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Walker v. American Education Services

April 26, 2010

VICKIE R. WALKER, PLAINTIFF
v.
AMERICAN EDUCATION SERVICES, AES/PHEAA, AND PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY, DEFENDANTS



The opinion of the court was delivered by: Sylvia H. Rambo United States District Judge

MEMORANDUM

On November 19, 2009, Defendants removed this case from the Dauphin County Court of Common Pleas where it had been originally filed by Plaintiff through a writ of summons on August 31, 2009, and then by a complaint on October 28, 2009. (See County Court Record, Doc. 4.) Defendants base removal on 28 U.S.C. § 1441(b), and assert that the court has jurisdiction because a federal question is implicated by Plaintiff's complaint, and therefore "arises under" the laws of the United States. Specifically, Defendants assert that Plaintiff's claims are preempted by the Higher Education Act of 1965, as amended in 20 U.S.C. § 1070, et seq. ("HEA"), and the applicable United States Department of Education regulations.

Presently before the court is Defendants' motion to dismiss Plaintiff's complaint, (Doc. 3), on the basis that the HEA preempts all of Plaintiff's claims. Upon review of the issues presented, the court determines that the case was improperly removed and this court lacks subject matter jurisdiction to decide the ultimate issue of whether Plaintiff's claims are preempted. Accordingly, the case will be remanded to the Dauphin County Court of Common Pleas and Defendants' motion to dismiss will be denied as moot.

I. Background

A. Parties

Plaintiff Vickie Walker resides in Blairsville, Indiana County, Pennsylvania. According to Plaintiff's Complaint, American Education Services is a fictitious name owned by the Pennsylvania Higher Education Assistance Agency, and is the servicer of Plaintiff's student loans. The Pennsylvania Higher Education Assistance Agency is a statutorily created agency of and for the Commonwealth of Pennsylvania. See 24 Pa. Cons. Stat. Ann. § 5101.

B. Facts

The following facts are taken directly from Plaintiff's complaint and, for purposes of the issues presently before the court, they are taken as true. In May 2005, Plaintiff began researching various loan servicers and lenders in anticipation of consolidating her student loans. Ultimately, Plaintiff chose to consolidate her loans through Key Bank and selected Plaintiff AES as the servicer. Plaintiff chose Key Bank because the terms of the loan consolidation provided that she would receive a 5% reduction in her principal balance after 36 months of consecutive payments and a .25% reduction in her interest rate if she had her loans directly debited from her bank account. Plaintiff did not choose to have her loan consolidated by Defendant AES/PHEAA because its terms were not as favorable.

Plaintiff completed her loan consolidation application online through AES' website. She began the process on June 30, 2005, but apparently was unable to complete the loan application until August 31, 2005 because of problems with the website. Plaintiff asserts that she had phone and e-mail contact with AES online technical support at various times from July 1, 2005 through August 31, 2005, due to the fact that the online application would not allow her to select Key Bank as her lender. Plaintiff asserts that she was told by AES' online technical support to chose "other" as her lender, and to type "Key Bank as lender" into the comment section of the application. Plaintiff completed the application on August 21, 2005, and selected Key Bank as her lender consistent with the instructions given by AES' technical support.

In or around October 2005, Plaintiff, who was then living in Portland, Oregon, contacted AES to inquire about the status of her loan consolidation. Defendants mailed a copy of her promissory note to her address in Oregon, but Plaintiff asserts that the note was incorrect because it listed Beneficial, or Citizens, as the lender. Plaintiff contacted AES and informed them that they listed the incorrect lender. She was sent a new promissory note which was also incorrect because it listed AES as the lender.

From October 2005 through October 2006, Plaintiff made frequent telephone contact with the consolidation department of AES because the lender listed on the promissory note sent to her was not the lender with whom Plaintiff chose to consolidate. Plaintiff never received a promissory note that listed Key Bank as her lender. Furthermore, Plaintiff asserts that she never received a required disclosure statement when her loans were originally processed for consolidation.

On October 11, 2006, Plaintiff received a letter from AES informing her that she was in default of her repayment obligations because she had not made any payments. Plaintiff asserts that at all times she was eligible for a deferment of her obligation to make payments on her loans, but at no time did anyone from AES inform her of her eligibility for a deferment. Plaintiff attempted to resolve her student loan delinquency but has thus far been unable to do so.

In her complaint, Plaintiff alleges that AES was aware that she moved frequently and that she preferred to be contacted about all matters relating to her student loans by e-mail rather than U.S. Mail. Despite this, AES never contacted her about her loan delinquency by e-mail. Instead, she only became aware of ...


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