United States District Court, W.D. Pennsylvania
September 13, 2005.
ADRIENNE JOHNSON, Plaintiff,
UNITED STATES DEPARTMENT OF EDUCATION, Defendant.
The opinion of the court was delivered by: GARY LANCASTER, District Judge
Plaintiff, Adrienne Johnson, seeks judicial review of an
administrative decision, made by defendant, United States
Department of Education, that Johnson's student loan debts may be
collected through administrative wage garnishment. Before the
court is defendant's motion for summary judgment and motion to
dismiss [doc. no. 3]. Defendant argues that it is entitled to
summary judgment because the agency decision was in accordance
with the law and was not arbitrary and capricious. Defendant also
argues that plaintiff has failed to state a claim for three new
claims that plaintiff did not raise before the administrative
For the reasons set forth below, defendant's motions will be
granted. I. BACKGROUND
Unless otherwise indicated, the following facts are undisputed.
Between 1978 and 1980, while attending Cornell University,
plaintiff signed several applications and promissory notes for
student loans totaling $12,860.00. See Administrative Record
("AR") at 0000030-0000032; Complaint ¶¶ 5&6. Plaintiff admits to
making timely repayments until August 1983 when she ran into
financial difficulties. Complaint ¶ 7. Plaintiff claims to have
unsuccessfully worked with defendant in an attempt to compromise
on the amount owed. In 1992 she told the agency to sue her "so
there could be a fair and competent determination of what
collection costs should be considered necessary and reasonable."
Id. at ¶ 9. In 1995, the guaranty agency transferred its loans
to defendant. Id. at ¶ 10. At that time, the principal balance
was $12,851.90. Id. Upon receipt of defendant's Notice of
Proposed Wage Garnishment, plaintiff made a timely Request for
At her agency hearing, plaintiff objected to the garnishment of
her wages because (a) she did not borrow the total amount
claimed; (b) the debt is not an enforceable debt; and (c)
withholding 15 percent of plaintiff's disposable pay would cause
a financial hardship. AR at 000002-000003. Defendant determined
that plaintiff's debt was legitimate and legally enforceable, and
that according to their records, plaintiff owed $12,851.90 in principal, accrued interest of $7,823.58, and unpaid collection
costs or fees of $5,168.87, for a total of $25,844.35. Id. at
II. STANDARD OF REVIEW
A. Legal Standard for Summary Judgment
Fed.R.Civ.P. 56 (c) provides that summary judgment may be
granted if, drawing all inferences in favor of the non-moving
party, "the pleadings, depositions, answers to interrogatories
and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact and
that the moving party is entitled to a judgment as a matter of
The mere existence of some factual dispute between the parties
will not defeat an otherwise properly supported motion for
summary judgment. A dispute over those facts that might affect
the outcome of the suit under the governing substantive law, i.e.
the material facts, however, will preclude the entry of summary
judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). Similarly, summary judgment is improper so long as the
dispute over the material facts is genuine. Id. In determining
whether the dispute is genuine, the court's function is not to
weigh the evidence or to determine the truth of the matter, but
only to determine whether the evidence of record is such that a reasonable jury could return a verdict for
the nonmoving party. Id. at 248-49.
In summary, the inquiry under a Rule 56 motion is whether the
evidence of record presents a genuine dispute over material facts
so as to require submission of the matter to a jury for
resolution of that factual dispute or whether the evidence is so
one-sided that the movant must prevail as a matter of law.
B. The Scope of Judicial Review of an Agency Decision
Here, the court must view the Rule 56 summary judgment standard
in conjunction with the appropriate scope of judicial review of
an administrative agency. "A district court's review of an
administrative decision is usually limited to determining whether
the agency action is arbitrary, capricious, an abuse of
discretion, or otherwise not in accord with law." United States
v. Bean, 537 U.S. 71, 77 (2002) (quoting 5 U.S.C. § 706(2)(A)).
This standard "presumes that agency decisions are valid as long
as the decision is supported by a rational basis." Pozzie v.
United States Dep't of Hous. and Urban Dev., 48 F.3d 1026, 1029
(7th Cir. 1995); Gorka v. United Stated Dep't of Educ., No. 02
C 5449, 2004 WL 2658071 *3 (N.D. Ill. Oct. 13, 2004). "Courts
reviewing administrative decisions are only to determine whether
the decision was based on `relevant factors,' and whether the
agency made a `clear error in judgment.'" Gorka, 2004 WL
2658071 at *3 (quoting Pozzie, 48 F.3d at 1029). The district court is
not permitted to substitute its judgment for that of the agency.
Bowman Transp., Inc. v. Arkansas Best Freight Sys., Inc.,
419 U.S. 281, 285 (1974). Thus, a district court may only set aside
an agency decision if the decision falls outside the scope of the
agency's lawful authority, or is not "logical and rational."
Allentown Mack Sales & Serv. v. NLRB, 522 U.S. 359, 374 (1998).
A. Defendant's Motion for Summary Judgment on the Agency's
Utilizing the standard set forth above, a reasonable
fact-finder could not conclude that defendant's decision was
arbitrary and capricious. All the available evidence, namely the
Administrative Record and the pleadings, lead to the conclusion
that defendant made a reasonable decision that Johnson's debts
were valid and enforceable. Indeed, plaintiff does not dispute
the fact that she took out the loans, nor does she allege any
fraudulent conduct involved in the execution of the loan
applications or promissory notes. Because there is no evidence
that defendant's decision and calculation was unreasonable,
arbitrary, or capricious, summary judgement is appropriate here.
See Gorka, 2004 WL 2658071 at *4; Allentown,
522 U.S. at 374. B. Defendant's Motion to Dismiss Johnson's Newly Raised
Plaintiff raised arguments here which were not raised in the
administrative proceeding below. The crux of plaintiff's "new
claims" is that defendant's collection costs are
unconstitutional, and that laches, and the statutes of
limitations prevent Education from collecting on the loans and
prejudgment interest. While we sympathize with plaintiff's
predicament that with interest, collection costs, and
administrative charges, the agency decision will require her to
pay more than double the original loan amount, there is no legal
basis for plaintiff's objective.
First, we note that the general rule is that a district court's
review of an agency decision is limited to the administrative
record. 5 B. Mezines, J. Stern & J. Gruff, Administrative Law §
51.04 (1980); see also Miller v. United Welfare Fund,
72 F.3d 1066, 1071 (2d Cir. 1995) ("We follow the majority of our
sister circuits [including the Third Circuit] in concluding that
a district court's review under the arbitrary and capricious
standard is limited to the administrative record.") On this basis
alone, plaintiff's new claims which were not raised before the
agency and are thus, not part of the administrative record, are
improperly before this court.
Nonetheless, plaintiff's claim that the "procedure Defendant is
employing to enforce its demands for collection costs violates the Constitution," is without merit. She does not cite to any
constitutional provision that has been violated. Thus, we agree
with the defendant that Johnson has not properly alleged a
constitutional violation. Second, even if properly alleged, there
is no legal basis to find that defendant's collection costs are
Moreover, neither laches nor statutes of limitation bar
defendant from collecting the debt owed by plaintiff.
20 U.S.C. § 1091(a) explicitly states that:
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 . . . a guaranty agency that has an
agreement with the Secretary [of Education] . . .
that is seeking repayment of the amount due from a
Most federal courts have interpreted section 1091(a) as
"retroactively eliminating all limitations and laches defenses
for collection of student loan debts." Lovitt v. Texas
Guaranteed Student Loan Corp., No. 3-05-CV-0175BD, 2005 WL
1552831 *2 (June 27, 2005 N.D. Tex.); see also United States
v. Lawrence, 276 F.3d 193
, 196 (5th Cir. 2001); United States
v. Distefano, 279 F.3d 1241
, 1243 (10th Cir. 2002); Millard v.
United States Aid Funds, Inc., 66 F.3d 252
(9th Cir. 1995);
United States v. Glockson, 998 F.2d 896
, 897 (11th Cir. 1993).
These holdings are consistent with the express purpose of the
statute: "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." Lovitt, 2005 WL 1552831 at
*2. Here, plaintiff's argument that statutes of limitations and
laches should act to bar defendant from collecting her delinquent
debt is contrary to the law. As such, plaintiff's "new claims" in
the complaint are dismissed for failure to state a claim upon
which relief may be granted.
The court has carefully considered all of the arguments
advanced by the parties, including those not specifically
referenced here, and concludes that it would serve no purpose to
engage in further analysis. We need only state that there is no
genuine issue of material fact as to whether the agency acted in
an arbitrary and capricious manner, therefore, defendant's motion
for summary judgment must be granted. ORDER
Therefore, this 13th day of September, 2005, IT IS HEREBY
ORDERED that Defendant's motion for summary judgment is GRANTED.
The Clerk of Court is directed to mark this case CLOSED.
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