Friday, November 17, 2017

Cousins v. Portfolio Recovery Associates: Debt Buyer nixes FDCPA violation claim with deemed admissions that contradict the debtor's essential allegations regarding the violation

Once more, a debt collector makes good use of classic gotcha tool in litigation - requests for admissions to the other party that kill the other parties' case if inadvertently not answered in timely fashion, then points to deemed admission in summary judgment motion to preclude consideration of any evidence on the real facts. Magistrate Judge recommends judgment for Portfolio Recovery in fair debt collection violations case against it based on deemed admissions, but the ruling may be contested and reviewed by the district court. More interestingly (given the pervasiveness of the use of deemed admissions by debt collectors, albeit here in a case in which PRA is the defendant, rather than the plaintiff), the Magistrate's report and recommendation approvingly cites a case for the proposition that conduct that is unlawful under the FDCPA is also unlawful under TDCA. That did not help the debtor here, but it can be highly relevant in a case where the 1-year statute of limitations for FDCPA claim has passed, but not for a claim under the TDCA, which is longer. Such a claim may then still be viable under the Texas fair debt collection act.  

BRADLEY COUSINS,
v.
PORTFOLIO RECOVERY ASSOCIATES, LLC and WESTERN SURETY COMPANY.

No. 1:16-CV-852-LY.
United States District Court, W.D. Texas, Austin Division.
November 3, 2017.
Bradley Cousins, Plaintiff, represented by Michael Jacob Wood, Community Lawyers Group, Ltd.
Bradley Cousins, Plaintiff, represented by Robert Alan Zimmer, Jr., Zimmer & Associates, Tyler Hickle, Law Office of Tyler Hickle, PLLC & Celetha Chatman, Community Lawyers Group Ltd.

Portfolio Recovery Associates, LLC, Defendant, represented by Eugene Xerxes Martin, IV, Malone Akerly Martin PLLC & Robbie Malone, Malone Akerly Martin PLLC.

Western Surety Company, Defendant, represented by Eugene Xerxes Martin, IV, Malone Akerly Martin PLLC & Robbie Malone, Malone Akerly Martin PLLC.

REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

ANDREW W. AUSTIN, Magistrate Judge.

TO: THE HONORABLE LEE YEAKEL UNITED STATES DISTRICT JUDGE

Before this Court are Plaintiff's Motion for Summary Judgment (Dkt. No. 14), Defendants' Response (Dkt. No. 17), and Plaintiff's Supplemental Authority (Dkt. No. 30); and Defendants' Motion for Summary Judgment (Dkt. No. 33) and Plaintiff's Opposition to Defendants' Motion for Summary Judgment (Dkt. No. 41). The District Court referred the above motions to the undersigned Magistrate Judge for report and recommendation pursuant to 28 U.S.C. §636(b)(1)(A), FED. R. CIV. P. 72, and Rule 1(c) of Appendix C of the Local Rules.

I. GENERAL BACKGROUND

Plaintiff Bradley Cousins brings this suit against Defendants Portfolio Recovery Associates, LLC and Western Surety Company (collectively "PRA") under the Fair Debt Collection Practices Act and the Texas Debt Collection Act. Cousins alleges that PRA failed to communicate to a consumer reporting agency that a debt was disputed when it reported the debt. See 15 U.S.C. §1692e(8); TEX. FIN. CODE § 392.202(a).

Cousins allegedly incurred a credit card debt, but due to financial difficulties was unable to make his payments. Sometime later, this debt was sold to PRA. Cousins obtained a copy of his credit report, which stated that he owed PRA $12,086.00. Believing this to be incorrect, Cousins—with the assistance of the attorneys at the Community Lawyers Group—allegedly sent a letter on April 21, 2016 to PRA disputing the debt. This letter reads:
I am writing to you regarding the account referenced above. I refuse to pay this debt. My monthly expenses exceed my monthly income; as such there is no reason for you to continue contacting me, and the amount you are reporting is not accurate either. If my circumstances should change I will be in touch.
Dkt. No. 1-1 at 4. Cousins claims that this letter disputed the debt. However, when he once again checked his credit report from the Experian consumer reporting agency (CRA) in June 2016, he found that it still contained a line item from PRA for this debt that was not marked as disputed. This, Cousins alleges, violated the FDCPA and TDCA. Both Cousins and PRA have moved for summary judgment.

II. LEGAL STANDARD

Summary judgment shall be rendered when the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986)Washburn v. Harvey, 504 F.3d 505, 508 (5th Cir. 2007). A dispute regarding a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a motion for summary judgment, the court is required to view all inferences drawn from the factual record in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986)Washburn, 504 F.3d at 508. Further, a court "may not make credibility determinations or weigh the evidence" in ruling on a motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000)Anderson, 477 U.S. at 254-55.

Once the moving party has made an initial showing that there is no evidence to support the nonmoving party's case, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine fact issue. Matsushita, 475 U.S. at 586. Mere conclusory allegations are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007)

Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. Id. The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports his claim. Adams v. Travelers Indem. Co. of Conn., 465 F.3d 156, 164 (5th Cir. 2006). If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to its case and on which it will bear the burden of proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23.

III. ANALYSIS

The FDCPA was enacted:
to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.
15 U.S.C § 1692(e). Section 1692e generally prohibits "false, deceptive, or misleading representation[s] or means in connection with the collection of any debt." 15 U.S.C. §1692e. The section provides a non-exhaustive list of examples of such conduct, including "[c]ommunicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed." 15 U.S.C. §1692e(8). Congress "clearly intended the FDCPA to have a broad remedial scope" and "[t]he FDCPA should therefore be construed liberally in favor of the consumer." Daugherty v. Convergent Outsourcing, Inc., 836 F.3d 507, 511 (5th Cir. 2016) (quoting Serna v. Law Office of Joseph Onwuteaka, P.C., 732 F.3d 440, 445 n.11 (5th Cir. 2013)). Further, "[t]he conduct prohibited under the TDCA is coextensive with that prohibited under the FDCPA, at least insofar as [t]he same actions that are unlawful under the FDCPA are also unlawful under the TDCA." Gomez v. Niemann & Heyer, LLP, 2016 WL 3562148, at *6 (W.D. Tex. June 24, 2016) (internal quotations omitted).[1]

Cousins brings this motion for summary judgment contending that there are no genuine issues of material fact on his FDCPA and TDCA claims. PRA disputes this, arguing that Cousins has, at the very least, failed to establish that he disputed the debt.[2] To establish a claim under either the FDCPA or TDCA, Cousins must show that: (1) he has been the object of collection activity arising from a consumer debt; (2) PRA is a debt collector as defined by the FDCPA; and (3) PRA has engaged in an act or omission prohibited by the FDCPA. Hunsinger v. Sko Brenner Am., Inc., 2014 WL 1462443, at *3 (N.D. Tex. Apr. 15, 2014).

PRA asserts that it issued Requests for Admissions to Cousins on December 22, 2016. Dkt. No. 17-2 at 1; Dkt. No. 33-3 at 3. However, Cousins failed to respond to these requests until June 30, 2017, more than six months after service and three months after Cousins filed his motion for summary judgment. Dkt. No. 33-3 at 3. PRA therefore argues that all admissions should be deemed admitted under Federal Rule of Civil Procedure 36. Cousins does not dispute this allegation, but merely asserts that "the evidence in the deemed admissions do not entitle PRA to summary judgment because actual damages are not required to prevail in an FDCPA lawsuit." Dkt. No. 41 at 1-2.

Rule 36 states that "[a] matter is admitted unless, within 30 days after being served, the party to whom the request is directed serves on the requesting party a written answer or objection addressed to the matter and signed by the party or its attorney." FED. R. CIV. P. 36(a)(3). Moreover, "[a] matter admitted . . . is conclusively established unless the court, on motion, permits the admission to be withdrawn or amended." FED. R. CIV. P. 36(b). The Fifth Circuit has held that a court may only allow the amendment or withdrawal of admissions on motion by the party. See In re Carney, 258 F.3d 415, 420 (5th Cir. 2001) (citing American Auto. Ass'n v. AAA Legal Clinic, 930 F.2d 1117, 1120 (5th Cir. 1991)). Cousins has not filed such a motion. Nor do his responses to PRA's motion for summary judgment evidence an intent to do so. Therefore, the admissions are deemed admitted. Id.

Here, this means Cousins has admitted that "at no time between March 2013 and April 21, 2016 did [he] notify Defendant that this debt was inaccurate" or that "this debt was disputed." Dkt. No. 33-3 at 10. As the sole basis for PRA's alleged knowledge that Cousins disputed the debt arose from the letter allegedly sent on April 21, 2016 (Dkt. No. 1 at 3), Cousins is unable to establish that PRA knew or should have known of the dispute. As deemed admissions "cannot be overcome at the summary judgment stage by contradictory affidavit testimony or other evidence in the summary judgment record," Cousins cannot prove that PRA has engaged in an act or omission prohibited by the FDCPA. In re Carney, 258 F.3d at 420. Similarly, because TEX. FIN. CODE § 392.301(a)(3) requires the same elements as a violation of the FDCPA, summary judgment should be granted for PRA on both of Cousins' claims.

IV. RECOMMENDATIONS

In accordance with the foregoing discussion, the Court RECOMMENDS that the District Court DENY Plaintiff's Motion for Summary Judgment (Dkt. No. 14) and GRANT Defendants' Motion for Summary Judgment (Dkt. No. 33).

V. WARNINGS

The parties may file objections to this Report and Recommendation. A party filing objections must specifically identify those findings or recommendations to which objections are being made. The District Court need not consider frivolous, conclusive, or general objections. See Battle v. United States Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987).

A party's failure to file written objections to the proposed findings and recommendations contained in this Report within fourteen (14) days after the party is served with a copy of the Report shall bar that party from de novo review by the District Court of the proposed findings and recommendations in the Report and, except upon grounds of plain error, shall bar the party from appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the District Court. See 28 U.S.C. § 636(b)(1)(C); Thomas v. Arn, 474 U.S. 140, 150-53 (1985)Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc).

To the extent that a party has not been served by the Clerk with this Report & Recommendation electronically pursuant to the CM/ECF procedures of this District, the Clerk is directed to mail such party a copy of this Report and Recommendation by certified mail, return receipt requested.

[1] TEX. FIN. CODE § 392.202(a) reads in relevant part: "The third-party debt collector shall make a written record of the dispute. If the third-party debt collector does not report information related to the dispute to a credit bureau, the third-party debt collector shall cease collection until an investigation of the dispute . . . determines the accurate amount of the debt, if any."

[2] PRA additionally presents several evidentiary arguments. PRA first argues that the dispute letter and credit report were not authenticated. Id. at 2-4. Additionally, PRA contends that the deposition testimony was improperly included. Id. at 5. Though the objections are likely meritorious, the Court need not reach this issue as the motion for summary judgment should be denied, even considering this evidence. See Palomo v. Portfolio Recovery Assocs., LLC, No. A-16-CV-628-SS, Dkt. No. 26 (W.D. Tex. Apr. 4, 2017) ("Notwithstanding . . . the specific objections (primarily technical) of the defendant to the motion and supporting documents, the Court finds . . . that the alleged letter relied on by the plaintiff Palomo in this case and its further consequences establishes a factual issue that should be determined by the fact finder.").

Thursday, November 16, 2017

The latest consumer advocate: Georgia Lawsuit Mill Operator Transworld Systems Inc.

TSI says in its intervention plea in the CFPB's enforcement case filed in Delaware [text pasted below] that the proposed consent judgment between the Bureau and the National Collegiate Student Loan Trusts will harm consumers. Whether that was with a straight face is not apparent on the face of the record. 

TAKE IT FROM THOSE THAT SUE TO SEIZE THE MEAGER BALANCE IN YOUR  BANK ACCOUNT: THE MORATORIUM ON COLLECTION SUITS TO WEED OUT THE TIME-BARRED AND OTHERWISE UNENFORCEABLE ONES WILL ONLY DO YOU HARM. NOT TO MENTION THE REIMBURSEMENT OF ILL-GOTTEN FUNDS ALREADY GARNISHED BASED ON DEFAULT JUDGMENTS PROCURED WITH DUBIOUS AFFIDAVITS.  


***


 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

Civil Action No.:  1:17-cv-01323-GMS 

Consumer Financial Protection Bureau, 
                        Plaintiff,  
      
v.          
      
The National Collegiate Master Student 
Loan Trust, et al.    
   Defendants.  
 
TRANSWORLD SYSTEMS INC.’S MOTION TO INTERVENE  
AND OPPOSITION TO PLAINTIFF’S MOTION TO APPROVE CONSENT JUDGMENT 

Pursuant to Federal Rule of Civil Procedure 24, Intervenor Transworld Systems Inc. (“TSI”) hereby moves to intervene and opposes the Motion to Approve Consent Judgment (D.I. 3) filed by Plaintiff Consumer Financial Protection Bureau (“CFPB” or “Bureau”). 

INTRODUCTION 

TSI is entitled to intervene in this action by right, and the Court should not approve the Proposed Consent Judgment (D.I. 3-1) filed by the CFPB. The Proposed Consent Judgment directly and substantially implicates the rights and obligations of numerous interested parties, including TSI, and the Proposed Consent Judgment contemplates conduct that would harm consumers. 

On the same day that the Bureau filed and publicly announced the Proposed Consent Judgment, the Bureau also publicly announced that, in connection with a separate administrative proceeding, it had entered into a Consent Order with TSI; that Order was stipulated to by TSI and has an effective date of September 15, 2017.  See In the Matter of Transworld Systems, Inc., File No. 2017-CFPB-0018, Doc. 1 (“TSI Consent Order”).1 

1   Available at http://files.consumerfinance.gov/f/documents/201709_cfpb_transworld-systems_consent-order.pdf  

The TSI Consent Order requires TSI to undertake certain tasks as part of prospective injunctive relief.  The terms of the TSI Consent Order are substantially inconsistent with the requirements of the Proposed Consent Judgment that the CFPB has submitted to the Court for approval.  Approval of the Proposed Consent Judgment would put TSI in an untenable position, subjecting it to two dueling and inconsistent consent orders: (1) the TSI Consent Order to which TSI is a party and which TSI negotiated in good-faith with the Bureau, and (2) the Proposed Consent Judgment between the CFPB and fifteen NCSLT Trusts (“Trusts”), to which TSI is not a party and only learned about on September 18.  One glaring contradiction between the two orders is that the TSI Consent Order provides that TSI will provide certain reports and compliance plans to the “successor special servicer,” which is U.S. Bank; the Proposed Consent Judgment, however, includes a different reporting structure, apparently empowering the Trusts to oversee all Servicers, including TSI, in total disregard of the contractual relationships among the Trusts and servicing parties and in stark contradiction to the TSI Consent Order.  This alone provides a basis for the Court to deny entry of the Proposed Consent Judgment. 

Moreover, there is a cloud of uncertainty surrounding the authority of McCarter & English, LLP, the law firm that signed the Proposed Consent Judgment, to enter into an agreement on behalf of the Trusts.  Issues relating to the Trusts’ governance structure currently are being litigated in the Delaware state and federal courts.  See National Collegiate Student Loan Master Trust et al. v. Pennsylvania Higher Education Assistance Agency et al., Case No. 12111 (Del. Ch.); In re National Collegiate Student Loan Trusts 2003-1 et al., Case No. 1:16-cv-00341-JFB-SRF (D. Del).  McCarter & English serves as counsel to VCG Securities, LLC (“VCG”) (though this is not disclosed anywhere on the Proposed Consent Order).2  VCG and its principal, Mr. Donald Uderitz, purportedly on behalf of the Trusts, have been mounting an aggressive campaign to install one of VCG’s affiliates, Odyssey Education Resources LLC, as a servicer for the Trusts. 

Tellingly, the very same day the CFPB filed its motion to enter the Proposed Consent Judgment, VCG (purportedly on behalf of the Trusts) submitted a “notice of supplemental authority” in the parallel proceeding pending in this District involving the Trusts, citing the Proposed Consent Judgment (which VCG’s representatives signed) as grounds for appointing VCG’s affiliate Odyssey as a servicer for the Trusts.  See Notice of Supplemental Authority, Case No. 16-341-JFB-SRF, D.I. 76 (Sept. 18, 2017).  Now, VCG’s counsel has signed a Proposed Consent Judgment with a federal regulatory agency, once again purporting to act on behalf of the Trusts. 

Entry of this Proposed Consent Judgment would enable VCG to appoint its own affiliates to undertake servicing work for the Trusts, and likely other actions that are contemplated by the Proposed Consent Judgment, notwithstanding the fact that VCG’s ability to assert such control over the Trusts is highly contested and the subject of several cases pending in Delaware federal and state courts.   

2  VCG and its affiliates have been represented by McCarter & English in at least one other Trust-related matter.  See, e.g., Pennsylvania Higher Education Assistance Agency v. NC Owners, LLC et al., Case No. 1:16-cv-01826-CCC (M.D. Pa.). 

In addition, as discussed below, TSI will suffer substantial harm if the Proposed Consent Judgment is approved, as it substantially constrains TSI’s ability to provide services for the NCSLT portfolio of loans.   Moreover, entry of the Proposed Consent Judgment as written could cause consumer harm.  The contemplated cessation of collection efforts could significantly impact consumers in that it risks causing confusion to borrowers about the status of their debt, while at the same time hamstringing TSI’s ability to respond to borrower queries about their NCSLT loans.  Further, it is unclear whether interest will continue to accrue during the pending Compliance Audit called for in the Proposed Consent Judgment, while collections are ceased; this risks making consumer debt more expensive over time.  The Proposed Consent Judgment also contemplates that consumer payments will be deposited into a single escrow account that would not necessarily segregate funds and that would be controlled by the Trusts’ purported representatives, who could, in turn, use the funds at their discretion.  It is similarly not clear from the Proposed Consent Judgment whether the flow of money directly into an escrow account would even enable the servicers to credit consumers’ accounts through the system of record at the time that consumers make their payments. 

Each of these items is an example of how the Proposed Consent Judgment’s provisions could also harm consumers.  For all of these reasons, the Court should grant TSI’s Motion to Intervene and decline to enter the Proposed Consent Judgment. 

THE CONFLICTING ORDERS

TSI and the CFPB entered into a negotiated Consent Order (the “TSI Consent Order”) that was signed and executed on September 15, 2017; this concluded an investigation into the services TSI’s Attorney Network business unit, which engages law firms to collect on defaulted private student loans, provided to the Trusts. 

The TSI Consent Order includes specific injunctive provisions, including that TSI:

· Provide reports about collections lawsuits to the successor special servicer;


· Provide account-level detail to the successor special servicer; 


· Provide loan information to the successor special servicer;


· Confer with the successor special servicer regarding pending collections lawsuits, including whether to withdraw pending lawsuits;


· Confer with the successor special servicer regarding directions to law firms;


· Confer with the successor special servicer regarding disclosures in connection with collection of debt owned by the Trusts;


· Submit a compliance plan to the CFPB that includes written policies and procedures.


Thus, TSI’s interactions under the TSI Consent Order are with the successor special servicer (U.S. Bank), not with the Trusts themselves. 

On September 18, 2017, the CFPB filed a Complaint against the Trusts, alleging violations of the Consumer Financial Protection Act’s (CFPA) prohibitions against unfair, deceptive or abusive acts and practices (UDAAP; see 12 U.S.C. §§ 5531, 5536).  Contemporaneously, the CFPB filed a motion to enforce a Proposed Consent Judgment (D.I. 3) the Bureau purportedly had entered into with the “Trusts.”  No prior notice of the existence of the Proposed Consent Judgment was given to TSI, even though TSI spent months negotiating the TSI Consent Order with the same Bureau attorneys.  The Proposed Consent Judgment differs materially from the TSI Consent Order, including that it:

· Contemplates that the Trusts – and not the successor special servicer – will interact with the Trusts’ servicers, including TSI, to implement the injunctive provisions.  (It should be noted that paragraph 5 of the TSI Consent Order states that “[t]he Trusts do not have any employees and all actions taken by the Trusts in connection with loan servicing and all actions taken by the Trusts in connection with loan servicing and collecting Debt are carried out by third parties.  Thus, it is unclear how the Trusts will effectuate the conduct provisions in the Proposed Consent Judgment.);

· Contemplates different affidavit-related policies and procedures than those in the TSI Consent Order;

· Contemplates that the Trusts will instruct the “Primary Servicer” to cease transferring any debt to “the Special Servicer and any Subservicer” and instead “retain possession of the Debt pending approval and implementation” of a compliance plan (which is to be prepared by the Trusts and thus is different than the plan to be provided by TSI under the TSI Consent Order); 

· Contemplates the cessation of “collection efforts” pending approval of the Trusts’ compliance plan;

· Contemplates that all payments will be remitted to a single escrow account designated by the Trusts (or, presumably, the entity purporting to represent the Trusts); 

· Contemplates an “independent audit” to be overseen by the Trusts (or the entity purporting to represent the Trusts) of all loans owned by the Trusts, with reports to be provided to the Trusts and the CFPB (and not to the successor special servicer or to any of the Trusts’ servicers); 

· Contemplates that a “Board” of the Trust will have the responsibility for overseeing the Trusts’ implementation of the conduct provisions, when it is not clear that the Trusts have a “Board,” let alone one that is authorized; and

· Apparently contemplates that, for certain borrowers, the Trusts will refrain from “furnishing reports on the Debt in question, except as otherwise required by this Order.” 

Thus, the TSI Consent Order and the Proposed Consent Judgment are materially inconsistent in that they contemplate different supervisory and reporting structures and they contemplate the implementation of different policies, procedures, and relief.   

Finally, there is a threshold question as to whether the Court has subject matter jurisdiction to entertain the CFPB’s motion.  Specifically, the Bureau’s authority to assert UDAAP claims, as it does here, arises only if the Trusts are “covered persons” within the meaning of the CFPA, the Bureau’s enabling statute. The Bureau’s Complaint avers that the Trusts are “covered person[s],” under 12 U.S.C. § 5481(6), because they have “engaged in” “servicing loans, including acquiring, purchasing, selling [or] brokering” of debt.  See D.I. 1,
CFPB Compl. at ¶8.  But the Complaint and the Proposed Consent Judgment expressly enumerate those entities that service the loans in the NCSLT portfolio; indeed, the Trusts are expressly distinguished from those servicing entities.  Moreover, as noted above, the TSI Consent Order expressly states that the Trusts have no employees and carry out servicing functions through third parties.  See supra at 5.   The CFPA does not intend for the definition of “covered persons” to extend to entities with no employees that hold debt through securitization and conduct their servicing and collection activities through third parties.  Indeed, other provisions of the CFPA that define other activities that make an actor a “covered person” within the meaning of the CFPA make this clear.  See, e.g, 12 U.S.C. § 5481(15).       

And if the Trusts are not “covered persons,” then the Court has no subject matter jurisdiction as to this matter.  Specifically, the Bureau’s Complaint alleges that its authority to pursue UDAAP claims under the CFPA confers federal question jurisdiction in this matter.  See D.I. 1, CFPB Compl. at ¶4 (referencing federal consumer financial law, which, as here, is the prohibition against UDAAP, referenced in 12 U.S.C. §§ 5531, 5536)).  And UDAAP claims can only be brought against entities that are expressly defined as “covered persons” within the meaning of the CFPA.  See 12 U.S.C. §§ 5531, 5536.  If the Trusts are not “covered persons,” this matter must be dismissed in its entirety, with prejudice.

ARGUMENT

I. TSI IS ENTITLED TO INTERVENE BY RIGHT IN THIS ACTION

Federal Rule of Civil Procedure 24 governs intervention in pending federal actions.  See Fed. R. Civ. P. 24.  Under Rule 24, a Court must permit a third party to intervene as of right where the third party “claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless existing parties adequately represent that interest.” Fed. R. Civ. P. 24(a)(2); see Endoheart AG v. Edwards Lifesciences Corp., No. 1:14-CV-1473, 2015 WL 6956603, at *1 (D. Del. Nov. 6, 2015). A third party should be permitted to intervene as of right if it establishes that “(1) its application for leave to intervene was timely; (2) it has a sufficient interest in the litigation; (3) there is a threat that that interest will be impaired or affected, as a practical matter, by the disposition of the action; and (4) there is inadequate representation of this interest by the existing parties in the litigation.” Advanced Dynamic Interfaces, LLC v. Aderas Inc., No. 1:12-CV-963, 2013 WL 6989428, at *1 n.1 (D. Del. Jan. 11, 2013) (citing Kleissler v. U.S. Forest Serv., 157 F.3d 964, 969 (3d Cir. 1998)). An intervention by right must be permitted where warranted.  See Fed. R. Civ. P. 24; Brody By and Through Sugzdinis v. Spang, 957 F.2d 1108, 1115 (3d Cir. 1992)). The non-conclusory allegations set forth in a motion to intervene are accepted as true. See Endoheart, 2015 WL 6956603, at *2 & n.2. 

A. TSI’s Motion To Intervene Is Timely

A court considers the following factors when determining timeliness: “(1) the stage of the proceeding; (2) the prejudice that delay may cause the parties; and (3) the reason for the delay.” Mountain Top Condo. Ass’n v. Dave Stabbert Master Builder, Inc., 72 F.3d 361, 369 (3d Cir. 1995). This action was commenced on September 18, 2017, a mere four days ago.  No scheduling conference has occurred. Given the very early stages of the proceeding, there is no delay and certainly no prejudice from any purported delay.  There can be no legitimate dispute that TSI’s Motion is timely.

B. TSI Has A Sufficient Interest In The Property And Transactions At Issue In This Litigation, And Those Interests May Be Impaired Or Impeded If The Consent Judgment Is Approved

A third party has a sufficient interest in the subject of litigation when there is a “significantly protectable” legal interest in the property or transaction at issue. Mountain Top, 72 F.3d at 366. “[I]ntervenors should have an interest that is specific to them, is capable of definition, and will be directly affected in a substantially concrete fashion by the relief sought.” Kleissler, 157 F.3d at 972.  To determine whether an intervenor’s interests may be impaired or impeded, a court assesses “the practical consequences of the litigation” and “consider[s] any significant legal effect” on the interests. See Brody by and Through Sugzdinis v. Spang, 957 F.2d 1108, 1122 (3d Cir. 1992). Contesting provisions in a consent order that affect contractual obligations is recognized as a sufficient interest warranting intervention in this Circuit. See EEOC v. Opportunity Comm’n v. Am. Tel. & Tel. Co., 506 F.2d 735, 739 (3d Cir. 1974).   

TSI’s interest in this matter is significant. First, if the Court enters the Proposed Consent Judgment, there will be two consent orders with irreconcilable provisions. As described above, the TSI Consent Order and the Proposed Consent Judgment are materially inconsistent and envision the implementation of different relief and, critically, subject TSI to different oversight regimes.         
 
Additional complications arise in connection with the Compliance Plans required under the two orders.  The Proposed Consent Judgment directs the Trusts to Direct “any Subservicer”
(and TSI is a subservicer) to suspend collection efforts on all debt owned by Defendants until a Compliance Plan that the Trusts must provide to the CFPB is approved and implemented. (D.I. 3-1 ¶ 16).  Here again TSI may be caught between a rock and a hard place if it submits its own Compliance Plan, which the Bureau will accept (and which is due before the Trusts’ Compliance Plan), but the Trusts submit a conflicting or more onerous Compliance Plan that affects the exact same activities.  Delaware law does not allow for the type of business uncertainty and confusion these conflicting orders would create.  See, e.g., Stroud v. Grace, 606 A.2d 75, 87 (Del. 1992) (noting that certainty is a key policy consideration in corporation law).

Second, TSI has a substantial economic interest in this matter that may be impeded or impaired if the Proposed Consent Judgment is accepted. The Proposed Consent Judgment requires the Trusts to direct the Primary Servicer to “cease transferring any Debt to the Special Servicer and any Subservicer” (again, TSI is a subservicer) and to instead retain possession of all debt pending approval and implementation of a Compliance Plan. See D.I. 3-1 ¶ 16.  It also directs the Trusts to direct “any Subservicer” to suspend collection efforts on all Debt owned by the Trusts until the Compliance Plan is approved and implemented. See id.   The Compliance Plan will not be approved and implemented for at least four months from the date of execution. See id. ¶ 28 (giving the Trusts 120 days to submit the Compliance Plan), ¶ 29 (detailing procedure for submitting revised Compliance Plan if it is not accepted by the Bureau).  Thus, for at least four months, and likely longer, TSI cannot engage in any collection efforts on behalf of the Trusts.  If implemented, this provision – which was not proposed or included by the Bureau in the Consent Order it negotiated with TSI – undoubtedly will cause TSI substantial financial loss, even as TSI is not a party to this Proposed Order. 

C. The Existing Parties Do Not Adequately Represent TSI’s Interests 

The inquiry into whether representation is inadequate is flexible and “varies with each case.” Kleissler, 157 F.3d at 972.  The CFPB does not represent TSI’s interests.  Nor do the purported representatives of the Trusts. VCG, whose attorneys signed the Proposed Consent Judgment on behalf of the Trusts, does not necessarily represent the Trusts’ interests (see Ambac’s Motion to Intervene, D.I. 4 at 7), nor does it represent TSI’s interests.  VCG’s desire to have its affiliate serve as the Trusts’ servicer, alone, renders VCG – and the Trusts it purports to speak for – unsuited to represent TSI’s interests in this matter. 

Because TSI overwhelmingly satisfies all of the requirements for intervention by right under Rule 24(a), TSI’s Motion to Intervene must be granted.3

3  To the extent the Court finds that permissive intervention is more appropriate here, TSI easily fulfills the requirements under Rule 24(b).  Permissive intervention is allowed when a third party “has a claim or defense that shares with the main action a common question of law or fact.” Fed. R. Civ. P. 24(b)(1)(B); United States v. Territory of V.I., 748 F.3d, 514, 524 (3d Cir. 2014). In exercising its discretion in allowing a permissive intervention, a court’s “central consideration” is “whether allowing intervention will cause delay or prejudice.” Bell Atl.-Del., Inc. v. Global NAPs S., Inc., 77 F. Supp. 2d 492, 502 (D. Del. 1999); see also Fed. R. Civ. P. 24(b)(3) (court must consider “whether the intervention will unduly delay or prejudice the adjudication of the original parties’ rights”).  As explained above, TSI shares claims with common questions of fact or law with the main action, and given the early stages of this matter there is no delay or prejudice to the parties.  

II. THE CFPB’S CONSENT JUDGMENT IS NEITHER FAIR NOR REASONABLE AND SHOULD NOT BE APPROVED

Proposed consent judgments “are at once both contracts and orders; they are construed largely as contracts, but are enforced as orders.”  Berger v. Heckler, 771 F.2d 1556, 1568-69 (2d Cir. 1985).  Before approving entry of a proposed consent judgment, a district court must independently review the negotiated consent decree to ensure it is “fair, adequate, reasonable, and in the public interest.”  See F.T.C. v. Circa Direct LLC, 2012 WL 2178705, at *1 (D.N.J.
June 13, 2012) (citing F.T.C. v. Standard Fin. Mgmt. Corp., 830 F.2d 404, 408 (1st Cir. 1987) (“When a public agency requests that a judicial stamp of approval be placed on a negotiated consent decree ... [t]he court, rather than blindly following the agency's lead, must make its own inquiry into the issue of reasonableness before judgment”) (internal quotations omitted))). 

In recent years, courts have reduced their analysis to whether a proposed consent judgment is both fair and reasonable. See S.E.C. v. Citigroup Glob. Markets, Inc., 752 F.3d 285, 294 (2d. Cir. 2014); United States v. Peterson, 859 F. Supp. 2d 477, 478 (E.D.N.Y. 2012) (“A district court has the duty to determine whether a consent decree based on a proposed settlement is fair and reasonable.”).  To determine whether a proposed consent judgment is both fair and reasonable, courts assess: “(1) the basic legality of the decree, see Benjamin v. Jacobson, 172 F.3d 144, 155-59 (2d Cir. 1999)”; (2) whether enforcement mechanisms and other terms are clear, see, e.g., Angela R. ex rel. Hesselbein v. Clinton, 999 F.2d 320, 325 (8th Cir. 1993) (finding abuse of discretion when lower court approved consent decree that failed to properly define enforcement mechanisms); (3) “whether the consent decree reflects a resolution of the actual claims in the complaint”; and (4) “whether the consent decree is tainted by improper collusion or corruption of some kind.” Citigroup Glob. Markets, 752 F.3d at 294.  A court will decline to enter a consent judgment it determines to be unfair or unreasonable. See, e.g., Clinton, 999 F.2d at 325.  Here, the Proposed Consent Judgment is neither fair nor reasonable.

A. The Proposed Consent Judgment Could Harm Consumers

As explained above, the Proposed Consent Judgment includes numerous provisions that may expose consumers to harm.   For example, the Proposed Consent Judgment contemplates a simultaneous bar on collection activities and servicer communication with borrowers, which risks consumer confusion regarding the terms of the two consent orders and their effects on
individual account-holders.  If interest continues to accrue during the period that collection activity is frozen, borrowers’ loans may become more expensive.  And, the Proposed Consent Judgment’s contemplated single escrow account construct, which is to be overseen by the disputed representatives of the Trust, presents a risk that those representatives may abuse their unfettered control over the escrow funds while simultaneously denying consumers credit for those escrowed payments.   

B. The Proposed Consent Judgment Would Impose Conflicting Directives On TSI, And Is Therefore Unfair And Unreasonable

As discussed supra, should the Court approve the Proposed Consent Judgment, TSI will be held to conflicting consent orders with irreconcilable provisions demanding compliance. Placing TSI in such a predicament, when it negotiated and executed a Consent Order with not only the same agency but the same attorneys at the agency that contemporaneously announced a conflicting Proposed Consent Judgment with another entity, is precisely the type of unfairness and unreasonableness that reviewing district courts seek to avoid.  See Standard Fin. Mgmt. Corp., 830 F.2d at 408. 

C. The Proposed Consent Judgment Is Unfair And Unreasonable Because The Purported Signatory for Defendants Lacks The Authority To Bind Certain Named Trusts 

The Proposed Consent Judgment indicates McCarter & English as the purported signatory for Defendants. However, as previously discussed, whether McCarter & English and their client were authorized to enter into the Proposed Consent Judgment on behalf of Defendants is a hotly disputed issue.  See Ambac Mot. To Intervene, D.I. 4 at 8.  It would be unfair and unreasonable to the other interested parties, including TSI, for the Court to approve a Proposed Consent Judgment that was negotiated and executed by a party with dubious authority.  See Citigroup Glob. Markets, Inc., 752 F.3d at 294. 

CONCLUSION

For these reasons, TSI respectfully requests the Court grant its Motion to Intervene and Deny Plaintiff’s Motion to Approve Consent Judgment. 
 
Oral Hearing Requested

Pursuant to Local Rule 7.1.4, TSI respectfully requests an oral hearing on this Motion.
Dated: September 22, 2017
Respectfully submitted,

/s/ Jamie L. Edmonson 
Jamie L. Edmonson (No. 4247)
VENABLE LLP
1201 N. Market Street
Suite 1400
Wilmington, DE 19801
Phone: (302) 298-3535
Fax: (302) 298-3550
JLEdmonson@venable.com

Allyson B. Baker (pro hac vice to be filed)
Meredith L. Boylan (pro hac vice to be filed)
Sameer P. Sheikh (pro hac vice to be filed)
Katherine M. Wright (pro hac vice to be filed)
VENABLE LLP
600 Massachusetts Ave., NW
Washington, DC 20001
Phone:  (202) 344-4000
Fax:  (202) 344-8300
ABBaker@venable.com
MLBoylan@venable.com
SPSheikh@venable.com
KMWright@venable.com

Counsel for Intervenor Transworld Systems Inc.

CERTIFICATE OF SERVICE

I hereby certify that on this 22d day of September, 2017, a copy of the foregoing document was electronically filed with the court and served via CM/ECF, on parties with counsel of record identified on the Court’s docket. A copy of the foregoing also has been sent via email to any party without a designated counsel of record currently identified on the Court’s docket.

       /s/ Jamie L. Edmonson 
Jamie L. Edmonson

Wednesday, November 15, 2017

Trust spat in Delaware Verbatim: CFPB's Opposition to Intervention of Interested Non-parties who want to block Consent Judgment between the Bureau and the National Collegiate Student Loan Trusts

On September 18, 2017, the CFPB filed its enforcement complaint and its proposed consent judgment with the fifteen National Collegiate Student Loan Trusts in the U.S. District Court for the District of Delaware. Numerous non-parties promptly filed motions for intervention to prevent the settlement and agreed-to remedies for student debt collection targets from being approved by the the court. 


The intervenors include TSI, the entity in charge of coordinating debt collection lawsuits and furnishing affidavits and supporting documentation for such lawsuits, which had itself already agreed with the CFPB to resolve its investigation with an administrative Consent Order that required TSI to clean up its act with respect to robosigning abuses and pay a hefty fine, but did not require court approval. TSI says it was unaware of the proposed consent judgment in the parallel enforcement action involving the Trusts until Sep. 18, 2017, when the CPFP announced it and filed its civil action complaint in Delaware, along with a motion asking for court approval of the proposed consent judgment. TSI complains that the Consent Order and the Proposed Consent Judgment are materially inconsistent in that they contemplate different supervisory and reporting structures, and  implementation of different policies, procedures, and relief. See -- > blog post on TSI intervention with text of motion and commentary.  

On Nov. 1, 2017, the CFPB filed a comprehensive response to all of the interventions in the Delaware  case. 
In it, the Bureau argues that the Court should deny the motions to intervene filed by TSI, PHEAA, GSS, the Objecting Noteholders, and Wilmington Trust Company (WTC) because they have failed to satisfy the requirements of Federal Rule of Civil Procedure 24, and that the Court should limit the intervenors’ participation to objecting to the entry of the Proposed Consent Judgment if the intervenors are permitted to proceed. 



The Bureau did not object to the participation of the Indenture Trustee, U.S. Bank National Association, a bank that looks out for the interests of the holders of the notes issued by the Trusts and handles the distributions of the cash flow provided by the payments and collections from the students obligors. Presumably because the Bureau anticipated that the Court would allow the intervention since the noteholder have an obvious interest in what happens with the current cash flow, which - pursuant to the proposed consent judgment - would be diverted into a trust account, at least temporarlily, and because the payment of fines to the U.S. Treasury from the revenue stream would reduce the amount available for distribution to the noteholders. 

U.S. Bank argued that the Proposed Consent would significantly affect the interests and rights of
U.S. Bank in its capacity as Indenture Trustee for the benefit of the Noteholders, and would impair its perfected security interests in the NCSLTs’ student loans, related collections and contractual agreements. See excerpt from its filing below: 




The Bureau also did not oppose the motions to intervene filed by Ambac, the insurer for some of noteholders as well as an investor.


Below is the text of the Bureau’s motion response in opposition (admittedly not very reader-friendly since the cut-and-paste from pdf does not work well with footnotes and formatting). 

The Bureau's 33-page filing contains a wealth of background information on the complex web of entities involved in the National Collegiate Student Loan Conglomerate, and the distinct roles played by different servicers. As is well known by know, the Trusts do not have any employees. They act through agents, all of which are entities, rather than individuals, and the issue of who is legitimately in control of the Trusts, and entitled to speak for them, and enter into agreements on their behalf, is the subject of litigation in multiple courts. 





The CFPB filing also summarizes the findings of the CFPB regarding illegal practices in collection lawsuits prosecuted on behalf of the Trust around the country, and the nature of the remedies devised for the benefit of borrower/consumers. Several of the putative intervenors argue that the consent judgment violates the governing documents and trust-related agreements, and challenge the validity of the execution of the proposed consent judgment, which was signed by a lawyer purporting to represent the Trusts, but not by the Owner Trustee. The Owner Trustee refused to sign and is one of the intervenors in the case. 

A copy of the pdf version of the CFPB's response that is located outside the PACER paywall can be found
here

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
CONSUMER FINANCIAL PROTECTION BUREAU
Plaintiff,
v.
THE NATIONAL COLLEGIATE MASTER STUDENT LOAN TRUST, et al.
Defendants.

C.A. No. 17-cv-01323 (GMS)

PLAINTIFF CONSUMER FINANCIAL PROTECTION BUREAU’S
CONSOLIDATED RESPONSE TO MOTIONS TO INTERVENE

Plaintiff Consumer Financial Protection Bureau (“Bureau”) hereby responds to the motions to intervene filed by Ambac Assurance Corporation (“Ambac”) (D.I. 4); Transworld Systems Inc. (“TSI”) (D.I. 9); Objecting Noteholders (D.I. 11); GSS Data Services, Inc. (“GSS”) (D.I. 12); the Pennsylvania Higher Education Assistance Agency d/b/a American Education Services (“PHEAA”) (D.I. 20); Wilmington Trust Company (“WTC”) (D.I. 31); U.S. Bank National Association (“U.S. Bank”) in its capacity as Successor Special Servicer (D.I. 33 & 34); and U.S. Bank in its capacity as Indenture Trustee (D.I. 35 & 36).
INTRODUCTION
The Consumer Financial Protection Bureau is a federal agency charged with protecting consumers by enforcing Federal consumer financial laws. Over the course of multiple years, the Bureau conducted an investigation into fifteen (15) Delaware statutory trusts known as the
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National Collegiate Student Loan Trusts (“NCSLTs” or “the Trusts”),
1 which own private student loans and hire third parties to service those loans. The Bureau’s investigation developed extensive evidence that the Trusts, acting through certain of their servicers, engaged in a variety of illegal debt collection and litigation practices—practices which caused substantial harm to thousands of consumers and unjustly enriched the Trusts. After arms-length negotiations, the Bureau and the Trusts agreed to the Proposed Consent Judgment that was filed with this Court on September 18, 2017. See D.I. 3-1 (“Proposed Consent Judgment” or “PCJ”). The Proposed Consent Judgment would, if approved, provide restitution to consumers harmed by the Trusts’ illegal practices in debt collection lawsuits, and comprehensive injunctive relief to prevent future harm. Of significance to the hundreds of thousands of consumers with student loans acquired by the Trusts, the Proposed Consent Judgment would require the Trusts to conduct an independent audit to address serious questions raised by the Bureau’s investigation about whether the Trusts possess documentation showing that consumers actually owe debts to the Trusts.
Seven entities now seek to intervene in this action for the purpose of opposing the Proposed Consent Judgment. None of the would-be intervenors dispute the violations alleged in the Complaint. Nor do they dispute that those violations caused harm to thousands of consumers. Nor do they claim to be owners of the Trusts, or to have the power to settle litigation on the Trusts’ behalf. Instead, the intervenors rely on various trust-related agreements, and ongoing litigation between them and the Trusts to present a litany of purported obstacles to the Trusts’ ability to enter into a settlement with the Bureau to reform the Trusts’ servicing practices and prevent future harm to consumers. There is no need for the Court to wade into the labyrinth of
1 The NCSLTs include the National Collegiate Master Student Loan Trust, NCSLT 2003-1, NCSLT 2004-1, NCSLT 2004-2, NCSLT 2005-1, NCSLT 2005-2, NCSLT 2005-3, NCSLT 2006-1, NCSLT 2006-2, NCSLT 2006-3, NCSLT 2006-4, NCSLT 2007-1, NCSLT 2007-2, NCSLT 2007-3, and NCSLT 2007-4.
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trust-related agreements to determine whether to enter the Proposed Consent Judgment. Moreover, to the extent the intervenors have disputes with the Trusts, including with the determination of the Trusts’ owners to enter into a negotiated settlement with the Bureau, those disputes should be resolved through private litigation and not intertwined with the Bureau’s efforts to protect consumers.
No movant has articulated a valid reason for why the Bureau should not be able to obtain the relief contained in the Proposed Consent Judgment on behalf of consumers. Nonetheless, the Bureau does not oppose the motions to intervene filed by Ambac, the insurer for some of noteholders as well as an investor, and U.S. Bank in its capacity as Indenture Trustee and as Successor Special Servicer. The Bureau respectfully requests that the Court deny the motions to intervene filed by TSI, PHEAA, GSS, the Objecting Noteholders, and WTC, because they have failed to meet their burden for intervention under Rule 24(a)(2), or 24(b) of the Federal Rules of Civil Procedure. To the extent the Court permits any entities to intervene it should be for the limited purpose of objecting to the Bureau’s Motion to Approve the Proposed Consent Judgment.2
BACKGROUND
A. The Trusts
Student loan debt is the second largest category of consumer debt in the United States, just behind mortgages.3 More than 44 million consumers across the country collectively owe
2 Consistent with the stipulated order extending the Bureau’s time to respond to the various intervention motions, see D.I. 46 at 2-3, this response only addresses the pending motions to intervene, and does not address movants’ objections to the Proposed Consent Judgment. The Bureau requests that the Court set a schedule for briefing the Bureau’s motion for approval of the Proposed Consent Judgment once the Court has resolved the intervention motions.
3 Federal Reserve Bank of New York, Household Debt and Credit Report: Q2 2017 (2017), https://www.newyorkfed.org/microeconomics/hhdc.
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over $1.4 trillion in student loan debt.
4 The student loans at issue in this matter are private student loans purchased by the Trusts. This section provides a brief history of the Trusts and their relationship with various third parties to provide background as to how the Trusts operate and how the collections lawsuits at issue came to be filed.
The Trusts are Delaware statutory trusts that were formed between 2001 and 2007. Compl. ¶¶ 9, 11; see also 12 Del. Code § 3801, et seq.5 They were formed for the purpose of acquiring private student loans, collecting payments from the student borrowers who entered into those loans, and then distributing those payments to the holders of notes sold to investors pursuant to certain agreements. Compl. ¶ 10. Under the Trust agreements, the Owners are those entities that acquire a beneficial interest in the Trusts. Significantly, the beneficial interest includes not only an equity interest in the Trusts, but also the “right to direct or consent to the actions of the Owner Trustee and otherwise participate in the management of and control the affairs of the Trust.” D.I. 13-1, Butcher Decl. Ex. A § 1.01 (Trust Agreement for National Collegiate Student Loan Trust 2006-4 (“Trust Agreement”)). The Trusts have no employees, and instead conduct their operations through various third parties. Compl. ¶¶ 12, 15.
Those third parties have various roles, which are set out in a series of agreements. The Owner Trustee, a position currently held by movant WTC,6 has certain ministerial obligations, such as executing documents. For non-ministerial matters, the Owner Trustee generally must
4 Consumer Financial Protection Bureau, Prepared Remarks of Seth Frotman at 1 (March 22, 2017) http://files.consumerfinance.gov/f/documents/201703_cfpb_Frotman-Testimony-CA-Senate-Banking-Committee.pdf.
5 A June 2015 Report issued by the Bureau on complaints regarding the servicing of private student loans included a simple graphical depiction of the structure of one of the National Collegiate Student Loan Trusts at the time. See Consumer Financial Protection Bureau, Mid-Year Update on Student Loan Complaints 13-14 (2015), http://files.consumerfinance.gov/f/201506_cfpb_mid-year-update-on-student-loan-complaints.pdf.
6 Wilmington Trust Company is seeking to resign its role as the Owner Trustee in an action pending in the Delaware Court of Chancery.
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follow the directions of the Trusts’ Owners. See infra Section V. The Administrator, a position held by movant GSS, performs various ministerial functions for the Trusts delineated in the Administration Agreement. See infra Section IV. The Indenture Trustee, one of the roles played by movant U.S. Bank, is responsible under indenture agreements for preserving the assets of the Trusts, including the payments obtained from student borrowers, for the benefit of the investors. Those investors include movants Ambac and the Objecting Noteholders; Ambac also serves as an insurer for certain of the Trusts.
The Trusts disperse responsibility for servicing and collecting on student loans across another group of third parties, who act as the Trusts’ agents. The role of the Primary Servicer, a position held by movant PHEAA, principally involves servicing and collection activities for student loans that are either current or no more than thirty days delinquent. See infra Section III. The Special Servicer, a position originally held by an affiliate of First Marblehead Corporation (“First Marblehead”), is responsible for collection activities for past-due and defaulted student loans, including collections litigation, pursuant to Special Servicing Agreements. In 2012, movant U.S. Bank assumed the role of Successor Special Servicer upon First Marblehead’s resignation. U.S. Bank, in turn, entered into Special Sub-Servicing Agreements with Subservicers, which were responsible for conducting collections, and if those efforts were unsuccessful, overseeing various law firms that file collection lawsuits against borrowers in the name of the Trusts. Movant TSI has been a Subservicer of the Trusts since November 1, 2014. Compl. ¶ 16; see also infra Section II.
This dispersion of servicing responsibility across a shifting group of agents and sub-agents of the Trusts created predictable risks for consumers, including the risk that collections Case 1:17-cv-01323-GMS Document 54 Filed 11/01/17 Page 5 of 33 PageID #: 583
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lawsuits would be filed without proper ownership records.
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B. The Bureau’s Investigation and Complaint
The Bureau’s investigation of the Trusts focused on collections lawsuits filed on behalf of the Trusts since 2012 against borrowers who allegedly had defaulted on their student loans. As alleged in the Complaint, the Bureau found that the Trusts, acting through certain of their servicers, engaged in several deceptive and unfair acts or practices in violation of the Consumer Financial Protection Act. Those practices included: the filing of false and misleading affidavits, see Compl. ¶¶ 24-42; the filing of improperly notarized affidavits, see id. ¶¶ 43-51; the filing of collections lawsuits against consumers even where the Trusts lacked documents necessary to prove that a debt was owed to the Trusts, see id. ¶¶ 52-57; and the filing of collections lawsuits outside the applicable statutes of limitations, see id. ¶ 58. These illegal practices caused substantial injury to thousands of consumers, and resulted in the unjust enrichment of the Trusts. See id. ¶ 94.
Since the Trusts have no employees, in May 2016, the Bureau contacted WTC inquiring whether the Trusts had counsel so the Bureau could schedule a call to inform the Trusts of the potential legal violations it had uncovered through its investigation. The Bureau was informed by WTC that the law firm Chaitman LLP was counsel to the Trusts. WTC had hired Chaitman LLP as counsel to coordinate representation for the Trusts in various lawsuits, and Chaitman then brought on the law firm McCarter & English to represent the Trusts in the Bureau’s investigation. WTC then notified the Bureau that an attorney from McCarter & English would be representing the Trusts and would participate in the call to discuss potential violations by the Trusts. After the call, McCarter & English submitted a written response on behalf of the Trusts.
7 See Stacey Cowen and Jessica Silver-Greenberg, As Paperwork Goes Missing, Private Student Loan Debts May be Wiped Away, N.Y. Times (July 17, 2017), https://www.nytimes.com/2017/07/17/business/dealbook/student-loan-debt-collection.html.
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The Bureau then engaged in settlement negotiations with the Trusts through counsel, McCarter & English. The Bureau was cognizant of ongoing litigation regarding ownership of the Trusts. However, the Trust Agreements explicitly give the Owners the authority to “compromise any claim or lawsuit brought by or against the Trust,” with an exception for collection lawsuits, see D.I. 13-1, Trust Agreement § 4.01(b)(i), and the Trusts provided the Bureau with a legal opinion regarding the authority of the Owners to enter into a settlement on behalf of the Trusts.
C. The Proposed Consent Judgment
The Proposed Consent Judgment, filed at the same time as the Complaint, would provide redress to harmed consumers and injunctive relief to ensure that the Trusts’ violations do not continue. During the course of its investigation, the Bureau identified more than 2000 lawsuits filed by the Trusts without paperwork demonstrating that that Trusts owned the subject loans, and more than 400 lawsuits filed by the Trust past the applicable statutes of limitations periods. PCJ ¶¶ 36, 37; Compl. ¶¶ 3, 58. Consumers subjected to these lawsuits will receive redress under the Proposed Consent Judgment. PCJ ¶¶ 34-37.
Moreover, in recognition that only a fraction of the consumers harmed by the Trusts’ servicing practices may have been uncovered during the Bureau’s investigation, the Proposed Consent Judgment requires the Trusts to conduct an independent audit to determine, among other things, whether the Trusts possess sufficient loan documentation, including signed promissory notes and complete chain of assignment documentation “to support the claim that a Debt is currently owed to a Trust.” PCJ ¶ 19. The audit will also determine whether additional lawsuits were filed without documentation or past the applicable statute of limitation. Id. One purpose of requiring the audit is to identify additional consumers who should receive redress. Another is to
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prevent lawsuits from being filed in the future without adequate documentation by requiring the Trusts to determine what documentation they have for each loan before filing.
The Proposed Consent Judgment also provides additional protections for consumers. It would require the Trusts to develop a comprehensive compliance plan, see PCJ ¶¶ 28-30, and would require that a Board ensure that the Trusts and their servicers comply with Federal consumer financial law and the terms of the Proposed Consent Judgment, id. ¶¶ 31-33. The Proposed Consent Judgment would also require the Trusts to suspend all collection on defaulted debt “pending approval and implementation” of the compliance plan. PCJ ¶ 16. The injunctive provisions of the Proposed Consent judgment will protect consumers from ongoing and future harm resulting from the illegal litigation practices alleged in the compliant. This brief description of the relief contained in the Proposed Consent Judgment illustrates some of the significant consequences to consumers if prolonged litigation delays entry of the Proposed Consent Judgment.
ARGUMENT
I. LEGAL STANDARD
While in many cases “the disposition of the action will have some impact on the interests of third parties,” Harris v. Pernsley, 820 F.2d 592, 596 (3d Cir. 1987), it is well-established that not all parties who may be affected by a litigation are entitled to intervene. Under Federal Rule of Civil Procedure 24(a)(2), a non-party seeking to intervene as of right has the burden to show that “‘(1) the application for intervention is timely; (2) the applicant has a sufficient interest in the litigation; (3) the interest may be affected or impaired, as a practical matter by the disposition of the action; and (4) the interest is not adequately represented by an existing party in the litigation.’” United States v. Territory of Virgin Islands, 748 F.3d 514, 519 (3d Cir. 2014) Case 1:17-cv-01323-GMS Document 54 Filed 11/01/17 Page 8 of 33 PageID #: 586
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(quoting Harris, 820 F.2d at 596). A potential intervenor must satisfy each of these four requirements. See id.
Many of the pending motions to intervene hinge on the second and third requirements, both of which are demanding. To satisfy the second requirement, a would-be intervenor “must demonstrate that there is a tangible threat to a legally cognizable interest.” Harris, 820 F.2d at 601. An interest that is “general and indefinite” will not suffice. Liberty Mut. Ins. Co. v. Treesdale, Inc., 419 F.3d 216, 220 (3d Cir. 2005) (internal citation omitted). Nor will an interest that is “remote or attenuated.” Kleissler v. U.S. Forest Service, 157 F.3d 964, 972 (3d Cir. 1998). Further, “a mere economic interest in the outcome of the litigation is insufficient to support a motion to intervene.” Mountain Top Condo. Ass’n v. Dave Stabbert Master Builder, Inc., 72 F.3d 361, 366 (3d Cir. 1995).
Even where a non-party has a legally sufficient interest in the litigation, it must separately satisfy the third Rule 24(a)(2) requirement by showing that that interest “will be directly affected in a substantially concrete fashion by the relief sought.” Kleissler, 157 F.3d at 972. Thus, a motion to intervene should be denied where the litigation “will not have an immediate, adverse effect” on the potential intervenor, and instead will have only a “collateral and … speculative” impact. Treesdale, 419 F.3d at 225; see also Harris, 820 F.2d at 601 (would-be intervenor “must do more than show that his or her interests may be affected in some incidental manner”).
Where a non-party fails to satisfy the requirements for intervening as of right, Federal Rule of Civil Procedure 24(b) allows for permissive intervention—but only under limited circumstances. As relevant here, a would-be intervenor must demonstrate that it “has a claim or defense that shares with the main action a common question of law or fact.” Fed. R. Civ. P. 24(b)(1)(B). The decision whether to allow permissive intervention is discretionary, and in
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“exercising its discretion, the court must consider whether the intervention will unduly delay or prejudice the adjudication of the original parties’ rights.” Fed. R. Civ. P. 24(b)(3).
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II. THE MOTION TO INTERVENE FILED BY TSI SHOULD BE DENIED
The Court should deny TSI’s motion to intervene. See D.I. 9. TSI was responsible for overseeing a network of law firms that filed collection lawsuits on behalf of the Trusts. On the same day the Bureau filed the Complaint and Proposed Consent Judgment with this Court, the Bureau entered into an administrative Consent Order with TSI (Consent Order) after a lengthy investigation into its conduct and extensive settlement negotiations. See Pl. Ex. A (Consent Order).9 TSI argues that it is entitled to intervene on the grounds (1) that the Proposed Consent Judgment will “conflict” with the Consent Order, and (2) that it has a “substantial economic interest in the matter.” D.I. 9 at 4-6, 10. Neither argument has merit.10
A. TSI Cannot Intervene Based on the Purported Conflict Between the Proposed Consent Judgment and the Administrative Consent Order
TSI argues that it has a right to intervene in this matter because the Proposed Consent Judgment and the Consent Order “contemplate different supervisory and reporting structures and … the implementation of different policies, procedures, and relief.” D.I. 9 at 6. That is incorrect.
8 TSI, PHEAA, and WTC have not moved to intervene under Rule 24(b) in their motions, see generally D.I. 9, 20, 31, and may not do so for the first time in their reply briefs, see D. Del. L.R. 7.1.3(c)(2).
9 Exhibits cited herein as “Pl. Ex.” are attached to the Declaration of Carolyn Hahn, filed herewith.
10 TSI also claims that the Court lacks subject matter jurisdiction because the Trusts are not “covered persons” under the Consumer Financial Protection Act (CFPA). See D.I. 9 at 6-7. TSI’s assertion is simply erroneous and contrary to the plain language of the CFPA. The Trusts engaged in both “servicing loans, including acquiring, purchasing, selling [or] brokering” and in collecting debt; they are therefore “covered persons.” 12 U.S.C. § 5481(15)(A)(i), (x). TSI suggests that the Trusts are exempt from these provisions because they have no employees and hire third parties, but there is no basis for such an exemption in the language of the CFPA. Nor does TSI dispute that the Trusts engage in “acquiring” student loans. See Compl. ¶ 10 (alleging that the “basic purpose of each Trust is to acquire a pool of private student loans”).
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The alleged “conflicts” between the two agreements that TSI asserts are illusory and cannot provide a basis for intervention in this matter.
First, TSI wrongly claims that there is a conflict between the reporting structure established by its Consent Order and by the Proposed Consent Judgment. It is true, as TSI notes, that its Consent Order requires it to interact with and provide information to U.S. Bank as Successor Special Servicer. D.I. 9 at 3-4. However, it is not the case that the Proposed Consent Judgment “[c]ontemplates that the Trusts – and not the successor special servicer – will interact with the Trusts’ servicers, including TSI, to implement the injunctive relief.” Id. at 5. As TSI acknowledges, the Trusts have no employees. Id. Indeed, the Proposed Consent Judgment’s injunctive provisions take the existing loan servicing structure into account,11 including U.S. Bank’s role as the successor Special Servicer, in requiring injunctive relief. The Proposed Consent Judgment specifically states that “Defendants shall take all actions necessary to comply with the terms of the Order, including but not limited to ensuring that all of Defendants’ Servicers acting as Defendants’ agents comply with the terms of the Order.” PCJ ¶ 9(a) (emphasis added). TSI’s obligations to interact with, cooperate with, and provide information to U.S. Bank pursuant to the Bureau’s Consent Order is not disturbed by the Proposed Consent Judgment, and no conflicting requirement to interact with the Trusts has been added.
Further, there is no conflict in the reporting structure between the Proposed Consent Judgment and the Consent Order with respect to pending and concluded lawsuits where misleading affidavits were filed. The Proposed Consent Judgment requires that: “Defendants must instruct their attorneys, Defendants’ Servicers, and their agents to either withdraw the
11 “Servicer” in the Proposed Consent Judgment is defined as “any Servicer, Primary Servicer, Subservicer, Special Servicer, Administrator, and any other individual or entity acting on behalf of Defendants with respect to the Servicing of the student loans owned by Defendants, whether retained directly by Defendants or retained by an individual or entity acting on behalf of Defendants.” PCJ ¶ 7(q).
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pending Collections Lawsuit or notify the Court [that it is withdrawing the affidavit pursuant to an agreement between the Bureau and the Trusts]” and for concluded lawsuits “instruct their attorneys, Defendants’ Servicers, and their agents to cease post-judgment enforcement activities . . . ” PCJ ¶¶ 14, 15. In accordance with the existing structure, the Trusts would instruct U.S. Bank as the Special Servicer responsible for default serving to take the necessary steps, including authorizing TSI to withdraw misleading affidavits and to cease post judgment enforcement activities, as required to implement the injunctive relief in the Proposed Consent Judgment. Thus, nothing in the Proposed Consent Judgment contemplates, let alone requires, that TSI interact with the Trusts. Rather, consistent with the Consent Order, TSI is obligated to work with U.S. Bank as the Successor Special Servicer to implement the injunctive relief required by the Proposed Consent Judgment.
Second, comparison of the affidavit provisions in the Consent Order and Proposed Consent Judgment demonstrates that TSI’s bald assertion that the Proposed Consent Judgment “[c]ontemplates different affidavit-related policies and procedures than those in the TSI Consent Order” is erroneous. D.I. 9 at 5. Indeed, the conduct provisions related to affidavits contained in the Consent Order and Proposed Consent Judgment are virtually identical. Compare Consent Order ¶ 45(l) with PCJ ¶ 9(f). Similarly, the Compliance Plan provisions of the Consent Order and the Proposed Consent Judgment related to affidavits closely track one another. Compare Consent Order ¶ 52(c)-(e) with PCJ ¶ 28(c)(iii-v).
Third, TSI’s claim that its interests may be impaired “if it submits its own Compliance Plan . . . but the Trusts submit a conflicting or more onerous Compliance plan that affects the exact same activities” rests entirely on speculation. D.I. 9 at 10. TSI hasn’t identified any actual conflict between the plans. Nor has it identified any potential conflict. Rather TSI makes Case 1:17-cv-01323-GMS Document 54 Filed 11/01/17 Page 12 of 33 PageID #: 590
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conclusory allegations that a conflict could hypothetically exist. Moreover, TSI’s hypothetical concern about potentially conflicting compliance plans fails to take into account that the Bureau must approve both TSI’s and the Trusts’ Compliance Plans. See Consent Order ¶¶ 52-54; PCJ ¶¶ 28-30. To ensure the expeditious implementation of the relief contained in both agreements for the benefit of consumers, the Bureau has every incentive to ensure that TSI is not subject to conflicting obligations.
12 TSI cannot establish a right to intervene based on such a speculative concern about a purely hypothetical conflict between the two compliance plans. See Treesdale, 419 F.3d at 225 (litigation must have “an immediate, adverse effect” on an intervenor, rather than a “speculative” impact, to support intervention under Rule 24(a)(2)).
Therefore, TSI has not satisfied its burden under Rule 24(a)(2) to demonstrate that it has a sufficient interest that would be impaired by entry of the Proposed Consent Judgment based on alleged conflicts between the Consent Order and the Proposed Judgment.
B. TSI Does Not Have a Sufficient Economic Interest That Will be Impaired
TSI also asserts that it will suffer “substantial financial loss” because the Proposed Consent Judgment requires the Trusts to stop transferring debt to the Special Servicer (and presumably TSI) and to suspend all collections efforts until a compliance plan is approved and implemented. D.I. 9 at 10. TSI does not explain or quantify the financial loss it would suffer as a result of this Court entering the Proposed Consent Judgment. It is unclear whether TSI is even referring to some potential loss of fees, or payments it receives resulting from its work overseeing law firms that file collection lawsuits on behalf of the Trusts. Thus, TSI’s assertion
12 TSI’s reliance on EEOC v. AT&T, 506 F.2d. 735 (3d Cir. 1974), is misplaced. In that case a union sought to intervene because provisions of its collective bargaining agreement with the defendants in that case “may well be modified or invalidated by the memorandum of agreement and consent decree.” Id. at 742. Here TSI is not claiming that the Proposed Consent Judgment conflicts with any agreement it has with the Trusts because it has no contractual agreement with the Trusts. Rather it relies on the theoretical possibility that there might be conflicts between the Consent Order and the Proposed Consent Judgment.
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that it would suffer a “substantial financial loss” is at best speculative. Kleissler, 157 F.3d at 976 (Becker, C.J., concurring) (stating that a court must examine whether “the litigation pose[s] a “’tangible threat’” to the applicant or simply a speculative one”).
Moreover, even assuming arguendo that TSI may incur a loss of revenue should the Court enter the Proposed Judgment, that “mere economic interest” does not support intervention as of right under Federal Rule of Civil Procedure 24(a)(2). Mountain Top, 72 F.3d at 366; see also United States v. Allegheny Cty. Sanitary Auth., Civ. A. No. 07-0737, 2008 WL 203378 at *3 (W.D. Pa. Jan. 24, 2008) (denying intervention as of right where “petitioners’ interest in this action is purely an economic one”). The loss of revenue or assumption of additional expenses by a nonparty are mere economic interests insufficient to support intervention as of right. See, e.g., Curry v. Regents of Minnesota, 167 F.3d 420, 423 (8th Cir. 1999) (potential intervenor’s economic interest in “maintaining the quantum of their funding” and “upholding the current fee system” did not “rise to the level of a legally protectable interest necessary for mandatory intervention”); Se. Pa. Transp. Auth. v. Pa. Pub. Util. Comm’n, 210 F. Supp. 2d 689, 704 (E.D. Pa. 2002) (denying intervention where potential intervenor claimed that enforcement of a judgment would require it to pay higher assessments). Thus, TSI has not shown it has a sufficient interest based on a potential loss of revenue resulting from entry of the Proposed Consent Judgment, and its motion under Rule 24(a)(2) should be denied.13
13 Although this Court has not granted (and should not grant) TSI’s intervention motion, TSI nevertheless proceeds in its motion to argue the merits regarding entry of the Proposed Consent Judgment. D.I. 9 at 11-14. The Bureau is fully prepared to refute TSI’s arguments and all other arguments concerning entry of the Proposed Consent Judgment once the Court resolves the pending intervention motions.
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III. THE MOTION TO INTERVENE FILED BY PHEAA SHOULD BE DENIED
The Court should also deny PHEAA’s motion to intervene. See D.I. 20. PHEAA’s role with respect to the Trusts is limited: it serves as the “Primary Servicer,” which principally involves servicing and collection activities for student loans that are either current or no more than thirty days delinquent. See D.I. 20 at 3. When loans are delinquent for more than thirty days, they are transferred to other agents of the Trusts for additional collection efforts. Thus, as PHEAA acknowledges, it does not file the debt collection lawsuits that are the subject of the Bureau’s Complaint and much of the injunctive relief contained in the Proposed Consent Judgment. Id. Notwithstanding its tangential relationship to the subject of this lawsuit, PHEAA seeks to intervene to protect two interests that are purportedly threatened by the Proposed Consent Decree – its reputation and its contractual rights. Neither of PHEAA’s asserted grounds for intervention under Rule 24(a)(2) is sufficient.
A. PHEAA Cannot Intervene Based on Its Alleged Reputational Interest
PHEAA claims that it is entitled to intervene because the Bureau’s Complaint and the Proposed Consent Judgment might “harm[] PHEAA’s reputation by improperly implicating PHEAA in wrongful conduct.” D.I. 20 at 5; see also id. at 6-7. As an initial matter, PHEAA “has cited no legal authority to support the argument that its interest in protecting its reputation is sufficient for intervention,” and many courts have held such an interest is not sufficient. EEOC v. Farmer’s Pride, Inc., No. 12-MC-148, 2014 WL 1053482, at *3 (E.D. Pa. Mar. 18, 2014) (collecting cases); see also Veasey v. Perry, 577 F. App’x 261, 263 (5th Cir. 2014) (“True the Vote claims it needs to intervene to defend its reputation. Nothing in the caselaw, however, recognizes such an abstractly defined interest.”). PHEAA’s attempt to intervene based upon a purported reputational interest thus fails as a matter of law.
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Further, even if a non-party’s interest in its reputation could in theory serve as a legally sufficient basis to intervene (which it cannot), PHEAA has not demonstrated that this litigation poses any actual harm to its reputation. Neither the Complaint nor the Proposed Consent Judgment ever identify PHEAA by name – not once. See generally D.I. 1; D.I. 3-1. And the Complaint contains only a single reference to the Primary Servicer (i.e., PHEAA). That reference appears in a paragraph that broadly defines “Servicers” to include “any Servicer, Primary Servicer, Subservicer, Special Servicer, Administrator, and any other individual or entity acting on behalf of the Trusts with respect to the servicing and collection of the student loans owned by the Trusts.” Compl. ¶ 13. Although the Complaint contains only that single indirect reference to it as the Primary Servicer, PHEAA asserts that it faces significant reputational harm from being “erroneously group[ed] … with other entities that allegedly participated in improper conduct.” D.I. 20 at 6.
This argument rests on an inaccurate reading of the Complaint, and on a speculative and unsupported theory of reputational harm. Contrary to PHEAA’s suggestion, see D.I. 20 at 7 & n.3, the Complaint makes clear that the Special Servicer and the Subservicer (not the Primary Servicer) are the parties responsible for litigation filed on behalf of the Trusts. See Compl. ¶¶ 21-23 (describing 2009 and 2012 agreements with the Special Servicer, which was required to hire Subservicers); id. at ¶ 24 (“Subservicers, acting through Defendants’ Special Servicer … initiated 94,046 collections lawsuits”). In any event, it is unduly speculative to suppose that a single reference to the “Primary Servicer” in the Complaint could (1) lead to the incorrect identification of PHEAA as an entity responsible for filing collection lawsuits and (2) thereby cause any meaningful harm to PHEAA’s reputation. PHEAA has presented no actual evidence of such harm, and its motion should therefore be denied. See Floyd v. City of New York, 770 F.3d
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1051, 1061 (2d Cir. 2014) (affirming denial of police unions’ motion to intervene in civil rights lawsuit where “unions had submitted no evidence to substantiate their claims of reputational harm”).
B. PHEAA Cannot Intervene Based on the Alleged Impairment of its Contractual Rights
PHEAA also claims that it is entitled to intervene “to protect its contractual rights” under the September 28, 2006 Amended and Restated Private Student Loan Servicing Agreement (the “Servicing Agreement”) that sets forth its duties and obligations as the Primary Servicer. D.I. 20 at 8. As noted above, PHEAA has at best only a tangential relationship to the main subject of this lawsuit. As the Primary Servicer, PHEAA had no responsibility for filing (or overseeing law firms that file) the collections lawsuits that are the focus of the Bureau’s Complaint. Id. at 3. Most of the injunctive provisions of the Proposed Consent Judgment impose obligations on the Trusts relating to those collections lawsuits. See, e.g., PCJ ¶¶ 9(c)-(f), 11, 14, 15. Only a few provisions in the Proposed Consent Judgment relate to PHEAA as the Primary Servicer. Those provisions neither “reform the terms of the Servicing Agreement” nor impose “new, onerous, and extremely expensive obligations” on PHEAA. D.I. 20 at 8. PHEAA’s arguments to the contrary rest on mischaracterizations of both the Proposed Consent Judgment and its own Servicing Agreement.
For example, PHEAA complains that it will have to submit to an independent audit of students’ loans and suggests that that obligation is not included in the Servicing Agreement. D.I. 20 at 5-6 (citing PCJ ¶ 19). However, the Proposed Consent Judgment requires the Trusts—not the Primary Servicer—to hire and pay the auditors who will conduct the compliance audit. See PCJ ¶ 19. And the Servicing Agreement (which PHEAA does not attach to its motion) expressly contemplates such an audit. Specifically, Section 7.01 of the Servicing Agreement grants First
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Marblehead (the predecessor to the current Owners), its agents, and any federal governmental officials with regulatory authority over FMC:
the absolute right, at FMC’s expense … at any time during the term hereof:
(i) to audit or examine all books, records, documents, other writings, information, whether in hard copies, electronic form or otherwise, relating to Services to be provided by Servicer [i.e., PHEAA] under this Agreement at the location(s) where Servicer maintains such books, records, documents writings and information….
Pl. Ex. B § 7.01 (Servicing Agreement); see also id. § 7.04 (requiring PHEAA to provide access to its personnel, facilities, and records for operational audits to evaluate its performance); id. § 7.09 (requiring PHEAA to “fully cooperate” with audits conducted by FMC). PHEAA cannot credibly argue that the Bureau’s settlement with the Trusts involves a compliance audit that it “did not bargain for” (D.I. 20 at 8) when its own contract gives the Trusts the absolute right to conduct such an audit.
Other provisions in the Proposed Consent Judgment are consistent with the Servicing Agreement or at most incidentally affect PHEAA as part of remedying the Trusts’ practices relating to collections lawsuits. For example:
• Paragraph 16(1) requires the Trusts to direct the Primary Servicer to temporarily cease transferring student loans to the Special Servicer and any Subservicer. PHEAA does not identify any provision of the Servicing Agreement that conflicts with this requirement or identify any actual burden that ceasing such transfers poses. See D.I. 20 at 5-6.
• Paragraph 16(4) requires the Trusts to direct the “Primary Servicer to instruct the Special Servicer and all Subservicers” to return certain loans to the Primary Servicer’s possession “that are completed and the subject of each monthly Compliance Audit Report” required under the Compliance Audit section of the Proposed Consent Judgment. PHEAA does not identify any provision of the Servicing Agreement that conflicts with this requirement or any actual burden this provision would pose. See D.I. 20 at 5-6. Indeed, this requirement is consistent with the Servicing Agreement’s requirement that PHEAA maintain custody of credit agreements and related documents. See Pl. Ex. B at § 4.04.
• Paragraph 17(1) requires that payments from consumers be placed in an escrow account. PHEAA already transfers money that it receives from consumers to other agents of the Trusts. Under the Proposed Consent Judgment, PHEAA would merely be required to
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temporarily redirect those funds into a new account designated by the Trusts in order to provide the relief contemplated.
• Paragraph 28 requires the Trusts to develop a compliance plan designed to ensure that the Trusts and its servicers comply with applicable Federal consumer financial laws and the terms of the Proposed Consent Judgment. While PHEAA implies that the compliance plan was not contemplated by the Servicing Agreement, D.I. 20 at 6, that agreement requires PHEAA to conduct servicing “in full compliance with … all federal and state laws and regulations” applicable to PHEAA or to any Owner of the Trusts, Pl. Ex. B at § 4.01. Further, while PHEAA speculates that the compliance plan will be “onerous,” D.I. 20 at 6, the Trusts (not PHEAA) are responsible for developing the compliance plan and most of the contemplated contents of the plan relate to collections lawsuits (which are filed by other agents of the Trusts, not PHEAA). See PCJ ¶ 28(c)(iii)-(vi).
As these examples illustrate, none of PHEAA’s conclusory allegations about the allegedly “massive” obligations imposed upon it hold up upon inspection of the Proposed Consent Judgment and the Servicing Agreement. D.I. 20 at 5. Similarly, there is no basis for PHEAA’s suggestion that the Proposed Consent Judgment attempts to “reform” the Servicing Agreement or interferes with PHEAA’s contractual rights. Id. at 2.14 PHEAA’s allegations therefore should be disregarded. See Floyd v. City of New York, 302 F.R.D. 69, 110 (S.D.N.Y. 2014), aff’d in relevant part, 770 F.3d 1051 (“[C]onclusory allegations ... do not entitle [a movant] to intervention as of right under Rule 24.” (citation omitted)).
Indeed, it is telling that while PHEAA claims that it needs to “protect its contractual rights,” D.I. 20 at 8, its motion does not cite any provision of the Servicing Agreement or even attach that agreement. In similar circumstances, courts have not hesitated to deny motions to intervene. See Sheppard v. Phoenix, No. 91 Civ. 4148(RPP), 1998 WL 397846, at *5 (S.D.N.Y. July 16, 1998) (denying intervention where movants, who alleged that their collective bargaining rights were harmed, “neither refer to any specific provision of their labor contract with the City
14 Nor is there any legal basis for PHEAA’s suggestion that approval of the Proposed Consent Judgment—which seeks to remedy violations of Federal consumer financial law—should hinge on whether the Bureau and the Trusts satisfy the Delaware state law standards for reformation of a written agreement. See D.I. 20 at 8-9.
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nor attach a copy of the contract, or any portions of it, to their papers”). This Court can and should do the same.
Ultimately, PHEAA’s various arguments about its reputation and the Servicing Agreement at most suggest that its “interests may be affected in some incidental manner” by implementation of the Proposed Consent Judgment, Harris, 820 F.2d at 601, including its “mere economic interest” as the Trusts’ Primary Servicer, Mountain Top, 72 F.3d at 366. That is simply not enough to intervene as of right under Rule 24(a)(2), and PHEAA’s motion should be denied.
IV. THE MOTION TO INTERVENE FILED BY GSS SHOULD BE DENIED
GSS Data Services’ motion to intervene fails to identify specific interests that the company possesses that would be affected in direct, concrete ways by the Proposed Consent Judgment. Because the interests that GSS asserts are, at best, “general and indefinite,” and because the asserted impacts on these purported interests are “collateral and … speculative,” its motion to intervene under Rule 24(a)(2) should be denied. See Treesdale, 419 F.3d at 220, 225.
GSS performs a limited role in the operation of the Trusts. Namely, it is the Trusts’ "Administrator,” and, as the company acknowledges in its motion, its duties and responsibilities are exclusively defined in its contract with the Trusts. See D.I. 12 at 1, 9; D.I. 13-2, Butcher Decl. Ex. B at § 1 (“Administration Agreement”). These duties are primarily ministerial, and consist mostly of preparing and filing “all such documents, reports, filings, instruments, certificates and opinions” that the Trusts must prepare and file under its various agreements and applicable law. See D.I. 13-2, Administration Agreement § 1(a)(i). Indeed, in the case of non-ministerial matters—which includes the compromising of lawsuits brought against the Trusts—GSS is explicitly forbidden from taking any action at all unless directed by the Indenture Trustee, Owner Trustee, or Owners. See id. at §§ 1(d)(i), 1(d)(i)(B). Significantly, GSS has no role in the Case 1:17-cv-01323-GMS Document 54 Filed 11/01/17 Page 20 of 33 PageID #: 598
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servicing of the delinquent loans at issue, let alone the filing of collection lawsuits. In contrast, the Complaint and the Proposed Consent Judgment in this action primarily address the loan servicing, debt collection, and litigation practices of the Trusts’ servicers responsible for these activities. See, e.g., Compl. ¶¶ 2-3; PCJ ¶ 4. Any overlap between the conduct addressed by the Proposed Consent Judgment and the duties assigned to GSS by the Administration Agreement is minimal at best, and GSS’s motion has not shown otherwise.
A. GSS Has Failed to Demonstrate That Any Legally Sufficient Interest Will be Impaired
GSS argues in conclusory fashion that it has a right to intervene because the Proposed Consent Judgment “conflicts with the Trust Related Agreements concerning the ongoing operation of the Trusts” and because the Trust Related Agreements “appear to be superseded” by the Proposed Consent Judgment. See D.I. 12 at 9-10. However, the company’s motion does not identify any contractual interest that it possesses that would be directly and concretely affected by the Proposed Consent Judgment. See Kleissler, 157 F.3d at 972. Rather, GSS makes categorical and unsupported assertions regarding the effect of the Proposed Consent Judgment on control of the Trusts. See D.I. 12 at 9.
In the only case GSS has cited to support its motion, a union sought to intervene in the entry of a consent judgment between several federal agencies and AT&T. See D.I. 12 at 7 (citing EEOC v. AT&T, 506 F.2d 735 (3d Cir. 1974)). There, the court found that the union could intervene because its collective bargaining agreement with the company was directly “impaired or impeded” by the consent judgment. See AT&T, 506 F.2d at 741-42; see also EEOC v. AT&T, 365 F. Supp. 1105, 1111 (E.D. Pa. 1973) (finding that the consent judgment made “unilateral revisions [to the union’s] current contracts.”) Case 1:17-cv-01323-GMS Document 54 Filed 11/01/17 Page 21 of 33 PageID #: 599
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Here, by contrast, GSS does not point to a single provision of the Proposed Consent Judgment that would directly revise or impair the Administration Agreement or any other agreement to which GSS is a party. This is unsurprising because the injunctive provisions in the Proposed Consent Judgment primarily relate to the default servicing of the loans – for which GSS has no responsibility. Similarly, the Compliance Audit required by the Proposed Consent Judgment does not anticipate the participation of GSS. Thus, GSS resorts to vague claims that the Proposed Consent Judgment “appears” to supersede Trust Related Agreements, and that it “appears to vest” authority over the Trusts with the Board. See D.I. 12 at 9-10. These vague assertions are unsupported by any concrete explanation as to how the Proposed Consent Judgment impacts the Administration Agreement, and therefore cannot carry GSS’s burden under Rule 24(a)(2) to demonstrate that it has a sufficient, protectable legal interest that would be concretely impaired by the Proposed Consent Judgment. See Virgin Islands, 748 F.3d at 519; Treesdale, 419 F.3d at 220.
B. GSS’s Remaining Arguments Are Unpersuasive and Inaccurate
GSS also makes two additional arguments for intervention under Rule 24(a)(2), neither of which establish that it has a right to intervene here.
First, GSS argues that it should be permitted to intervene because the Trusts moved in the action in the Delaware Court of Chancery to have a notice of default entered as to GSS as administrator of the Trusts. See D.I. 12 at 7-8. But, as GSS admits, the Court of Chancery denied this motion, rendering it irrelevant to this motion to intervene. See id. at 8. Any anticipated future actions by the Trusts regarding GSS are entirely speculative. Further, the Proposed Consent Judgment contains no provisions concerning the Administrator’s position in the Trusts’ structure (or any provisions suggesting that the Administrator should be replaced). GSS’s concern that the Case 1:17-cv-01323-GMS Document 54 Filed 11/01/17 Page 22 of 33 PageID #: 600
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Proposed Consent Judgment will result in its removal from its position does not constitute a sufficient basis for intervention under Rule 24(a).
Second, GSS argues that the Proposed Consent Judgment identifies the company as a “Servicer” and speculates that the definition may create a conflict with the Administration Agreement or make the company’s obligations “unclear.” See D.I 12. at 8-9. This hypothetical concern lacks an actual basis in the Proposed Consent Judgment. The conduct provisions in the Proposed Consent Judgment do obligate the Trusts to require that their servicers, including GSS as the Administrator, agree to abide by its provisions and refrain from taking certain actions. See PCJ ¶ 9. However, these conduct provisions predominantly address the filing of collection lawsuits. Id. As discussed above, GSS has no role in the default servicing of the Trusts’ student loans, let alone in the filing of collection lawsuits. See D.I. 13-2, Administration Agreement § 1. Therefore, GSS has not demonstrated that the Proposed Consent Judgment’s conduct provisions relating to servicers conflict with or make unclear any of GSS’s existing contractual obligations or duties.
Finally, GSS also moves in the alternative for permissive intervention under Rule 24(b)(1)(B). See D.I. 12 at 6-7. That request should be denied. GSS’s presence in this lawsuit—given its largely ministerial role and its lack of involvement in the Trusts’ collections suits—will add little, and risks unduly delaying these proceedings. See Fed. R. Civ. P. 24(b)(3). Further, its motion makes no claims or arguments in support of permissive intervention. Anspach ex rel. Anspach v. City of Philadelphia, Dep't of Pub. Health, 503 F.3d 256, 258 n.1 (3d Cir. 2007) (“[F]ailure to raise an argument in one's opening brief waives it.” (citation omitted)).
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V. THE MOTION TO INTERVENE FILED BY WILMINGTON TRUST COMPANY SHOULD BE DENIED
The Court should deny WTC’s motion for intervention. As the company acknowledges in its motion, WTC plays a limited, non-discretionary role in the Trusts’ operations. See D.I. 31 at 2.15 Its responsibilities are delineated in the Trust Agreements, and consist principally of ministerial duties such as executing and signing trust documents and tax returns. See D.I. 13-1, Trust Agreement §§ 8.02, 8.05, 8.07. As WTC also acknowledges, it can be directed by the Owners or, in some cases, the Administrator. D.I. 31 at 2. In the event that WTC takes or refrains from taking any action at the direction or instruction of the Owners, it is protected from personal liability for that action or restraint and is fully indemnified by the Owners. See D.I. 13-1, Trust Agreement §§ 8.06, 10.02. Additionally, WTC has no role in the servicing or default servicing of the student loans at issue. WTC thus has a tangential relationship to the Proposed Consent Judgment, which aims to end illegal debt collection and loan servicing activities conducted on behalf of the Trusts. WTC nonetheless argues that it is entitled to intervene as of right under Rule 24(a), but its motion fails to satisfy its burden of demonstrating that it has a sufficient interest in this litigation and that that interest will be impaired.
A. WTC Has Not Shown That It Has a Specific Protectable Interest in This Litigation
WTC cannot meet its burden of showing that it has a right to intervene in this litigation because it has no specific and definite interest in this litigation’s subject matter. See Treesdale, 419 F.3d at 220. Indeed, WTC admits that it “does not have discretionary management or regulatory responsibilities” in the Trusts, that it serves merely as an “accommodation party,” and that it receives “de-minimus annual compensation” for performing this role. See D.I. 31 at 2. In
15 The Bureau initially dealt with WTC, as it is the designated agent for service of process for the Trusts, with respect to procedural issues regarding service of administrative subpoenas on the Trusts.
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fact, the sole argument that WTC makes to support its claim to a legally protectable right is the statement that it is “indisputably the Owner Trustee of the Trusts.” See id. at 5. However, the company provides no explanation of how its limited role in the Trusts’ structure, and nothing more, gives it a right to intervene here. Nor does it cite to a single authority in support of its position. Moreover, as discussed above, this litigation addresses the loan servicing, debt collection, and litigation practices of the Trusts’ servicers. See, e.g., Compl. ¶¶ 2-3; PCJ ¶ 4. Nothing in WTC’s motion or the Trust Agreement shows that WTC has any meaningful connection with these activities or servicers.
B. WTC Has Not Shown That Any Interest That It Has Will be Concretely Affected by This Litigation
Even if WTC’s role as the current Owner Trustee provides it with a sufficient protectable interest in this litigation (which it does not), WTC fails to satisfy its burden to demonstrate that this interest will be affected in an immediate and adverse way. See Treesdale, 419 F.3d at 225. Although WTC claims that the Proposed Consent Judgment will require it to take actions “in violation of the Trust Agreements and the Trust Related Agreements” it neither cites to any offending provision of the Proposed Consent Judgment, or even explains these claimed violations. D.I. 31 at 6. On the contrary, the Trust-Related Agreements grant the Owners the right to compromise lawsuits brought against the Trusts, and here, a Proposed Consent Judgment was negotiated and agreed to by the Owners (with counsel appointed with the participation of WTC) pursuant to that authority.
Elsewhere in its motion, WTC asserts that it received an opinion from counsel advising it that the Proposed Consent Judgment would “contravene the Trusts’ Indentures.” D.I. 31 at 3. But it does not attach or quote this purported advice, or even explain the content of counsel’s Case 1:17-cv-01323-GMS Document 54 Filed 11/01/17 Page 25 of 33 PageID #: 603
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advice.
16 WTC cannot intervene based on such conclusory assertions that the Proposed Consent Judgment is contrary to the Trust Agreements. See Floyd, 302 F.R.D. at 110 (noting that conclusory allegations cannot support intervention as of right under Rule 24); Sheppard, 1998 WL 397846, at *5 (denying motion to intervene where union claimed that a settlement was contrary to its labor agreement but failed to cite specific provisions of the labor agreement that would be impaired).
Moreover, as noted above, WTC is fully indemnified by the Owners for taking or refraining to take any action at the direction of the Owners. Thus, even assuming arguendo that the Proposed Consent Judgment does violate the Trusts Agreements and Related Trust Agreements (which it does not), WTC would not appear to incur any liability. See D.I. 13-1, Trust Agreement §§ 8.06, 10.02. In light of this fact, and WTC’s failure to put forth more than conclusory assertions about the consequences of the Proposed Consent Judgment, it has not even identified how its interests might be affected, let alone demonstrated that they will be.
VI. THE MOTION TO INTERVENE FILED BY THE OBJECTING NOTEHOLDERS SHOULD BE DENIED
A. The Objecting Noteholders and U.S. Bank as Indenture Trustee Seek to Intervene to Protect the Same Interest
In the event the Court grants U.S. Bank’s motion to intervene in its capacity as Indenture Trustee (which the Bureau does not oppose), the Court should deny the motion to intervene filed by the Objecting Noteholders, whose interests will be adequately represented by U.S. Bank. See
16 WTC and some of the other intervenors appear prepared to argue that the Trusts cannot be ordered to pay penalties, or even to return amounts collected unlawfully from consumers whose loans the Trusts cannot demonstrate they own. In essence, they are arguing that—although the Trusts profit directly from the unlawful collections—they cannot be held liable because of the securitization contracts.
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Virgin Islands, 748 F.3d at 519 (denying motion to intervene where movant’s interests were adequately represented).
Various entities that own approximately $1.4 billion in notes issued by the Trusts (Objecting Noteholders) filed a motion to intervene for the limited purpose of opposing the Proposed Consent Judgment. D.I. 11 at 1. The Objecting Noteholders seek to intervene based on their possession of notes issued by the Trusts. See id. The Objecting Noteholders claim that entry of the Proposed Consent Judgment “would impose a substantial – and potentially irreparable injury” because of the dilution of the Trusts’ assets that would occur if the Trusts had to pay $19.1 million to the Bureau and implement the required injunctive provisions. Id. at 2. It is the Trusts’ assets that back and guarantee the payments owed to the Objecting Noteholders. Id. In addition, the Objecting Noteholders argue that certain provisions in the Proposed Consent Judgment (ceasing collections, establishing an escrow account for monies collected by the Trusts, and altering the Indenture to permit a Board to determine what if any amounts are paid to the noteholders) would “threaten to vitiate” their rights to obtain payment of interest and principal due to them under agreements governing the Trusts. Id. at 3. Thus, the Noteholders’ purpose in intervening is clearly to oppose entry of the Proposed Consent Judgment in order to protect their right to receive payments under the various Trust agreements.
U.S. Bank’s interests are the same or substantially overlap with the interests of the Objecting Noteholders. U.S. Bank states in its Opening Brief supporting its motion to intervene that it “holds as trustee for the benefit of the holders’ of the debt issued by the Trusts (the ‘Noteholders’) a perfected security interest in the student loans . . . including payments collected by servicers and paid out as principal and interest to the debt holders.” D.I. 36 at 1. U.S. Bank goes on to claim that the “Proposed Consent [Judgment] imposes a lengthy moratorium on
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collection activity, which will inevitably reduce the funds available to pay the Noteholders.” Id. at 2. In arguing that as Indenture Trustee it has a sufficient interest in the litigation, U.S. Bank claims that the Proposed Consent Judgment “will directly and adversely affect the security and other contractual interests of the Noteholders, and therefore affect the Indenture Trustee.” Id. at 8. Indeed, U.S. Bank acknowledges that it “has consulted with Noteholders and has the authority under the Indentures to act for Noteholders in legal proceedings, such as this matter.” Id. (emphasis added). Therefore, U.S. Bank as Indenture Trustee is seeking to intervene in this matter for the same purpose as the Noteholders—to oppose entry of the Proposed Consent Judgment in order to protect the interest of Noteholders as investors in the Trusts to receive payments under the various Trust agreements.
B. U.S. Bank as Indenture Trustee Would Adequately Represent the Interests of the Noteholders
“Representation will be considered inadequate on any of the following three grounds: (1) that although the applicant's interests are similar to those of a party, they diverge sufficiently that the existing party cannot devote proper attention to the applicant's interests; (2) that there is collusion between the representative party and the opposing party; or (3) that the representative party is not diligently prosecuting the suit.” Brody By and Through Sugzdinis v. Sprang, 657 F.2d 1108, 1123 (3d Cir. 1992) (citation omitted); Nat’l Collegiate Athletic Ass'n v. Corbett, 296 F.R.D. 342, 349 (M.D. Pa. 2013). The Noteholders do not and cannot credibly argue that there is any collusion between U.S. Bank and either the Bureau or the Trusts, or that U.S. Bank would not diligently oppose entry of the Proposed Consent Judgment should the Court grant its intervention motion as Indenture Trustee.
Thus the only possible grounds for determining that the Noteholders’ interests are not adequately represented would be that its interests in this litigation diverge from those of U.S.
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Bank as Indenture Trustee. However, as articulated supra, a plain reading of the Noteholders’ Motion and U.S. Bank’s Opening Brief as Indenture Trustee reveals that both entities are seeking to intervene in this matter for the purpose of protecting the Noteholders’ right to receive payments under the various Trust agreements. Where an entity seeking to intervene shares the same or substantially overlapping interests with another party, then that entity is adequately represented and cannot intervene under Rule 24. See Pennsylvania Gen. Energy Co., LLC v. Grant Twp., 658 F. App’x 37, 41 (3d Cir. 2016) (“Fatal to the Appellant’s request to intervention is the substantial overlap between their interests and those of the Township.”);
U.S. ex rel. Frank M. Sheesley Co. v. St. Paul Fire and Marine Ins. Co., 239 F.R.D. 404, 414 (W.D. Pa. 2006) (denying intervention as of right where intervenor “made no contention that the [Defendants’] interests are different from its own”); In re Camden Police Cases, No. 11–1315 RBK/JS, 2012 WL 4442415 at *3 (D.N.J. Sep. 24, 2012) (denying intervention where proposed intervenor and existing party both shared interest in maximizing insurance coverage).
Given U.S. Bank’s representation that it has contractual obligation to act on behalf of the noteholders, and its shared objective of maximizing payments to the noteholders, it adequately represents the interests of the Objecting Noteholders. Therefore, if the Court grants U.S. Bank’s motion to intervene in its capacity as Indenture Trustee, the Objecting Noteholders’ motion to intervene should be denied.17
VII. THE COURT SHOULD LIMIT INTERVENORS’ PARTICIPATION IN THIS LAWSUIT
To the extent the Court grants any of the pending motions to intervene, it should limit intervenors’ participation in this lawsuit to objecting to entry of the Proposed Consent Judgment.
17 If the Court find that U.S. Bank as Indenture Trustee lacks a sufficient interest to intervene in this action, the Objecting Noteholders also clearly do not have a sufficient interest.
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It is well established that intervention under Rule 24(a)(2) “may be subject to appropriate conditions or restrictions responsive, among other things, to the requirements of efficient conduct of the proceedings.” Fed. R. Civ. P. 24 Adv. Comm. Notes (1966); see also Beauregard, Inc. v. Sword Servs. L.L.C., 107 F.3d 351, 353 (5th Cir. 1997) (“[R]easonable conditions may be imposed even upon one who intervenes as of right”). The Third Circuit has thus recognized that it can be appropriate to limit an intervenor’s participation to a “discrete phase[] of an action”—such as the “remedial stage”—because an intervenor “may have a sufficient interest to intervene as to certain issues in an action without having an interest in the litigation as a whole.” Harris, 820 F.2d at 599.
Here, the movants generally acknowledge that their reason for seeking to intervene is for the purpose of opposing the Proposed Consent Judgment. See, e.g., D.I. 11 at 1 (Objecting Noteholders “move to intervene for the limited purpose of objecting to the Proposed Consent Judgment”). None of the movants claim to intervene for the purpose of disputing the Trusts’ liability for the debt collection misconduct alleged in the Complaint. Accordingly, if the Court grants any of the intervention motions, it should be for the limited purpose of presenting briefing on their positions regarding the remedies ordered by the Proposed Consent Judgment. Such a limitation will ensure that the presence of additional parties does not unduly delay this action—which seeks urgently needed relief on behalf of consumers for Defendants’ ongoing violations of Federal consumer financial law. See F.T.C. v. Mercury Mktg. of Delaware, Inc., No. CIV.A.00-3281, 2004 WL 2110686, at *2 (E.D. Pa. Aug. 25, 2004) (allowing entities to intervene “for the limited purpose of advancing their interest as to the appropriate remedy as it relates to all parties, on condition that they do not attempt to delay or continue the proceedings presently scheduled”). To further avoid such delay, the Bureau respectfully requests that the Court set a schedule for
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briefing the Bureau’s motion for entry of the Proposed Consent Judgment once the Court has ruled on the pending intervention motions.
CONCLUSION
For the reasons set forth above, the Court should deny the motions to intervene filed by TSI, PHEAA, GSS, the Objecting Noteholders, and WTC because they have failed to satisfy the requirements of Federal Rule of Civil Procedure 24. In addition, should the Court grant any of the pending motions to intervene, it should limit intervenors’ participation in this action to objecting to the entry of the Proposed Consent Judgment.

Dated: November 1, 2017

Respectfully submitted,

ANTHONY ALEXIS
Enforcement Director
DEBORAH MORRIS
Deputy Enforcement Director
CRAIG COWIE
Assistant Litigation Deputy
/s/ Carolyn Hahn
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(E-mail: Carolyn.Hahn@cfpb.gov)
(Phone: 202-435-7250
Colin Reardon
(E-mail Colin.Reardon@cfpb.gov)
(Phone: 202-435-9668)
Gabriel Hopkins
(E-mail Gabriel.Hopkins@cfpb.gov)
(Phone: 202-435-7842)
Enforcement Attorneys
Consumer Financial Protection Bureau
1700 G Street NW
Washington, DC 20552
Facsimile: (202) 435-7722
For the Consumer Financial Protection Bureau
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Certificate of Service
I hereby certify that on November 1, 2017, a copy of foregoing Plaintiff Consumer Financial Protection Bureau’s Consolidated Response to Motions to Intervene was filed electronically. Notice of this filing will be sent by operation of the Court’s electronic filing system to all parties indicated on the electronic filing receipt. Parties may access this filing through the Court’s system.
/s/ Carolyn Hahn
Carolyn Hahn
1700 G Street NW
Washington, DC 20552
E-mail: Carolyn.Hahn@cfpb.gov
Phone: 202-435-7250
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