BROWNE v. NATIONAL COLLEGIATE STUDENT LOAN TRUST

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

LESROY E. BROWNE,

Plaintiff,

v. Civ. No. 22-2713 (KM) (JSA)

NATIONAL COLLEGIATE STUDENT OPINION

LOAN TRUST a/k/a NATIONAL

COLLEGIATE MASTER STUDENT LOAN

TRUST I, et al.,

Defendants.

KEVIN MCNULTY, U.S.D.J.:

This matter comes before the Court on the motion (DE 17)1 of Plaintiff

Lesroy E. Browne to remand the removed action to state court. This is the

second time this matter has come before this Court. Previously, I dismissed

Browne’s claims for lack of Article III standing and ordered that the case be

remanded to the state court. See Browne v. National Collegiate Student Loan

Trust, Docket No. 21-cv-11871-KM-JSA (“Browne I”). Thereafter, Browne filed

an amended complaint in state court, which defendants contend contains new

allegations that provide a basis for removal. Browne disagrees and seeks to

remand the action. For the following reasons, the motion to remand is

GRANTED.

1 Certain citations to the record are abbreviated as follows:

DE = docket entry

Compl. = Amended Complaint (DE 8-1)

Mot. = Browne’s Brief in Support of Motion to Remand (DE 17-1)

Opp. = Defendants’ Brief in Opposition to Motion to Remand (DE 20)

Reply = Browne’s Reply Brief in Support of Motion to Remand (DE 21)

I. BACKGROUND

A. Factual Summary

In 2007, Lesroy E. Browne entered into a student loan agreement with JP

Morgan Chase Bank. (Compl. ¶ 84.) At some point around 2017, Browne was

advised that “NCT” was entitled to collect payments on the loan. (Id. at 86.)

Upon being informed of the assignment, Browne duly continued to make

payments to the NCT Trusts until at least June 2020. (Id. ¶¶ 87–89.) Fifteen

statutory trusts are named as defendants. (I refer to them collectively as the

“NCT Trusts.”)2 According to Exhibit E attached to the amended complaint, the

NCT Trusts are “Delaware statutory trusts created between 2001 and 2007.

The basic purpose of each Trust is to acquire a pool of student loans, enter into

the so-called trust-related agreements, and provide for the administration of

the Trusts and the servicing of student loans.” (Compl., Ex. E ¶ 4.) The NCT

Trusts are not licensed under New Jersey’s Consumer Finance Licensing Act,

N.J. Stat. Ann. 17:11C-3. (Compl. ¶ 5.)

Also named as defendants are Wilmington Trust Company, the trustee

for the NCT Trusts; U.S. Bank, N.A., the special servicer for the NCT Trusts;

and Transworld Systems Inc., a servicer of the NCT Trusts. (Id. ¶¶ 7, 22–23.)

Transworld Systems Inc. is also not licensed to service student loans in New

Jersey. (Id. ¶ 7, 10.)

2 The NCT Trusts include National Collegiate Student Loan Trust a/k/a National

Collegiate Master Student Loan Trust I, National Collegiate Student Loan Trust 2003-

1, National Collegiate Student Loan Trust 2004-1, National Collegiate Student Loan

Trust 2004-2, National Collegiate Student Loan Trust 2005-1, National Collegiate

Student Loan Trust 2005-2, National Collegiate Student Loan Trust 2005-3, National

Collegiate Student Loan Trust 2006-1, National Collegiate Student Loan Trust 2006-2,

National Collegiate Student Loan Trust 2006-3, National Collegiate Student Loan

Trust 2006-4, National Collegiate Student Loan Trust 2007-1, National Collegiate

Student Loan Trust 2007-2, National Collegiate Student Loan Trust 2007-3, National

Collegiate Student Loan Trust 2007-4.

B. Procedural History

On April 21, 2021, Plaintiff filed this putative class action in the Superior

Court of New Jersey, Law Division, Hudson County (Docket No. HUD-L-1598-

21), naming as defendant National Collegiate Student Loan Trust (“NCSLT”).

NCSLT removed the case to this court on May 27, 2021, and moved to dismiss

on July 30, 2021. (Browne I, DE 1, 14, 16.) On December 22, 2021, I granted

the motion to dismiss, without prejudice, on jurisdictional grounds for lack of

Article III standing. (Browne I, DE 38 pp. 5–6.) I determined that Browne had

not alleged that he suffered any concrete harm, or any risk of concrete harm. I

recognized that Browne’s claim, based on the fact that NCSLT was not licensed

in New Jersey, was the type of “bare procedural violation” that could not confer

federal-court standing without evidence of concrete harm:

Browne has not alleged that he suffered any concrete harm, or any

risk of concrete harm. All he has alleged is that at some point while

paying back the student loan, he began to pay NCSLT 2007-1

rather than JP Morgan Chase. He does not allege that this change

caused him to pay a single penny more than he would otherwise

have paid, or that it delayed his repayment of the loan, or that it

harmed his credit rating, or that it even caused him distress,

confusion, or wasted time. If JP Morgan Chase had kept the loan

on its own books until it was paid off, plaintiff would have paid

back the exact same amount of money and finished paying off the

loan at the exact same time, and he would occupy the very same

status with respect to the loan that he occupies today.

(Browne I, DE 38 pp. 5–6.)

Thereafter, Browne declined to amend his complaint and instead filed a

motion to amend the court’s order of dismissal to include a mandate that his

case be remanded to state court. (Browne I, DE 40.) I found that, because

Browne chose not to amend his complaint, it left the matter in status quo ante,

without subject matter jurisdiction. (Browne I, DE 43 p. 3.) I recognized that,

under 28 U.S.C. § 1447(c), remand is mandatory when the Court lacks subject

matter jurisdiction. (Id.) Therefore, I granted Browne’s motion to amend the

order and ordered that the case be remanded to the New Jersey Superior

Court, Law Division, Hudson County. (Id.)

On April 21, 2022, Browne filed an amended complaint in state court.

On May 9, 2022, the NCT Trusts removed the case to this court. (DE 1.) On

June 8, 2022, Browne filed a motion to remand. (DE 17.) The NCT Trusts filed

their opposition on June 21, 2022 (DE 20), to which Browne replied on June

28, 2022 (DE 21). The motion is fully briefed and ripe for decision.

II. DISCUSSION

A. Standard

The NCT Trusts removed this case pursuant to the federal removal

statute, 28 U.S.C. § 1441. Under 28 U.S.C. § 1441(a), a defendant may remove

“any civil action brought in a State court of which the district courts of the

United States have original jurisdiction.” The NCT Trusts assert that the Court

has jurisdiction over this matter under the Class Action Fairness Act, which

provides that district courts have “original jurisdiction of any civil action in

which the matter in controversy exceeds the sum or value of $5,000,000,

exclusive of interest and costs, and is a class action in which . . . any member

of a class of plaintiffs is a citizen of a State different from any defendant.” 28

U.S.C. § 1332(d)(2)(A).

A party’s right to remove a civil action is “determined according to the

plaintiffs’ pleading at the time of the petition for removal.” Pullman Co. v.

Jenkins, 305 U.S. 534, 537 (1939). Removal is “strictly construed, with all

doubts to be resolved in favor of remand.” Brown v. JEVIC, 575 F.3d 322, 326

(3d Cir. 2009); see also Samuel-Bassett v. KIA Motors Am., Inc., 357 F.3d 392,

396, 403 (3d Cir. 2004). The removing party bears the burden of showing that

removal is appropriate. See Frederico v. Home Depot, 507 F.3d 188, 193 (3d

Cir. 2007). A removed action must be remanded “[i]f at any time before final

judgment it appears that the district court lacks subject matter jurisdiction.”

28 U.S.C. § 1447(c).

B. Analysis

Browne asserts that removal was improper because the federal

requirement of Article III standing is still not satisfied. (Mot. pp. 5–7.)

Accordingly, Browne states that this Court does not have subject matter

jurisdiction, and I must remand the case to state court. (Id. p. 7; Reply pp. 4–

5.) The NCT Trusts disagree and submit that removal was proper because the

amended complaint asserts a “different theory of liability” based on defendants’

misrepresentations that they had ownership of the loans at issue and collected

on those loans without the ability to prove their ownership. (Opp. pp. 7–8.)

Article III standing is “essential to federal subject matter jurisdiction.”

Hartig Drug Co. Inc. v. Senju Pharm. Co. Ltd., 836 F.3d 261, 269 (3d Cir. 2016);

see also Ellison v. Am. Bd. of Orthopaedic Surgery, 11 F.4th 200, 209 (3d Cir.

2021) (“[T]he absence of standing leaves the court without subject matter

jurisdiction to reach a decision on the merits[.]”). To prove standing, a plaintiff

must establish

(1) an injury-in-fact, which is an invasion of a legally protected

interest that is (a) concrete and particularized, and (b) actual or

imminent, not conjectural or hypothetical; (2) a causal connection

between the injury and the conduct complained of; and (3) that it

must be likely, as opposed to merely speculative, that the injury

will be redressed by a favorable decision.

Winer Family Tr. v. Queen, 503 F.3d 319, 325 (3d Cir. 2007) (citing Danvers

Motor Co., Inc. v. Ford Motor Co., 432 F.3d 286, 290-91 (3d Cir. 2005)); see

Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992). To suffer an “injury-in-

fact” a plaintiff must show that he or she suffered “an invasion of a legally

protected interest” that is “concrete and particularized” and “actual or

imminent, not conjectural or hypothetical.” Lujan, 504 U.S. at 560 (internal

quotation marks omitted). “Article III standing requires a concrete injury even

in the context of a statutory violation.” Spokeo, Inc. v. Robins, 578 U.S. 330,

341 (2016). Therefore, “a bare procedural violation, divorced from any concrete

harm” cannot satisfy Article III’s injury-in-fact requirement. Id. “Only those

plaintiffs who have been concretely harmed by a defendant’s statutory violation

may sue that private defendant over that violation in federal court.” TransUnion

LLC v. Ramirez, 141 S. Ct. 2190, 2205 (2021) (emphasis in original).

I have considered the amendments to the complaint and conclude that

this case was improperly removed. The NCT Trusts cite to several new

allegations in the amended complaint that relate to defendants’

misrepresentations and inability to show ownership of the loans at issue. (See

Opp. pp. 8–9.)3 The NCT Trusts argue that those allegations constitute a new

and different theory of liability that warrants removal. I do not find the NCT

Trusts’ argument persuasive because similar allegations were included in the

original complaint.4

Regarding Article III standing, the same defects that led to my prior

holding are still present in the amended complaint: Browne still fails to allege

that the transfer of the loan from JP Morgan Chase Bank to the NCT Trusts

caused him to be in any different or worse position than he would have

occupied if the loan had not been transferred. Browne has not alleged that the

3 Examples of allegations in the amended complaint on which the NCT Trusts

rely include: “[N]one of the Defendant NCT Trusts can prove their assignee status

through competent and admissible evidence.” (Compl. ¶ 7); “As a result of the NCT

Trusts[’] inability to show that they have been assigned any specific student loans or

as a result of the NCT Trusts’ unlicensed status, the collection efforts by the

Defendants are neither valid nor enforceable claims to collect on any student loans,

including Browne or any other New Jersey student loan borrower.” (Compl. ¶ 9); that

the NCT Trusts are “unable to show ownership of loans through admissible evidence.”

(Compl. ¶ 103(C)); and that the NCT Trusts cannot prove that they “acquired any

particular loans” and “[the] NCT Trusts and TSI [Transworld Systems Inc.] . . . lacked

the ability to prove that the Defendant NCT Trusts had been assigned the legal right to

enforce the accounts.” (Compl. ¶ 139(A), (F)).

4 See, e.g., the following allegations in the original complaint related to

defendants’ misrepresentations and inability to show ownership of the loans: that

NCSLT communicated that it “allegedly acquired certain loans between Plaintiff and

the Class and others, when the assertion could not be shown to be true” (Browne I, DE

1-1 ¶ 41(D)); that NCSLT made “false or misleading communications that it had

acquired the loans of Plaintiff and the Class when Defendants knew they could not

show they had acquired any particular loans.” (Browne I, DE 1-1 ¶ 57); and that

NCSLT cannot prove that they “acquired any particular loans” and “lacked the ability

to show it had [a] legal right to enforce the accounts.” (Browne I, DE 1-1 ¶ 72(a), (e)).

transfer caused him to pay more than he was required to, delayed his

repayment of the loan, or harmed his credit rating. (See Browne I, DE 38 pp. 5–

6.) Browne has also not alleged that JP Morgan Chase Bank continued to

pursue its own rights as creditor after the loan was transferred to the NCT

Trusts, or that there is a risk that it will seek to do so. The NCT Trusts do not

address these issues in their notice of removal or opposition to Browne’s

motion to remand.

The NCT Trusts appear to assert that a standing analysis is not

warranted because it has not moved to dismiss on standing grounds. (Opp. p.

10.) The NCT Trusts’ position would lead to an endless cycle of litigation

wherein the action may be removed but then must be dismissed, either on

motion or sua sponte, for lack of Article III standing, only to be remanded and

removed again, and so on. Browne filed this action in state court, asserting

state-law claims which, whatever their viability in state court may be, do not

satisfy federal Article III standing requirements. This action must be remanded

to state court, where it should remain.

III. CONCLUSION

For the reasons set forth above, the motion to remand is granted. A

separate order will issue.

Dated: March 9, 2023

/s/ Kevin McNulty

___________________________________

Hon. Kevin McNulty

United States District Judge