People of the State of New York v. Pennsylvania Higher Education Assistance…
People of the State of New York v. Pennsylvania Higher Education Assistance Agency
- Edgardo Ramos
- 1:19-cv-09155
- U.S. District Court · Southern District of New York
- 13
In People of New York v. Pennsylvania Higher Education Assistance Agency, Judge Ramos granted New York’s motion to compel older student-loan documents.
The New York Attorney General and PHEAA are affected directly: PHEAA’s motion-related discovery obligations were expanded to include responsive documents from the disputed period. The underlying allegations concern borrowers whose federal student loans PHEAA serviced, but the opinion does not resolve those allegations.
What happened
In People of the State of New York v. Pennsylvania Higher Education Assistance Agency, New York’s Attorney General sued PHEAA over alleged problems in its administration of public-service loan forgiveness and income-based repayment programs. New York asked the court to require PHEAA to produce documents created between October 3, 2013, and August 26, 2016.
PHEAA argued that the documents were outside the relevant three-year limitations period and would be too burdensome to collect and review. The court held that a six-year limitations period applied retroactively to New York’s claims under Executive Law § 63(12). It also found the requested documents relevant and proportional to the case despite the expected time and expense.
Judge Edgardo Ramos granted New York’s motion to compel. The court denied New York’s request for oral argument as moot and directed the clerk to terminate the motion.
The detailed version
- People of the State of New York v. Pennsylvania Higher Education Assistance… · No. 1:19-cv-09155
- Edgardo Ramos
- Mar. 30, 2022
Background
The New York Attorney General brought claims against the Pennsylvania Higher Education Assistance Agency, doing business as FedLoan Servicing and American Education Services. The claims concern PHEAA’s administration of the Public Service Loan Forgiveness Program and income-driven repayment plans. The Attorney General alleged that PHEAA gave borrowers incorrect information, delayed information and paperwork, provided inaccurate assistance, and engaged in other conduct violating federal and New York law.
The Attorney General served requests for 46 categories of documents. It moved under Federal Rule of Civil Procedure 37 to compel PHEAA to produce responsive documents created between October 3, 2013, and August 26, 2016. PHEAA had produced some documents from that period but refused to produce other responsive materials based on its position that the relevant limitations period was three years.
Statute of Limitations
The Attorney General argued that New York Civil Practice Law and Rules § 213(9) established a six-year limitations period for claims brought by the Attorney General under Executive Law § 63(12). PHEAA argued that the six-year period should not apply retroactively to conduct occurring before the statute took effect, relying on a New York Court of Appeals decision concerning the retroactive revival of time-barred claims.
The court agreed with the Attorney General. It relied on decisions concluding that the Legislature enacted § 213(9) quickly after a New York Court of Appeals decision had reduced the limitations period and intended the amendment to clarify that the period was six years. The court also noted that the New York Appellate Division, First Department, had affirmed the relevant lower-court decision and distinguished the authority cited by PHEAA. The court therefore held that the six-year limitations period applied retroactively to the Attorney General’s § 63(12) claims.
Relevance and Proportionality
The requested materials included internal communications, communications with borrowers, borrower complaints, manuals and training materials, audits, quality-control information, information about investigations, communications with the Department of Education and other servicers, and borrower repayment data. The court found these categories directly relevant to the Attorney General’s claims about PHEAA’s servicing practices over a multi-year period.
PHEAA argued that producing the documents would require substantial employee time and expense, including reviewing potentially more than 100,000 documents and many borrower files. The Attorney General responded that the allegations affected many borrowers over many years and that it had agreed to limit some searches by using specified search terms, custodians, and borrower groups.
Applying the discovery rule that permits discovery of nonprivileged information relevant and proportional to the needs of the case, the court recognized that production would likely require significant time and expense. It nevertheless concluded that PHEAA had not shown that the burden outweighed the likely benefit of the discovery.
Disposition
The court granted the Attorney General’s motion to compel. It denied as moot the Attorney General’s request for oral argument and directed the clerk to terminate the motion. This order addressed discovery and did not decide whether the Attorney General would ultimately prevail on the underlying claims.
Read the full 13-page opinion on CourtListener, the free public archive maintained by the Free Law Project.