Daniel v. Navient Solutions, LLC

• Decision Date: 25 June 2018
• Docket Number: Case No. 8:17-cv-2503-T-24JSS
• Parties: Edwing D. DANIEL, William Cottrill, Brooke Padgett, Michael Fanella, James Morgan, and Elaine Lareina, Plaintiffs, v. NAVIENT SOLUTIONS, LLC, Defendant.
• Court: U.S. District Court — Middle District of Florida

328 F.Supp.3d 1319

Edwing D. DANIEL, William Cottrill, Brooke Padgett, Michael Fanella, James Morgan, and Elaine Lareina, Plaintiffs,

v.NAVIENT SOLUTIONS, LLC, Defendant.

Case No. 8:17-cv-2503-T-24JSS

United States District Court, M.D. Florida, Tampa Division.

Signed June 25, 2018

Gus M. Centrone, Brian Lucas Shrader, Dunlap Bennett & Ludwig PLLC, Katherine Earle Yanes, Brandon Kyle Breslow, Kynes, Markman & Felman, PA, Tampa, FL, for Plaintiffs.

Ashley Nicole Rector, Dayle Marie Van Hoose, Sessions, Fishman, Nathan & Israel, LLC, Tampa, FL, Lisa M. Simonetti, Vedder Price, LLP, Los Angeles, CA, for Defendant.

ORDER

SUSAN C. BUCKLEW, United States District Judge

Before the Court is Defendant Navient Solutions, LLC's Motion to Strike Class Allegations and to Dismiss and Incorporated Memorandum of Law (Doc. 28), Plaintiffs Edwing D. Daniel, William Cottrill, Brooke Padgett, Michael Fanella, and Elaine Lareina's Response in Opposition (Doc. 37), and Defendant's Reply to the Response (Doc. 56). The Court, having carefully considered the parties' submissions, finds that the Motion is due to be denied.

I FACTUAL BACKGROUND

Plaintiffs are a group of individuals working in public interest occupations who allegedly relied on the Public Service Loan Forgiveness (PSLF) program to forgive their student loans. All of the Plaintiffs used Defendant Navient Solutions LLC to service their student loans. Defendant is the largest student loan servicer in the United States and services more than 12 million borrowers. Defendant's responsibilities as a student loan servicer include informing borrowers about available repayment plans and communicating with borrowers about the repayment of their loans.

Plaintiffs allege that they relied on incorrect information and recommendations given to them by Defendant regarding their eligibility for student loan forgiveness under the PSLF, resulting in their mistaken belief that they were eligible for the PSLF program. Plaintiffs filed this Class Action Complaint against Defendant, on behalf of themselves and a proposed class of similarly-situated loan borrowers, for breach of fiduciary duty (Count I), negligence (Count II), unjust enrichment (Count III), breach of implied-in-law contract (Count IV), violation of the Florida Consumer Collection Practices Act, Fla. Stat. § 559.72 (Count V), violation of the Illinois Consumer Fraud and Deceptive Practices Act, 815 ILCS 501, et seq. (Count VI), violation of the D.C. Consumer Protection Procedures Act, D.C. Code Ann. § 28.3901, et seq. (Count VIII), and violation of the Colorado Consumer Protection Act, Colo. Rev. Stat. § 6-1-101, et seq. (Count VIII). Plaintiffs seek damages, costs, and attorneys' fees for the alleged violations.

II. MOTION TO STRIKE

Defendant moves to strike Plaintiffs' class action allegations, arguing that Plaintiffs' proposed national class and state subclasses do not satisfy the requirements of Rule 23, Federal Rules of Civil Procedure. Specifically, Defendant argues that Plaintiffs will fail to satisfy the commonality, predominance, and superiority requirements of Rule 23 because determining its liability "will require a highly fact-intensive and individualized analysis of the interactions that [Navient] had with hundreds of thousands of its borrowers." (Doc. 28, p. 12). Defendant relies in large part on Rule 23(c)(1), which requires the Court "[a]t an early practicable time after a person sues or is sued as a class representative" to "determine by order whether to certify the action as a class action." Fed. R. Civ. P. 23(c)(1). (Doc. 28, p. 10). Defendant, however, overlooks the fact that "on a motion to strike pursuant to Rule 23, the Rule 23 factors should be viewed through the lens of the Rule 12(f) standard for motions to strike." DeJesus v. Cigna Corp. , 2018 WL 375579, at *2 (M.D. Fla. Jan. 11, 2018) (citing Gill-Samuel v. Nova Biomedical Corp. , 298 F.R.D. 693 (S.D. Fla 2014) ) (internal quotation marks omitted). The Court may only strike an allegation from a pleading that is "redundant, immaterial, impertinent, or scandalous." Fed. R. Civ. P. 12(f). "Motions to strike may be granted only if ‘the matter sought to be omitted has no possible relationship to the controversy, may confuse the issues, or otherwise prejudice a party.’ " Argentine v. Bank of Am. Corp. , 2015 WL 12844395, at *1 (M.D. Fla. July 29, 2015) (quoting United States v. MLU Servs., Inc. , 544 F.Supp.2d 1326 (M.D. Fla. 2008) ). "In the context of motions directed to allegations of class certification as insufficient under [ Rule 23 ], the court must be particularly hesitant to decide matters against a class in view of the absence of a developed factual record." Id.

Defendant's motion necessarily fails when the Rule 12(f) standard is applied. In their First Amended Complaint, Plaintiffs adequately plead each of the pertinent requirements to maintain a Rule 23(b)(3) class action—numerosity, commonality, typicality, adequacy, predominance, and superiority—and the factual basis for asserting each requirement will be met at the class certification stage. (Doc. 19, pp. 4–7). Moreover, as Plaintiffs argue, Defendant's assertion that Plaintiffs will fail to meet particular Rule 23 requirements calls for a premature analysis by this Court into the viability of class certification. An order on class certification is premature prior to discovery and the parties having an opportunity to thoroughly brief the Rule 23 requirements. See, e.g., Fosbrink v. Area Wide Protective, Inc. , 2017 WL 6947421, at *2 (M.D. Fla. Aug. 23, 2017) ("Here, Defendant's request to deny certification of the proposed classes is premature. The Court finds that the allegations in the Amended Complaint are not so facially defective to allow this Court to deny certification without Plaintiff being allowed to take discovery to try to satisfy the requirements of [R]ule 23."); Argentine , 2015 WL 12844395, at *1 ("The Court...agrees with Plaintiff that the motion to strike the allegations of class certification is premature."); James D. Hinson Elec. Contracting Co., Inc. v. AT & T Servs., Inc. , 2014 WL 1118015, at *4 (M.D. Fla. Mar. 20, 2014) (holding it was premature to strike class action allegations based on the pleadings). While the instant motion to strike class allegations may be premature, one or more of Defendant's attacks on commonality, predominance, and superiority could ultimately provide a valid basis for denying a motion for class certification and, thus, Plaintiffs should be well-prepared to address them at that stage of this case.

III. MOTION TO DISMISS

A. Preemption

Defendant also argues that the Amended Complaint should be dismissed pursuant to Rule 12(b)(6), Federal Rules of Civil Procedure, based on preemption by the Higher Education Act ("HEA"). Defendant asserts that Plaintiffs' claims are barred by both express preemption and conflict preemption. In support of their express preemption argument, Defendant argues that 20 U.S.C. § 1098g has been interpreted as requiring dismissal of state law claims against student loan servicers for alleged misrepresentation or omissions of fact. Defendant argues that Plaintiffs' state law claims are expressly preempted by the HEA inasmuch as they seek to impose additional disclosure requirements on Defendant. Defendant further argues that Plaintiffs' claims are barred by conflict preemption because allowing individual, state-law causes of action is inconsistent with Congress's intention to create a uniform structure for servicing Direct Loans. Defendant maintains that allowing state-law causes of action would create a significant obstacle to implementation of the HEA's statutory purpose and the related regulatory scheme, but offers no evidence or case law to support its argument.

Plaintiffs' causes of action are not preempted by either express or conflict preemption. Defendants rely upon "express preemption, where Congress has expressly preempted local law," and "conflict preemption, where local law conflicts with federal law such that it is impossible for a party to comply with both or the local law is an obstacle to the achievement of such objectives." New York SMSA Ltd. P'ship v. Town of Clarkstown , 612 F.3d 97 (2d Cir. 2010). The Supreme Court has held the interpretation of a preemption statute is informed by two presumptions about the nature of preemption: (1) in all preemption cases, we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress, Medtronic, Inc. v. Lohr , 518 U.S. 470, 485, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996) ; and (2) the analysis of the scope of a statute's preemption is guided by the purpose of Congress in enacting the statute, and the understanding of the scope of a preemption statute must rest primarily on a fair understanding of congressional purpose. Cipollone v. Liggett Group, Inc. , 505 U.S. 504, 530, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992).

Defendant's preemption argument must fail. There is a strong presumption against preemption for matters that have typically been left to the States, and consumer protection is one of those traditionally state-regulated matters. See California v. ARC Am. Corp. , 490 U.S. 93, 101, 109 S.Ct. 1661, 104 L.Ed.2d 86 (1989). Defendant relies on cases holding that state-law claims based on improper disclosures, or failure to disclose information the HEA does not require disclosure of, are expressly preempted. See Chae v. SLM Corp., 593 F.3d 936 (9th Cir. 2010) ; Linsley v. FMS Inv. Corp., 3:11CV961 VLB, 2012 WL 1309840 (D. Conn. Apr. 17, 2012) ; McCulloch v. PNC Bank, Inc. , 298 F.3d 1217 (11th Cir. 2002). However, these cases are inapplicable here because Plaintiffs are not claiming that Defendant merely failed to disclose the requirements of the PSLF program, but rather, they are asserting that Defendant made affirmative misrepresentations to them. This contrasts...