial review provisions of the Social Security Act, 42 U.S.C. 405(g)-(h), to
conclude that this Court had no jurisdiction. The provisions Pettaway cites grant the

district courts authority to review final decisions of the Commissioner of Social Security
as to a claimant's eligibility for Social Security Disability benefits. Importantly, these

statutes apply only to Social Security Disability Income eligibility determinations, and
mean only that the district courts have no jurisdiction until a final decision denying

eligibility has been issued. In any event, these statutes are inapplicable to Pettaway's
case, as her eligibility for Social Security Disability Income was never at issue. The only
issue before this Court, with respect to Social Security benefits, was whether it was error

for the Bankruptcy Court to consider the reality that Pettaway gambled away her Social

Security Disability Income, as well as funds received from a personal injuryjudgment, in
its assessment of whether Pettaway would suffer any undue hardship if her student loans
were not discharged. This Court, as well as the Fourth Circuit, concluded that it was not.
Neither the decision of this Court, nor the decision of the Bankruptcy Court,

affected Pettaway's eligibility for, or right to receive, Social Security Disability Income.
Thus, this Court did not exceed its jurisdictional authority with respect to the Social

3Although this Court is not convinced that Pettaway would satisfy thethreshold requirements—particularly that of
"exceptional circumstances"—for bringing a motionunder Rule60(b), the Court will assume for purposes ofthis
discussion that Pettaway has satisfied the threshold requirements.

Security Act, 42 U.S.C. §§401, et seq. Furthermore, this Court hadjurisdiction to review
the final decision of the Bankruptcy Court in Pettaway's appeal of her Chapter 7
bankruptcy proceeding. See 28 U.S.C. § 158.

Pettaway also relies upon 34 C.F.R. § 685.213 to argue that because she receives
total disability benefits, her student loans must be discharged. This regulation applies to
an administrative discharge of student loans on the basis of total and permanent

disability. See 20 U.S.C. § 1087(c); see also Faison v. Duncan, 2012 U.S. Dist. LEXIS
51508 (N.D. Ga. 2012). Only the Secretary of Education, not a district court, has

discretion to administratively discharge a loan. United States v. Wright, 87 F. Supp. 2d
464, 466 (D. Md. 2000); see also Bega v. Dept. ofEduc, 180 B.R. 642 (1995). Thus, this
Court lacksjurisdiction to provide Pettaway any relief under this statute.
IV.

CONCLUSION

This Court's August 8, 2013 judgment is not void for want ofjurisdiction, as 28

U.S.C. § 158, undoubtedly, conferred upon this Court jurisdiction to review the decision
of the Bankruptcy Court. Additionally, thejudgment of the Fourth Circuit affirms that
neither this Court, nor the Bankruptcy Court, committed error or exceededjurisdictional

authority by considering Pettaway's gambling away of her Social Security benefits as a
factor in applying the "undue hardship" standard to determine that Pettaway's student
loans could not be discharged.

For these reasons, Appellant Sonya D. Pettaway's "Motion to Dismiss for Lack of
Subject Matter Jurisdiction," construed as a Motion for Relief from Judgment pursuant to
Fed. R. Civ. P. 60(b)(4), will be denied.

An appropriate order will accompany this Memorandum Opinion.

V

/s/

Henry E. Hudson
United States District Judge
Date:"S^f\ 3d*ZolS
Richmond, Virginia