Lesroy Browne v. National Collegiate Student Loan Trust

• Court: Court of Appeals for the Third Circuit
• Decided: June 16, 2025
• Docket: 24-1896
• Status: Unpublished

Opinion

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ______________ No. 24-1896 ______________ LESROY BROWNE, on behalf of himself and those similarly situated, Appellant

v.

NATIONAL COLLEGIATE STUDENT LOAN TRUST, also known as NATIONAL COLLEGIATE MASTER STUDENT LOAN TRUST 1; NATIONAL COLLEGIATE STUDENT LOAN TRUST 2003-1; NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-1; NATIONAL COLLEGIATE STUDENT LOAN TRUST 2004-2; NATIONAL COLLEGIATE STUDENT LOAN TRUST 2005-1; NATIONAL COLLEGIATE STUDENT LOAN TRUST 2005-2; NATIONAL COLLEGIATE STUDENT LOAN TRUST 2005-3; NATIONAL COLLEGIATE STUDENT LOAN TRUST 2006-1; NATIONAL COLLEGIATE STUDENT LOAN TRUST 2006-2; NATIONAL COLLEGIATE STUDENT LOAN TRUST 2006-3; NATIONAL COLLEGIATE STUDENT LOAN TRUST 2006-4; NATIONAL COLLEGIATE STUDENT LOAN TRUST 2007-1; NATIONAL COLLEGIATE STUDENT LOAN TRUST 2007-2; NATIONAL COLLEGIATE STUDENT LOAN TRUST 2007-3; NATIONAL COLLEGIATE STUDENT LOAN TRUST 2007-4; WILMINGTON TRUST CO, as Trustee for National Collegiate Student Loan Trust; U.S. BANK, N.A., in its Role as Special Servicer for the National Collegiate Student Loan Trust; TRANSWORLD SYSTEMS, INC.; JOHN DOES 1 TO 15 ______________ On Appeal from the United States District Court for the District of New Jersey (D.C. Civil No. 2:22-cv-02713) District Judge: Honorable Madeline C. Arleo ______________ Submitted Under Third Circuit L.A.R. 34.1(a) May 2, 2025

Before: KRAUSE, BIBAS, and MONTGOMERY-REEVES, Circuit Judges.

(Opinion filed: June 16, 2025) ______________ OPINION ∗ ______________ MONTGOMERY-REEVES, Circuit Judge.

In this litigation, Lesroy Browne argues that the National Collegiate Student Loan

Trust (the “Trust”) failed to follow a state licensing rule and cannot prove that it owns his

loan. He claims that these oversights relieved him of his obligation to make any

payments on his student loans after 2017. As such, according to Browne, payments he

made from 2017 to 2020 were fraudulently obtained. Browne sued the Trust, its trustees,

and debt collectors (collectively “Defendants”), alleging violations of New Jersey’s

Consumer Finance Protection Act (“CFLA”), N.J. Stat. Ann. § 17:11C-3, and New

Jersey’s Consumer Fraud Act (“CFA”), N.J. Stat. Ann. § 56:8-2, as well as unjust

enrichment. Browne sought a declaration that Defendants violated the CFLA and the

CFA; he also requested damages and injunctive relief. But the District Court dismissed

Browne’s complaint for failure to state a claim. For the reasons explained below, we will

affirm the District Court’s order. 1

First, Browne cannot assert a claim for a violation of the CFLA. New Jersey’s

intermediate appellate court has held that the CFLA does not contain a private right of

∗ This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. 1 The District Court had jurisdiction over this case under 28 U.S.C. § 1332. We have jurisdiction over this appeal under 28 U.S.C. § 1291. We review de novo a district court’s decision to grant a motion to dismiss. Kalu v. Spaulding, 113 F.4th 311, 324 (3d Cir. 2024) (citing Doe v. Univ. of the Scis., 961 F.3d 203, 208 (3d Cir. 2020)).

2 action. See Francavilla v. Absolute Resols. VI, LLC, 312 A.3d 307, 312 (N.J. Super. Ct.

App. Div. 2024). And Browne cannot use New Jersey’s Declaratory Judgment Act (N.J.

Stat. Ann. § 16-50, et seq.) to circumvent the lack of a private right of action. See In re

Comm’n of Investigation, 527 A.2d 851, 856–57 (N.J. 1987) (affirming the denial of

declaratory judgment where, absent a private right of action, the court would be unable to

grant affirmative relief). Because the highest court in New Jersey to address the issue

consistently holds that the CFLA does not contain a private right of action, we will affirm

the dismissal of Browne’s CFLA claim. 2

Second, Browne fails to sufficiently plead a violation of the CFA because the CFA

only applies to misrepresentations made during an offer to sell a product or during

negotiations about modifying an existing obligation. DepoLink Ct. Reporting & Litig.

Support Servs. v. Rochman, 64 A.3d 579, 587–88 (N.J. Super. Ct. App. Div. 2013); see

also Gonzalez v. Wilshire Credit Corp., 25 A.3d 1103, 1107 (N.J. 2011) (applying the

CFA to post-foreclosure financing negotiations). “[T]he CFA is inapplicable to

[plaintiff’s] claim against the collection agency because any misrepresentations by the

collection agency . . . occurred later on, when the collection agency was attempting to

collect the debt.” Id. at 588. Debt collection efforts alone are “not an offer to sell

2 Browne argues that Francavilla and its progeny erroneously concluded that the CFLA does not contain a private right of action. When sitting in diversity, “the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court.” Guar. Tr. Co. of N.Y. v. York, 326 U.S. 99, 109 (1945). Because the New Jersey appellate courts consistently hold that the CFLA does not provide a private right of action, we need not resolve this issue.

3 merchandise, nor d[oes] [plainitff] buy anything from the collection agency.” Id.

Because Browne’s claims all center around collection efforts on a 2007 loan without any

allegations of subsequent agreements or inducements to modify the loan, the collection

actions cannot support a CFA violation. Id.; but see Gonzalez, 25 A.3d at 1115 (holding

that a plaintiff could bring a CFA claim based on fraudulent statements where a plaintiff

was induced to enter post-foreclosure financing deals). Thus, we will affirm the District

Court’s dismissal.

Finally, Browne’s unjust enrichment claim also fails. “To prove a claim for unjust

enrichment, a party must demonstrate that the opposing party ‘received a benefit and that

retention of that benefit without payment would be unjust.’” Thieme v. Aucoin-Thieme,

151 A.3d 545, 557 (N.J. 2016) (quoting Iliadis v. Wal–Mart Stores, Inc., 922 A.2d 710,

723 (N.J. 2007)). An unjust enrichment claim also “requires that [a] plaintiff show that it

expected remuneration from the defendant at the time it performed or conferred a benefit

on defendant and that the failure of remuneration enriched defendant beyond its

contractual rights.” Iliadis, 922 A.2d at 723. But Browne does not allege that he

expected any benefits, monetary or otherwise, from the Appellees during the alleged

collection efforts. This is fatal to his claim. As such, the District Court properly

dismissed the unjust enrichment claim.

For the reasons discussed above, we will affirm the District Court’s dismissal. 3

3 Because each of Mr. Brown’s claims fails for the reasons discussed above, we need not address his other arguments.