Am. Bar Ass'n v. U.S. Dep't of Educ.
This text of 370 F. Supp. 3d 1 (Am. Bar Ass'n v. U.S. Dep't of Educ.) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
TIMOTHY J. KELLY, United States District Judge *10In 2007, Congress established the Public Service Loan Forgiveness Program ("PSLF" or "PSLF Program"), which offers federal student loan forgiveness for those who make ten years, or 120 months, of monthly loan payments while employed in public service. At any time, federal student loan borrowers employed in public service may check their ongoing eligibility to participate in the program by submitting an Employment Certification Form (ECF). Upon receipt of that form, the Department of Education (the "Department") determines whether the borrower's loan payments were made while employed at a qualifying "public service organization," such that they count towards the PSLF Program's requirements. This case concerns whether the Department's reversals of certain of those determinations, made before the borrower's completion of all 120 monthly loan payments, were lawful.
Plaintiffs American Bar Association (ABA) and Michelle Quintero-Millan, Geoffrey Burkhart, Kate Voigt, and Jamie Rudert (collectively, the "Individual Plaintiffs") filed this action against the Department and Betsy DeVos, in her official capacity as Secretary of Education (collectively, "Defendants"), challenging the Department's allegedly unlawful reversal of certain determinations under the PSLF Program. They bring five claims against Defendants. Counts I, II, III, and IV are brought under the Administrative Procedure Act (APA),
Before the Court are the parties' cross-motions for summary judgment. For the reasons explained below, the Court concludes that Defendants acted arbitrarily and capriciously when the Department changed its interpretation of the PSLF regulation in two ways without displaying awareness of its changed position, providing a reasoned explanation for that decision, and taking into account the serious reliance interests affected. Accordingly, summary judgment is appropriate on behalf of Quintero-Millan, Burkhart, and Voigt, on Count I, and the new standards on which the Department relied when it sent denial letters to them must be vacated. As a result, the Court need not reach their additional causes of action.
In contrast, summary judgment is appropriate in favor of Defendants on all causes of action brought by Rudert and the ABA. The record does not support Rudert's assertion that the Department *11impermissibly changed its interpretation of the PSLF regulation, and then relied on that interpretation in determining that his employment failed to qualify for the PSLF Program. For this and other reasons explained below, Rudert has failed to demonstrate that the APA was violated in his case. And further, for the reasons explained below, the Department's representations to the ABA concerning whether it qualified as a public service organization for purposes of the PSLF Program were not final agency actions subject to challenge by the ABA through the APA. Finally, both the ABA's and Rudert's claims under the Due Process Clause fail because both lack the protected property interests required to succeed on their claims.
Accordingly, the Court will grant in part and deny in part Plaintiffs' Motion for Summary Judgment, ECF No. 17, and grant in part and deny in part Defendants' Motion for Summary Judgment, ECF No. 22. For the reasons explained below, the Court will also grant Plaintiffs' Supplemental Motions to Allow for Extra-Record Review. ECF Nos. 24, 35.1
I. Background
1. The PSLF Statute
In 2007, the College Cost Reduction and Access Act, Pub. L. No. 110-84,
Free access — add to your briefcase to read the full text and ask questions with AI
TIMOTHY J. KELLY, United States District Judge *10In 2007, Congress established the Public Service Loan Forgiveness Program ("PSLF" or "PSLF Program"), which offers federal student loan forgiveness for those who make ten years, or 120 months, of monthly loan payments while employed in public service. At any time, federal student loan borrowers employed in public service may check their ongoing eligibility to participate in the program by submitting an Employment Certification Form (ECF). Upon receipt of that form, the Department of Education (the "Department") determines whether the borrower's loan payments were made while employed at a qualifying "public service organization," such that they count towards the PSLF Program's requirements. This case concerns whether the Department's reversals of certain of those determinations, made before the borrower's completion of all 120 monthly loan payments, were lawful.
Plaintiffs American Bar Association (ABA) and Michelle Quintero-Millan, Geoffrey Burkhart, Kate Voigt, and Jamie Rudert (collectively, the "Individual Plaintiffs") filed this action against the Department and Betsy DeVos, in her official capacity as Secretary of Education (collectively, "Defendants"), challenging the Department's allegedly unlawful reversal of certain determinations under the PSLF Program. They bring five claims against Defendants. Counts I, II, III, and IV are brought under the Administrative Procedure Act (APA),
Before the Court are the parties' cross-motions for summary judgment. For the reasons explained below, the Court concludes that Defendants acted arbitrarily and capriciously when the Department changed its interpretation of the PSLF regulation in two ways without displaying awareness of its changed position, providing a reasoned explanation for that decision, and taking into account the serious reliance interests affected. Accordingly, summary judgment is appropriate on behalf of Quintero-Millan, Burkhart, and Voigt, on Count I, and the new standards on which the Department relied when it sent denial letters to them must be vacated. As a result, the Court need not reach their additional causes of action.
In contrast, summary judgment is appropriate in favor of Defendants on all causes of action brought by Rudert and the ABA. The record does not support Rudert's assertion that the Department *11impermissibly changed its interpretation of the PSLF regulation, and then relied on that interpretation in determining that his employment failed to qualify for the PSLF Program. For this and other reasons explained below, Rudert has failed to demonstrate that the APA was violated in his case. And further, for the reasons explained below, the Department's representations to the ABA concerning whether it qualified as a public service organization for purposes of the PSLF Program were not final agency actions subject to challenge by the ABA through the APA. Finally, both the ABA's and Rudert's claims under the Due Process Clause fail because both lack the protected property interests required to succeed on their claims.
Accordingly, the Court will grant in part and deny in part Plaintiffs' Motion for Summary Judgment, ECF No. 17, and grant in part and deny in part Defendants' Motion for Summary Judgment, ECF No. 22. For the reasons explained below, the Court will also grant Plaintiffs' Supplemental Motions to Allow for Extra-Record Review. ECF Nos. 24, 35.1
I. Background
1. The PSLF Statute
In 2007, the College Cost Reduction and Access Act, Pub. L. No. 110-84,
2. The PSLF Regulation
In October 2008, the Department promulgated a regulation setting forth the procedures through which a borrower may apply for loan forgiveness. See
During the negotiated rulemaking process leading to the promulgation of the regulation, the Department agreed to develop a form with "an employer certification section and instructions regarding supporting documentation that the Department [needs] to determine the borrower's eligibility for the forgiveness benefit." Federal Perkins Loan Program, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program,
3. The ECF Process
According to the Department, the ECF Process allows borrowers to certify that their "employment and payments qualify for [the PSLF Program]." AR 178. Through the submission of an ECF, borrowers and their employers certify that the borrower was employed full-time for a qualifying public service organization when making monthly loan payments. See AR 152-53. In order to receive loan forgiveness under the program, borrowers must submit valid ECFs covering their "full-time public service employment while making the required 120 separate, qualifying monthly payments." AR 154. But, as noted above, borrowers may also submit ECFs before they are eligible to apply for loan forgiveness in order to "receive feedback on the eligibility of [a borrower's] employment and payments," AR 178, and to "verify that [a borrower's] employer qualifies as a public service organization," AR 152. The Department recommends that borrowers submit ECFs either annually or whenever the borrower changes employers. AR 154. A single ECF may cover loan payments made over any length of time, but the Department requires borrowers to submit separate ECFs for each employer. See AR 152-53. The ECF application must be signed by an authorized official from the relevant organization to verify that the borrower was a full-time employee during the relevant time period.
The Department relies on PSLF servicers, primarily "FedLoan Servicing," to process ECFs prior to a borrower submitting a loan forgiveness application at the conclusion of making 120 qualifying monthly payments. AR 178. ECFs are processed in several steps. First, FedLoan Servicing conducts an "initial review" in which it "check[s] that the borrower provided all required information" and followed the form instructions. AR 143. Once the check is complete, Fedloan Servicing "determine[s] whether an employer is a qualifying *13public service organization" by confirming that the organization is listed in one of the Department's "searchable databases, based on the type of public service organization."
After determining that the borrower's employer is a qualifying public service organization, FedLoan Servicing will "determine whether the borrower has met the full-time requirement ... while employed [there]." AR 143. If FedLoan Servicing confirms that the borrower made loan payments while employed full-time at a qualifying employer, then, after approving the first ECF received by the borrower, it will "request the transfer of all federally-held loans" to FedLoan Servicing from the borrower's original loan servicer. AR 144. Once the transfer is made, FedLoan Servicing will "track the number of PSLF qualifying payments made after the loans [were] transferred from the original servicer."
After completing 120 eligible monthly payments, borrowers may apply for loan forgiveness through a separate application. AR 179. If a borrower submitted ECFs covering the entire period during which she made 120 qualifying payments, then she must submit "one additional" ECF to verify that she is employed full-time with a qualifying public service organization at the time she submits the application.
The ABA is an organization for legal professionals that asserts that the Department unlawfully stripped it of its status as a qualifying public service organization for purposes of the PSLF Program. Compl. ¶¶ 21, 208. The Individual Plaintiffs are law school graduates who contend that they made qualifying loan payments under the PSLF Program while employed by public service organizations, including the ABA, over varying periods since 2011-but have since been informed that, to the contrary, because their employers are not public service organizations, their payments do not qualify. See
The ABA is a private, not-for-profit 501(c)(6) organization that, among other activities, conducts legal education initiatives, administers the accreditation of law schools and other projects for the legal profession, and provides public interest law services. Pls.' MSJ Br., Ex. A ¶¶ 5-11. The ABA operates several public interest legal divisions, including the South Texas Pro Bono Asylum Representative Project ("ProBAR"), the Commission on Homelessness and Poverty, and the Center on Children and the Law.
Following the establishment of the ECF Process in January 2012, the ABA asserts that several of its employees submitted ECFs to the Department and received letters in response confirming that their "employment with the ABA qualified" for participation in the PSLF program.
After graduating from the Sturm College of Law at the University of Denver in 2012, Quintero-Millan joined ProBAR in June 2012 as a Staff Attorney. See Pls.' MSJ Br., Ex. E ¶¶ 1, 4. She departed in May 2015 with the title of Supervising Attorney.
In June 2014, Burkhart-a 2008 graduate of DePaul University College of Law-joined the ABA as Attorney and Project Director for the Division for Legal Services. Pls.' MSJ Br., Ex. D ¶¶ 1, 4. He remained in the position until December 21, 2016, when he became the Deputy Director of the ABA's Center for Innovation.
Prior to joining the ABA, Burkhart asserts that he received confirmation (though he does not specify how) from both the ABA and FedLoan Servicing that his prospective position there was eligible *15for the PSLF Program.
Voigt graduated from Boston College Law School in 2011. Pls.' MSJ Br., Ex. C ¶ 1. In December 2011, she accepted a position in the Liaison Department of the American Immigration Lawyers Association ("AILA"), a 501(c)(6) organization that provides a variety of services for immigrants, as well as educational services on the topic of immigration.
In November 2016, almost two years later, Voigt received a letter from FedLoan Servicing confirming that the Department had reversed its position as to whether employment at AILA qualified for the PSLF Program.
In April 2012, Rudert began working at Vietnam Veterans of America ("VVA"), a 501(c)(19) organization that provides advocacy and support services to Vietnam veterans, including representing veterans seeking government benefits and services.
In July 2012, Rudert submitted an ECF and received a letter from FedLoan Servicing (which was not his loan servicer at the time but receives all ECF applications regardless of whether it is a borrower's servicer) indicating that his work at VVA from April 1, 2012, to June 18, 2012, qualified for the PSLF Program.
In early 2016, after his departure from VVA, Rudert submitted another ECF, while employed at PVA, which covered loan payments during his final year at VVA.
II. The Parties' Motions for Summary Judgment
A. Legal Standard
Under Federal Rule of Civil Procedure 56(c), this Court must grant summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." "Summary judgment is appropriately granted when, viewing the evidence in the light most favorable to the non-movants and drawing all reasonable inferences accordingly, no *17reasonable jury could reach a verdict in their favor." Lopez v. Council on Am.-Islamic Relations Action Network, Inc. ,
B. Analysis
Defendants assert two threshold challenges to Plaintiffs' APA claims. First, they assert that the ABA does not have a cause of action because its interests do not fall within the "zone of interests" protected by the PSLF statute. The Court concludes that the zone-of-interests test does not bar the ABA's claims. Second, Defendants assert that Plaintiffs do not have a cause of action because the Department's actions at issue are not final agency actions subject to judicial review. The Court concludes that the letters sent to the Individual Plaintiffs determining that their employment did not qualify for the PSLF Program-and thus that their loan payments made while working for those employers did not count toward the total needed for loan forgiveness-are final agency actions. Therefore, the Individual Plaintiffs may assert causes of action challenging them under the APA. On the other hand, the Department's letters to the ABA concerning its status as a qualifying "public service organization" under the PSLF regulation are not final agency actions. Therefore, the ABA may not assert APA claims directed at those letters.
Turning to the merits of the Individual Plaintiffs' APA claims, the Court concludes that the Department changed the standards by which it assessed whether non-501(c)(3) not-for-profit organizations qualified as public service organizations under the PSLF Program. Moreover, these changes were arbitrary and capricious because, in adopting the new standards, the Department failed to display awareness of its changed position, provide a reasoned analysis for that decision, and take into account the serious reliance interests affected. Because summary judgment is appropriate in favor of Quintero-Millan, Burkhart, and Voigt on Count I on that basis, the Court need not reach their other challenges under the APA, or their argument that the Department violated their due process rights under the Fifth Amendment.
On the other hand, the Court concludes that summary judgment is appropriate in Defendants' favor on Rudert's APA claims. It does so because it cannot conclude that the Department based its determination that his employment failed to qualify for the PSLF Program on a new interpretation of the PSLF regulation, and for other reasons explained below. Finally, the Court concludes that the ABA and Rudert's due process claims under the Fifth Amendment fail, as well. As a result, summary judgment is appropriate in Defendants'
1. Whether the ABA's Injuries Fall Within the Zone of Interests of the PSLF Statute
Defendants assert that the ABA's alleged injuries do not fall within the zone of interests of the PSLF statute and regulation,2 which are "intended to provide student debt relief to borrowers," not public service organizations. Dfs.' Opp. at 21. The Court disagrees, especially given how this test is typically applied in the APA context.
The "zone-of-interests limitation" is a "requirement of general application" for "all statutorily created causes of action." Lexmark Int'l, Inc. v. Static Control Components, Inc. ,
The zone-of-interests standard "is particularly generous as applied to plaintiffs who bring suit under the APA, in light of the need to 'preserv[e] the flexibility of the APA's omnibus judicial-review provision, which permits suit for violations of numerous statutes of varying character that do not themselves include causes of action for judicial review.' " Otay Mesa Prop., L.P. v. U.S. Dep't of the Interior ,
The Court concludes that the ABA's asserted interests in this action are not "so marginally related to or inconsistent with the purposes implicit in the [PSLF] statute that it cannot reasonably be assumed that Congress intended to permit the suit." Clarke ,
Defendants argue that the ABA falls outside of the zone of interests of the PSLF statute because its purpose is "to encourage individuals to enter and continue in full-time public service employment." Dfs.' MSJ Br. at 21 (emphasis added) (quoting
Defendants construe the PSLF statute too narrowly, at least for the purpose of applying the zone-of-interests test. To satisfy the test, a plaintiff need only show that its interests in the agency action "in practice can be expected to police the interests that the statute protects." Amgen, Inc. v. Smith ,
2. Whether Plaintiffs' APA Claims Challenge Final Agency Action
Next, the Court must determine whether Plaintiffs' APA claims challenge final agency action, such that they are cognizable under that statute.
"Where there is no final agency action, a plaintiff has no cause of action under the APA." Aracely, R. v. Nielsen ,
a. Consummation of the Department's Decisionmaking Process
Under the first prong of the Bennett test, a final agency action "must mark the consummation of the agency's decisionmaking process" and "must not be of a merely tentative or interlocutory nature." Bennett ,
When considering the first Bennett prong, the D.C. Circuit has looked to the relevant language of the challenged agency decision. See Holistic Candlers & Consumers Ass'n v. FDA ,
In arguing that the denial letters were not final, Defendants point to the allegedly less-than-definitive language in Quintero-Millan's letter, which stated that her "employer does not appear to qualify for PSLF" and invited her to "reapply if *21[she could] provide additional information to show that [her] employment qualifies." AR 237. But this language does not undermine the conclusion that her denial letter was a final agency action. First, other language in the letter was far more categorical about the Department's determination. The Department identified her "eligibility status" to be, simply, "Organization Does Not Qualify."
As part of the first Bennett prong, courts also look to "the way in which the agency subsequently treats the challenged action." Sw. Airlines Co. v. U.S. Dep't of Transp. ,
Defendants contend that the Individual Plaintiffs' denial letters are "interlocutory and subject to change" because "the Department does not make a final determination on eligibility for PSLF until the borrower files her application ... after making 120 qualifying payments." Dfs.' MSJ Br. at 15-16. But this argument conflates separate determinations that the Department undertakes in connection with the PSLF Program. Certainly, the Department considers an application to determine a borrower's ultimate eligibility for debt relief only after she has submitted 120 qualifying loan payments. AR 153. But along the way, according to the Department, upon receiving an ECF it "verif[ies] that [the borrower's] employer qualifies as a public service organization" and "notif[ies] [the borrower] in writing of the number of qualifying payments ... made while employed in qualifying public service." AR 155. Through this process, the Department "determine[s]" the eligibility of loan payments made during a borrower's employment with a particular organization. See AR 143-44. And, if the loan payments are approved as eligible, the Department will "request the transfer of all federally-held loans" to FedLoan Servicing *22from the borrower's original loan servicer and "track the number of PSLF qualifying payments" going forward. AR 144. That the Individual Plaintiffs have not submitted applications for loan forgiveness does not undercut the conclusion that, at the very least, the denial letters reflect the end of the Department's decisionmaking process concerning whether a borrower's employer qualifies as a public service organization, and whether the loan payments at issue count toward the 120 monthly payments required.
Courts have also looked to other agency materials to evaluate whether an action marked the consummation of an agency's decisionmaking. See Holistic Candlers ,
In considering whether an agency action marks the consummation of a decisionmaking process, the D.C. Circuit has also instructed courts to look to "whether the impact of the [agency action] is sufficiently 'final' to warrant review in the context of the particular case." Citizens Ass'n of Georgetown v. FAA ,
*23Pls.' MSJ Br., Ex. E ¶ 19. Burkhart submits that, with the demands of a family and his "growing educational debt," the Department's decision caused him "great concern about [his] ability to meet [his] student loan obligations, and to doubt [his] decision to devote [his] career to public service."
Defendants argue that the denial letters did not have "an immediate or significant practical effect" on the Individual Plaintiffs because their "eligibility for PSLF had not yet been finally determined." Dfs.' MSJ Br. at 17 n.6. This is nonsense. In the face of growing debt burdens, the Individual Plaintiffs structured their careers and long-term financial plans around their eligibility for the PSLF Program. The Department's determinations quite obviously had an "immediate" and "significant" impact on their ability to plan their careers and finances, despite the fact that they have not had (and may never have) the opportunity to submit an application for loan forgiveness. To hold otherwise would be incompatible with the Court's obligation to apply the finality requirement in a "flexible" and "pragmatic" manner. Ciba-Geigy ,
Finally, Defendants contend that the Department's statements in the Federal Register during the PSLF negotiated rulemaking process demonstrate that the denial letters "fall well short of being the 'consummation' of the agency's decision-making process." Dfs.' MSJ Br. at 14. Of course, these statements are of quite limited value to the Court, insofar as they are not the "governing statutes and regulations [that] structure [an agency's] decisionmaking processes." Soundboard ,
Defendants largely rest their argument on part of the proposed rulemaking record.
For the reasons described above, the Court concludes that the denial letters sent to the Individual Plaintiffs satisfy the first prong of the Bennett test.
b. Determination of Plaintiffs' Rights and Obligations
The second prong of the Bennett inquiry is satisfied if the agency action is "one by which 'rights or obligations have been determined,' or from which 'legal consequences will flow.' " Bennett ,
When the "definitiveness" of an agency decision satisfies the first Bennett prong, the D.C. Circuit has recognized that the same evidence may "also lead[ ] inexorably to the conclusion that [a plaintiff's] 'rights ... have been determined.' " Safari Club Int'l v. Jewell ,
Defendants contend that the denial letters "fall well short of determining rights or obligations" because the letters only provide "provisional guidance" to the Individual Plaintiffs. Dfs.' MSJ Br. at 17. In support of their position, Defendants cite to the language contained in the denial letter to Quintero-Millan, addressed in the Court's analysis of Bennett 's first prong, stating that the Department will "only determine" whether the borrowers have "fulfilled all of the requirements to be eligible for PSLF" after submitting a final loan forgiveness application.
Unlike the Individual Plaintiffs' denial letters, however, the Department's letters to the ABA are not actions by which a party's "rights or obligations have been determined" or from which "legal consequences will flow." Bennett ,
In its June 2016 letter, the Department informed the ABA that it had "determined that the ABA does not qualify as a public service organization for [...] PSLF purposes" because it failed to demonstrate that its "primary purpose" was to provide "public interest law services." AR 190-91. In December 2016, the Department confirmed that determination. AR 192-93. Though these letters appear similar to those sent to the Individual Plaintiffs, they cannot satisfy the second prong of the Bennett test.
Under the PSLF statute, the Department has an obligation to provide loan forgiveness only to eligible borrowers. See 20 U.S.C. 1087e(m). The system by which it does so requires that borrowers collect and submit ECFs covering 120 valid loan payments, which the Department approves or denies as they are received. Accordingly, the Department's letters to the ABA-which do not constitute a determination on the eligibility of payments made by a particular borrower -cannot be said to determine rights or obligations under the statute. As an employer, the ABA has no such rights or obligations, since it has no possible claim to loan forgiveness. And indeed, there is no procedure set out in
For the same reasons, legal consequences do not flow from the Department's letters to the ABA. When considering the issue of legal consequences, the D.C. Circuit has looked to "the actual legal effect (or lack thereof) of the agency action in question on regulated entities." Nat'l Min. Ass'n , 758 F.3d at 252. "[I]f the practical effect of the agency action is not a certain change in the legal obligations of a party, the action is non-final for the purpose of judicial review." Nat'l Ass'n of Home Builders , 415 F.3d at 15. Although the letters to the ABA describe separate eligibility determinations rendered by the Department, as well as the basis for those decisions, the letters themselves do not carry the same legal consequences for any particular borrower, like the letters sent to the Individual Plaintiffs. Nor do the letters carry legal consequences for the ABA. Because the ABA has no legal obligations or rights under the PSLF statute, the Department's letters cannot have changed them. And the ABA's extensive account of "serious recruiting and retention problems due to the revocation of its status as a PSLF-eligible employer" does not alter this conclusion. Pls.' Reply at 9. Practical effects alone, significant as they may be, do not meet the ABA's burden under Bennett 's second prong. See Ctr. for Auto Safety v. Nat'l Highway Traffic Safety Admin. ,
For the foregoing reasons, the Court concludes that the Department's denial letters sent to the Individual Plaintiffs were final agency actions, and the letters it sent to the ABA were not. Consequently, the Court will proceed to consider the Individual Plaintiffs' claims that the Department's determinations reflected in those letters violated the APA.
3. The Individual Plaintiffs' APA Claims
a. Whether the Department Changed its Practices
The Individual Plaintiffs allege, in Count I, that Defendants violated the APA when the Department changed its practices "without notice or explanation," Pls.' MSJ Br. at 29, by adopting a set of new "interpretations of statutory and regulatory terms defining the types of employment that qualify for the PSLF program." Pls.' Reply at 8; see also id. at 30-31. The Department relied upon these new interpretations, the Individual Plaintiffs argue, when it issued the denial letters to them and reversed its earlier determinations that their employment with the ABA, AILA, and VVA qualified. Pls.' MSJ Br. at 29-33. In fact, the various APA claims they bring are all predicated on their contention that the Department changed its interpretation of the PSLF regulation in certain ways, thereby rendering their employment and related payments ineligible under the PSLF Program. For their part, Defendants deny that any change took place, maintaining that the Department's denial letters were only "individualized, non-final determinations" that should not be read as "the agency's generally applicable policy in administering the PSLF." Dfs.' MSJ Br. at 28-29. Therefore, the first step in evaluating the Individual Plaintiffs' APA claims is determining whether the Department did in fact change its practices by applying a new interpretation of the PSLF regulation to the Individual Plaintiffs.6
To determine whether an agency has changed its practices in the face of its insistence "that nothing [has] changed," courts independently review the administrative record.
*27Am. Wild Horse Preservation Campaign v. Perdue ,
The Individual Plaintiffs allege that the Department changed its interpretation of the PSLF regulation by adopting new, heightened standards governing whether non-501(c)(3) not-for-profit organizations qualify as public service organizations for purposes of the PSLF Program.7 They identify three newly-adopted standards the Court will refer to as the "Primary Purpose" standard, the "School-like Setting" standard, and the "Outright Provision of Services" standard. See Pls.' MSJ Br. at 31-33. The Court considers whether the evidence supports their claim that each reflects a change to how the Department interpreted and applied the PSLF regulation below.
The "Primary Purpose" Standard
The Individual Plaintiffs allege that, sometime between 2015 and 2016, the Department adopted the Primary Purpose standard as part of its determination as to whether non-501(c)(3) not-for-profit organizations that provide "public interest law services" qualify as "public service organizations" under the PSLF regulation. Id. at 31-32; id. , Ex. A ¶¶ 24, 31-36. Under this standard, for her loan payments to qualify, a borrower must demonstrate that the "primary purpose" of her non-501(c)(3) not-for-profit employer is to provide qualifying public services. See id. , Ex. A ¶ 31; AR 190-91. As Defendants' concede, the Department relied on this reasoning when it sent denial letters to ABA employees in 2016, Dfs.' MSJ Br. at 27, which includes the denial letters challenged by Quintero-Millan and Burkhart, see AR 214-15, 237-39. The Individual Plaintiffs contend that, by adopting the standard, the Department "reversed [its] past practice without notice or explanation." Pls.' MSJ Br. at 29. Defendants, by contrast, contend that the Department had always applied this reasoning in evaluating whether employment at particular organizations qualified for the PSLF Program, and that the letters approving ECFs submitted by Burkhart prior to his 2016 denial letter resulted from a "mistake" or "contractor's error." Dfs.' MSJ Br. at 9; Dfs.' Reply at 17-18.
The evidence supports the Individual Plaintiffs' claim that the Department changed how it interpreted and applied the PSLF regulation by adopting the Primary Purpose standard at some point before it *28began issuing denial letters to ABA employees like Quintero-Millan and Burkhart. The Department's handling of Burkhart's case is, at a minimum, consistent with such a change. As discussed above, despite the ABA's apparent failure to meet this standard, the Department approved his employment there on at least four occasions before reversing course. Pls.' MSJ Br., Ex. D ¶¶ 7-8. In addition, according to the ABA, several of its other employees received letters confirming that their employment there had qualified as well. Id. , Ex. A ¶ 22. But the record is also notable for what it lacks: any evidence as to whether the Department applied the Primary Purpose standard-or even sought information about any employer's primary purpose-prior to sending letters to the ABA's employees denying their eligibility in 2015.8 Id. , Ex. A ¶ 24. The earliest specific reference to the Primary Purpose standard in the record appears to be in the Department's June 2016 letter to the ABA. See AR 190-91 (describing how the Department had not received documentation demonstrating "that the primary purpose of the ABA is to provide 'public interest law services' ").
The extra-record evidence-which consists of internal Department and FedLoan Servicing email traffic-addresses this point directly. And it demonstrates that the Department changed how it interpreted the PSLF regulation by adopting the Primary Purpose standard and applying it to borrowers generally. In February 2017, a FedLoan Servicing employee emailed Foss to express "concern[ ]" as to whether his recent instruction that an "organization's 'primary purpose' [had] to be to provide one of the qualifying services" was "directly conflicting with how we have been evaluating certain [public health] organizations" based on guidance Foss had offered several years earlier.9 Pls.' Supp. Br., Ex. B. The employee referenced a prior case in which FedLoan Servicing and the Department, in applying that guidance, had jointly agreed to approve an employer even though its primary purpose did not involve a qualifying service. Id. In response, Foss instructed the employee to "do a retraction" of the employer's eligibility status. Id. Foss then requested that the employee "comb through those organizations that [they had] approved" and "provide [the Department] a list, like [the employee had] done for public education and public interest legal services. " Id. (emphasis added).
Not long afterward, in June 2017, that same FedLoan Servicing employee described to a co-worker how, a "few months ago," the Department "introduced a new concept in the review, 'primary purpose.' " Pls.' 2d Supp. Br., Ex. E. As a result, the Department was reevaluating ECFs that FedLoan Servicing had previously approved based on earlier Department guidance. Id. In fact, the employee recounted, FedLoan Servicing had provided the Department a spreadsheet of organizations that it had approved pursuant to the prior guidance, but the Department "still ha[d] not provided follow-up" on it. Id. The next month, FedLoan Servicing updated its "Employment Certification Form Manual" to reflect that "[a]s of February 23, 2017, [the Department] advised [that] a private *29not-for-profit (non-501(c)(3) ) organization should be evaluated based on [its] 'primary purpose.' " Id. , Ex. C.
This extra-record evidence shows that the Department's adoption of the Primary Purpose standard represented a change to how it interpreted and applied the PSLF regulation. To be sure, this evidence postdates the denial letters sent to Quintero-Millan and Burkhart, and some of it appears to concern the standard's application to public health organizations specifically. Nonetheless, it shows a Department employee referencing an earlier implementation of the Primary Purpose standard with regard to "public interest legal services" employers. Pls.' Supp. Br., Ex. B. That implementation apparently required the Department to request a list of such employers that had been approved beforehand so that they could be reconsidered. Id. And it does not appear that the manual used by FedLoan Servicing to apply the PSLF regulation included the Primary Purpose standard until as late as 2017. Pls.' 2d Supp. Br., Ex. E. Indeed, following the commencement of this action, the Department added the Primary Purpose standard to its on-line description of the PSLF Program's qualifications. See Pls.' Reply at 18 n.6; Federal Student Aid: Public Service Loan Forgiveness , https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service#qualify (last visited Feb. 21, 2019). This evidence simply does not comport with Defendants' contention that the prior letters sent to Burkhart and other ABA employees confirming that their employment qualified for the PSLF Program were the result of individualized mistakes or errors in applying a standard that had always been in place.
In total, this evidence makes abundantly clear that, at some point before sending the denial letters to Quintero-Millan and Burkhart in 2016, the Department changed its practices by adopting the Primary Purpose standard. Through this change, the Department modified the requirements by which a non-501(c)(3) not-for-profit organization may qualify as a public service organization by adding the condition that organizations that serve multiple purposes must show that their primary one is to provide a qualifying public service. Regardless of whether adding such a requirement was "a reasonable decision" and "consistent with the intent of the statute," as Defendants contend, Dfs.' MSJ Br. at 27, the Department's adoption of the Primary Purpose standard constituted a change to how it interpreted and applied the PSLF regulation. And as explained in more detail below, that change, at the least, required it to meet the minimum requirements for reasoned decisionmaking under the APA. See Ark Initiative v. Tidwell ,
The "School-Like Setting" Standard
According to the Individual Plaintiffs, the Department also changed its practices by adopting the School-like Setting standard, and then relied upon that standard in sending Voigt her denial letter in December 2014. Pls.' MSJ Br. at 32; AR 335-36. Under the School-like Setting standard, a public education organization under consideration for PSLF eligibility is required to demonstrate that it provides qualifying services "in a school or a school-like setting." AR 336. Over two years beforehand, when the Department determined that Voigt's employer, AILA, qualified as "an eligible public service organization"
*30under
The evidence, however, shows that the Department changed how it interpreted and applied the PSLF regulation by adopting this new standard. Once again, there is evidence in the record consistent with such a change-for example, at first, the Department told Voigt that her employment at AILA "[met] the definition of public service organization" under the regulation, only to then reverse course, AR 337-but it does not directly address the point. And, as it did with the Primary Purpose standard, the Department added the School-like Setting standard to an updated version of its ECF instruction sheet following the commencement of this suit. Pls.' MSJ Br. at 10-11 n.4; see Public Service Loan Forgiveness (PSLF): Employment Certification Form at 3, https://studentaid.ed.gov/sa/sites/default/files/public-service-employment-certification-form.pdf (last visited Feb. 21, 2019). However, the record does not contain any evidence, one way or the other, as to whether the Department applied the School-like Setting standard to any particular borrower's employment, or even inquired into the setting in which an organization provided education services, before its December 2014 denial letter to Voigt. See supra note 8.
The extra-record evidence, however, decimates Defendants' position in Voigt's case. In August 2014, Foss emailed a FedLoan Servicing employee, excitedly announcing that Department had finally "settled ... on a definition of public education!" Pls.' Supp. Br., Ex. C. Foss then went on to describe how the new definition would require a qualifying organization to "provide educational enrichment or support directly to students or their families in a school or a school-like setting." Id. This email, unrebutted by the Department, is all-but-conclusive evidence that it introduced the School-like Setting standard over two years after it informed Voigt in June 2012 that her employment at AILA qualified, and a few months before it reversed itself in her case. And even accepting Defendants' contention-for which there is no contemporaneous evidence-that the Department did not assess Voigt's employment as potentially providing public education services (as opposed to public interest law services) prior to issuing its June 2012 letter, the extra-record evidence shows that the Department adopted this new standard years after its promulgation of the PSLF regulation. See id. Moreover, as noted above, the extra-record evidence indicates that, after it adopted this new standard, the Department was forced to retract letters that had previously confirmed borrowers' eligibility based on their *31employment with organizations that provided "public education and public interest legal services." Id. , Ex. B (emphasis added).
Based on this evidence, the Court concludes that the Department changed how it interpreted and applied the PSLF regulation by adopting the School-like Setting standard, and then applied that new standard to Voigt's case. Through this change, the Department added the condition that qualifying organizations must provide public education services directly to students or their families in a school or a school-like setting.11 That requirement appears nowhere in the text of the regulation itself, which does not define the term "public education." See
The "Outright Provision of Services" Standard
Finally, the Individual Plaintiffs argue that the Department changed its practices by adopting the Outright Provision of Services standard when considering whether an organization provides a "public service for individuals with disabilities and the elderly" under
Unlike the Individual Plaintiffs' claims about the Primary Purpose and School-like Setting standards, however, their claim that the Outright Provision of Services standard represented a change to the Department's interpretation of the PSLF regulation is unsupported by the evidence. The only reference to this alleged standard in the record is in an August 2016 letter from the Department to a congresswoman who had inquired about Rudert's denial. AR 330-31. And unlike with the other standards, there is no extra-record evidence that shows a discrete shift how the Department's interpreted and applied the PSLF regulation. Indeed, the purported Outright Provision of Services standard appears only to reflect a straightforward application of the regulation to Rudert's case, rather than a new interpretation, given that its plain language mandates that a qualifying organization "[p]rovide[ ]" particular public services.
In Count I, the Individual Plaintiffs assert, among other things, that because the Department changed its interpretations of the PSLF regulation by adopting the Primary Purpose and School-like Setting standards, it must-but did not-adhere to certain minimal procedural requirements under the APA. The Court agrees. The Department argues, for various reasons, that the Primary Purpose and School-like Setting standards are "reasonable" and "consistent with the intent of the statute." Dfs.' MSJ Br. at 25-28. Maybe so. But its refusal to concede that it changed its practices when it adopted the standards effectively precluded it from satisfying the APA's basic procedural requirements when it did so.13
The APA requires that a court "hold unlawful and set aside agency action" that is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."
Therefore, by adopting new standards that modified the criteria by which borrowers' employment qualified for the PSLF Program, the Department was required to "display awareness" of its changing position, provide reasoned analysis for that decision, and take into account any serious reliance interests affected.
There is no indication in the record that, prior to issuing the denial letters to Quintero-Millan and Burkhart, the Department acknowledged that it changed its practices by adopting the Primary Purpose standard, provided a reasoned analysis for such a change, or demonstrated that it had considered the substantial reliance interests at stake. Nor did the Department meet these minimum requirements in the denial letters themselves. Indeed, the Department did not even reference the Primary Purpose standard as the basis for its decision in the denial letters issued to Quintero-Millan and Burkhart, although it now asserts that it relied on it when evaluating the eligibility of ABA employees at that time. See Dfs.' MSJ Br. at 27. And to this day, the Department has not acknowledged that it changed its practices in this regard. Therefore, Quintero-Millan and Burkhart were provided none of the process required by the APA, and the Department concedes as much. See id. at 30 (arguing that no process was required because the Department's interpretation of the PSLF regulation remained unchanged). Accordingly, the Department acted arbitrarily and capriciously when it adopted the Primary Purpose standard without the minimum requirements of reasoned decisionmaking and determined that Quintero-Millan and Burkhart's employment did not qualify on that basis. Summary judgment is thus warranted in their favor, and against Defendants, on Count I.
Likewise, the Department failed to provide Voigt with the required minimum process under the APA when it denied that her employment qualified for the PSLF program by applying the School-like Setting standard. In her December 2014 denial letter, the Department mentioned the relevant standard by informing her that it "considers 'public education services' to be services that provide educational enrichment or support directly to students or their families in a school or school-like setting." AR 336. But the Department failed to acknowledge that it had adopted this standard just a few months beforehand, failed to explain its reasoning for the change to its practices, and failed to show that it had considered the relevant *34reliance interests.14 And there is no indication in the record that it met these minimum procedural requirements through any other means, such as a public notice to borrowers, prior to issuing the denial letter to Voigt. Therefore, the Department acted arbitrarily and capriciously when it adopted the School-like Setting standard without meeting the requirements of reasoned decisionmaking and, on that basis, determined that Voigt's employment did not qualify. For this reason, summary judgment is warranted in Voigt's favor, and against Defendants, on Count I as well.
In contrast, because the record does not support the conclusion that the Department changed its interpretation of the PSLF regulation by adopting the purported Outright Provision of Services standard, the Court cannot conclude that it violated the APA's procedural requirements when it determined that Rudert's employment at the VVA did not qualify. See Select Specialty Hosp.-Bloomington, Inc. v. Sebelius ,
Having determined that Defendants are entitled to summary judgment on Rudert's procedural APA claim, the Court turns to his remaining APA claims-namely, that the Department failed to follow APA notice requirements when it adopted the purported Outright Provision of Services standard, that it unlawfully *35imposed retroactive consequences in applying the standard to Rudert, and that the standard is contrary to the PSLF statute and regulation. The Court concludes that Defendants are entitled to summary judgment on each of these claims.15
First, Defendants are entitled to summary judgment on Rudert's claim in Count II that the Department failed to follow APA notice requirements. The statute requires that agencies publish in the federal register all "substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretations of general applicability formulated and adopted by the agency."
Second, Defendants are also entitled to summary judgment on Rudert's claim in Count III that the Department imposed retroactive consequences on him by relying on a new standard to revoke the eligibility status of his employment and past loan payments. "[A] retroactive rule forbidden by the APA is one which 'alter[s] the past legal consequences of past actions.' " Celtronix Telemetry, Inc. v. FCC ,
Third, Defendants are entitled to summary judgment on Rudert's claim in Count IV that the purported Outright Provision of Services standard is substantively inconsistent with the plain language of the statute and the PSLF regulation. Even assuming for the sake of argument that this standard reflected an interpretation of the regulation, it is not plainly inconsistent with it. Indeed, "as a general rule, [the Court] defers to the [an agency's interpretation] 'unless [its] interpretation is plainly erroneous or inconsistent with the regulation.' "
Therefore, the Court first determines if either the ABA or Rudert has a property interest "that triggers Fifth Amendment due process protection." C & E Servs., Inc. of Wash. v. D.C. Water & Sewer Auth. ,
The Court agrees with Defendants that the ABA has no protected property interest in its status as a qualifying organization that provides public interest law services. The ABA's qualification under the PSLF regulation is understandably important to the ABA because of the second-order effects of that determination on its employees and recruitment. But as explained in Section II(B)(2)(b), the PSLF statute does not create any property rights for the ABA. The PSLF statute grants an entitlement to debt relief for borrowers *37determined to be eligible, but it creates no legitimate claim of entitlement to a property interest protected by the Fifth Amendment on the ABA's part. See 20 U.S.C. § 1087e(m). Accordingly, Defendants are entitled to summary judgment on the ABA's claim under the Fifth Amendment's Due Process Clause.
In addition, the statute only creates rights for those borrowers who are entitled to benefits under the PSLF Program. As discussed above, the Department determined that Rudert's employment with VVA did not qualify because VVA does not provide public services for individuals with disabilities outright, in light of the PSLF regulation's requirement that the organization "provide[ ] ... public services."
III. Plaintiffs' Motions for Extra-Record Review
Plaintiffs have also filed two motions for extra-record review. Pls.' Supp. Br.; Pls.' 2d Supp. Br. For the reasons explained below, and as reflected in the analysis in Section II(B)(3)(a), the Court will grant both motions.
It is "black-letter administrative law that in an APA case, a reviewing court 'should have before it neither more nor less information than did the agency when it made its decision.' " Hill Dermaceuticals , 709 F.3d at 47 (quoting Walter O. Boswell Mem'l Hosp. v. Heckler ,
Although the exceptions to this rule "are quite narrow and rarely invoked," CTS Corp. v. EPA ,
During and after briefing on the parties' motions for summary judgment, Plaintiffs twice moved the Court to allow for extra-record review of documents that they allege "provide irrefutable evidence of the Department's changed interpretations of the relevant statutory and regulatory *38terms at issue in this case."16 Pls.' 2d Supp. Br., Mot. Plaintiffs urge the Court to make an exception to the "default rule" in APA cases here, because they "challenge gross procedural deficiencies" in that the current record precludes judicial review as to whether the Department adopted the Primary Purpose and School-like Setting standards as new interpretations of the PSLF regulation following its promulgation. Pls.' Supp. Br. at 3-4.
The Court agrees that this is the rare APA case in which consideration of Plaintiffs' proffered extra-record evidence is permissible. First, it is the procedural-as opposed to substantive-validity of the Department's actions that are primarily at issue, so the usual rule prohibiting extra-record evidence applies with less potency. As the D.C. Circuit recently reaffirmed, "district courts may consult extra-record evidence when 'the procedural validity of the [agency's] action ... remains in serious question.' " Hill Dermaceuticals , 709 F.3d at 47 (alterations in original) (quoting Esch ,
Second, the "administrative record itself is so deficient as to preclude effective review" as to whether the Department changed its interpretation of the PSLF regulation when it adopted the Primary Purpose and School-like Setting standards.
In United Student Aid Funds , Judge Mehta recently reached the same conclusion in a highly similar circumstance. In that case, the administrative record was "silent" on "two factual issues central to resolving whether [a] Dear Colleague Letter announced a 'new rule' in a manner that satisfie[d] the APA."
*39
Defendants advance several arguments urging the Court not to consider the extra-record evidence, but none of them are persuasive.
First, Defendants argue that the extra-record evidence should not be considered because the documents at issue were not "before the agency" at the time of the decisions at issue. Defs.' Opp. to Supp. at 4. But extra-record review of documents not before the agency is precisely what the exceptions to the general rule in APA cases permit. See, e.g., Univ. of Colo. Health at Mem'l Hosp. v. Burwell ,
Second, Defendants assert that the extra-record evidence is irrelevant, for a variety of reasons-either because it postdates the agency actions at issue, or it relates to FedLoan Servicing (as opposed to Department) employees, or it concerns individual borrowers or employers not at issue in this case. Defs.' Opp. to 2d Supp. at 4. None of these arguments withstand scrutiny. The extra-record evidence is highly probative as to whether the Department changed its interpretation of the PSLF regulation by introducing the Primary Purpose and School-like Setting standards. The evidence concerning Voigt's claim makes the point the most clearly. As described in Section II(B)(3)(a), one email depicts a Department employee announcing in August 2014 that the Department had "settled" on a "definition of public education" that required such services to be provided "in a school or school-like setting." See Pls.' Supp. Br., Ex. C. He did so only after the Department told Voigt in June 2012 that her employment at AILA qualified, but well before the Department sent her a denial letter in December 2014. And although the email does not concern Voigt's case specifically, that is part of the point-it demonstrates that the Department adopted a new standard for "public education services" and then applied that standard across the board, to the borrower reflected in the email as well as others, like Voigt.
As for Quintero-Millan and Burkhart, the extra-record evidence does indeed postdate their denial letters. And to be sure, in some cases the evidence reflects communications from FedLoan Servicing employees, as opposed to the Department's-a distinction that in this context hardly makes a difference given the integrated way in which ECFs are processed. See AR 143, 160-61 (guidance instructing that all ECF submissions for non-501(c)(3) not-for-profit organizations be escalated to the Department). But in any event, the most important of these emails reflects a Department employee discussing an earlier effort to implement the Primary Purpose standard to "public interest legal services" organizations. Pls.' Supp. Br., Ex. B. And at that time, the Department apparently tasked FedLoan Servicing employees with compiling a list of ECFs that had to be reevaluated based on its introduction of this new standard.
*40Accordingly, the Court will grant Plaintiffs' Motion to Allow for Extra-Record Review and Supplemental Motion to Allow for Extra-Record Review, and, as reflected above, has considered the extra-record evidence submitted by Plaintiffs in its evaluation of their claims.
IV. Remedy
Under
Although the Court has wide discretion to apply an appropriate remedy in APA cases, it sees no reason not to apply this usual remedy to the Primary Purpose and School-like Setting standards. For their part, Defendants do not provide any particular reason why the Court should not vacate these standards until the procedural deficiencies identified above are corrected. Therefore, the Court will vacate the Primary Purpose and School-like Setting standards, as well as remand the denial letters sent to Quintero-Millan, AR 237-39, Burkhart, AR 214-15, and Voigt, AR 335-36, to the Department for further consideration consistent with this Opinion.
For all of the above reasons, the Court will, in a separate Order, grant in part and deny in part Plaintiffs' Motion for Summary Judgment, ECF No. 17 ; grant in part and deny in part Defendants' Cross-Motion for Summary Judgment, ECF No. 22 ; and grant Plaintiffs' Motion to Allow for Extra-Record Review, ECF No. 24, and Supplemental Motion to Allow for Extra-Record Review, ECF No. 35.
In evaluating these motions, the Court considered all relevant filings including, but not limited to, the following: Compl.; ECF No. 14 ("Ans.") ; ECF No. 17 at 1-4 ("Mot.") ; id. at 5-99 ("Pls.' MSJ Br."); ECF No. 22 at 1-2 ("Cross-Mot.") ; id. at 3-46 ("Defs.' MSJ Br."); ECF No. 24 ("Pls.' Supp. Br.") ; ECF No. 25 ("Pls.' Reply") ; ECF No. 30 ("Defs.' Opp. to Supp.") ; ECF No. 31 ("Defs.' Reply") ; ECF No. 32 ("Pls.' Supp. Reply") ; ECF Nos. 34-1, 34-2 (Joint Appendix, with citations designated as "AR ___"); ECF No. 35 ("Pls.' 2d Supp. Br.") ; ECF No. 36 ("Defs.' Opp. to 2d Supp.") ; ECF No. 37 ("Pls.' 2d Supp. Reply") ; and ECF No. 46 ("Oral Arg. Tr.").
Although Defendants allege that the ABA's claims fall outside the zone of interests of both the PSLF statute and regulation, Defendants cite to no authority indicating that the zone-of-interests doctrine applies to agency regulations. The Supreme Court instructs that the doctrine applies to "all statutorily created causes of action" based on the presumption that Congress " 'legislat[es] against the background of' the zone-of-interests limitation...." Lexmark Int'l, Inc. ,
The "denial letters" received by the Individual Plaintiffs are: (1) the October 12, 2016 letter to Burkhart, AR 214-15; (2) the November 19, 2016 letter to Quintero-Millan, AR 237-39; (3) the April 19, 2016 and April 21, 2016 letters to Rudert, AR 277-79, 282-83; and (4) the December 10, 2014 letter to Voigt, AR 335-36.
Because the Department's letters to the ABA fail to satisfy the second prong of the Bennett test, as discussed below, the Court need not address them here.
In addressing whether the denial letters had "an immediate or significant practical effect" on the Individual Plaintiffs, the Court may consider factual assertions in declarations attached to their motion papers. See Pharm. Research & Manufacturers of Am. v. U.S. Dep't of Health & Human Servs. ,
Throughout the briefing, the parties reference two distinct sets of agency actions: (1) the issuance of the denial letters and (2) the alleged adoption of new standards by which the Department determined whether non-501(c)(3) not-for-profit organizations qualified as public service organizations under the PSLF Program. Compare Pls.' MSJ Br. at 15-16 (arguing that the Department's "eligibility denials" are final agency actions) with id. at 25-26 (arguing that the standards reflect the Department's "changed interpretations" of the PSLF regulation). However, the parties only address the finality of the denial letters, and not the finality of the Department's decision to adopt the purportedly-new standards on which the letters were based. While Defendants argue that the denial letters, and other letters in response to ECF submissions, should not be considered final, they contend that the three contested standards reflect the Department's "consistent and unchanged" interpretation of the PSLF regulation. Dfs.' MSJ Br. at 30. And although Defendants suggested at oral argument, for the first time, that these standards may not reflect final agency action, that suggestion was made only in furtherance of their argument that the denial letters were not final. See Oral Arg. Tr. at 27:15-28:16. Therefore, for the same reasons that the denial letters are final-and in light of Defendants' position that the Department applied the standards at issue to determine that the Individual Plaintiffs' employment did not qualify under the PSLF Program, Dfs.' MSJ Br. at 27-the Court concludes that it may review the Department's adoption of the standards as final agency action, as well, see Aracely ,
The Court notes that these standards appear to have no bearing on the eligibility of borrowers who are not employed at non-501(c)(3) not-for-profit organizations, such as Federal, State and local government employees, uniformed members of the U.S. Armed Forces or the National Guard, employees of 501(c)(3) not-for-profits, or those who are otherwise eligible for the PSLF Program. See
At oral argument, the Court invited Defendants to point to any evidence in the record, or to submit additional evidence, showing that it had applied the Primary Purpose and School-like Setting standards prior to 2015 or 2014, respectively. Oral Arg. Tr. 49:25-51:17. Defendants did not do so.
In 2014, Foss had sent Voigt the Department's explanation as to why it changed its position on whether her employment at AILA qualified for the PSLF Program. See AR 334.
In its June 2012 confirmation that Voigt's employment was eligible, the Department did not specify whether AILA qualified as an organization that provided "public interest law services" or "public education services." See AR 337. Defendants contend that, at that time, the Department had mistakenly determined that AILA qualified as "a not-for-profit organization that provided public interest law services." Dfs.' MSJ Br. at 10. Plaintiffs do not challenge the Department's determination that AILA was not a qualifying public service organization on that basis. See Pls.' Reply at 30.
The Court notes that the extra-record evidence, by reflecting the adoption and application of both the Primary Purpose standard and the School-like Setting standard to borrowers in an across-the-board fashion, further underscores the finality of the denial letters sent to Quintero-Millan, Burkhart, and Voigt. See supra Section II(B)(2).
The Department appears to have also determined that VVA did not meet the regulatory requirements to provide "public interest law services" because it was not "funded in whole or in part by a local, State, Federal, or Tribal government" as set out in
Although the parties agree that the Primary Purpose and School-like Setting standards represent the Department's interpretation of its own regulations, they do not squarely address in their briefing the type of agency action by which the Department adopted the standards. See Nat'l Min. Ass'n , 758 F.3d at 251 ("The APA divides agency action ... into three boxes: legislative rules, interpretive rules, and general statements of policy."). At times, Plaintiffs suggest that the Department's adoption of the standards constituted a legislative rulemaking, which would require the Department to undergo formal notice-and-comment procedures. Pls.' MSJ Br. at 11, 30 n.15; see
Even if the Department had not yet settled on an interpretation of the term "public education services" before it adopted the School-like Setting standard in 2014, its application of that standard from that point forward would still be arbitrary and capricious for lack of any reasoned explanation. See Kirwa v. U.S. Dep't of Defense ,
In Plaintiffs' reply brief, Rudert also argues-for the first time-that the Department erred when it concluded, as a factual matter, that VVA did not directly provide a "public service for individuals with disabilities." Pls.' Reply at 28-29. The Court considers this argument forfeited. See Abdullah v. Obama ,
Plaintiffs assert that they obtained the documents submitted as extra-record evidence through two public records requests made pursuant to the Pennsylvania Right-to-Know Act, 65 P.S. § 67.101, et seq. , and directed to the Pennsylvania Higher Education Assistance Agency, which does business as FedLoan Servicing, as well as through a FOIA request by Voigt litigated in Voigt v. U.S. Dep't of Educ. , No. 17-790 (D.D.C.) (Complaint filed Apr. 28, 2017). Pls.' Supp. Br., Ex. A ¶¶ 3-5; Pls.' 2d Supp. Br., Ex. A ¶¶ 6-9. Defendants do not contest the authenticity of these documents.
Related
Cite This Page — Counsel Stack
370 F. Supp. 3d 1, Counsel Stack Legal Research, https://law.counselstack.com/opinion/am-bar-assn-v-us-dept-of-educ-cadc-2019.