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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 12-12859
Non-Argument Calendar
________________________
D.C. Docket No. 4:11-cv-00124-BAE-GRS
SHERRY COUNCIL BENNETT,
Plaintiff - Appellant,
versus
PREMIERE CREDIT OF NORTH AMERICA, LLC,
EDUCATIONAL CREDIT MANAGEMENT CORP.
Defendants - Appellees,
THE LANDINGS CLUB, INC.
Defendant.
________________________
Appeal from the United States District Court
for the Southern District of Georgia
________________________
(January 28, 2013)
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Before MARCUS, WILSON and KRAVITCH, Circuit Judges.
PER CURIAM:
Appellant Sherry Council Bennett appeals from the district court’s grant of
summary judgment in favor of appellees Educational Credit Management
Corporation (ECMC) and Premiere Credit of North America, LLC (Premiere) and
denial of her motion for partial summary judgment.1 See Bennett v. Premiere
Credit of N. Am., LLC, et al., D. Ga. 2012, __ F.Supp.2d __, (No. 11-124, Oct. 20,
2011) (“Bennett I”) (order granting ECMC’s motion for summary judgment); see
also Bennett v. Premiere Credit of N. Am., LLC, et al., D. Ga. 2012, __ F.Supp.2d
__, (No. 11-124, May 8, 2012) (“Bennett II”) (order granting Premiere’s motion
for summary judgment). Bennett challenges an administrative wage garnishment
instituted by appellees in an attempt to collect monies allegedly owed by Bennett
after she defaulted on her Stafford student loan. Finding no error on the part of the
district court, we affirm.
1
Although ECMC originally filed a motion to dismiss for failure to state a claim, the
district court construed that motion as one for summary judgment, and gave the parties additional
time to supplement the record. See Bennett I, D. Ga. 2012, __ F.Supp.2d __, (No. 11-124, Oct.
20, 2011). Bennett also filed a motion for a permanent injunction, which the district court denied
because it had already “dismissed Bennett’s claims against ECM[C] on summary judgment.”
Bennett I, D. Ga. 2012, __ F.Supp.2d __, (No. 11-124, Oct. 20, 2011). However, because
Bennett does not “plainly and prominently” contest the permanent injunction ruling on appeal, it
is therefore deemed abandoned. See United States v. Jernigan, 341 F.3d 1273, 1283 n.8 (11th
Cir. 2003) (holding that an issue is abandoned when it is not “plainly and prominently” raised on
appeal).
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I. STANDARD OF REVIEW
“We review a grant of summary judgment de novo and apply the same legal
standards as the district court.” Citizens for Smart Growth v. Sec’y of the Dep’t of
Transp., 669 F.3d 1203, 1210 (11th Cir. 2012) (citation omitted). “The court shall
grant summary judgment if the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). When reviewing a summary judgment motion, “[w]e do not make
credibility determinations, but instead believe the evidence of the non-movant . . .
and all justifiable inferences are to be drawn in [her] favor.” Evans v. Stephens,
407 F.3d 1272, 1277 (11th Cir. 2005) (citation and internal quotation marks
omitted) (ellipses in original). We also review de novo a district court’s conclusion
that federal law preempts state law. See Cliff v. Payco Gen. Am. Credits, Inc., 363
F.3d 1113, 1121 (11th Cir. 2004).
II. DISCUSSION
On appeal, Bennett claims that ECMC and Premiere violated the Higher
Education Act (HEA), 20 U.S.C. §§ 1001 et seq.; the Fair Debt Collection
Practices Act (FDCPA), 15 U.S.C. § 1692g; and Georgia state garnishment law,
O.C.G.A. § 18-4-46.2 Bennett also contends that there is a question of fact as to
2
Bennett’s arguments are somewhat disjointed and scattered through the entirety of her
brief. While it is not our place to make arguments for an appellant, we have done our best to
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whether she owes a debt at all, and therefore the district court improperly granted
summary judgment in favor of ECMC and Premiere.
A. The Higher Education Act
Bennett asserts that ECMC and Premiere violated certain provisions of the
HEA, which govern the procedures for administrative wage garnishment. See 20
U.S.C. § 1095a(a)(2)–(5). 3 Bennett contends that ECMC and Premiere violated
construe Bennett’s contentions into broad categories in order to facilitate the efficiency of our
review.
3
The relevant provisions read as follows:
(a) Garnishment requirements. Notwithstanding any provision of State law, a
guaranty agency . . . may garnish the disposable pay of an individual to collect the
amount owed by the individual, if he or she is not currently making required
repayment under a repayment agreement with the Secretary, or, in the case of a
loan guaranteed under part B [20 U.S.C. §§ 1071 et seq.] on which the guaranty
agency received reimbursement from the Secretary under section 1078(c) of this
title, with the guaranty agency holding the loan, as appropriate, provided that—
...
(2) the individual shall be provided written notice, sent by mail to the
individual’s last known address, a minimum of 30 days prior to the
initiation of proceedings, from the guaranty agency or the Secretary, as
appropriate, informing such individual of the nature and amount of the
loan obligation to be collected, the intention of the guaranty agency or the
Secretary, as appropriate, to initiate proceedings to collect the debt
through deductions from pay, and an explanation of the rights of the
individual under this section;
(3) the individual shall be provided an opportunity to inspect and copy
records relating to the debt;
(4) the individual shall be provided an opportunity to enter into a written
agreement with the guaranty agency or the Secretary, under terms
agreeable to the Secretary, or the head of the guaranty agency or his
designee, as appropriate, to establish a schedule for the repayment of the
debt;
(5) the individual shall be provided an opportunity for a hearing in
accordance with subsection (b) of this section on the determination of the
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the HEA when they failed to: (1) provide her with prior notice of the nature and
amount of the debt owed; (2) give her notice of their intent to initiate the
administrative wage garnishment; and (3) provide certain documents and records
upon request regarding Bennett’s alleged Stafford loan default. However, we have
consistently held that “[w]hile the HEA endows debtors with certain rights during
the wage garnishment process, the HEA expressly empowers only the Secretary of
Education—not debtors—with the authority to enforce the HEA and rectify HEA
violations.” Cliff, 363 F.3d at 1123 (citation omitted); see 20 U.S.C. § 1095a.
Therefore, “[i]t is well-settled that the HEA does not expressly provide debtors
with a private right of action.” Cliff, 363 F.3d at 1123 (citing McCulloch v. PNC
Bank Inc., 298 F.3d 1217, 1221 (11th Cir. 2002)). There is also no implied private
right of action. McCulloch, 298 F.3d at 1224–25. Accordingly, the district court
properly found that Bennett could not bring a private cause of action against
ECMC and Premiere for the alleged HEA violations. See Bennett I, D. Ga. 2012,
__ F.Supp.2d __, (No. 11-124, Oct. 20, 2011); Bennett II, D. Ga. 2012, __
F.Supp.2d __, (No. 11-124, May 8, 2012).
Secretary or the guaranty agency, as appropriate, concerning the existence
or the amount of the debt, and, in the case of an individual whose
repayment schedule is established other than by a written agreement
pursuant to paragraph (4), concerning the terms of the repayment
schedule[.] . . .
20 U.S.C. § 1095a(a)(2)–(5) (alterations in original).
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B. Fair Debt Collection Practices Act
Although there is no express or implied private right of action under the
HEA, a violation of the HEA can, at times, give rise to a private cause of action
under the FDCPA. See Cliff, 363 F.3d at 1127. Bennett contends that ECMC and
Premiere violated the FDCPA, directly and via their failure to qualify as guaranty
agencies under the HEA, when they communicated with and improperly “issued
[a] garnishment withholding order to [her] employer.” See 15 U.S.C. § 1692c(b)
(prohibiting a debt collector’s communication with third parties under the FDCPA
unless certain limited conditions apply). However, Bennett can only succeed on
this claim if ECMC and Premiere: (1) fail to qualify as “guaranty agencies” under
the HEA, and therefore did not have express authority to contact her employer; and
(2) are classified as “debt collectors” under the FDCPA, and acted in violation of
its regulatory provisions.
1. “Guaranty Agencies”
Under the Family Federal Education Loan (FFEL) Program, student loans,
such as Bennett’s Stafford loan, are guaranteed either by a state agency or by a
“private nonprofit organization that has an agreement with the Secretary [of the
Department of Education (DOE)] under which it will administer a loan guarantee
program under the [HEA].” 34 C.F.R. § 682.200; see 20 U.S.C. § 1078(a)(1).
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These nonprofit organizations, known as guaranty agencies, enter into agreements
with the DOE that:
[S]et forth such administrative and fiscal procedures as may be
necessary to protect the United States from the risk of unreasonable
loss thereunder, to ensure proper and efficient administration of the
loan insurance program, and to assure that due diligence will be
exercised in the collection of loans insured under the program.
20 U.S.C. § 1078(C)(2)(A) (emphasis added). HEA regulations have expressly
characterized the relationship between a guaranty agency and the DOE as a
fiduciary relationship. See 34 C.F.R. § 682.419(a) (“The guaranty agency must
exercise the level of care required of a fiduciary charged with the duty of
protecting, investing, and administering the money of others.”).
Guaranty agencies are not only given express authority to engage in
collection activities, but federal regulations mandate that the agencies engage in
“due diligence” to collect on defaulted loans as part of their agreement with the
DOE. See 34 C.F.R. § 682.410(b)(6)(i) (“A guaranty agency must engage in
reasonable and documented collection activities on a loan on which it pays a
default claim filed by a lender. . . . [T]he agency must perform at least one activity
every 180 days to collect the debt, locate the borrower (if necessary), or determine
if the borrower has the means to repay the debt.” (emphasis added)); see generally
34 C.F.R. § 682.411(governing “[l]ender due diligence in collecting guaranty
agency loans”).
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In addition, as part of their mandatory collection activities, guaranty
agencies are given express authority to “garnish the disposable pay of a debtor to
collect the amount owed if the debtor has failed to make payments required under a
repayment agreement.” Cliff, 363 F.3d at 1118 (citing 20 U.S.C. § 1095a(a)
(“Notwithstanding any provision of State law, a guaranty agency . . . may garnish
the disposable pay of an individual to collect the amount owed by the individual, if
he or she is not currently making required repayment under a repayment
agreement. . . .”)). Guaranty agencies also have express authority to contact a
debtor’s employer and issue a withholding order demanding that the employer
garnish the debtor’s wages. See 20 U.S.C. § 1095a(a)(6) (“[T]he employer shall
pay to the Secretary or the guaranty agency as directed in the withholding order. . .
.”); see also 34 C.F.R. § 682.410(b)(9)(i)(H) (“Unless the guaranty agency receives
information that the agency believes justifies a delay or cancellation of the
withholding order, it shall send a withholding order to the employer. . . .”).
Bennett contends that ECMC is not a guaranty agency, and that because
there is no evidence that her Stafford loan was transferred or assigned to ECMC, it
is not the current holder of her loan. Bennett asserts that the sworn affidavit of
ECMC’s Senior Account Servicing Representative, Julia Lambert—which states
that ECMC is the current holder of Bennett’s loan and that it is a guaranty
agency—is nothing more than an unsupported opinion. Citing a decision from the
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Ninth Circuit, Bennett further maintains that neither ECMC nor Premiere have
engaged in the requisite activities to be classified as anything more than debt
collectors. See Rowe v. Educ. Credit Mgmt. Corp., 559 F.3d 1028, 1032 (9th Cir.
2009). ECMC, on the other hand, cites Lambert’s affidavit and contends that it
qualifies as a guaranty agency under the HEA, such that its issuance of a
withholding order to Bennett’s employer was appropriate. Premiere concedes that
it is not a guaranty agency.
As a preliminary matter, we reiterate the district court’s observation that
Bennett has confused the requirements for demonstrating an organization’s
“guaranty agency” status under the HEA with the requirements necessary to prove
an entity’s status as a “debt collector” under the FDCPA. See Bennett II, D. Ga.
2012, __ F.Supp.2d __, (No. 11-124, May 8, 2012) (“Bennett appears to
intermingle the FDCPA and HEA.”). The test that Bennett cites, as stated in our
sister circuit’s decision in Rowe and discussed by the district court below, resolves
the question of “debt collector” status, but is inapplicable to determine “guaranty
agency” status. See 559 F.3d at 1032 (“Two requirements must be satisfied for an
entity to come within the exception to the FDCPA for collection activities
‘incidental to a bona fide fiduciary obligation.’” (citing 15 U.S.C. § 1692a(6)(F)(i))
(emphasis added)). Therefore, we simply look for an agreement between ECMC
and the DOE to determine guaranty agency status. See 34 C.F.R. § 682.200(b).
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ECMC has presented sufficient evidence that it is the current holder of
Bennett’s Stafford loan, as well as evidence of its guaranty agency status, through
Lambert’s sworn affidavit and the attached letter listing ECMC as a guaranty
agency to the DOE. Although the list of guaranty agencies is not on official DOE
letterhead, as Bennett vehemently points out, the list attached to Lambert’s
affidavit is identical to the list of guaranty agencies posted on the DOE’s official
website. See U.S. Department of Education, State Guaranty Agency,
Organizations by Type,
http://wdcrobcolp01.ed.gov/Programs/EROD/org_list.cfm?category_cd=SGA (last
visited Dec. 16, 2012). Moreover, numerous sister circuits have explicitly held
that ECMC is a guaranty agency. See Rowe, 559 F.3d at 1032 (finding no dispute
as to ECMC’s guaranty agency status); see also Black v. Educ. Credit Mgmt.
Corp., 459 F.3d 796, 798 (7th Cir. 2006) (finding that ECMC is “a non-profit
corporation that acts as a guarantee agency and occasionally handles the defaulted
FFELP loans of debtors who file a petition for relief under Chapter 13”).
Aside from making a bald assertion that Lambert’s affidavit is nothing more
than “an opinion,” Bennett has not presented any other evidence to support her
claims regarding ECMC’s guaranty agency status. Based on the evidence in the
record before us, and Bennett’s failure to present sufficient evidence otherwise, we
agree with the district court that ECMC qualifies as a guaranty agency under the
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HEA, and is therefore engaged in a fiduciary relationship with the DOE. See 34
C.F.R. § 682.419(a). Accordingly, ECMC had the authority to engage in
administrative wage garnishment and issue a withholding order to Bennett’s
employer. See 20 U.S.C. § 1095a(a)(6).
2. “Debt Collectors”
Congress enacted the FDCPA in order to eliminate “the use of abusive,
deceptive, and unfair debt collection practices” and “to protect consumers against
debt collection abuses.” 15 U.S.C. §§ 1692(a), (e). The Act thereby regulates the
collection of “debts” by “debt collectors” by dictating, inter alia, the type and
frequency of the contacts that a debt collector can make with a debtor. See 15
U.S.C. §§ 1692a, 1692c; see also Pelfrey v. Educ. Credit Mgmt. Corp., 71 F. Supp.
2d 1161, 1165 (N.D. Ala. 1999), aff’d 208 F.3d 945 (11th Cir. 2000) (per curiam).
A violation of any of the prohibited activities listed in the FDPCA gives rise to a
private cause of action. See 15 U.S.C. § 1692k.
The FDCPA broadly defines a “debt collector” as “any person who uses any
instrumentality of interstate commerce or the mails in any business the principal
purpose of which is the collection of any debts, or who regularly collects or
attempts to collect, directly or indirectly, debts owed or due or asserted to be owed
or due another.” 15 U.S.C. § 1692a(6). However, the Act lists multiple exceptions
to this definition; in relevant part, the FDCPA does not apply to “any person
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collecting or attempting to collect any debt owed or due or asserted to be owed or
due another to the extent such activity . . . is incidental to a bona fide fiduciary
obligation.” 15 U.S.C. § 1692a(6)(F)(i) (emphasis added). Although an entity that
satisfies this exception is not subject to the FDCPA, “the Secretary of Education
has expressed the belief that third-party debt collectors acting on behalf of
guaranty agencies to collect federal student loans must comply with the FDCPA.”
Cliff, 363 F.3d at 1123–24 (citing 55 Fed. Reg. 40120 (Oct. 1, 1990)).
Bennett contends that ECMC and Premiere are both debt collectors under
the FDCPA. However, based on facts similar to the ones at bar, we have explicitly
held that ECMC is an entity acting incident to a fiduciary relationship with the
DOE, and is therefore exempt from the provisions of the FDCPA. Pelfrey, 208
F.3d at 945 (“[T]he [FDCPA] does not apply to [ECMC], because [ECMC] is a
‘person collecting or attempting to collect any debt owed or due or asserted to be
owed or due another to the extent such activity . . . is incidental to a bona fide
fiduciary obligation.” (alterations in original)). Likewise in this case, ECMC’s
status as a guaranty agency, and therefore its fiduciary relationship to the DOE, is
direct evidence that it satisfies the fiduciary relationship exemption and is not
subject to the provisions of the FDCPA. 4
4
Even if we were to apply the test articulated in Rowe, as Bennett demands, ECMC is
exempt from the FDCPA because (1) it has a fiduciary relationship with the DOE, and (2) its
collection activities are incidental to that fiduciary obligation. See 559 F.3d at 1032.
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Premiere, on the other hand, concedes “that it is a third-party debt collector
subject to the FDCPA.” However, it contends that because ECMC actually issued
the withholding order to Bennett’s employer, and because Bennett’s employer was
specifically directed to remit payments to ECMC, Premiere “merely acted as an
accounts receivable collection contractor assisting ECMC with collection of
[Bennett’s] defaulted student loan.” Once again, ECMC had the authority to issue
a withholding order to effectuate wage garnishment. See 20 U.S.C. § 1095a(a)(6).
Moreover, the Secretary of Education has recognized that “[a] great deal of the
collection action on [FFEL] Program loans is performed for guarant[y] agencies by
third party collection contractors . . . subject to the FDCPA.” See 55 Fed. Reg.
40120; see also Cliff, 363 F,3d at 1123–24. Accordingly, because ECMC is
authorized to engage in administrative wage garnishment, and because Premiere is
authorized to perform collection activities on ECMC’s behalf as a third-party
contractor, Premiere did not violate the FDCPA.
C. Preemption by Georgia Wage Garnishment Statute
Bennett also argues that the Georgia state wage garnishment statute
supersedes the HEA. See O.C.G.A. § 18-4-46 (“[N]o part of the personal earnings
of [a debtor] shall be subject to garnishment prior to [a] judgment.”). However, we
expressly decided this issue in Cliff when we held that, pursuant to the
“notwithstanding any provision of state law” clause of the HEA, 20 U.S.C. §
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1095a(a), the HEA “preempts [] those provisions of state law that would otherwise
prohibit or hinder the ability of a guaranty agency to garnish a debtor’s wages.”
363 F.3d at 1125. Here, because the Georgia statute would require ECMC to
obtain a state court judgment prior to garnishing Bennett’s wages, the Georgia
statute is preempted because it hinders ECMC’s ability to garnish a debtor’s
wages. Therefore, Bennett’s argument to the contrary is foreclosed.
D. Question of Fact as to Debt Owed
Bennett contends that “the record . . . is completely absent evidence that
ECMC or Premiere is the owner or holder of [her] note or judgment.” Bennett also
maintains that she has already paid any debt owed on the Stafford loan, and cites
two official letters issued by the DOE on September 24, 2000 and February 20,
2010, stating that two of her defaulted loans have been “paid in full.” Finally,
Bennett claims that appellees’ failure to file a compulsory counterclaim under
Federal Rule of Civil Procedure 13(a) provides further evidence that there is a
question of fact as to whether she owes a debt.
Contrary to Bennett’s assertions, we need not address any of these claims.
As recognized by the district court, this is not the appropriate forum to raise these
issues; instead, Bennett should pursue these claims in accordance with the
available administrative rights, procedures and remedies provided under the HEA.
See, e.g., 20 U.S.C. § 1095a(a)(5) (“[T]he individual shall be provided an
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opportunity for a hearing . . . concerning the existence or the amount of the debt.”);
34 C.F.R. §§ 682.410(b)(9)(i)(E) (“The guaranty agency shall offer the borrower
an opportunity for a hearing . . . concerning the existence or the amount of the
debt.”), 682.410(b)(i)(J) (“The guaranty agency shall provide a hearing, which, at
the borrower's option, may be oral or written, if the borrower submits a written
request for a hearing on the existence or amount of the debt.”). Bennett has a right
to a hearing before a “hearing official appointed by the [guaranty] agency,” who
“may be any qualified individual, including an administrative law judge, not under
the supervision or control of the head of the guaranty agency.” 34 C.F.R. §
682.410(b)(9)(i)(M).
AFFIRMED.
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