Opinion
Civil File No. 02-820 (PAM/RLE).
July 22, 2003.
MEMORANDUM AND ORDER
This matter is before the Court on the parties' cross-Motions for Summary Judgment. For the following reasons, the Court denies Plaintiff's Motion for Summary Judgment and grants Defendant's Motion for Summary Judgment.
BACKGROUND
In 1969, Plaintiff Carol Jane Roth obtained student loans to attend Northwestern University. Roth borrowed a total of $1590 in principal. The loans became due in March 1971, and Roth made payments until 1982. At that time, the loans went into default. The university assigned the loans to the United States in 1986. Since then, the Government claims that the Department of Education ("DOE") has sent Roth more than thirty-five letters about the status of the loans. Roth denies receiving notice that the loans were in default from the DOE, or from a collection agency until 1999.
In an attempt to collect on the defaulted loans, the Government imposed "offsets," confiscating Roth's tax refunds and portions of her Social Security income to pay down the debt. The balance on Roth's debt is currently $929.39 in principal and $191.41 in interest.
Roth initially brought this action in Minnesota state court to enjoin the Government from collecting on her loans under the theory of laches. Roth asserts that the DOE failed to provide reasonable notice of the default status of her loans and of the DOE's intention to impose offsets. Finally, Roth explains her delinquency by noting that her ex-husband assumed the loan obligations pursuant to their divorce decree. Her former husband, now deceased, apparently failed to fully pay back the loans in violation of the divorce decree.
The Government removed the case to this Court and filed a Motion to Dismiss, or in the alternative for Summary Judgment. However, on September 12, 2002, this Court stayed the Motion, pending an administrative appeal before the DOE. On December 3, 2002, the Hearing Officer for the DOE approved the offsets. Roth amended her Complaint to include a request for judicial review of the Hearing Officer's decision.
The Government moved for summary judgment on Roth's Amended Complaint. Subsequently, Roth cross-moved for summary judgment. The Court reviews this case under the Administrative Procedure Act, 5 U.S.C. § 701, 706(2)(a)-(c).
DISCUSSION
A. Summary Judgment Standard
The parties move for summary judgment pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, which provides that such a motion shall be granted only if "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). When considering a motion for summary judgment, Courts must view the evidence and the inferences that may be reasonably drawn from the evidence in the light most favorable to the non-moving party. Enter. Bank v. Magna Bank, 92 F.3d 740, 747 (8th Cir. 1996). The burden of demonstrating that there are no genuine issues of material fact rests on the moving party. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party has carried its burden, the non-moving party must demonstrate the existence of specific facts in the record that create a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); Krenik v. County of LeSueur, 47 F.3d 953, 957 (8th Cir. 1995).
B. Agency Review
Agency action can only be set aside as arbitrary and capricious if the agency:
relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.Cent. S.D. Co-op Grazing Dist. v. Sec'y of United States Dep't of Agric., 266 F.3d 889, 894 (8th Cir. 2001) (quoting Motor Vehicle Mfrs. Ass'n v. State Farm, 463 U.S. 29, 43 (1983)). Moreover, "the standard of review is narrow and a court is not to substitute its judgment for that of the agency." Id., at 895. Accordingly, under this standard of review, agency decisions receive "a high degree of judicial deference." Mo. Limestone Producers Ass'n, Inc. v. Browner, 165 F.3d 619, 621 (8th Cir. 1999) (quoting Dubois v. Thomas, 820 F.2d 943, 948-49 (8th Cir. 1987)). In this case, Roth primarily asserts that the Hearing Officer abused her discretion by not considering the following issues. First, Roth complains that the Hearing Officer misapplied the doctrine of laches. Second, Roth alleges that the Hearing Officer failed to consider that the DOE had her correct address on file, yet sent the notice to the wrong address. Correspondingly, Roth alleges that the offset began before she received actual notice of the DOE's intention to impose offsets.
C. Applicability of Laches
Roth claims that the Government waived its right to collect on her defaulted student loans because it did not commence collection actions against her for a period of several years. In response, the Government contends that 20 U.S.C. § 1091a(a)(2), as amended by the Higher Education Technical Amendments of 1991, abrogated the laches doctrine as a defense against the Government in student loan collection cases. This Court agrees.
The Fifth Circuit Court of Appeals held that in eliminating the statute of limitations defense, Congress also eliminated the laches defense against the Government in student loan collection actions:
Although we have never directly addressed this question, several other circuits have held that § 1091a negates any limitations defense. Today we follow those circuits that have decided the issue and conclude that § 1091a eliminates all limitations defenses for collection of student debts. Further, we adopt the district court's holding that § 1091a also extends to eliminate the equitable defense of laches.United States v. Lawrence, 276 F.3d 193, 196 (5th Cir. 2001). The Lawrence court grounded their decision in the statutory language of § 1091a which provides that:
(1) It is the purpose of this subsection to ensure that obligations to repay loans and grant overpayments are enforced without regard to any Federal or State statutory, regulatory, or administrative limitation on the period within which debts may be enforced.
(2) Notwithstanding any other provision of statute, regulation, or administrative limitation, no limitation shall terminate the period within which suit may be filed, a judgment may be enforced, or an offset, garnishment, or other action initiated or taken by-[the DOE].20 U.S.C. § 1091a(1), (2).
Similarly the Eighth Circuit held that the Higher Education Technical Amendments of 1991 eliminated the six-year statute of limitations for student loan collections. See United States v. Hodges, 999 F.2d 341, 342 (8th Cir. 1993). Therefore, this Court finds that laches does not apply against the Government in student loan collection cases.
D. Merits of the Laches Theory
Even if laches did apply, Roth has not created a fact issue on whether the Hearing Officer was arbitrary or capricious in her decision that Roth failed to prove either of the elements of laches. The Hearing Officer based her findings on the fact that the DOE made numerous attempts to contact Roth soon after assuming control of the loans from Northwestern University. Further, the Hearing Officer correctly determined that the DOE could use the address noted on the debtor's most recent tax return. 31 C.F.R. § 285.2(d)(2)(i) ("[A] creditor agency has made a reasonable attempt to notify the debtor if the agency uses the current address information contained in the agency's records related to the debt. Agencies may, but are not required to, obtain address information from the IRS. . . .") Finally, the Hearing Officer reasonably concluded that to satisfy its obligation to provide notice to the debtor, the DOE need not prove that Roth actually received notice. See Kerr v. Charles F. Vatterott Co., 184 F.3d 938, 947 (8th Cir. 1999) (courts recognize rebuttable presumption that properly mailed document is received); see also Dusenbery v. United States, 534 U.S. 161, 170-71 (2002) (due process does not require proof of actual notice); Morse v. Internal Revenue Serv., 635 F.2d 701, 703 (8th Cir. 1980) (notice provisions of Internal Revenue Code, 26 U.S.C. § 6212, 6901, do not require actual receipt).
CONCLUSION
In passing 20 U.S.C. § 1091a, Congress intended to eliminate limitations defenses to the collection of student loans, including the doctrine of laches. Even assuming, however, that laches did apply, the Hearing Officer did not arbitrarily reject Roth's claims. Accordingly, IT IS HEREBY ORDERED that:
1. Plaintiff's Motion for Summary Judgment (Clerk Doc. No. 36) is DENIED; and
2. Defendant's Motion for Summary Judgment (Clerk Doc. No. 34) is GRANTED.