Winston v. U.S. Department of Education

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

:

NICOLE YVETTE WINSTON

:

v. : Civil Action No. DKC 21-1358

:

U.S. DEPARTMENT OF EDUCATION

:

MEMORANDUM OPINION

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 (4th Cir.

1 Ms. Winston no longer pursues her two other claims for

violations of the Maryland Fair Debt Collection Act and the Federal

Debt Collection Act. (ECF No. 13, at 3).

2019). The plaintiff bears the burden of proving that subject

matter jurisdiction exists. Demetres v. East West Constr., Inc.,

776 F.3d 271, 272 (4th 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 (4th 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 (4th 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 (4th Cir. 2020) (citation

omitted); Barnett v. Hargett, 174 F.3d 1128, 1133 (10th 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 (9th 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

(4th 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 (4th 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

2 Ms. Winston cites to 34 C.F.R. § 5B.3. That part of the

Department of Education regulations “implements section 3 of the

Privacy Act of 1974.” 34 C.F.R. § 5b.2.

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. King, 822 F.3d 61, 82-83

(2d Cir. 2016) (allowing review of the Department of Education’s

refusal to suspend loan collection and send certain notices despite

the fact that the Department had not yet resolved whether the

plaintiff was eligible for discharge).4 But, Ms. Winston only

requests recission of her loan agreements.

Properly read, Ms. Winston’s complaint has one animating

purpose: the discharge of her loans. The allegations supporting

her named claims seek to justify this result but cannot support

independent causes of action, for the reasons just discussed.

Short of arguing that her loans were invalid from the start, there

appear to be two possible causes of action for discharging

3 Ms. Winston also objects to the disclosure of her loan

information to collections agencies. Improper disclosure of

private information is actionable under the Privacy Act, see 5

U.S.C. § 552a(g)(1)(D); id. § 552a(b); 34 C.F.R. § 5b.9, but only

for money damages, FAA v. Cooper, 566 U.S. 284, 299 (2012)

(interpreting 5 U.S.C. § 552a(g)(4)).

4 It is not clear whether the proper vehicle for such relief

would be the Privacy Act or the APA.

federally guaranteed student loans: the HEA and the APA. The HEA

sets out limited circumstances under which the Department of

Education shall discharge student debt. 20 U.S.C. § 1087(a).

Requests for discharge under the HEA are often adjudicated within

an APA suit, for reasons discussed below. See Gavin v. Dep’t of

Air Force, 324 F.Supp.3d 147, 151 (D.D.C. 2018) (asserting that

HEA discharge claims may be sought administratively and then

challenged under the APA); Wimberly v. U.S. Dep’t of Educ., No.

12-cv-7773, 2013 WL 6123172, at *2 (S.D.N.Y. Nov. 12, 2013) (same).

Ms. Winston’s complaint is therefore construed to assert an

HEA claim for discharge on the grounds that her outstanding debt

has been incorrectly calculated, and that her disability and

economic hardship entitle her to relief. It is also construed to

assert an APA claim challenging any Department decision denying

Ms. Winston’s request for discharge. To the extent Ms. Winston

seeks relief short of discharge that might be available through

the causes of action named in her complaint (or otherwise through

the APA), such as money damages, an order requiring the Department

to remove the default classification, or an order prohibiting the

use of collection agencies or the Treasury offset program to

recover her debt, she may seek leave to amend and say so clearly.

2. HEA

The HEA provides a fairly broad waiver of sovereign immunity

on its face, stating that the Secretary may “sue and be sued . . .

in any district court of the United States.” 20 U.S.C.

§ 1082(a)(2).5 “It is settled that a statute authorizing an agency

to sue and be sued” presumptively waives sovereign immunity,

“although the scope of the waiver with respect to the incidents of

litigation, such as the availability of punitive damages as a

remedy, may be subject to further inquiry.” Charles A. Wright &

Arthur R. Miller, Actions Against Federal Agencies and Officers,

Federal Practice & Procedure § 3655 (4th ed. 2022).6

Here, either the scope of the waiver, or the federal

jurisdiction to adjudicate HEA claims, is limited. Following a

sub-clause extending to federal district courts jurisdiction over

civil actions arising under the Federal Family Education Loan

Program, Section 1082 of the HEA states that “no attachment,

injunction, garnishment, or other similar process, mesne or final,

shall be issued against the Secretary or property under the

Secretary’s control.” 20 U.S.C. § 1082(a)(2). As Judge Blake

has noted, “[c]ourts have repeatedly held that [§ 1082(a)(2)]

prohibits claims for injunctive relief against the Secretary in

5 The court assumes that the waiver of immunity for suits

against the Secretary extends to suits against the Department.

6 It is often unclear whether a given statutory provision

limits a waiver of sovereign immunity, a statutory cause of action,

or the jurisdiction conferred on federal courts. The Department

makes no attempt to differentiate among these three concepts. The

outcome is the same regardless because all three are necessary to

Ms. Winston’s suit and there is no suggestion that another statute

might waive immunity to her HEA or APA claims.

relation to his powers under the HEA.” Lipczenko v. Duncan, No.

09-cv-1407-CCB, 2010 WL 672846, at *1 (D.Md. Feb. 22, 2010)

(collecting cases); see also Carr v. Devos, 369 F.Supp.3d 554, 559

(S.D.N.Y. 2019).

Here, Ms. Winston asks the court for “rescission of the

contract, with extinguishing all duties and obligations of the

such.” (ECF No. 1, ¶¶ 1, 22). As noted above, this request would

necessarily prohibit the Department of Education from enforcing

the loan agreements and attempting collection on outstanding debt.

A request for an order of cessation of collection efforts “is

plainly injunctive.” Dennis v. U.S. Dep’t of Educ., No. 19-cv-

2064-DKC, 2020 WL 6450212, at *5 (D.Md. Nov. 3, 2020).

Accordingly, the court does not have jurisdiction over any HEA

cause of action for discharge that Ms. Winston may assert.

3. APA

Section 702 of the APA adopts a broad waiver of sovereign

immunity, stating that an action “seeking relief other than money

damages and stating a claim that an agency . . . acted or failed

to act in an official capacity or under color of legal authority

shall not be dismissed nor relief therein be denied on the ground

that it is against the United States[.]” 5 U.S.C. § 702. This

waiver extends to APA and non-APA causes of action. Standage v.

Braithwaite, 526 F.Supp.3d 56, 86 (D.Md. 2021) (citing Food Town

Stores, Inc. v. EEOC, 708 F.2d 920, 921-22 (4th Cir. 1983).

But the APA’s waiver is qualified. It can be limited by

another statute. Section 702 states that “[n]othing herein . . .

confers authority to grant relief if any other statute that grants

consent to suit expressly or impliedly forbids the relief which is

sought.” 5 U.S.C. § 702; see also Standage, 526 F.Supp.3d at 86

(same); Charles A. Wright & Arthur R. Miller, Statutory Exceptions

to Sovereign Immunity – Actions for Nonmonetary Relief Under the

Administrative Procedure Act, Federal Practice and Procedure

§ 3659 at n.53, n.54, n.55 (4th ed. 2022) (collecting cases). In

addition, the scope of an APA cause of action is limited, absent

other statutory authority, to challenges to “final agency

action[s] for which there is no other adequate remedy in a court

are subject to judicial review.” 5 U.S.C. § 704. Whether

jurisdictional or not, this is a necessary precondition to suit.

City of New York v. U.S. Dep’t of Def., 913 F.3d 423, 430-31 (4th

Cir. 2019) (holding subject matter jurisdiction is lacking where

a plaintiff fails to challenge a proper agency action); Perry

Capital v. Mnuchin, 864 F.3d 591, 621 (D.C. Cir. 2017) (holding

that finality and adequate remedy are elements of an APA cause of

action and not jurisdictional requirements).7

7 It appears that the “final agency action” with “no other

adequate remedy” requirement limits only the scope of the APA cause

of action, and not the scope of the APA’s waiver of sovereign

immunity for non-APA causes of action. Perry Capital, 864 F.3d at

620-21 (D.C. Cir. 2017); Trudeau v. FTC, 456 F.3d 178, 186-87 (D.C.

Cir. 2006).

The Department of Education does not seriously assert that

another statute expressly or implied forbids an APA challenge

seeking discharge of the plaintiff’s student loans. Although the

Department contends that the HEA’s prohibition on injunctive

relief bars review under the Privacy Act, that argument is limited

to a single bare sentence and is not also asserted against the

APA. (ECF No. 11-1, at 11). In addition, “[m]any federal district

and circuit courts have concluded that the APA grants federal

courts subject matter jurisdiction over cases seeking declaratory

and injunctive relief for injuries caused by the Secretary’s

decisions made under the HEA.” Adams v. Duncan, 179 F.Supp.3d

632, 640 (S.D.W.V. 2016) (collecting cases).

However, Ms. Winston has not shown that the Department has

taken a final agency action regarding her eligibility for discharge

of her loans, or that a suit in this court now is the only adequate

remedy for her continued liability for the loans. Final agency

actions are (1) “circumscribed and discrete,” (2) “the

consummation of the agency’s decisionmaking process” and not

“merely tentative or interlocutory,” and (3) determine rights or

obligations or create legal consequences. Vill. of Bald Head

Island v. U.S. Army Corps of Eng’rs, 714 F.3d 186, 194 (4th Cir.

2013).

Ms. Winston can apply administratively for discharge of her

loans but has not done so. The HEA authorizes the Department of

Education to discharge student borrowers’ loans in limited

circumstances, typically upon application by the individual

borrower. Discharge is available in the event of death, total and

permanent disability, false certification of eligibility, or

attendance at a school that closed or failed to provide refunds.

20 U.S.C. § 1087(a), (c); 34 C.F.R. § 682.402. (A borrower may

also seek discharge during bankruptcy proceedings, 34 C.F.R.

§ 682.402(f), (i), but must show undue hardship, 11 U.S.C.

§ 523(a)(8)). In the complaint and attached letters to the

Department of Education, Ms. Winston argues that her loans are

unenforceable because her outstanding debt has been improperly

calculated, she is disabled, and she has faced severe economic

hardship. It appears only Ms. Winston’s disability status could

support a request for discharge under the HEA, although she can

likely challenge administratively the amount of debt owed.

The HEA states that “the Secretary shall discharge” a student

borrower’s liability “by repaying the amount owed on the loan” if

the borrower “becomes permanently and totally disabled,” which

includes being “unable to engage in any substantial gainful

activity by reason of any medically determinable physical or mental

impairment that . . . has lasted for a continuous period of not

less than 60 months, or can be expected to last for a continuous

period of not less than 60 months[.]” 20 U.S.C. § 1087(a)(1).

Department of Education regulations adopt the same definition. 34

C.F.R. § 682.200(b) (referenced in id. § 682.402(c)(1)(i)).

Unless the Department of Education exercises its discretion

to discharge a borrower’s loan unilaterally, 34 C.F.R.

§ 682.402(c)(10), a borrower must submit an application to have

her loan discharged based on her disability, id.

§ 682.402(c)(1)(i)-(ii), (2). Once notified of a borrower’s

intent to apply, the Secretary must provide her with the relevant

application information. Id. § 682.402(c)(2)(ii). “The borrower

must submit to the Secretary an application for a total and

permanent disability discharge on a form approved by the

Secretary.” Id. § 682.402(c)(2)(iv). The application “must

contain” a recent physician certification of total and permanent

disability and “a [Social Security Administration] SSA notice of

award for Social Security Disability Insurance (SSDI) or

Supplemental Security Income (SSI) benefits indicating that the

next scheduled disability review will be within five to seven

years.” Id. § 682.402(c)(2)(iv)-(v).

The Department of Education’s loan analyst attests that,

“[a]s of September 16, 2021, [Department] records do not reveal

that Ms. Winston has ever submitted a request for administrative

discharge of any student loan due to Total and Permanent

Disability.” (ECF No. 11-2, ¶ 32). Ms. Winston can show that she

protested Department action at every turn, but not that she

submitted an application for discharge. She pleads that she

“submitted dispute letters and complaints” regarding the Treasury

offset and the collection letters she received, filed “an online

civil rights complaint” with the Department of Education,” and

requested to have the default status on her loan removed. (ECF

No. 1, ¶¶ 5, 7). She attaches evidence of correspondence with the

Department and a receipt for the Office of Civil Rights complaint.

(ECF No. 1-2, at 10 (Office of Civil Rights Complaint), 13

(letter), 16 (same), 18 (same), 19 (same), 21 (same), 25 (same),

26 (same), 29 (same), 31 (same)). In one letter, she states that

she submitted medical documents and a SSI letter to the Department

of Education in December 2018. (Id., at 22). She even attaches

a form “Request for Review” dated November 2018 in which she checks

the box indicating her loan is not enforceable but not the box

regarding discharge for disability. (Id., at 32-33). The court

finds that Ms. Winston has not submitted an application for

discharge and concludes as a result that the Department has not

taken the requisite final agency action.8

8 In her opposition, Ms. Winston attempts to introduce for

the first time a procedural due process claim. (ECF No. 13, at 3).

She appears to contend that to the extent she “cannot pursue

injunctive remedies” under the HEA, she is left without any avenue

for disputing her debt. (Id.). “The essential requirements of

due process . . . are notice and opportunity to respond.”

Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 546 (1985).

Any procedural due process claim Ms. Winston seeks to raise would

be based on the mistaken premise that she has no opportunity to

The court lacks subject matter jurisdiction over Ms.

Winston’s HEA claim and has no final agency action to review for

Ms. Winston’s APA claim. The court need not reach the Department’s

merits arguments.

IV. Conclusion

For the foregoing reasons, the Department of Education’s

motion to dismiss will be granted. Ms. Winston’s complaint will

be dismissed without prejudice. A separate order will follow.

/s/

DEBORAH K. CHASANOW

United States District Judge

seek discharge of her debt. As just discussed, Ms. Winston can

apply to the Department for that very relief. In addition, the

APA provides her with the opportunity to challenge any denial of

her application or other final agency actions taken in response to

her requests to cease collection efforts.