IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ...

Case 1:19-cv-02056 Document 1 Filed 07/11/19 Page 1 of 111

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

RANDI WEINGARTEN, in her official capacity as President of the American Federation of Teachers, AFL-CIO,

555 New Jersey Avenue N.W. Washington, D.C. 20001

AMERICAN FEDERATION OF TEACHERS, AFL-CIO, 555 New Jersey Avenue N.W. Washington, D.C. 20001

CYNTHIA MILLER, 9305 S. Oakley Avenue Chicago, Illinois 60643

CRYSTAL ADAMS, 2361 Sunnyside Drive Arnold, Missouri 63010

CONNIE WAKEFIELD, 54561 Jack Drive Macomb, Michigan 48042

DEBORAH BAKER, 12330 S. 14th Street Jenks, Oklahoma 74037

JANELLE MENZEL, 14889 Nokay Lake Road Brainerd, Minnesota 56401

KELLY FINLAW, 735 W. 172nd Street #A51 New York, New York 10032

GLORIA NOLAN, 4184 Sacramento Avenue St. Louis, Missouri 63115

MICHAEL GIAMBONA, 35 Tiffin Court Clayton, California 94517

Case No. __________

Case 1:19-cv-02056 Document 1 Filed 07/11/19 Page 2 of 111

Plaintiffs,

v.

ELISABETH DEVOS, in her official capacity as Secretary of Education,

400 Maryland Avenue S.W. Washington, D.C. 20202

and

UNITED STATES DEPARTMENT OF EDUCATION, 400 Maryland Avenue S.W. Washington, D.C. 20202

Defendants.

Date: July 11, 2019

COMPLAINT

Mark Richard (D.C. Bar No. 1033699) PHILLIPS, RICHARD & RIND, P.A. 9360 SW 72 Street, Suite 283 Miami, FL 33173 Telephone: (305) 412-8322 E-mail: mrichard@

Attorneys for Plaintiffs Weingarten & AFT

Aaron Ament* Daniel A. Zibel (D.C. Bar No. 491377) Robyn K. Bitner (D.C. Bar No. 1617036) NATIONAL STUDENT LEGAL DEFENSE NETWORK 1015 15th Street N.W., Suite 600 Washington, D.C. 20005 Telephone: (202) 734-7496 E-mail: aaron@

dan@ robyn@

Faith Gay* Caitlin Halligan* Maria Ginzburg* Yelena Konanova* Margaret Siller (D.C. Bar No. 230475) SELENDY & GAY PLLC 1290 Avenue of the Americas New York, NY 10104 Telephone: (212) 390-9000 E-mail: fgay@

challigan@ mginzburg@ lkonanova@ msiller@

Attorneys for Plaintiffs

*Pro hac vice forthcoming

Attorneys for Plaintiffs Weingarten & AFT

Case 1:19-cv-02056 Document 1 Filed 07/11/19 Page 3 of 111

TABLE OF CONTENTS

Pages

NATURE OF THE ACTION ......................................................................................... 1

PARTIES ...................................................................................................................... 12

Plaintiffs ............................................................................................................ 12

Defendants ........................................................................................................ 15

JURISDICTION........................................................................................................... 16

VENUE......................................................................................................................... 19

FACTUAL ALLEGATIONS ........................................................................................ 19

ED AND FEDERAL STUDENT LOANS.................................................................... 19

ED's Mission...................................................................................................... 19

The Role of Federal Student Loan Servicers ................................................... 22

THE PUBLIC SERVICE LOAN FORGIVENESS PROGRAM ................................. 25

PSLF Program Requirements .......................................................................... 27

The Failure of PSLF and the Equally Unsuccessful Temporary BandAid of TEPSLF........................................................................................ 33

ED's Authority to Discharge Student Loans.................................................... 35

ED'S ADMINISTRATIVE PROCESSING ERRORS.................................................. 37

ED's Documented Failure to Correctly Process PSLF Applications ............... 37

Administrative Error Plaintiffs ........................................................................ 41

1. Cynthia Miller ............................................................................. 41

2. Crystal Adams ............................................................................. 51

3. Connie Wakefield......................................................................... 56

ED'S DISREGARD OF SERVICER MISREPRESENTATIONS TO BORROWERS REGARDING PSLF................................................................. 66

ED's Awareness of Widespread Servicer Misconduct...................................... 66

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Case 1:19-cv-02056 Document 1 Filed 07/11/19 Page 4 of 111

Servicer Misconduct Plaintiffs.......................................................................... 71 1. Deborah Baker ............................................................................. 71 2. Janelle Menzel ............................................................................. 79 3. Kelly Finlaw................................................................................. 83 4. Gloria Nolan................................................................................. 86 5. Michael Giambona ....................................................................... 89

CAUSES OF ACTION ................................................................................................. 93 COUNT I ? ARBITRARY AND CAPRICIOUS AGENCY ACTION DUE TO

ADMINISTRATIVE PROCESSING ERRORS PURSUANT TO 5 U.S.C. ? 706(2)(A) (ADMINISTRATIVE ERROR PLAINTIFFS AGAINST DEFENDANTS) .............................................................................. 93 COUNT II ? INADEQUATE NOTICE OF DENIALS PURSUANT TO 5 U.S.C. ? 555(e) (ADMINISTRATIVE ERROR PLAINTIFFS AGAINST DEFENDANTS) .............................................................................. 95 COUNT III ? VIOLATION OF DUE PROCESS DUE TO ADMINISTRATIVE PROCESSING ERRORS PURSUANT TO THE FIFTH AMENDMENT TO THE U.S. CONSTITUTION (ADMINISTRATIVE ERROR PLAINTIFFS AND AFT AGAINST DEFENDANTS) ..................................... 97 COUNT IV ? ARBITRARY AND CAPRICIOUS AGENCY ACTION DUE TO SERVICER MISCONDUCT PURSUANT TO 5 U.S.C. ? 706(2) (SERVICER MISCONDUCT PLAINTIFFS AGAINST DEFENDANTS) .... 100 COUNT V ? VIOLATION OF DUE PROCESS DUE TO SERVICER MISCONDUCT PURSUANT TO THE FIFTH AMENDMENT TO THE U.S. CONSTITUTION (SERVICER MISCONDUCT PLAINTIFFS AND AFT AGAINST DEFENDANTS)........................................................... 102 PRAYER FOR RELIEF ............................................................................................. 104

ii

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Plaintiffs Randi Weingarten, in her official capacity as President of the American Federation of Teachers, AFL-CIO, and the American Federation of Teachers, AFL-CIO (collectively, "AFT"); Cynthia Miller, Crystal Adams, and Connie Wakefield (together, the "Administrative Error Plaintiffs"); and Deborah Baker, Janelle Menzel, Kelly Finlaw, Gloria Nolan, and Michael Giambona (together, the "Servicer Misconduct Plaintiffs," and together with Administrative Error Plaintiffs, the "Individual Plaintiffs"), through their attorneys, Selendy & Gay PLLC, Phillips, Richard & Rind, P.A., and the National Student Legal Defense Network, allege the following against Defendants Elisabeth DeVos, in her official capacity as Secretary of Education ("Secretary DeVos"), and the United States Department of Education (the "Department," and collectively with Secretary DeVos, "ED") and assert the following claims under the Administrative Procedure Act ("APA") and the Due Process Clause of the Fifth Amendment to the United States Constitution.

Plaintiffs seek to hold ED accountable for its gross mismanagement of the Public Service Loan Forgiveness ("PSLF") Program and the Temporary Expanded Public Service Loan Forgiveness ("TEPSLF") Program in violation of the APA and the Fifth Amendment's Due Process Clause. Plaintiffs ask this Court to direct ED to provide PSLF and TEPSLF applicants with a decision-making process that minimizes the risk of erroneous denials, a meaningful opportunity to contest denials, and a written, reasoned explanation for its decisions. The Individual Plaintiffs also seek loan forgiveness in their specific cases.

NATURE OF THE ACTION 1. In 2007, recognizing that the skyrocketing cost of higher education made it nearly impossible for public servants to obtain the degrees required to serve in their professions and pay back their resulting student loans, a bipartisan Congress enacted the PSLF Program. PSLF's purpose was to relieve the burden of student debt for

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