328 F. Supp. 3d 1319
M.D. Fla.2018Background
- Plaintiffs are federal student-loan borrowers who worked in public-interest jobs and used Navient Solutions, LLC as their loan servicer; they allege Navient gave incorrect advice causing them to miss Public Service Loan Forgiveness (PSLF) benefits.
- Plaintiffs filed a putative class action asserting state-law claims including breach of fiduciary duty, negligence, unjust enrichment, implied-in-law contract, and various state consumer-protection statutes.
- Navient moved to strike the class allegations under Rule 12(f)/Rule 23 and moved to dismiss under Rule 12(b)(6), principally arguing HEA preemption (express and conflict) and failure to state claims.
- Navient contended class certification is impossible because individualized, fact-intensive inquiries would predominate; it also argued 20 U.S.C. § 1098g preempts state-law claims about loan servicing and disclosures.
- The Court denied the motion to strike as premature under the Rule 12(f) standard and found Plaintiffs sufficiently pleaded Rule 23 elements to allow discovery; it also rejected Navient’s HEA preemption and Rule 12(b)(6) arguments, holding the complaint survives dismissal and factual issues (e.g., fiduciary relationship, enrichment) are for later stages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Motion to strike class allegations | Class allegations satisfy Rule 23 elements; discovery needed | Class cannot satisfy commonality/predominance/superiority due to individualized issues | Denied as premature under Rule 12(f); plaintiffs pleaded Rule 23 elements sufficient to permit discovery |
| HEA preemption (express & conflict) | State-law claims for affirmative misrepresentations are not preempted | 20 U.S.C. § 1098g and HEA create preemption of state disclosure/servicing claims; uniformity requires preemption | Denied; strong presumption against preemption for consumer-protection claims and plaintiffs allege affirmative misrepresentations, not mere disclosure failures |
| Breach of fiduciary duty / negligence | Navient made affirmative advice and held itself out as expert, creating special relationship and duty | Relationship was arm’s-length servicer; no fiduciary duty or duty to give repayment advice | Denied as premature; factual question whether special circumstances produced fiduciary duty and negligence claim sufficiently pleaded to proceed to discovery |
| Unjust enrichment / implied-in-law contract (and duplicative claims) | Plaintiffs allege Navient benefitted from servicing and was compensated; alternative pleading | Claims are duplicative and fail because no benefit conferred | Denied at dismissal stage; potential duplicity is for summary judgment and factual issues about benefit are inappropriate to resolve on Rule 12(b)(6) |
Key Cases Cited
- Gill-Samuel v. Nova Biomedical Corp., 298 F.R.D. 693 (S.D. Fla.) (motion to strike class allegations scrutinized against Rule 12(f) standard)
- United States v. MLU Servs., Inc., 544 F. Supp. 2d 1326 (M.D. Fla.) (standards for motions to strike)
- Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996) (presumption against preemption of traditional state powers)
- Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992) (preemption analysis guided by congressional purpose)
- Chae v. SLM Corp., 593 F.3d 936 (9th Cir.) (HEA preemption of certain state disclosure claims)
- McCulloch v. PNC Bank, Inc., 298 F.3d 1217 (11th Cir.) (state claims premised on failure to disclose may be preempted where no affirmative misrepresentations asserted)
- Cliff v. Payco Gen. Am. Credits, Inc., 363 F.3d 1113 (11th Cir.) (conflict preemption under HEA requires impossibility or obstacle to federal objectives)
- College Loan Corp. v. SLM Corp., 396 F.3d 588 (4th Cir.) (rejecting uniformity as a clear congressional goal for HEA preemption)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard to survive dismissal)