A federal judge in Pennsylvania has denied a motion to dismiss a lawsuit filed by the state against Navient, ruling that the suit is not pre-empted by a similar suit filed against the company by the Bureau of Consumer Financial Protection.
A copy of the ruling can be accessed by clicking here.
The BCFP filed its lawsuit against Navient nearly two years ago, 10 months before the Commonwealth of Pennsylvania filed its suit against the company, essentially accusing the student loan servicing giant of the same misdeeds — engaging in unfair, deceptive and abusive conduct that harmed student loan borrowers.
Navient has been on the offensive in this case from the very beginning, arguing in its motion to dismiss — which was filed a year ago and two months after the original suit was filed — that the Pennsylvania suit “essentially cut-and-pasted from the CFPB’s long-ago filed complaint.”
The judge did not buy Navient’s arguments that the Consumer Financial Protection Act bars states from filing what Navient referred to as a “copycat” action.
“While Navient’s arguments are creative, they do not convince the Court that the CFPA prohibits concurrent state enforcement actions,” wrote Judge Robert Mariani. “Following Navient’s position would require the Court to accept an amalgam of tenuous postulates regarding several provisions of the CFPA and a strained reading of the plain text of the statute.”
Because concurrent enforcement actions are barred in other areas of the CFPA, but not in the section relevant to this particular case, “applying the canon of statutory interpretation … is particularly appropriate,” Judge Mariani wrote. The judge also ruled that other federal statutes, the Truth in Lending Act and Higher Education Act, do not pre-empted the state’s action in this case.
Other states have followed Pennsylvania and the BCFP in filing suit against Navient.
