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Washington v. Duncan

United States District Court, E.D. Wisconsin

January 26, 2016

ARNE DUNCAN, Secretary, United States Department of Education, Defendant.



Pro se Plaintiff Levante Washington (Washington) appeals the decision by Arne Duncan (Duncan), Secretary of the United States Department of Education (DOE), denying administrative discharge of his student loans on the basis of disqualifying status. Washington was given leave to proceed in forma pauperis on this action for judicial review pursuant to 5 U.S.C. § 706(2)[1] of the Administrative Procedure Act (APA), and his action includes Fifth Amendment substantive and procedural due process claims relating to those denials. Mindful of Washington’s pro se status, the Court has liberally construed his pleadings.

By a May 8, 2015, Decision and Order (ECF No. 30), the Court informed the parties that it would adopt this District’s procedures for review of Social Security Disability Appeals[2] in this action. Duncan filed the administrative record, and the briefing of this matter is complete. (ECF Nos. 32-1, 35, 38, 39.) Consequently, the matter is ready for resolution.

The APA sets the appropriate standard of review for challenges to final federal agency action: whether that agency action was “arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). In reviewing an agency decision under this standard, it is well-settled that the court’s inquiry is ultimately narrow and limited to “whether the [Secretary's] decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.” Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971), overruled on unrelated grounds by Califano v. Sanders, 430 U.S. 99, 105 (1977). The court “is not empowered to substitute its judgment for that of the agency.” Id. Rather, the agency's decision must be affirmed if it is rationally based. Bowman Transp., Inc. v. Ark. Best Freight Sys., Inc., 419 U.S. 281, 285 (1974).

Washington maintains that Duncan rendered arbitrary and capricious decisions and cannot evade the violation of Washington’s procedural due process rights as provided in 34 C.F.R. §§ 685.215(a)(iii) and his substantive due process property rights. (ECF No. 35.) Duncan asserts that Washington has provided no basis for overturning the decisions and the denial of Washington’s applications for discharge of his student loans should be upheld. In reply, Washington states that given the narrow scope of review under the APA, he would like to assert rights pursuant to 42 U.S.C. § 1983. (Br. Opp’n Denial Student Loan Discharge 1, ECF No. 38.) However, under the APA, claims arising out of alleged constitutional violations are reviewed de novo, see McNary v. Haitian Refugee Ctr., 498 U.S. 479, 493 (1991), [3] and therefore Washington’s due process claims will be considered under the APA.[4]

Washington has filed materials outside the record - an undated page of Cardinal Stritch University (Stritch) information stating that more than 96% of its students are in jobs within a year of graduation; a form entitled “Your Great Lakes-Serviced Student Loan Accounts Anticipated to Default 30 Days from the Date of this Letter, ” indicating an August 29, 2015, anticipated default date for Washington’s loans totaling $43, 386.97; and a page from a 2015 online application for Stritch. (ECF Nos. 38-1, 39-2, 40-1.)

As the Court’s May 8 decision indicated, judicial review of an agency’s decision is generally limited to the administrative record prepared in connection with that decision. 5 U.S.C. § 706; Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 743-44 (1985). Nonetheless, courts can look beyond the administrative record when (1) evidence suggests bad faith or improprieties may have influenced the decisionmaker; (2) it appears that the agency has relied on substantial records and materials not included in the record; or (3) the procedures utilized and factors considered by the decisionmaker require further explanation for effective review. Sokaogon Chippewa Cmty. v.

Babbitt, 929 F.Supp. 1165, 1177 (W.D. Wis. 1996) (citing Overton Park, 401 U.S. at 420); See also USA Grp. Loan Servs., Inc. v. Riley, 82 F.3d 708, 715 (7th Cir. 1996). However, a party must make a “strong showing” that one of these exceptions applies before a court will allow extra-record inquiry. Id. None of the documents Washington proffers make the strong showing that could trigger an extra-record inquiry. Therefore, those documents will not be considered in reviewing the administrative decision. Because the documents do not contain information that is arguably relevant to Washington’s due process claim they also have not been considered with respect those claims.

Section 1087(c)(1) of Title 20 of the United States Code addresses the discharge of student loans by the Secretary of Education, in pertinent part, as follows:

If a borrower who received, on or after January 1, 1986, a loan made, insured, or guaranteed under this part and the student borrower, . . . is unable to complete the program in which such student is enrolled due to the closure of the institution or if such student’s eligibility to borrow under this part was falsely certified by the eligible institution . . ., then the Secretary shall discharge the borrower’s liability on the loan (including interest and collection fees) by repaying the amount owed on the loan and shall subsequently pursue any claim available to such borrower against the institution and its affiliates and principals or settle the loan obligation pursuant to the financial responsibility authority under subpart 3 of part G of this subchapter.

(Emphasis added.)

34 C.F.R. § 685.215(a)(1)(iii) provides in pertinent part:

(a) Basis for discharge.
(1) False certification. The Secretary discharges a borrower’s . . . obligation to repay a Direct Loan in accordance with the provisions of this section if a school falsely certifies the eligibility of the borrower . . . to receive the loan. The Secretary considers a student’s ...

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