Bennett v. Premiere Credit of N. Am., LLC

Decision Date28 January 2013
Docket NumberD.C. Docket No. 4:11-cv-00124-BAE-GRS,No. 12-12859,12-12859
CourtU.S. Court of Appeals — Eleventh Circuit


Non-Argument Calendar

Appeal from the United States District Court

for the Southern District of GeorgiaBefore MARCUS, WILSON and KRAVITCH, Circuit Judges.


Appellant Sherry Council Bennett appeals from the district court's grant of summary judgment in favor of appellees Educational Credit Management Corporation (ECMC) and Premiere Credit of North America, LLC (Premiere) and denial of her motion for partial summary judgment.1 See Bennett v. Premiere Credit of N. Am., LLC, et al., D. Ga. 2012, __ F.Supp.2d __, (No. 11-124, Oct. 20, 2011) ("Bennett I") (order granting ECMC's motion for summary judgment); see also Bennett v. Premiere Credit of N. Am., LLC, et al., D. Ga. 2012, __ F.Supp.2d __, (No. 11-124, May 8, 2012) ("Bennett II") (order granting Premiere's motion for summary judgment). Bennett challenges an administrative wage garnishment instituted by appellees in an attempt to collect monies allegedly owed by Bennett after she defaulted on her Stafford student loan. Finding no error on the part of the district court, we affirm.


"We review a grant of summary judgment de novo and apply the same legal standards as the district court." Citizens for Smart Growth v. Sec'y of the Dep't of Transp., 669 F.3d 1203, 1210 (11th Cir. 2012) (citation omitted). "The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). When reviewing a summary judgment motion, "[w]e do not make credibility determinations, but instead believe the evidence of the non-movant . . . and all justifiable inferences are to be drawn in [her] favor." Evans v. Stephens, 407 F.3d 1272, 1277 (11th Cir. 2005) (citation and internal quotation marks omitted) (ellipses in original). We also review de novo a district court's conclusion that federal law preempts state law. See Cliff v. Payco Gen. Am. Credits, Inc., 363 F.3d 1113, 1121 (11th Cir. 2004).


On appeal, Bennett claims that ECMC and Premiere violated the Higher Education Act (HEA), 20 U.S.C. §§ 1001 et seq.; the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692g; and Georgia state garnishment law, O.C.G.A. § 18-4-46.2 Bennett also contends that there is a question of fact as towhether she owes a debt at all, and therefore the district court improperly granted summary judgment in favor of ECMC and Premiere.

A. The Higher Education Act

Bennett asserts that ECMC and Premiere violated certain provisions of the HEA, which govern the procedures for administrative wage garnishment. See 20 U.S.C. § 1095a(a)(2)(5).3 Bennett contends that ECMC and Premiere violatedthe HEA when they failed to: (1) provide her with prior notice of the nature and amount of the debt owed; (2) give her notice of their intent to initiate the administrative wage garnishment; and (3) provide certain documents and records upon request regarding Bennett's alleged Stafford loan default. However, we have consistently held that "[w]hile the HEA endows debtors with certain rights during the wage garnishment process, the HEA expressly empowers only the Secretary of Education—not debtors—with the authority to enforce the HEA and rectify HEA violations." Cliff, 363 F.3d at 1123 (citation omitted); see 20 U.S.C. § 1095a. Therefore, "[i]t is well-settled that the HEA does not expressly provide debtors with a private right of action." Cliff, 363 F.3d at 1123 (citing McCulloch v. PNC Bank Inc., 298 F.3d 1217, 1221 (11th Cir. 2002)). There is also no implied private right of action. McCulloch, 298 F.3d at 1224-25. Accordingly, the district court properly found that Bennett could not bring a private cause of action against ECMC and Premiere for the alleged HEA violations. See Bennett I, D. Ga. 2012, __ F.Supp.2d __, (No. 11-124, Oct. 20, 2011); Bennett II, D. Ga. 2012, __ F.Supp.2d __, (No. 11-124, May 8, 2012).

B. Fair Debt Collection Practices Act

Although there is no express or implied private right of action under the HEA, a violation of the HEA can, at times, give rise to a private cause of action under the FDCPA. See Cliff, 363 F.3d at 1127. Bennett contends that ECMC and Premiere violated the FDCPA, directly and via their failure to qualify as guaranty agencies under the HEA, when they communicated with and improperly "issued [a] garnishment withholding order to [her] employer." See 15 U.S.C. § 1692c(b) (prohibiting a debt collector's communication with third parties under the FDCPA unless certain limited conditions apply). However, Bennett can only succeed on this claim if ECMC and Premiere: (1) fail to qualify as "guaranty agencies" under the HEA, and therefore did not have express authority to contact her employer; and (2) are classified as "debt collectors" under the FDCPA, and acted in violation of its regulatory provisions.

1. "Guaranty Agencies"

Under the Family Federal Education Loan (FFEL) Program, student loans, such as Bennett's Stafford loan, are guaranteed either by a state agency or by a "private nonprofit organization that has an agreement with the Secretary [of the Department of Education (DOE)] under which it will administer a loan guarantee program under the [HEA]." 34 C.F.R. § 682.200; see 20 U.S.C. § 1078(a)(1).These nonprofit organizations, known as guaranty agencies, enter into agreements with the DOE that:

[S]et forth such administrative and fiscal procedures as may be necessary to protect the United States from the risk of unreasonable loss thereunder, to ensure proper and efficient administration of the loan insurance program, and to assure that due diligence will be exercised in the collection of loans insured under the program.

20 U.S.C. § 1078(C)(2)(A) (emphasis added). HEA regulations have expressly characterized the relationship between a guaranty agency and the DOE as a fiduciary relationship. See 34 C.F.R. § 682.419(a) ("The guaranty agency must exercise the level of care required of a fiduciary charged with the duty of protecting, investing, and administering the money of others.").

Guaranty agencies are not only given express authority to engage in collection activities, but federal regulations mandate that the agencies engage in "due diligence" to collect on defaulted loans as part of their agreement with the DOE. See 34 C.F.R. § 682.410(b)(6)(i) ("A guaranty agency must engage in reasonable and documented collection activities on a loan on which it pays a default claim filed by a lender. . . . [T]he agency must perform at least one activity every 180 days to collect the debt, locate the borrower (if necessary), or determine if the borrower has the means to repay the debt." (emphasis added)); see generally 34 C.F.R. § 682.411(governing "[l]ender due diligence in collecting guaranty agency loans").

In addition, as part of their mandatory collection activities, guaranty agencies are given express authority to "garnish the disposable pay of a debtor to collect the amount owed if the debtor has failed to make payments required under a repayment agreement." Cliff, 363 F.3d at 1118 (citing 20 U.S.C. § 1095a(a) ("Notwithstanding any provision of State law, a guaranty agency . . . may garnish the disposable pay of an individual to collect the amount owed by the individual, if he or she is not currently making required repayment under a repayment agreement. . . .")). Guaranty agencies also have express authority to contact a debtor's employer and issue a withholding order demanding that the employer garnish the debtor's wages. See 20 U.S.C. § 1095a(a)(6) ("[T]he employer shall pay to the Secretary or the guaranty agency as directed in the withholding order. . . ."); see also 34 C.F.R. § 682.410(b)(9)(i)(H) ("Unless the guaranty agency receives information that the agency believes justifies a delay or cancellation of the withholding order, it shall send a withholding order to the employer. . . .").

Bennett contends that ECMC is not a guaranty agency, and that because there is no evidence that her Stafford loan was transferred or assigned to ECMC, it is not the current holder of her loan. Bennett asserts that the sworn affidavit of ECMC's Senior Account Servicing Representative, Julia Lambert—which states that ECMC is the current holder of Bennett's loan and that it is a guaranty agency—is nothing more than an unsupported opinion. Citing a decision from theNinth Circuit, Bennett further maintains that neither ECMC nor Premiere have engaged in the requisite activities to be classified as anything more than debt collectors. See Rowe v. Educ. Credit Mgmt. Corp., 559 F.3d 1028, 1032 (9th Cir. 2009). ECMC, on the other hand, cites Lambert's affidavit and contends that it qualifies as a guaranty agency under the HEA, such that its issuance of a withholding order to Bennett's employer was appropriate. Premiere concedes that it is not a guaranty agency.

As a preliminary matter, we reiterate the district court's observation that Bennett has confused the requirements for demonstrating an organization's "guaranty agency" status under the HEA with the requirements necessary to prove an entity's status as a "debt collector" under the FDCPA. See Bennett II, D. Ga. 2012, __ F.Supp.2d __, (No. 11-124, May 8, 2012) ("Bennett appears to intermingle the FDCPA and HEA."). The test that Bennett cites, as stated in our sister circuit's decision in Rowe and discussed by the district court below, resolves the question of "debt collector" status, but is inapplicable to determine "guaranty agency" status. See 559 F.3d at 1032 ("Two requirements must be satisfied for an entity to come within the exception to the FDCPA for collection...

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