Chery v. Conduent Education Services, LLC
1:18-cv-00075-DNH-CFH
| N.D.N.Y. | Jan 20, 2022Background
- Plaintiff Jeffrey Chery filed a putative class action against Conduent Education Services, Access Group, and Access Funding alleging Conduent failed to timely provide Loan Verification Certificates (LVCs) needed for FFELP loan consolidation; class was certified for borrowers who applied to consolidate between Jan 18, 2012 and May 5, 2021 and for whom Conduent failed to provide an LVC within 10 days.
- Conduent produced class data showing failures on 7,394 loan packets with an average LVC delay of 173 days; regulatory consent orders (NY DFS and CFPB) found servicing failures and preserved borrowers’ rights.
- Chery moved for summary judgment on the New York Gen. Bus. Law § 349 claim; Conduent moved for summary judgment dismissing the case and to exclude plaintiff’s damages expert (William Jeffers, CFA).
- Court denied Conduent’s Daubert challenge, finding Jeffers qualified to calculate damages by comparing actual outcomes to counterfactuals based on Conduent’s class data.
- Court granted Chery summary judgment on liability under N.Y. GBL § 349 (consumer-oriented, materially misleading conduct that caused injury), denied Conduent’s summary judgment on all claims, and directed the parties to seek settlement and, if none, proceed to a damages trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Liability under N.Y. GBL § 349 | Conduent misrepresented borrowers could prepay/consolidate at any time while knowing its systems failed to process timely LVCs, causing classwide harm | No proof plaintiffs were actually misled or suffered cognizable harm from bookkeeping delays | Court: liability established as matter of law—consumer-oriented, objectively misleading conduct and actual injury shown |
| Causation/reliance for § 349 | Reliance not required; injury arises from being trapped in non-qualifying loans and misapplied payments due to LVC delay | Argues lack of evidence plaintiffs saw or relied on disclosures; harms are merely bookkeeping artifacts | Court: reliance not an element of § 349; delays caused cognizable harm (e.g., loss of qualifying payments) |
| Damages scope and trebling under § 349 | Damages measured per loan-packet per payment period delayed; willful/knowing conduct supports treble | Damages should be $50 per class member (one violation) and trebling inapplicable because delays were self-disclosed remediation | Court: each payment period delayed is a § 349 violation (statutory damages per period appropriate); facts support willful/knowing conduct—treble available for damages phase |
| Expert admissibility (William Jeffers) | Jeffers is qualified to compute damages using standard counterfactual methodology applied to Conduent’s class data | Opinion is speculative, not grounded in student-loan expertise, and improperly assumes future forgiveness eligibility | Court: Jeffers admissible—methodology reliable for damages calculation; Daubert challenge denied |
| One-way intervention / timing of merits adjudication | N/A (plaintiff sought merits on § 349) | Court should defer merits until after class notice/opt-out to avoid one-way intervention prejudice | Court: rejected—Conduent waived the rule by seeking dispositive schedule and failing to timely assert it; adjudication proceeds |
| Conduent’s summary judgment on other claims (breach, negligence, unjust enrichment) | N/A (plaintiff opposes dismissal) | Seeks dismissal for lack of harm, privity, and duty | Court: denied—genuine issues of fact remain on privity/functional privity, assumed duty, and unjust enrichment; trial on those issues may be necessary |
Key Cases Cited
- Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993) (trial courts' gatekeeping role for expert reliability)
- Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20 (1995) (§ 349 requires consumer-oriented conduct affecting the public and actual injury)
- Stutman v. Chemical Bank, 95 N.Y.2d 24 (2000) (reliance is not an element of a § 349 claim)
- Amorgianos v. National R.R. Passenger Corp., 303 F.3d 256 (2d Cir. 2002) (Daubert inquiry is flexible; exclude unreliable "junk science")
- Schweizer v. Trans Union Corp., 136 F.3d 233 (2d Cir. 1998) (courts may consider merits before notice where defendants waive one-way intervention protections)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment standard: no genuine dispute of material fact)