De La Mota v. United States
| Decision Date | 20 August 2003 |
| Docket Number | 02 Civ. 4276 (LAP) |
| Parties | MARISOL DE LA MOTA, FROEBEL CHUNGATA, and OREN DORON, individually and on behalf of a class of all others similarly situated, Plaintiffs, v. THE UNITED STATES DEPARTMENT OF EDUCATION; DR. RODERICK R. PAIGE, in his official capacity as Secretary of the United States Department of Education; NEW YORK LAW SCHOOL and RUTGERS — THE STATE UNIVERSITY OF NEW JERSEY, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Plaintiffs Marisol De La Mota ("De La Mota"), Froebel Chungata ("Chungata"), and Oron Doron ("Doron") (collectively, the "plaintiffs") bring this Amended Complaint (the "Complaint" or "Compl."), individually and on behalf of a class of all others similarly situated, against defendants United States Department of Education ("DOE") and Dr. Roderick R. Paige, in his official capacity as Secretary of the DOE (together, the "government defendants"), New York Law School ("NYLS") and Rutgers — The State University of New Jersey ("Rutgers") (collectively, the "defendants"), arising out of the defendants' termination of federal student loan cancellation benefits, in violation of 20 U.S.C. § 1087ee(a)(2)(I) and 34 C.F.R. § 674.56(b). The government defendants now move to dismiss the Complaint as against them or, in the alternative, for summary judgment on those claims. For the reasons stated herein, the government defendants' motion to dismiss is granted in part and denied in part.
The Higher Education Act of 1965, as amended, 20 U.S.C. § 1070, et seq. ("HEA"), authorizes the primary federal student financial aid programs for students enrolled in post-secondary education. The program involved in this case, the Federal Perkins Loan Program, is established by Title IV, Part E of the HEA, 20 U.S.C. § 1087aa, et seq. DOE has issued regulations governing the Perkins Loan Program in 34 C.F.R. Part 674.
The Perkins Loan Program provides low-interest loans (a "Perkins Loan") to financially needy students attending institutions of higher education to help them pay their educational costs. 34 C.F.R. 674.1(a). Under the program, DOE provides federal funds to participating institutions of higher education for use in capitalizing a loan fund. 20 U.S.C. § 1087bb. The institution makes matching institutional capital contributions to the fund. 20 U.S.C. § 1087cc(a)(2)(B). The institution uses the fund to make loans to eligible students. 34 C.F.R. § 674.8. Once the student graduates or otherwise leaves the institution, the loan goes into repayment. 34 C.F.R. §§ 674.31(b)(2) & 674.33. The loans are repayable to the institution, which is responsible for servicing and collecting on the loan. 34 C.F.R. §§ 674.41-674.48. The institution's Perkins Loan fund operates as a revolving fund. Monies repaid on outstanding loans are deposited into the institution's fund and are supplemented by new Federal and institutional capital contributions; these funds are then used to make new loans to students. 34 C.F.R. § 674.8. DOE regulations specify how the assets of an institution's Perkins Loan fund may be used by the institution. 34 C.F.R. § 674.8(b). The terms of the Perkins Loan are established by the HEA and DOE regulations.
Pursuant to section 1087ee of the HEA, Perkins Loan borrowers may have their loans cancelled in whole or in part by performing any of a variety of types of qualifying public service. 20 U.S.C. § 1087ee. One type of qualifying public service requiring the cancellation of loans is where a borrower works
as a full-time employee of a public or private nonprofit child or family service agency who is providing, or supervising the provision of, services to high-risk children who are from low-income communities and the families of such children.
20 U.S.C. § 1087ee(a)(2)(I); 34 C.F.R. § 674.56(b).
A borrower seeking cancellation of a Perkins Loan must submit a request to the institution that provided the loan and provide any documentation required by that institution to demonstrate that the borrower meets the conditions for cancellation of the loan. 34 C.F.R. § 674.52(a). An institution must cancel the loan if the borrower meets the requirements of section 674.56(b). 34 C.F.R. § 674.56(b).
According to the Complaint, De La Mota has been employed by the Administration for Children's Services ("ACS"), a New York City agency, in its Child Litigation Support Unit since April 1999. (Compl. ¶¶ 31-32). From April 1999 until August 2001, De La Mota received the benefits from the cancellation of her Perkins Loans.1 (Id.). In August 2001, defendant NYLS informed De La Mota that the DOE had ruled that she was ineligible for loan cancellation benefits. (Declaration of Marisol De La Mota, "De La Mota Decl.," dated March 26, 2003, at ¶ 8). NYLS also advised De La Mota that she would be required to repay the portion of her already-cancelled loans retroactively from the date she began receiving the benefits of cancellation. (Id.; Compl. at ¶ 35). In addition, NYLS informed De La Mota that the ruling regarding her ineligibility was made by an employee at DOE and "there was nothing NYLS could do without DOE's approval." (De La Mota Decl. at ¶ 10). On September 25, 2001, De La Mota contacted the DOE's Ombudsman's Office and requested that it investigate the ruling. (Id. at ¶ 12). By letter dated October 25, 2001, the DOE's Ombudsman concurred with NYLS' decision, explaining that "[t]he school was correct in denying your request for a child or family services cancellation since you are not providing services directly to high-risk children." (Compl. at ¶ 37; Government Defendants' Brief, hereafter "Defs' Br.," at 6) (emphasis in original).
According to the Complaint, Chungata is also an employee of ACS in the Child Support Litigation Unit. (Compl. at ¶¶ 31, 38). In March 2001, Chungata applied for the cancellation of his Perkins Loans. (Id. at ¶ 38). Thereafter, he was advised by NYLS that his application was rejected. (Declaration of Froebel Chungata, "Chungata Decl.," dated March 26, 2003, at ¶ 5). When he inquired as to why his application was rejected, NYLS referred him to a DOE ruling. (Id.). The ruling was in the form of an email from Brian Smith ("Smith") of the Policy Development Division ("PDD") at DOE setting forth the reasons why loan cancellation was inappropriate in an identical case, namely, that Chungata "was only providing legal services to high-risk children indirectly, and was thus ineligible to receive the benefit of cancellation." (Compl. at ¶ 38-39; Chungata Decl. at ¶ 6).
According to the Complaint, Doron, a graduate of Rutgers Law School, is employed in the Brooklyn Family Court Unit of ACS. (Compl. at ¶¶ 13, 31). In January 2002, Doron applied for cancellation of his Perkins Loans. (Id. at ¶ 40). On February 6, 2002, Rutgers requested guidance from DOE's PPD as to whether Doron's loan should be cancelled pursuant to 34 C.F.R. § 674.56(b). (Ex. B to the Declaration of Brian Smith, "Smith Decl.," dated January 28, 2003). In an email dated February 8, 2002, Brian Smith of the PPD responded that because Doron "does not provide services directly and exclusively to high-risk children," he was ineligible for loan cancellation benefits. (Id.). The Rutgers Financial Aid Office then informed Doron that his application was rejected because an individual at the DOE ruled that Doron was ineligible for loan cancellation benefits. (Declaration of Oron Doron, "Doron Decl.," dated March 26, 2003, at ¶ 5). When Doron questioned Rutgers about the denial of his application, he was advised that he should contact Brian Smith at DOE directly. (Id.). In addition, Rutgers forwarded Doron the February 8, 2002 email from Smith. (Compl. at ¶ 41).
On March 4, 2002, Doron contacted Smith directly with regard to Rutgers' denial of his request for loan cancellation. (Ex. C to the Smith Decl.). In response to Doron's email, Smith replied that DOE concurred in Rutgers' decision but that (Ex. D to the Smith Decl.). Smith added that, "[t]he Department of Education does, however, provide guidance to colleges and their servicers to assist them in making determinations of borrower eligibility for cancellation benefits." (Id.).
Under the well-established doctrine of sovereign immunity, an individual may not sue the United States without the latter's consent. See United States v. Mitchell, 445 U.S. 535, 538 (1980) ("It is elementary that `[the] United States, as sovereign, is immune from suit save as it consents to be sued ..., and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit.'" (quoting United States v. Sherwood, 312 U.S. 584, 586 (1941)); Haughton v. FBI, 98 Civ. 3418, 1999 U.S. Dist. LEXIS 19031, at *14 (S.D.N.Y. Dec. 10, 1999); Lopes v. United States, 862 F. Supp. 1178, 1185 (S.D.N.Y. 1994). Indeed, "[t]he waiver of sovereign immunity is a prerequisite to subject-matter jurisdiction." Presidential Gardens Assocs. v. United States ex rel. Secretary of Housing and Urban Dev., 175 F.3d 132, 139 (2d Cir. 1999). A waiver of sovereign immunity cannot be implied; rather, it must be "unequivocally expressed." See United States v. Testan, 424 U.S. 392, 399 (1976); Doe v. Civiletti, 635 F.2d 88, 93-94 (2d Cir. 1980); Lopes, 862 F. Supp. at 1185-86.
The general federal question jurisdiction statute, 28 U.S.C. § 1331, "is in no way a general waiver of sovereign immunity." Civiletti, ...
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