United States District Court, E.D. Wisconsin
Stadtmueller U.S. District Judge.
November 1, 2016, the defendant Navient Solutions Inc.
(“Navient”) filed a motion to dismiss the
plaintiffs Dannel Riel (“Riel”) and Cherie
(collectively, “Plaintiffs”) complaint along with
a brief in support of the motion. (Motion, Docket #5; Brief
in Support, Docket #6). Plaintiffs filed a brief in
opposition on November 22, 2016. (Docket #13). Navient
submitted a reply in support of its motion on December 6,
2016. (Docket #15). The motion is fully briefed and, for the
reasons explained below, it will be granted in part and
denied in part.
STANDARD OF REVIEW
has moved to dismiss Plaintiffs' complaint pursuant to
Federal Rule of Civil Procedure 12(b)(6). This rule provides
for dismissal of complaints which fail to state a viable
claim for relief. Fed.R.Civ.P. 12(b)(6). To state a viable
claim, a complaint must provide “a short and plain
statement of the claim showing that the pleader is entitled
to relief.” Fed.R.Civ.P. 8(a)(2). In other words, the
complaint must give “fair notice of what the . . .
claim is and the grounds upon which it rests.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)
(citation omitted). The allegations must “plausibly
suggest that the plaintiff has a right to relief, raising
that possibility above a speculative level[.]”
Kubiak v. City of Chicago, 810 F.3d 476, 480 (7th
Cir. 2016) (citation omitted).
reviewing Plaintiffs' complaint, the Court is required to
“accept as true all of the well-pleaded facts in the
complaint and draw all reasonable inferences in [their]
favor[.]” Id. at 480-81. However, a complaint
that offers “labels and conclusions” or “a
formulaic recitation of the elements of a cause of action
will not do.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Twombly, 550 U.S. at 555). The
Court must identify allegations “that, because they are
no more than conclusions, are not entitled to the assumption
of truth.” Id. at 679.
the truth of Plaintiffs' well-pleaded allegations and
drawing all reasonable inferences in their favor, the
relevant facts are as follows. Riel took out a number of
student loans to pay for school. The loans were initially
serviced by Sallie Mae, but that company created Navient and
apparently transferred servicing duties to Navient.
was unable to find gainful employment sufficient to repay the
loans and went into default in June 2015. Plaintiffs believe
that Navient referred some of the loans to third-party
collectors while retaining others to collect on its own.
Navient began calling Riel's home phone in August 2015.
Plaintiffs note that Riel's wife, Bingenheimer, worked
from home and needed to use the phone frequently as part of
time, Riel retained his current counsel. Prior to the calling
campaign, Riel had attempted to deal with Navient and its
collectors himself without success. Feeling stressed by the
repeated calls from Navient and the other collectors, Riel
asked his lawyer to handle the contacts (and he apparently
agreed to do so). Riel told each of the collectors that he
had hired a lawyer and wanted all contacts to go through him.
evening of September 3, 2015, Riel gave Navient his
lawyer's contact information and asked that it cease
calling him at home. Navient's operator seemed to not be
listening while Riel made these statements. It attempted to
call him again early the next morning, but reached
Bingenheimer, interrupting her work. The calls continued
throughout the fall of 2015, coming repeatedly and
potentially using different numbers to mask Navient's
also called Riel's parents at least one time in 2014, and
continuing through 2015 and 2016. Riel never gave Navient
permission to call his parents and never gave it their phone
number. These calls came several times per week, and each
time they picked up a call, Riel's parents would inform
Navient that Riel did not live there. Navient would respond
that it knew Riel was living with his parents and that they
were trying to hide him. In one particular call, Navient told
Riel's mother that she owed student loans and
that her home might be sold if she did not pay.
assert two causes of action. They first allege violations of
the Wisconsin Consumer Act (“WCA”) for
Navient's unconscionable conduct, though they do not cite
a particular provision of the law which was violated.
Plaintiffs claim that Navient's above-described conduct
unfairly takes advantage of customers like them, especially
in light of Navient's substantial resources and financial
acumen compared to that of the average borrower. They contend
that Navient's harassment was aimed at placing undue
stress on borrowers such that they would make payments on the
student loans to the detriment of their other financial
obligations. As a result, Plaintiffs pray for the Court to
declare Riel's student loans void and order Navient to
cease any related credit reporting activity.
second cause of action, also pursuant to the WCA, alleges
that Navient engaged in illegal collection practices in
violation of Wis.Stat. § 427.104(1). These included
calling Riel's parents, disclosing the existence of his
loans to them, asserting that Riel's mother owed a debt
to Navient, ignoring Riel's request that it contact his
counsel alone, and harassing Plaintiffs with repeated calls
using disguised phone numbers. Plaintiffs claim that
Navient's actions caused them mental and emotional
suffering. Bingenheimer further contends that she lost her
job because Navient's calls continually interrupted her
work. Plaintiffs do not explicitly pray for compensatory
damages, but they do request punitive damages.
seeks dismissal of different portions of the complaint for
different reasons, and in sum requests that the entire action
be dismissed. It argues that the first cause of action must
be dismissed because the applicable statute, Wis.Stat. §
425.107, provides no independent right of action, and even if
it did, Plaintiffs fail to state a viable claim thereunder.
Next, Navient contends that all of the first cause of action,
and three of the four subparts of the second, are preempted
by federal law, namely the Higher Education Act
(“HEA”) and its attendant regulations. The Court
will address each of Plaintiffs' causes of action in
First Cause of ...