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American Bar Association v. United States Department of Education

United States District Court, District of Columbia

May 22, 2019



          Timothy J. Kelly, United States District Judge.

         Plaintiff Jamie Rudert seeks relief from the Court's decision to grant summary judgment against him and in favor of Defendants on his claims that the Department of Education violated the Administrative Procedure Act (APA) and the Fifth Amendment's Due Process Clause when it determined that loan payments he made while employed at Vietnam Veterans of America (VVA) did not qualify for loan forgiveness under the Public Service Loan Forgiveness (PSLF) Program. Rudert has moved to alter or amend the Court's judgment pursuant to Federal Rule of Civil Procedure 59(e) after obtaining new evidence-a letter issued by the Department to another former VVA employee-that he contends justifies this extraordinary remedy. However, he has not met the stringent requirements of Rule 59(e) because the new evidence would not have altered the Court's summary judgment decision. Accordingly, and for the reasons explained below, the Court will deny his motion.

         I. Background

         The Court's Memorandum Opinion, ECF No. 49 (“Mem. Op.”), fully sets forth the factual background underlying Rudert's claims. Accordingly, only some relevant facts are recounted here.

         Rudert began working at VVA, a 501(c)(19) not-for-profit organization that provides advocacy and support services to Vietnam veterans, in April 2012. ECF No. 17-2 ¶ 4; AR 315. While employed there, Rudert represented veterans with service-connected disability claims before the Board of Veterans' Appeals. ECF No. 17-2 ¶ 6. In July 2012, Rudert sought confirmation from the Department of Education (the “Department”) that he would be eligible to participate in the PSLF Program while employed at VVA by submitting an Employment Certification Form (ECF). Id. ¶ 8. In response, he received a letter from FedLoan Servicing, which manages ECF submissions on behalf of the Department, indicating that his payments made while employed at VVA from April to June 2012 qualified for the PSLF Program. Id. About two years later, in October 2014, he received another letter confirming the same. Id. ¶ 10. Rudert departed VVA as Deputy Director in September 2015. Id. ¶ 11. Subsequently, FedLoan Servicing informed Rudert that, as of January 2015, he had made 30 qualifying payments while employed at VVA. Id. ¶ 10.

         In early 2016, Rudert submitted another ECF, which covered the remainder of his loan payments while at VVA. Id. ¶ 12. He received a denial letter from FedLoan Servicing in April 2016 stating that, based on its “further research and after consulting with the Department, ” it “reversed [his] previously approved employment period” because VVA “does not provide a qualifying service.” AR 282-83. After receiving that letter, Rudert sent a letter to the Department contesting the denial, AR 289, along with additional documentation that, he alleged, established that VVA “provides public service[s] for individuals with disabilities, ” AR 286. Subsequently, in June 2016, a congresswoman wrote to the Department on Rudert's behalf, inquiring about his eligibility for the PSLF Program. AR 320. In August 2016, the Department replied to the congresswoman in a letter confirming that VVA did not provide a qualifying service because “while they facilitate the provision of disability-related services to Vietnam Veterans, they do not provide the services outright.” AR 331. The Department also clarified that, although Rudert's initial ECF was “approved in error, ” the payments he made while employed at VVA did not qualify for the PSLF Program. Id.

         Rudert, along with the American Bar Association and three other individual borrowers (collectively, “Plaintiffs”), then sued the Department and the Secretary of Education (“Defendants”). ECF No. 1. In their Motion for Summary Judgment, Plaintiffs argued that the Department illegally changed its interpretation of the PSLF regulation by adopting three new standards for assessing whether non-501(c)(3) not-for-profit organizations qualify as public service organizations under the PSLF Program. See generally ECF No. 17. According to Plaintiffs, the Department determined that loan payments made by Rudert while employed at VVA were ineligible for the PSLF Program based on its application of a new interpretation of its regulation-described as the Outright Provision of Services standard-under which the Department required qualifying organizations to provide disability-related services directly to the recipient or “outright.” Id. at 32-33. Similarly, Plaintiffs alleged that payments made by the other three individual borrowers were wrongfully denied by operation of two other newly-applied interpretations: the Primary Purpose and School-Like Setting standards. Id. at 31-32. As relevant here, Plaintiffs alleged that, under the Primary Purpose standard, the Department required that a qualifying organization provide an otherwise qualifying public service as part of that organization's primary purpose.

         On February 22, 2019, the Court entered summary judgment on behalf of Defendants as to Rudert's claims. ECF No. 48. In its accompanying Memorandum Opinion, the Court concluded Plaintiffs had not established that the Outright Provision of Services standard reflected a new interpretation; rather, the record showed that the Department engaged in “a straightforward application of the regulation” when it issued the denial letter to Rudert. Mem. Op. at 39. In contrast, the Court concluded that the other two standards reflected new interpretations by the Department that it adopted in violation of certain APA requirements. On that basis, it entered summary judgment on behalf of the other three individual borrowers and vacated those standards. See Id. at 39-44, 53.

         In the instant motion, Rudert seeks to alter or amend the Court's judgment based on new evidence purportedly showing that the Department relied upon the now-vacated Primary Purpose standard when it determined that the payments he made while employed at VVA did not qualify for the PSLF Program. See ECF No. 50 (“Pl.'s Mot.”).

         II. Legal Standard

         “Federal Rule of Civil Procedure 59(e) provides a limited exception to the rule that judgments are to remain final.” Leidos, Inc. v. Hellenic Republic, 881 F.3d 213, 217 (D.C. Cir. 2018). Rule 59(e) motions to alter or amend a judgment are “discretionary and need not be granted unless the district court finds that there is an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.” Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996). “Rule 59(e) motions on the basis of new evidence are restricted to evidence that is ‘newly discovered or previously unavailable despite the exercise of due diligence.'” Johnson v. District of Columbia, 266 F.Supp.3d 206, 211 (D.D.C. 2017) (quoting Niedermeier, 153 F.Supp.2d at 29). And a party moving for relief under Rule 59(e) has not met its burden if the new evidence “would not have changed [the Court's] outcome.” Roane v. Gonzales, 832 F.Supp.2d 61, 65 (D.D.C. 2011); see Odhiambo v. Republic of Kenya, 947 F.Supp.2d 30, 36 (D.D.C. 2013) (denying Rule 59(e) motion because the new proffered evidence would not have altered the court's decision).

         Rule 59(e) motions “are disfavored and relief from judgment is granted only when the moving party establishes extraordinary circumstances.” Niedermeier v. Office of Baucus, 153 F.Supp.2d 23, 28 (D.D.C. 2001). “The strictness with which such motions are viewed is justified by the need to protect both the integrity of the adversarial process in which parties are expected to bring all arguments before the court, and the ability of the parties and others to rely on the finality of judgments.” U.S. Commodity Futures Trading Comm 'n v. McGraw-Hill Cos., 403 F.Supp.2d 34, 36 (D.D.C 2005).

         III. Analysis

         Rudert argues that the Court should alter or amend its judgment based on a March 2018 denial letter sent to another borrower, Amanda Radke, who was employed at VVA around the same time.[1] ECF No. 50-3. He contends that this “critical piece of evidence . . . would have been outcome determinative for [his claims] had it been discovered prior to the Court's entry of judgment.” Pl.'s Mot. at 6. In the letter to Radke, the Department reversed its prior position and determined that loan payments made by her while employed at VVA did not qualify for the PSLF Program because the VVA “d[id] not provide a qualifying service for the PSLF program as its primary purpose.” Id. The letter also noted that the Department “could find no evidence that [VVA] provide[d] services directly to individuals with disabilities as part of its primary purpose.” Id. Rudert points to those statements as evidence that the Department, contrary to its representations, relied on the Primary Purpose standard in determining that VVA was not a qualifying public service organization. Pl.'s Mot. at 5-6. And because the Department reaches PSLF-eligibility determinations based on the nature of a borrower's employer, rather than each borrower's specific duties while employed there, Rudert argues that the ...

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