Kaetz v. United States

• Decision Date: 30 March 2023
• Docket Number: Civ. 22-03469 (KM) (JRA)
• Parties: WILLIAM F. KAETZ, Plaintiff, v. UNITED STATES OF AMERICA; U.S. DEPARTMENT OF JUSTICE; EDUCATIONAL CREDIT MANAGEMENT CORP.; EXPERIAN; TRANSUNION; EQUIFAX INC; LAW OFFICES OF KENNETH L. BAUM; KENNETH L. BAUM; SCHUCKIT & ASSOCIATES; CAMILLE R. NICODEMUS; WILLIAM R. BROWN; PRICE MEESE SHULMAN & D'ARMINIO; DOROTHY A. KOWAL; SEYFARTH SHAW LLP; ROBERT T. SZYBA; CLARK HILL INTERNATIONAL LAW FIRM; and BORIS BROWNSTEIN, ESQ., Defendants.
• Court: U.S. District Court — District of New Jersey

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WILLIAM F. KAETZ, Plaintiff, v. UNITED STATES OF AMERICA; U.S. DEPARTMENT OF JUSTICE; EDUCATIONAL CREDIT MANAGEMENT CORP.; EXPERIAN; TRANSUNION; EQUIFAX INC; LAW OFFICES OF KENNETH L. BAUM; KENNETH L. BAUM; SCHUCKIT & ASSOCIATES; CAMILLE R. NICODEMUS; WILLIAM R. BROWN; PRICE MEESE SHULMAN & D'ARMINIO; DOROTHY A. KOWAL; SEYFARTH SHAW LLP; ROBERT T. SZYBA; CLARK HILL INTERNATIONAL LAW FIRM; and BORIS BROWNSTEIN, ESQ., Defendants.

Civ. No. 22-03469 (KM) (JRA)

United States District Court, D. New Jersey

March 30, 2023

OPINION

Hon Kevin McNulty United States District Judge

Pro se plaintiff William F. Kaetz filed this civil action against the United States of America and the United States Department of Justice ("DOJ" and together, the "Federal Defendants"), along with Educational Credit Management Corp. ("ECMC"); Experian Information Solutions, Inc. ("Experian"); Equifax Inc. ("Equifax"); the Law Office of Kenneth L. Baum LLC; Kenneth L. Baum; Schuckit & Associates, P.C ("Schuckit"); Camille R. Nicodemus; Trans Union LLC; William R. Brown; Price Meese Shulman &amp D'Arminio ("Price Meese"); Dorothy A. Kowal; Seyfarth Shaw LLP; Robert T. Szyba; Clark Hill, PLC; and Boris Brownstein, Esq. (collectively, the "Defendants"). Kaetz asserts that 1) 11 U.S.C. § 523(a)(8) is unconstitutional, and 2) Defendants committed fraud, fraud on the court, and various civil rights violations based on their involvement in a prior action he brought in this Court: Kaetz v. Educ. Credit Mgmt. Corp. et al, Case No. 2:16-CV-09225 (the "2016 Action").^[1]

Now before the Court are three sets of motions: 1) Defendants' motions to dismiss Kaetz's complaint (DE 39, 42, 56, 58, 59, 62, 90), primarily on preclusion grounds and for failure to state a claim, pursuant to Fed.R.Civ.P. 12(b)(6);^[2] 2) Kaetz's cross motions to strike (DE 41, 66, 67, 68, 69, 91) each of Defendants' motions to dismiss; and 3) Kaetz's motion for reconsideration (DE 114) of this Court's administrative termination of his January 9, 2023 motion for summary judgment. For the reasons set forth below, Kaetz's motions to strike Defendants' motions to dismiss are DENIED, Defendants' motions to dismiss the complaint are GRANTED, and Kaetz's motion for reconsideration of this Court's administrative termination of his summary judgment motion is DENIED.

I. BACKGROUND^[3]

The allegations in Kaetz's complaint all arise out of events that occurred during and leading up to the 2016 Action. I begin with pertinent background regarding Kaetz's claims in the 2016 Action and the outcome of that case. The following is a brief history of the 2016 Action, courtesy of the Third Circuit:

Kaetz filed a complaint against Educational Credit Management Corporation ("ECMC"), and three credit reporting agencies, Experian, Equifax, and TransUnion (together, the "CRAs"), arising from actions taken to collect and report his student loan debt. Kaetz alleged that in 2012, he filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the District of New Jersey. He listed ECMC in his petition as a creditor with claims totaling $15,835, which represented his student loans. The Bankruptcy Court granted Kaetz a discharge in 2013. Kaetz alleged that, after the discharge and completion of his bankruptcy case, ECMC used harassing telephone calls and letters to collect the debt. ECMC also informed the CRAs about his debt and the CRAs published the information on his credit report. Kaetz averred that the debt was discharged and that he disputed the debt without success.

Kaetz claimed that the defendants violated the Fair Debt Collection Practices Act, that the CRAs violated the Fair Credit Reporting Act, and that the defendants were in civil contempt of the Bankruptcy Court's discharge order. He also raised constitutional claims challenging, among other things, the constitutionality of the Bankruptcy Code provision excepting student loan debt from discharge, 11 U.S.C. § 523(a)(8).

ECMC moved to dismiss Kaetz's second amended complaint for failure to state a claim upon which relief could be granted. Experian and Equifax filed a joint motion to dismiss, which TransUnion joined. The District Court granted the motions and dismissed Kaetz's complaint. It ruled that many of Kaetz's claims failed because their premise-that his student loan debt was discharged in his bankruptcy case-was incorrect. The District Court explained that student loan debt is presumptively nondischargeable under § 523(a)(8) and that Kaetz had not filed an adversary proceeding to determine whether his debt could be discharged.

Kaetz filed a motion for reconsideration. . . [H]e disputed the District Court's conclusion that his student loan debts were not discharged in his bankruptcy case. He argued that he was not required to file an adversary proceeding and that he rebutted the presumption that his debt was nondischargeable by satisfying the exception in § 523(a)(8) for undue hardship. The District Court ruled that Kaetz had provided no reason justifying reconsideration of its prior decision and denied relief. It stated that Kaetz did not point to a change in law, new evidence, a clear error of law or fact, or manifest injustice, but had restated arguments he had made in opposition to the defendants' motion to dismiss. The District Court reiterated that his student loan debt was not discharged in his bankruptcy case.

Kaetz v. Educ. Credit Mgmt. Corp., No. 20-2592, 2022 WL 996422, at *1 (3d Cir. Apr. 4, 2022), cert, denied, 143 S.Ct. 277 (2022), reh'g denied, 143 S.Ct. 416 (2022) (affirming this Court's decision denying Kaetz's motion to reconsider its prior dismissal of his Second Amended Complaint in the 2016 Action).

Kaetz initiated the current action on June 6, 2022, approximately two months after the Third Circuit upheld this Court's dismissal of his Second Amended Complaint in the 2016 Action. In his current complaint, Kaetz articulates two primary contentions:

First, Kaetz asserts-once again-that the Bankruptcy Code provision excepting student loan debt from discharge, 11 U.S.C. § 523(a)(8), is unconstitutional. (Compl. at 10.) He argues that the statute is vague insofar as it "fails to provide adequate notice of its scope and sufficient guidelines for its application." As a result, says Kaetz, the statute is being "arbitrarily [and] discriminatorily enforced against debtors" like him. (Id. at 15.)^[4]

Second, Kaetz claims that during the 2016 Action, Defendants "manipulated] court processes" and impermissibly "read language into the [challenged] statute," thereby committing fraud against him, fraud on the court, and various violations of his civil rights. Kaetz alleges that Defendants' actions inflicted various "tort and economic injuries that resulted in cruel and unusual punishment and intentional infliction of emotional distress." (Id. at 10, 13, 26.)

Kaetz seeks monetary relief in the amount of $100,009,999.99, as well as injunctive relief prohibiting "the reading of court dicta and [other] language into statutes and rules." (Id. at 26.)

All Defendants have filed motions to dismiss Kaetz's complaint. (DE 39, 42, 56, 58, 59, 62, 90.) In response, Kaetz filed cross motions to strike each of the Defendants' motions to dismiss, simultaneously filing opposition briefs in the alternative. (DE 41, 66, 67, 68, 69, 91.) Defendants then filed reply briefs in further support of their motions to dismiss and in opposition to Kaetz's cross motions to strike. (DE 70, 73, 80, 82, 83, 94.) Defendants' motions to dismiss and Kaetz's cross motions to strike are fully briefed and ripe for decision.^[5]

II. MOTIONS TO STRIKE

Before addressing the pending motions to dismiss, I consider Kaetz's six motions to strike them. "As a general matter, motions to strike under Rule 12(f) are highly disfavored." F.T.C v. Hope Now Modifications, LLC, No. CIV. 09-1204 JBS/JS, 2011 WL 883202, at *1 (D.N.J. Mar. 10, 2011) (citations omitted). Viewed through the lens of the Civil Rule explicitly authorizing a motion to strike, Fed.R.Civ.P. 12(f), each of Kaetz's motions is invalid.

Rule 12(f) authorizes a court "to strike from a pleading an insufficient defendant or any redundant, immaterial, impertinent, or scandalous matter." The "pleadings" in a federal action consist of a complaint, an answer to a complaint, an answer to a counterclaim, an answer to a crossclaim, a third-party complaint, an answer to a third-party complaint, and, if the court so orders, a reply to an answer. Fed.R.Civ.P. 7(a). A motion to dismiss, however, is not a "pleading," and for that matter, neither is a response to a motion to strike. See Thompson v. Real Estate Mortg. Network, Inc., Civ. No. 11-1494, 2018 WL 4604310, at *2 (D.N.J. Sept. 24, 2018) (holding that a motion to strike is the improper response to a motion for summary judgment). And even if the Rule applied here, the motion would not be granted; the motions to dismiss contain no impertinent, scandalous, or otherwise improper matter that should not appear in the record.

Kaetz's motions to strike are therefore denied. His contentions are more properly considered as his opposition to Defendants' motions to dismiss, and I will so consider them in the following section.

III. MOTIONS TO DISMISS^[6]

Defendants all move to dismiss Kaetz's complaint on the following grounds: 1) Defendants argue that Kaetz's claims are barred by the preclusion doctrines of res judicata and/or collateral estoppel (Schuckit MTD at 6-11, Price Meese MTD at 6, Equifax MTD at 8-11, Experian MTD at 6-11, ECMC MTD at 6-9, Govt. MTD at 9-11.), and 2) Defendants argue that Kaetz's complaint fails to state a claim upon which relief can be granted, pursuant to Fed. R. Civ. 12(b)(6). (Schuckit MTD at 11-14, Price Meese MTD at 7, Equifax MTD at...