Pine v. Dep't of Educ.

Decision Date28 July 2020
Docket NumberCIVIL ACTION NO. 20-527
CourtU.S. District Court — Eastern District of Pennsylvania


Almost twenty-five years after she left Drexel University believing she owed it no student loans and twenty-two years after she thought she satisfied all of her student loans to pay for other universities, Melissa Beth Pine learned the Department of Education or its debt collector Reliant Capital Solutions, LLC began garnishing her wages for an alleged defaulted student loan paid to Drexel. Ms. Pine claims she never borrowed funds to attend Drexel and the debt collector or Department garnished her wages without the required statutory notice and hearing. The Department answered but reminds Ms. Pine we may review her claims under the Administrative Procedures Act's arbitrary and capricious standard, since she earlier contested her student debt in the administrative process and lost. Reliant Capital moves to dismiss. We grant most of its motion but cannot resolve the fact issues concerning whether it is a debt collector or the nature of its notice before garnishment. We dismiss Ms. Pine's claim under the Higher Education Act with prejudice and her Fair Credit Reporting Act, Debt Collection Improvement Act, Pennsylvania Unfair Trade Practices and Consumer Protection Law, and common law fraud claims without prejudice. Ms. Pine sufficiently pleads a Fair Debt Collection Practices Act claim against Reliant Capital subject to discovery and further review in response to a summary judgment motion.

I. Alleged pro se facts

Ms. Pine began her undergraduate studies in Fall 1985 at Pennsylvania State University.1 She remained a student at Penn State for three years but then transferred to Philadelphia College of Textile and Sciences to complete her studies.2 She received a bachelor's degree in finance in May 1990.3

Ms. Pine signed notes for guaranteed student loans to finance her education: for the 1985-86 school year, she borrowed $2,500; for the 1986-87 school year, she borrowed $2,500; for the 1987-88 school year she borrowed $850; and for the 1989-90 school year she borrowed $3,902.4 These loans total $9,752. She did not sign promissory notes to finance the 1988-89 school year because her grandmother paid her tuition then.5 She has not signed a promissory note for a student loan since her May 1990 graduation. She paid off all earlier student loans by 1997.6 She never signed a consolidation loan.7

Ms. Pine considered attending veterinary school in 1994. She began taking evening classes at Drexel University from summer 1994 to May 1995.8 She did not sign for student loans to finance her studies at Drexel University.9

Reliant Capital issues a wage garnishment order in December 2019.

Twenty-two years after paying off her student loans and almost twenty-five years after leaving Drexel, Reliant Capital began to garnish Ms. Pine's wages without notice to her. Beginning with her December 20, 2019 paycheck, she noticed a deduction of $338.62 attributed to "Student Loan."10 Her employer's human resources personnel told her Reliant Capital sent a December 4, 2019 wage garnishment order.11 Ms. Pine's employer provided her with a copy of the wage garnishment order marking the first time Ms. Pine saw the order.12

The December 4, 2019 wage garnishment order identifies Reliant Capital as the "Creditor Agency" with the Department of Education's address for administrative wage garnishments in St. Louis, Missouri.13 The total amount due is $67,918.33. The wage garnishment order is signed by a "Mark LaVia" for the Creditor Agency and certifies the order "is issued in accordance with the requirements of 31 U.S.C. § 3720D and 31 C.F.R. § 285.11 . . . ."14

Ms. Pine alleges Reliant Capital "did not receive and [sic] administrative order from the Department of Education in authorizing the garnishment of my wages."15

Ms. Pine's paystubs show her employer, under the wage garnishment order, deducted:16

 Paycheck date Amount YTD amount  12/20/2019  $336.62  $336.62         1/3/2020  $109.59  $109.59  1/17/2020  $80.72  $190.31  1/31/2020  $129.19  $319.50  2/14/2020  $114.17  $433.67  2/13/2020  ($114.27)  $319.50  2/21/2020  0  $319.50  2/28/2020  $137.60  $457.10  3/13/2020  $129.73  $586.83  3/24/2020  0  $586.83  3/27/2020  0  $586.83  4/9/2020  0  $586.83  4/24/2020  0  $586.83  5/8/2020  0  $586.83         2019   $336.62  2020   $586.83 Total  $923.45 

Although she does not explain in her amended complaint, it appears her employer stopped the wage garnishment as of March 24, 2020. Reliant Capital has not returned the money it garnished from Ms. Pine's wages.Ms. Pine attempts to resolve with Reliant Capital and demands a hearing.

Sometime after December 20, 2019, Ms. Pine contacted Reliant Capital to determine the basis of the wage garnishment order.17 Reliant Capital told Ms. Pine the debt arises from a June 1995 consolidation loan to attend Drexel University.18 Ms. Pine told Reliant Capital she did not attend Drexel University in June 1995 and she did not sign a consolidation loan.19 Ms. Pine advised Reliant Capital this is not her loan, the loan is "fraudulent," requested an investigation, and requested documents to show Reliant Capital is an agent for the Department of Education, but Reliant Capital contended it has a "legitimate" wage garnishment order and otherwise ignored her.20

After requesting, and receiving, a copy of the wage garnishment order from Reliant Capital in mid-January 2020, Ms. Pine noticed page 8 missing from the document. Ms. Pine contends this is the page notifying her of her right to a fair hearing. She alleges neither she nor her employer received page 8 of the wage garnishment order which she believes is "not an accident," suggesting Reliant Capital purposely failed to include the page notifying of her right to a hearing.21

Ms. Pine demanded a hearing from Reliant Capital. She alleges "until recently, she received little to no documentation proving that the loans they stated were mine that are being garnished," and alleges Reliant Capital is relying on false information in the National Student Database.22 She alleges she submitted forms showing she is a victim of identity theft.23

Ms. Pine further alleges Reliant Capital "sent [her] a fraudulent consolidation loan as well as fraudulent forms that they claimed were proof of this debt being mine"; is not an agent for the Department of Education; failed to determine the validity of her debt; and Reliant Capital failed to turn over the money garnished from her wages to the Department of Education.24

II. Analysis25

Ms. Pine sues the United States Department of Education and Reliant Capital for violating various federal wage garnishment laws, possibly the Fair Debt Collection Practices Act, and state law relating to garnishing her wages to collect a student loan she denies is her obligation. Ms. Pine alleges she never took out a student loan on which Reliant Capital began garnishing her wages in December 2019.

Liberally construed, Ms. Pine brings five claims against Reliant Capital and the Department of Education.26 Our Court of Appeals directs us to be "mindful of our 'obligation to liberally construe a pro se litigant's pleadings ...'"27 She claims Reliant Capital violated the Higher Education Act, the Fair Credit Reporting Act, the Debt Collection Improvement Act, engaged in "deceptive practices," "committed fraud," and "negligence" :

• Ms. Pine alleges Reliant Capital violated the Higher Education Act,28 the Fair Credit Reporting Act,29 and the Debt Collection Improvement Act ("DCIA")"30 by sending the wage garnishment order to her employer representing she had notice and an opportunity to be heard on the alleged student debt when she did not have such opportunity for notice and hearing; denied her the procedural safeguards of the DCIA, including a hearing, before a wage garnishment order is entered; violated the "[f]air credit collection act" by using deceptive collection tactics in falsely representing to her employer it complied with federal law and had the authority to garnish wages;31 committed fraud when it represented to her employer it had the authority to garnish wages on behalf of the Department of Education on which her employer relied to her detriment; committed mail fraud by sending fraudulent documents in the mail to her and her employer; and negligently sent the wage garnishment order. As to the Department of Education, Ms. Pine alleges it violated HEA by allowing "fraudulent loans to remain on their Websites" and allowed her "fraudulent loans to be used to garnish her wages and permitted private debt collectors like Reliant Capital to collect under its authority."
• Ms. Pine alleges the Department of Education violated "FEHA" (which we assume is the Higher Education Act, HEA) "by allowing fraudulent debt" which the Department of Education has an obligation to ensure accurate information relating to a defaulted loan; mishandled information in the National Student Loan Database and exposed her "personal information" for over a year.
• Reliant Capital engaged in "deceptive practices" as detailed in "Claim 1."
• Reliant Capital "committed fraud by misrepresenting that they were legally allowed to take my money" resulting in her employer deducting garnished amounts from her wages causing her financial damage including her inability to pay for her mother's life insurance policy which she lost.
• Reliant Capital engaged in "unequivocal negligence by sending them [employer] a wage garnishment order without real cause, authorization, and first fulfilling the requirements that must be met prior to actual garnishment."

Reliant Capital moves to dismiss the amended complaint against it.32 Reliant Capital attempts to distance itself from the Department of Education suggesting it had no role in the wage garnishment order. For example, it argues the Department of Education, not Reliant...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT