Wendell Dwayne O'Neil v. USA

• Court: Court of Appeals for the Eleventh Circuit
• Decided: September 4, 2020
• Docket: 19-13094
• Status: Unpublished

Opinion

Case: 19-13094 Date Filed: 09/04/2020 Page: 1 of 9

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 19-13094 Non-Argument Calendar ________________________

D.C. Docket No. 5:18-cv-01358-LCB

WENDELL DWAYNE O’NEAL,

Plaintiff-Appellant,

versus

UNITED STATES OF AMERICA, SECRETARY OF EDUCATION, FEDLOAN INC.,

Defendants-Appellees.

________________________

Appeal from the United States District Court for the Northern District of Alabama ________________________

(September 4, 2020)

Before WILSON, JILL PRYOR and LUCK, Circuit Judges.

PER CURIAM: Case: 19-13094 Date Filed: 09/04/2020 Page: 2 of 9

Wendell Dwayne O’Neal appeals the district court’s dismissal of his claims

against FedLoan, Inc. and its grant of summary judgment in favor of the United

States and the Secretary of the Department of Education. He argues that the district

court erred by: (1) dismissing his claims against FedLoan based on res judicata and

collateral estoppel; (2) denying him leave to amend his complaint; (3) refusing to

recuse itself for bias; (4) finding that the Secretary properly referred his student loan

for collection; and (5) denying his motion to enforce a subpoena against FedLoan.

But O’Neal’s dispute is moot because, while the suit was pending before the district

court, the government discharged his student loan. Therefore, we dismiss the appeal

against FedLoan, vacate the district court’s orders and remand with instructions to

dismiss for lack of subject matter jurisdiction.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

This case started because the government attempted to collect on one of

O’Neal’s student loans. In July 2018, the government sent O’Neal a notice that it

was referring his loan for collection through the Treasury Offset Program. In

response, O’Neal submitted an administrative request objecting to the government’s

collection efforts because: he had already paid back the loan; he had discharged the

loan in bankruptcy; he had a permanent disability; he believed the debt was not

enforceable; and, at the time the loan was made, he had a condition which prevented

him from practicing the relevant occupation. The government denied his request

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and informed him that he would need to provide evidence of a permanent disability

to discharge the loan. O’Neal submitted the additional disability paperwork.

While the administrative process was ongoing, O’Neal filed this lawsuit

against FedLoan and the government, alleging that they violated his due process and

equal protection rights by referring the approximately $2,000 loan for collection and

by improperly retaining educational loan funds that should have been disbursed to

him. He claimed that the defendants “falsely certified” the loan for collection

because it was discharged in bankruptcy and that he had an agreement with his

educational institution that he would receive the full amount of his educational loans

despite withdrawing from his program before completion. As a remedy, he

requested an “equitable order” reversing the government’s decision to refer his debt

for collection and the “remittance” of funds from student loans that he had not

received.

On December 20, 2018, the district court granted FedLoan’s motion to

dismiss based on collateral estoppel and res judicata. The government then filed a

motion for summary judgment. But while the summary judgment motion was

pending, the government agreed with O’Neal’s administrative request and

discharged the loan at issue because of permanent disability. That discharge

“cancel[led] [O’Neal’s] obligation to repay the loan.” The government also agreed

to report the discharge to national consumer reporting agencies. The discharge

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notice informed O’Neal that “[a]lthough your loan . . . obligation has now been

discharged, you are subject to a 3-year post-discharge monitoring period.” If, during

those three years, O’Neal was no longer permanently disabled, the government

would reinstate the discharged loan. On July 9, 2019, O’Neal filed a notice with the

district court attaching the letter showing the discharge of his loan. He argued that

his lawsuit was not moot because the discharge did not affect his claims that the

government “falsely certified” his loan for collection and because he was subject to

the three-year monitoring period.

On July 18, 2019, the district court granted summary judgment for the

government. It acknowledged that the government had discharged O’Neal’s loan,

but the court went on to analyze the merits of the dispute. The district court found

that O’Neal had offered no evidence that showed the government’s action was

arbitrary or capricious under the Administrative Procedure Act. O’Neal now

appeals.

STANDARD OF REVIEW

Mootness is a question of law, which we review de novo. Hall v. Sec’y, Ala.,

902 F.3d 1294, 1297 (11th Cir. 2018). We review de novo a district court’s order

on a motion to dismiss, Shields v. Bellsouth Advert. & Publ’g Co., 228 F.3d 1284,

1288 (11th Cir. 2000), and for summary judgment, Buckner v. Fla. Habilitation

Network, Inc., 489 F.3d 1151, 1154 (11th Cir. 2007).

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DISCUSSION

The government argues that O’Neal’s case is moot because it discharged the

student loan debt. Article III of the Constitution limits federal courts to deciding

“Cases” and “Controversies.” U.S. Const. art. III, § 2. “A case becomes moot—

and therefore no longer a ‘Case’ or ‘Controversy’ for purposes of Article III—when

the issues presented are no longer ‘live’ or the parties lack a legally cognizable

interest in the outcome.” Atheists of Fla., Inc. v. City of Lakeland, 713 F.3d 577,

593–94 (11th Cir. 2013). Because mootness is a jurisdictional requirement, a

federal court must dismiss a moot case. Sierra Club v. U.S. E.P.A., 315 F.3d 1295,

1299 (11th Cir. 2002). In considering whether a case is moot, we “look at the

events at the present time, not at the time the complaint was filed or when the

federal order on review was issued.” Dow Jones & Co. v. Kaye, 256 F.3d 1251,

1254 (11th Cir. 2001). “If events that occur subsequent to the filing of a lawsuit

or an appeal deprive the court of the ability to give meaningful relief, then the case

is moot and must be dismissed.” Sierra Club, 315 F.3d at 1299.

Here, we have no ability to give meaningful relief. O’Neal seeks an order

setting aside the government’s action to refer his loan for collection. But the

government’s discharge “cancel[led]” and “discharged” the debt. The object of the

government’s action—the loan—no longer is in collection. Even if we declared the

government’s action in referring the loan for collection unlawful, nothing would

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happen. The loan would remain discharged consistent with the terms in the

government’s notice.

O’Neal’s argument that his case is not moot because he is subject to the three-

year monitoring period misses the mark. That condition does not create a live

controversy because O’Neal seeks relief not from the terms of the discharge of his

loan, but from the government’s decision to refer it for collection. And that no

longer is a live controversy because the loan is not in collection. The condition on

the discharge due to permanent disability has no bearing on the question of whether

the government lawfully referred the loan for collection. Any injury caused by that

condition is not at issue in the present dispute.

Further, the voluntary cessation exception to mootness does not apply here

even though the government voluntarily stopped its collection efforts. “Pursuant to

that exception, a defendant’s voluntary cessation of allegedly illegal conduct does

not moot a case.” Keohane v. Fla. Dep’t of Corr. Sec’y, 952 F.3d 1257, 1267 (11th

Cir. 2020) (internal quotation marks omitted). But “there is an important exception

to this important exception.” Troiano v. Supervisor of Elections in Palm Beach

Cty., 382 F.3d 1276, 1283 (11th Cir. 2004). Voluntarily ceased conduct will “moot

a claim when there is no reasonable expectation that the accused litigant will resume

the conduct after the lawsuit is dismissed.” Nat’l Ass’n of Bds. of Pharmacy v. Bd.

of Regents of the Univ. Sys. of Ga., 633 F.3d 1297, 1309 (11th Cir. 2011) (internal

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quotation marks omitted). “Moreover, when the defendant is not a private citizen

but a government actor, there is a rebuttable presumption that the objectionable

behavior will not recur.” Troiano, 382 F.3d at 1283. To take advantage of this

presumption, however, the government must “show[] unambiguous termination of

the complained of activity.” Doe v. Wooten, 747 F.3d 1317, 1322 (11th Cir. 2014).

To conduct the voluntary cessation analysis, we consider three factors: “(1) whether

the termination of the offending conduct was unambiguous; (2) whether the change

in government . . . conduct appears to be the result of substantial deliberation, or is

simply an attempt to manipulate jurisdiction; and (3) whether the government has

consistently . . . adhered to a new course of conduct.” Id. at 1323 (internal

quotation marks omitted); see also Flanigan’s Enters., Inc. of Ga. v. City of Sandy

Springs, 868 F.3d 1248, 1257 (11th Cir. 2017) (en banc) (applying the same

factors).

Here, the termination of the conduct was unambiguous. The government

stopped its attempts to collect on O’Neal’s debt and, in fact, discharged the debt.

Thus, the government is entitled to the rebuttable presumption, which no evidence

rebuts. There is no indication the government attempted to manipulate jurisdiction.

At first, it denied O’Neal’s request based on lack of evidence, but later granted it

when he submitted the appropriate documentation. Further, the government did not

even argue before the district court that its action made O’Neal’s suit moot. Finally,

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there is no indication that the government has attempted to reinstate the loan and

collect on it. We see no reasonable likelihood that the government will attempt to

collect on the debt after the end of this lawsuit.

Because this dispute is moot, we have no jurisdiction to consider the merits

of O’Neal’s appeal. But the timing of mootness here is important. The case became

moot when the government discharged O’Neal’s debt, which occurred before the

district court’s order on summary judgment. See Beta Upsilon Chi Upsilon Chapter

at the Univ. of Fla. v. Machen, 586 F.3d 908, 916 (11th Cir. 2009) (“[D]ismissal is

compulsory as federal subject matter jurisdiction vanishes at the instant the case is

mooted.”). The district court thus was without jurisdiction to grant summary

judgment to the government and should have dismissed the case. When we

determine that neither we nor the district court have jurisdiction because of

mootness, we vacate the district court’s decision and remand with instructions to

dismiss for lack of jurisdiction. See Hall, 902 F.3d at 1307. Therefore, we vacate

the district court’s summary judgment and remand with instructions to dismiss.

A similar rule applies to the district court’s dismissal of FedLoan. “When a

case has become moot, we do not consider the merits presented, but instead vacate

the judgments below with directions to dismiss even if a controversy did exist at

the time the district court rendered its decision.” Coal. for the Abolition of

Marijuana Prevention v. City of Atlanta, 219 F.3d 1301, 1309–10 (11th Cir. 2000)

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(citing United States v. Munsingwear, Inc., 340 U.S. 36, 39–40 (1950)); see also In

re Ghandtchi, 705 F.2d 1315, 1316 (11th Cir. 1983) (“Where a case becomes moot

after the district court enters judgment but before the appellate court has issued a

decision, the appellate court must dismiss the appeal, vacate the district court’s

judgment, and remand with instructions to dismiss the case as moot.”). Therefore,

we dismiss O’Neal’s appeal as to FedLoan, vacate the district court’s dismissal

order on the basis of collateral estoppel and res judicata, and remand with

instructions to dismiss the entire dispute as moot.

APPEAL DISMISSED; JUDGMENT VACATED AND REMANDED

with instructions.