Winston v. U.S. Dep't of Educ.

• Decision Date: 06 July 2022
• Docket Number: Civil Action DKC 21-1358
• Parties: NICOLE YVETTE WINSTON v. U.S. DEPARTMENT OF EDUCATION
• Court: U.S. District Court — District of Maryland

NICOLE YVETTE WINSTON v. U.S. DEPARTMENT OF EDUCATION

Civil Action No. DKC 21-1358

United States District Court, D. Maryland

July 6, 2022

MEMORANDUM OPINION

DEBORAH K. CHASANOW, United States District Judge.

Presently pending and ready for resolution in this pro se student loan case is a motion to dismiss or, in the alternative, for summary judgment, filed by Defendant United States Department of Education (“Department of Education”). (ECF No. 11). The issues have been fully briefed, and the court now rules, no hearing being necessary. Local Rule 105.6. For the following reasons, the motion will be granted.

I. Factual Background

The facts outlined here, which are set forth in the complaint and an accompanying attachment, are construed in the light most favorable to the Plaintiff, Nicole Yvette Winston. Ms Winston alleges that she took out $77,701 in student loans to attend law school beginning in 1996. (ECF No. 1, ¶ 1). The total amount outstanding today is likely greater than $300,000. (See ECF No. 1-2, at 29). She consolidated her loans in 1999. (ECF No. 1, ¶ 1). The loans were serviced after consolidation by American Education Services, although Ms. Winston indicates that Key Bank also serviced her loans at some point. (ECF No. 1, ¶¶ 4, 6, 10). Ms. Winston became a D.C. bar member but struggled to find work and filed for bankruptcy in November 2006. (Id., ¶ 3). She resigned from the D.C. bar in May 2007 and had a serious medical event later that year which required her to go on disability. (Id., ¶ 3). Throughout this period, Ms. Winston received continuous deferments from her loan servicer. (Id., ¶ 4).

In 2018, Ms. Winston started receiving collection letters and notices that the Treasury Department would begin withholding funds from her. (ECF No. 1, ¶ 5). Ms. Winston contested these efforts, believing the loan should not have been placed in default in the first place. (Id.). She appears to believe her debt is unenforceable because she is on disability and suffered economic hardship (in part due to a government campaign of harassment). (Id., ¶¶ 5, 8, 22; see also ECF No. 1-2, at 16-18, 21-23, 26-28 (various letters); ECF No. 13, at 6 (invoking the doctrine of unconscionability)). Ms. Winston also alleges that the Department's outstanding debt calculations are incorrect but cites only to an allegedly improper fee charged, without her knowledge, for consolidating her loans in 1999. (ECF No. 1, ¶¶ 5-6). She also believes the Department improperly disclosed her personal information to collection agencies. (Id., ¶¶ 6-7, 15-16).

II. Procedural Background

Ms. Winston filed this action without legal representation in June 2021. (ECF No. 1). In September 2021, the Department of Education moved to dismiss or, in the alternative, for summary judgment on Ms. Winston's claims. (ECF No. 11). Ms. Winston opposed and the Department replied. (ECF Nos. 13; 14). The Department attacks Ms. Winston's claims jurisdictionally and on the merits.

Ms. Winston purports to bring claims for (1) fraudulent misrepresentation, (2) conspiracy, and (3) violations of Department of Education privacy regulations. (See generally ECF No. 1).^[1] However, the only relief she explicitly requests is “rescission of the contract, with extinguishing all duties and obligations of the such.” (Id., ¶¶ 1, 22). For this reason, Ms. Winston's complaint is construed to assert a claim for discharge of her loans under Higher Education Act (“HEA”) and the Administrative Procedure Act (“APA”), as discussed further below.

III. Subject Matter Jurisdiction

A. Standard of Review

Questions of subject matter jurisdiction raised under Fed.R.Civ.P. 12(b)(1) concern the court's authority to hear the case. Va. Dep't of Corr. v. Jordan, 921 F.3d 180, 187 (4^th Cir. 2019).

The plaintiff bears the burden of proving that subject matter jurisdiction exists. Demetres v. East West Constr., Inc., 776 F.3d 271, 272 (4^th Cir. 2015). Defendants may challenge subject matter jurisdiction in one of two ways: facially or factually. Kerns v. United States, 585 F.3d 187, 192 (4^th Cir. 2009) (citation omitted). When a defendant makes a facial challenge, the plaintiff “is afforded the same procedural protection” as under Rule 12(b)(6). Wikimedia Found. v. NSA, 857 F.3d 193, 208 (4^th Cir. 2017) (quotation omitted). “[T]he motion must be denied if the complaint alleges sufficient facts to invoke subject matter jurisdiction.” Kerns, 585 F.3d at 192. Where a defendant makes a factual challenge, the complaint is not presumed to be true, and the court may consider other evidence and resolve disputed issues of fact. Id.

Unrepresented parties' pleadings are liberally construed and held to a less strict standard than those drafted by lawyers. Erickson v. Pardus, 551 U.S. 89, 94 (2007). Liberal construction means that courts will read the pleadings to state a valid claim to the extent that it is possible to do so from the facts available; it “does not mean overlooking the pleading requirements[.]” See Bing v. Bravo Sys., LLC, 959 F.3d 605, 618 (4^th Cir. 2020) (citation omitted); Barnett v. Hargett, 174 F.3d 1128, 1133 (10^th Cir. 1999). Where an unrepresented plaintiff's complaint must be dismissed, courts should provide “notice of the deficiencies” so that the plaintiff can “use[] the opportunity to amend effectively.” See Akhtar v. Mesa, 698 F.3d 1202, 1212 (9^th Cir. 2012).

B. Analysis

The Department of Education argues that the court lacks subject matter jurisdiction because Congress has not waived sovereign immunity for Ms. Winston's claims. Sovereign immunity protects the United States and its agencies “from suit without consent[.]” Robinson v. U.S. Dep't of Educ., 917 F.3d 799, 801 (4^th Cir. 2019). Whether the United States has waived its sovereign immunity to suit is a separate question from whether Congress has conferred jurisdiction on federal courts for a given type of suit. See Charles A. Wright & Arthur R. Miller, Jurisdiction Over Actions Against the United States-The Sovereign Immunity Problem, Federal Practice & Procedure §§ 3654 (4^th ed. 2022) (“A statute waiving the Government's immunity to suit does not always also confer jurisdiction upon the federal courts . . . . Likewise, a statute conferring jurisdiction . . . does not always waive the Government's immunity[.]”). Nevertheless, the United States' consent is an independent “prerequisite for jurisdiction” in a suit against one of its departments. Robinson, 917 F.3d at 801 (quotation omitted). Sovereign immunity “can only be waived by statutory text that is unambiguous and unequivocal.” Id. at 802. “The plaintiff bears the burden of showing that the government has waived sovereign immunity at the motion to dismiss stage.” Id.

It is necessary first to determine what causes of action Ms. Winston asserts before assessing whether the United States has waived immunity to her claims.

1. Construction of Ms. Winston's Complaint

Ms. Winston's complaint is construed to assert claims under the HEA and the APA. In form, Ms. Winston's complaint identifies three causes of action: state law fraudulent misrepresentation, state law conspiracy to defraud, and violations of Department of Education privacy regulations. However, these formal causes of action do not match the substance of Ms. Winston's complaint. The court is not obligated to accept Ms. Winston's labels. Even if it were, it would be required to dismiss any claims inadequately stated because Ms. Winston proceeds in forma pauperis. 28 U.S.C. § 1915 (e)(2).

Ms. Winston simply does not assert claims for fraudulent misrepresentation or conspiracy to defraud. She primarily supports her misrepresentation count by alleging that her 1999 loan consolidation resulted from her completion of “unsolicited” materials which she understood to be “routine paperwork.” (ECF No. 1, at 4, 6). She states that she was “unaware that a fee was charged and recall[s] that there was nothing indicated in the paperwork that there was such a fee.” (Id., at 4). This registers more as an admission of Ms. Winston's own inattention to detail than an allegation that her loan servicers misled or defrauded her. That conclusion is reinforced by the lack of any connection to fraud in Ms. Winston's other allegations. Namely, she also pleads that she was defrauded because she was charged unspecified fees based on inaccurate calculations and because her disability and “extreme hardship” made her loans unenforceable. (Id., at 6). Neither allegation contains a false representation. Ms. Winston's supposed conspiracy claim is equally devoid of substance. The sole basis for it is that Ms. Winston raised her purported fraud concerns many times but the Department did not remedy them. (Id., at 7). The Government's mere denial her requests does not point to an agreement between parties to engage in unlawful conduct.

Ms Winston comes closer to the mark with her purported claims for violations of the Department of Education's privacy regulations, which are actionable under the Privacy Act.^[2] Unlike Ms. Winston's state law claims, these claims may have substance but are disconnected from the relief Ms. Winston seeks. Given that Ms. Winston only requests equitable relief, there appears to be one plausible theory of recovery: failure “to amend an individual's record in accordance with [her] request.” See 5 U.S.C. § 552a(g)(1)(A), (2)(A).^[3] Ms. Winston clearly alleges that the Department of Education wrongly classified her loans as being in default, sent her debt to collections, and withheld funds from her under the Treasury offset program. Ms. Winston therefore might have brought this suit to obtain orders to remove the default classification and cease use of collection agencies and the Treasury offset program. See Salazar v....