Student loan servicer Navient Solutions has successfully defended against motion to dismiss in a racketeering lawsuit it filed last October against Krohn & Moss, a consumer law firm based in Chicago.
Navient filed the lawsuit against the firm and a number of other defendants because they allegedly were offering tutorials on how to manufacture lawsuits alleging violations of the Telephone Consumer Protection Act as a means of getting rid of their student loans.
The defendants had filed motions to dismiss on the grounds that Navient failed to state a claim, and lack of jurisdiction. Judge Leonie Brinkema of the District Court for the Eastern District of Virginia denied the motions on Jan. 12.
In its initial complaint, Navient laid out a “scheme” allegedly being perpetrated by the defendants, who would recruit individuals with student loans and then provide them with a script to read, revoking consent to be contacted via telephone. Those individuals were then told to track all incoming calls made by Navient and — based on the statutory penalty of $500 per call under the TCPA — when the total amount of damages equaled the amount of the outstanding debt, a lawsuit against Navient was filed.
In a published report back in November, one of the defendants denied the existence of any scheme.