Berdeaux v. U.S. Dep't of Educ. Loan Discharge Unit, CV 10-1737-PHX-JAT

Decision Date02 September 2011
Docket NumberNo. CV 10-1737-PHX-JAT,CV 10-1737-PHX-JAT
PartiesJack Berdeaux, Plaintiff, v. U.S. Department of Education Loan Discharge Unit, San Francisco CA; U.S. Department of Education Federal Offset Unit, Greenville TX; Diane Spadoni, Default Resolution U.S. Department of Education, Chicago IL, in her official and individual capacity, Defendants.
CourtU.S. District Court — District of Arizona
ORDER

Pending before the Court are the following motions: (1) Defendants' Motion to Dismiss for Lack of Subject Matter Jurisdiction and Failure to State a Claim (dkt. 25); (2) Plaintiff's Motion to Amend Complaint and Case File Notice Placement for Disability Accomidations [sic] (dkt. 26); (3) Plaintiff's Motion to Amend Complaint, Discovery Request and Disability Accomidations [sic] (dkt. 29); and (4) Plaintiff's Request for Entry of Default and Application for Default Judgment (dkt. 32 & 33). The Court has considered the pending motions, and rules as follows.

I. BACKGROUND

Plaintiff's Complaint, filed on August 16, 2010, is based on a series of interactionswith the U.S. Department of Education1 concerning Plaintiff's student loans. (Dkt. 1.) According to the Complaint, Plaintiff is permanently disabled, and seeks the cancellation of his student loan obligations. (Dkt. 1 at ¶ 5.) Plaintiff states that he submitted a loan discharge application in December 2002, and an updated loan discharge application in July 2006. (Id. at ¶ 6.) Plaintiff alleges that: (1) Defendants "failed to properly execute process and comply with policies, procedures, and applicable due process statutes related to Plaintiff[']s loan discharge application"; (2) Plaintiff was not provided a formal hearing despite filing a request; and (3) Defendants failed "to have the offsets reversed and refunded and to have future offsets stopped." (Id. at ¶¶ 6, 7.) Plaintiff seeks damages, and requests that Defendants be enjoined from garnishing Plaintiff's monthly Social Security benefits, refund of all sums previously offset from these benefits, and discharge Plaintiff's student loan obligations. (Id. at pp. 9-10.)

The Complaint is peppered with citations to federal statutes, references to the Constitution, and attempts at stating common law claims. Consequently, it difficult to ascertain the specific causes of action set forth in the Complaint. Pursuant to paragraph 4 of the Complaint, Plaintiff seeks relief for deprivation of his rights secured by: the Constitution; the Civil Rights Act of 1866, 42 U.S.C. § 1981; Title II of the Americans with Disabilities Act of 1990, 42 U.S.C. §§ 12101 et seq. (the "ADA"); and the Civil Rights Act of 1871, 42 U.S.C. § 1983. Plaintiff also attempts to seek relief for the common law claims of "interference with contract, negligence, libel, and abuse of process, malicious use of process, economic oppression, false representations, and malpractice."2 (Id. at ¶ 4.) In paragraph 1 of the Complaint, Plaintiff invokes federal subject matter jurisdiction under the 14thAmendment; 42 U.S.C. §§ 1981, 1985, 1986, 1988; 28 U.S.C. § 1331 and 1334.3 (Id. at ¶ 1.)

On March 2, 2011, Defendants were served with the Summons and Complaint (dkt. 22), and on April 29, 2011, Defendants filed the pending Motion to Dismiss (dkt. 25). Less than 21 days after the Motion to Dismiss was filed, Plaintiff filed a motion seeking leave to amend the Complaint. (Dkt. 26.)

II. APPLICATION FOR DEFAULT JUDGMENT

Plaintiff has moved for entry of default against Defendants on the ground that "named Defendants have failed to plead or otherwise defend in this action within the time allowed by law." (Dkt. 32 & 33.) Plaintiff cites Rule 55 of the Federal Rules of Civil Procedure as support for his application. Rule 55 provides that "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, . . . the clerk must enter the party's default." Fed. R. Civ. P. 55(a). Although Defendants have not filed an answer in this action, Defendants have not failed to "otherwise defend." On April 29, 2011, Defendant filed the pending Motion to Dismiss (dkt. 25), which was filed within 60 days of service of the Summons and Complaint (dkt. 22). This timely motion to dismiss, filed pursuant to Rule 12(b), satisfies the "otherwise defend" portion of Rule 55. See 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2682 (3d ed. 2004). Therefore, Plaintiff's application for default judgment must be denied.

III. MOTION TO DISMISS

Defendants have moved to dismiss the Complaint pursuant to Rule 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. (Dkt. 25.) Plaintiff filed a response in opposition to Defendants' motion attempting to address the sovereign immunity issues andgenerally denying Defendants' arguments.4 (Dkt. 27.) The Motion to Dismiss is fully briefed, and for the reasons that follow, the Court will dismiss the Complaint.

A. Legal Standards

The following legal standards will be applied by the Court in connection with the Motion to Dismiss.

1. Rule 12(b)(1)

"Federal Rule of Civil Procedure 12(b)(1) allows litigants to seek the dismissal of an action from federal court for lack of subject matter jurisdiction. . . . When subject matter jurisdiction is challenged under Federal Rule of [Civil] Procedure 12(b)(1), the plaintiff has the burden of proving jurisdiction in order to survive the motion." Tosco Corp. v. Communities for a Better Env't, 236 F.3d 495, 499 (9th Cir. 2001) overruled on other grounds by Hertz Corp. v. Friend, __ U.S. __, 130 S. Ct. 1181 (2010). Federal courts are courts of limited jurisdiction, and can only hear those cases authorized by the Constitution and by statute; namely, cases involving diversity of citizenship, a federal question, or cases to which the United States is a party. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). "It is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction." Id. (internal citations omitted). Accordingly, on a motion to dismiss for lack of subject matter jurisdiction, the plaintiff must demonstrate that subject matter jurisdiction exists to defeat dismissal. See A-Z Int'l v. Phillips, 323 F.3d 1141, 1145 (9th Cir. 2003) (citing Stock W., Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 (9th Cir. 1989)).

As a general rule, the United States may not be sued unless it has waived its sovereign immunity. Bramwell v. U.S. Bureau of Prisons, 348 F.3d 804, 806 (9th Cir. 2003). Accordingly, unless the United States consents to be sued, the Court lacks subject matterjurisdiction over claims against the Federal Government. United States v. Sherwood, 312 U.S. 584, 586 (1941); Consejo de Desarrollo Economico de Mexicali, A.C. v. United States, 482 F.3d 1157, 1173 (9th Cir. 2007) ("A court lacks subject matter jurisdiction over a claim against the United States if it has not consented to be sued on that claim.") (citing McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1998)). The doctrine of sovereign immunity applies to federal agencies and to federal employees acting within their official capacities. Hodge v. Dalton 107 F.3d 705, 707 (9th Cir. 1997) (citing S. Delta Water Agency v. U.S., Dep't of Interior, 767 F.2d 531, 536 (9th Cir. 1985)).

"A waiver of the Federal Government's sovereign immunity must be unequivocally expressed in statutory text, and will not be implied." Lane v. Pena, 518 U.S. 187, 192 (1996) (internal citations omitted). Any limitations and conditions upon the waiver must be strictly observed. Hodge, 107 F.3d at 707. Moreover, the Court construes any ambiguities in the scope of such waiver in favor of immunity. Lane, 518 U.S. at 192 (citing United States v. Williams, 514 U.S. 527, 531 (1995)).

Normally, on a Rule 12(b)(1) motion, the Court is "free to hear evidence regarding jurisdiction and to rule on that issue prior to trial, resolving factual disputes where necessary, [and] no presumptive truthfulness attaches to plaintiff's allegations." Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987) (internal quotations and citations omitted). However, when the jurisdictional issue is dependant on the resolution of factual issues relating to the merits of the case, the Court applies the Rule 12(b)(6) standard of assuming that all of the allegations in the complaint are true. Id.

2. Rule 12(b)(6)

To survive a Rule 12(b)(6) motion for failure to state a claim, a complaint must meet the requirements of Rule 8 of the Federal Rules of Civil Procedure. Rule 8(a)(2) requires a "short and plain statement of the claim showing that the pleader is entitled to relief," so that the defendant has "fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). The pleading standard in Rule 8 "demands more than an unadorned,the-defendant- unlawfully-harmed-me accusation." Ashcroft v. Iqbal, __ U.S. __, 129 S. Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 555). A complaint that offers nothing more than naked assertions will not suffice. Id. To survive a motion to dismiss, a complaint must contain sufficient factual matter, which, if accepted as true, states "a claim to relief that is plausible on its face." Id. Although a complaint attacked for failure to state a claim does not need detailed factual allegations, the pleader's obligation to provide the grounds for relief requires "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (internal citations omitted). The factual allegations of the complaint must be sufficient to raise a right to relief above a speculative level. Id.

In deciding a motion to dismiss under Rule 12(b)(6), the Court must construe the facts alleged in the complaint in the light most...

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