Seo v. Education Credit Management Corporation, Case No. 1:15-cv-03703, 2016 WL 521065 (N.D. Ill. Feb. 9, 2016)
Hinshaw & Culbertson LLP lawyers convinced a district court judge in the Northern District of Illinois to grant a motion for judgment on the pleadings in the collector’s favor in a Fair Debt Collection Practices Act (FDCPA) lawsuit where the debtor asked the court to expand the definition of a "debt collector." Although the debtor alleged the collector violated the FDCPA regarding post-bankruptcy discharge collection efforts on a federal student loan, the court reasoned that the collector was a guaranty agency acting in a fiduciary relationship with the U.S. Department of Education (DOE), and therefore, not a "debt collector" under the FDCPA. The court acknowledged that federal student loans are not generally dischargeable in bankruptcy and are subject to post-petition interest, which continues to accrue during the pendency of the bankruptcy.
The debtor alleged that collection efforts continued following discharge in violation of the FDCPA. In moving for judgment on the pleadings, the collector maintained that the student loan had not been completely paid, that post-petition interest accrued during the bankruptcy, and that the collector was a nonprofit guaranty agency acting in a fiduciary relationship with the DOE and therefore not a "debt collector" under Section 1692a(6)(F)(i) of the FDCPA. In defending its position, the collector argued that the district court take judicial notice of decisions from other federal courts that have held that this collector was a guaranty agency acting pursuant to its relationship with the DOE. The court took judicial notice of the other decisions and further found that, at least, post-petition interest remained due and owing on the student loan.
This ruling demonstrates that in appropriate circumstances, defendants need not incur the burden and expense of discovery in order to get to summary judgment or go through the extensive process that most courts require with that motion, and can instead ask the court to take judicial notice as a viable option. This ruling also underscores the importance of reviewing the terms that are defined by the FDCPA while assessing the viability of any claim made.
