Hyland v. Navient Corporation

Background

The plaintiffs sued Navient Corporation and Navient Solutions, LLC in a proposed class action. The attached notice states that the plaintiffs alleged Navient misled borrowers who worked for qualifying public employers about their eligibility for the federal Public Service Loan Forgiveness program. Navient denied wrongdoing. The notice also states that the court had dismissed all claims except one claim under a New York law prohibiting deceptive business practices, which was available to New York State residents, and that the court had not decided which side was right.

The parties entered a settlement agreement on April 24, 2020, after negotiations that included mediation supervised by Magistrate Judge Barbara C. Moses. The plaintiffs filed an unopposed motion seeking preliminary settlement approval, conditional certification of the settlement class, appointment of class representatives and class counsel, and approval of the proposed settlement notice.

The Settlement Class and Proposed Settlement

The court conditionally certified, for settlement purposes only, a class consisting of individuals who, from October 1, 2007 through the settlement’s effective date: (1) had or had previously had Federal Family Education Loans or Direct Loans serviced by Navient; (2) were or had been employed full-time by a qualifying public-service employer for purposes of the Public Service Loan Forgiveness program; and (3) spoke with a Navient customer-service representative about subjects related to eligibility for that program.

The notice states that the proposed settlement would require Navient to improve its internal resources, call-center training and monitoring, borrower forms, website, and chat communications concerning the program. Navient would also contribute $1.75 million to a newly formed nonprofit organization for education and student-loan counseling for public-service borrowers. Class members would receive no direct monetary recovery, but the settlement would preserve their ability to bring individual lawsuits for actual money damages. If finally approved, the settlement would release covered claims for nonmonetary relief and for monetary relief brought on a class or aggregate basis.

Ruling

The court granted the motion. It preliminarily approved the settlement agreement and its releases as fair, reasonable, and adequate under Rules 23(b)(2) and 23(e) of the Federal Rules of Civil Procedure, subject to final approval after a fairness hearing. The court also approved the proposed nonprofit recipient to launch the specified public-service loan-forgiveness project.

For settlement purposes only, the court found that the Rule 23 requirements of numerosity, common questions, typical claims, and adequate representation were satisfied. It also found that the defendants were alleged to have acted or refused to act on grounds generally applicable to the settlement class. The court appointed the named plaintiffs as class representatives, appointed the listed attorneys as class counsel, and appointed Rust Consulting as settlement administrator.

The court approved the short-form and long-form notices and the notice plan, with one specified modification. It ordered deadlines of August 28, 2020, for the motion for final approval and fee and incentive-award applications; September 11, 2020, for objections and notices of intention to appear; and September 25, 2020, for responses to objections. It scheduled the final approval hearing for October 2, 2020, at 3:00 p.m., by videoconference or teleconference. Pending that hearing, the court stayed other proceedings and enjoined settlement-class members from asserting or maintaining claims that the settlement would release. The order did not finally approve the settlement.