Chavez v. Capella

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JUAN PABLO CHAVEZ, Plaintiff, v. CAPELLA, et al., Defendants.

No. 3:22-CV-0007-D (BH)

United States District Court, N.D. Texas, Dallas Division

May 31, 2023

FINDINGS, CONCLUSIONS, AND RECOMMENDATION REFERRED TO U.S. MAGISTRATE JUDGE ^[1]

IRMA CARRILLO RAMIREZ UNITED STATES MAGISTRATE JUDGE

Based on the relevant filings and applicable law, any claims against the United States Department of Education under the Higher Education Act should be DISMISSED without prejudice for lack of subject matter jurisdiction and all remaining claims should be DISMISSED with prejudice for failure to state a claim upon which relief can be granted.

I. BACKGROUND

On January 3, 2022, Juan Pablo Chavez (Plaintiff) filed an original complaint that simply stated “RICO”. (See doc. 3 at 1.)^[2] Attached were copies of e-mails regarding his attempt to obtain an extension of time to complete a course at Capella University (Capella) and his request for a tuition refund, and pleadings and orders from an unrelated case he filed in the United States District Court for the Southern District of New York. (See id. at 2-31.) He subsequently filed an amended complaint alleging that he had “not received a refund of [his] student loans” despite a “total disability imposition,” that he was made to take an introduction to business class twice but charged the non-introduction rate, and that he was never given access to the non-introduction business courses. (doc. 17 at 5.) It also alleges that he was given a zero on an assignment when he was told the teacher gave him a 110, he was not permitted to turn in homework, and he received a failing grade despite having already passed the introduction to business course. (See id.)

Plaintiff sues Capella; its owner, Strategic Education Inc. (SEI); various faculty members and/or employees, including Amanda Tanner (Tanner), Kelly Stratman (Stratman), Michelle Adderly (Adderly), Keith Seidl (Seidl), and Paul Jeannotte (Jeannotte); and the United States Department of Education (DOE). (See doc. 17 at 4; doc. 34 at 10.)^[3] He claims that Capella, SEI and Tanner violated his “equal rights” and the Americans with Disabilities Act, 42 U.S.C. § 12132, et seq. (ADA), by only giving him 101 minutes to turn in an assignment that would qualify him for an extension of time to turn in other coursework and take other classes. (See doc. 34 at 3-5.) He contends that Stratman “advised extension policy untimely” and Adderly engaged in “e-mail fraud.” (Id. at 6-7.) Plaintiff's cause of action against Seidl is for “reading comprehension/corona”; DOE “spends [his] unbankruptable money without letting [him] touch it. Can't refund one introductory online business course. Excluded [him] from disability relief.” (Id. at 8-9.) He alleges that Jeannotte did not provide a “refund for intro class” in violation of his equal rights and/or the Truth in Lending Act (TILA). (Id. at 10.)

Plaintiff wants his student loans to be forgiven or discharged, a full refund for “dev. bus. persp. course,” $100,000.00 in damages for “multiple counts of wire fraud,” and “a respectable education/degree(s) at a non-vastly-inflated price.” (See doc. 17 at 6; doc. 34 at 4, 12.)^[4]

II. PRELIMINARY SCREENING

Because Plaintiff has been permitted to proceed in forma pauperis (IFP), his complaint is subject to screening under 28 U.S.C. § 1915(e)(2)(B). That statute provides for sua sponte dismissal of the complaint, or any portion thereof, if the Court finds it is frivolous or malicious, if it fails to state a claim upon which relief may be granted, or if it seeks monetary relief against a defendant who is immune from such relief.

A complaint is frivolous when it “lacks an arguable basis either in law or in fact.” Neitzke v. Williams, 490 U.S. 319, 325 (1989). Courts follow the same analysis in determining whether a complaint fails to state a claim under § 1915(e)(2)(B)(ii) as when ruling on a motion to dismiss under Rule 12(b)(6). See Hale v. King, 642 F.3d 492, 497 (5th Cir. 2011) (per curiam). A complaint fails to state a claim upon which relief may be granted when it fails to plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Neither mere “labels and conclusions” nor “a formulaic recitation of the elements of a cause of action” suffice to state a claim upon which relief may be granted. Id.

III. CLAIMS AGAINST THE DOE

Plaintiff appears to sue the DOE for the discharge or refund of his student loan debt due to his alleged “total permanent disability” status. (doc. 17 at 5-6; doc. 34 at 9.)^[5]

“[T]here appear to be two possible causes of action for discharging federally guaranteed student loans: the [Higher Education Act] and the [Administrative Procedure Act].” Winston v. Department of Education, Civil Action No. DKC 21-1358, 2022 WL 2466792, at *3 (D. Md. July 6, 2022). “The HEA sets out limited circumstances under which the DOE shall discharge student debt.” Id. (citing 20 U.S.C. § 1087(a)). And “requests for discharge under the HEA are often adjudicated within an APA suit” because “[m]any federal district and circuit courts have concluded that the APA grants federal district courts subject matter jurisdiction over cases seeking declaratory and injunctive relief for injuries caused by the Secretary's decisions under the HEA.” Id. (citing Gavin v. Dep't of Air Force, 324 F.Supp.3d 147, 151 (D.D.C. 2018); Wimberly v. U.S. Dep't of Educ., No. 12-cv-7773, 2013 WL 6123172, at *2 (S.D.N.Y. Nov. 12, 2013)) then quoting Adams v. Duncan, 179 F.Supp.3d 632, 640 (S.D.W.V. 2016)).

A. HEA

The HEA provides that the Secretary may “sue and be sued.in any district court of the United States.” 20 U.S.C. § 1082(a)(2).^[6] Section 1082 of the HEA states that “no attachment, injunction, garnishment, or other similar process, mesne or final, shall be issued against the Secretary or property under the Secretary's control.” 20 U.S.C. § 1082(a)(2). “Courts have repeatedly held that [§ 1082(a)(2)] prohibits claims for injunctive relief against the Secretary in relation to his powers under the HEA.” Lipczenko v. Duncan, No. 09-cv-1407-CCB, 2010 WL 672846, at *1 (D. Md. Feb. 22, 2010) (collecting cases); see also Carr v. Devos, 369 F.Supp.3d 554, 559 (S.D.N.Y. 2019).

Here, Plaintiff seeks a discharge or “refund” of his student loan debt because of a disability. (doc. 17 at 5-6; doc. 34 at 9.) As this would “necessarily prohibit the Department of Education from enforcing the loan agreements and attempting collection on outstanding debt,” it is “‘plainly injunctive.'” Winston, 2022 WL 2466792, at *4 (finding that the plaintiff's request for “recission of the [loan] contract with extinguishing all duties and obligations of the such” to be a request for injunctive relief under the HEA and barred by sovereign immunity) (quoting Dennis v. U.S. Dep't of Educ. No. 19-cv-2064-DKC, 2020 WL 6450212, at *5 (D. Md. Nov. 3, 2020)). Accordingly, jurisdiction over any HEA cause of action seeking discharge is lacking.

B. APA

The APA states that an action “seeking relief other than money damages and stating a claim that an agency.. .acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States[.]” 5 U.S.C. § 702. As noted, “[m]any federal district courts and circuit courts have concluded that the APA grants federal courts subject matter jurisdiction over cases seeking declaratory and injunctive relief for injuries caused by the Secretary's decision under the HEA.” Adams, 179 F.Supp.3d at 640 (collecting cases).

The scope of an APA cause of action is limited, however. Where “review is sought not pursuant to specific authorization in the substantive statute, but only under the general review provisions of the APA, the ‘agency action' in question must be ‘final agency action.'” Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 882 (1990) (citing 5 U.S.C. § 704). To be “final,” an agency action must “mark the consummation of the agency's decisionmaking process” and “be one by which rights or obligations have been determined, or from which legal consequences will flow.” U.S. Army Corps of Engrs. v. Hawkes Co., 578 U.S. 590, 599 (2016)

Here, Plaintiff has not alleged or shown that DOE has taken a final agency action regarding his eligibility for discharge of his loans. Even if he is asserting an APA claim, there is no final agency action to review. See Winston, 2022 WL 2466792, at *5-6. Any APA claim should be dismissed for failure to state a claim.

IV. SECTION 1983

Plaintiff vaguely suggests that some defendants violated his “equal rights.” (See, e.g., doc. 34 at 3.) To the extent that he is asserting § 1983 claims, he must allege facts showing that (1) he has been deprived of a right secured by the Constitution and the laws of the United States; and (2) the deprivation occurred under state law. See Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 155 (1978); Cornish v. Corr. Servs. Corp., 402 F.3d 545, 549 (5th Cir. 2005). “Under color of state law” excludes from its reach purely private conduct, no matter how discriminatory or wrongful. Blum v. Yaretsky, 457 U.S. 991, 1002 (1982).

Here, there is no indication from Plaintiff's allegations that any defendant is a state actor. Courts have specifically held that Capella and its teachers and faculty are private parties. See, e.g., Ofor v. Capella for Profit Online Univ., Case No. 17-CV-5301 (DSD/DTS), 2018 WL 1403327, at *1 (D. Minn. Mar. 2, 2018), rec. accepted 2018 WL 1401814 (D. Minn. Mar. 20, 2018) (“Capella is a private party, not a state actor. The same is true of the professors of Capella University named as defendants to this action.”).

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