Professional Documents
Culture Documents
Student Loan
Student Loan
Plaintiffs,
v. No. 4:22-cv-0908-P
Defendants.
ORDER
The Constitution vests “all legislative powers” in Congress. This
power, however, can be delegated to the executive branch. But if the
executive branch seeks to use that delegated power to create a law of
vast economic and political significance, it must have clear congressional
authorization. If not, the executive branch unconstitutionally exercises
“legislative powers” vested in Congress. In this case, the HEROES Act—
a law to provide loan assistance to military personnel defending our
nation—does not provide the executive branch clear congressional
authorization to create a $400 billion student loan forgiveness program.
The Program is thus an unconstitutional exercise of Congress’s
legislative power and must be vacated. 1
BACKGROUND
A. Title IV of the Higher Education Act
The Department of Education (“Department”) offers two types of
financial aid to help students pay for their college education—grants
and loans. 2 Grants do not have to be repaid. Id. But loans do. Id. Title
IV of the Higher Education Act of 1965 (“HEA”) covers the
administration of three types of federal student loans: (1) Direct Loans;
(2) Federal Family Education Loans (“FFEL”); and (3) Perkins Loans.
See 20 U.S.C. § 1070.
2 See Types of Aid, U.S. DEP’T OF EDUC., https://bit.ly/3S51Heu (last visited Nov.
7, 2022).
3 Federal Student Loan Portfolio, U.S. DEP’T OF EDUC., https://bit.ly/3qYd5Nm (last
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The executive branch has also recently explored its ability to forgive
student loans. Specifically, the Trump administration considered its
statutory authority under the Higher Education Relief Opportunities for
Students Act of 2003 (“HEROES Act”) to forgive student loans due to
the COVID-19 pandemic. But the Department concluded that it lacked
such authority. 4 House speaker Nancy Pelosi agreed with the
Department’s conclusion: “People think that the president of the United
States has the power for debt forgiveness. . . He does not. He can
postpone, he can delay, but he does not have that power. That has to be
[accomplished through] an act of Congress.” 5
NEWS. & WORLD REPORT (July 28, 2021, 3:16 PM), https://tinyurl.com/33ex63de.
6 Joe Biden, Joe Biden Outlines New Steps to Ease Economic Burden on Working
People, MEDIUM (Apr. 9, 2020), https://tinyurl.com/3cbw4zh2.
7 See L. Egan, Biden to Review Executive Authority to Cancel Student Debt, NBC
Who Need It Most, THE WHITE HOUSE (Aug. 24, 2022), https://bit.ly/3dATj7p.
3
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4
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D. Student-Loan Program
The Secretary invoked its authority under the HEROES Act to create
a loan-forgiveness program (“Program”) that would address the
financial harms of the COVID-19 pandemic. 11 The Secretary contends
that COVID-19 pandemic was declared a national emergency by
President Trump in 2020 and thus a “national emergency” under the
HEROES Act. Id. And according to the Secretary, every portion of the
country is a “disaster area due to COVID-19,” and “every person with a
federal student loan under title IV of the HEA” is an affected individual.
Id.
E. Procedural History
1. Plaintiffs’ Lawsuit
Plaintiffs Myra Brown and Alexander Taylor both have student
loans. ECF No. 1 at 3–4. Brown is ineligible for any debt forgiveness
under the Program because her loans are commercially held. Id. at 3.
And Taylor is ineligible for the full $20,000 in debt forgiveness under
the Program because he did not receive a Pell Grant. Id. at 3–4. Because
Brown loses out on $20,000 in debt forgiveness and Taylor loses out on
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$10,000, they disagree with the lines drawn for the Program’s eligibility
criteria. Id. at 2–3.
The same day Plaintiffs sued, they moved to enjoin the Department
“from enforcing, applying, or implementing the Program.” ECF No. 4 at
14. Shortly after, Defendants filed their opposition to Plaintiffs’ motion.
ECF No. 24.
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LEGAL STANDARD
A preliminary injunction is an “extraordinary remedy” and will be
granted only if the movants carry their burden on four requirements.
Nichols v. Alcatel USA, Inc., 532 F.3d 364, 372 (5th Cir. 2008). The
movants must show: “(1) a substantial likelihood of success on the
merits; (2) a substantial threat of irreparable injury; (3) the threatened
injury to the movant outweighs the threatened harm to the party sought
to be enjoined; and (4) granting the injunctive relief will not disserve the
public interest.” City of Dall. v. Delta Airlines, Inc., 847 F.3d 279, 285
(5th Cir. 2017) (quotation omitted). “The decision to grant or deny a
preliminary injunction is discretionary with the district court.” Miss.
Power & Light Co. v. United Gas Pipe Line Co., 760 F.2d 618, 621 (5th
Cir. 1985).
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ANALYSIS
A. Proceeding to the Merits is Appropriate
Under Federal Rule of Civil Procedure 65, “[b]efore or after beginning
the hearing on a motion for a preliminary injunction, the court may
advance the trial on the merits and consolidate it with the hearing.” FED.
R. CIV. P. 65(a)(2) (emphasis added). But if “the eventual outcome on the
merits is plain at the preliminary injunction stage, the judge should,
after due notice to the parties, merge the stages and enter a final
judgment.” Curtis 1000, Inc. v. Suess, 24 F.3d 941, 945 (7th Cir. 1994)
(emphasis added). Courts typically require that the parties “receive
clear and unambiguous notice [of the court’s intent to consolidate the
trial and the hearing] either before the hearing commences or at a time
which will still afford the parties a full opportunity to present their
respective cases.” Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981)
(quoting Pughsley v. 3750 Lake Shore Drive Coop. Bldg., 463 F.2d 1055,
1057 (7th Cir. 1972)) (alteration in original). Courts may also consolidate
without giving the parties notice if the lack of notice is not prejudicial to
either party. See Wohlfahrt v. Mem’l Med. Ctr., 658 F.2d 416, 418 (5th
Cir. 1981).
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to the merits because the Court would rule in Defendants favor and
dismiss the case for lack of standing. This argument thus fails.
Third, Defendants have not yet produced the data underlying the
Secretary’s decision. ECF No. 35 at 3–4. Like Defendants’ second
objection, the data underlying the Secretary’s decision is not material.
Plaintiffs’ central arguments are whether the Secretary lacks the
authority for the Program and whether the Program had to go through
notice-and-comment procedures before the Secretary implemented the
Program. The data underlying the Secretary’s decision—while part of
the administrative record—is not material to either issue. See Sierra
Club v. U.S. Fish & Wildlife Serv., 245 F.3d 434, 441 (5th Cir. 2001)
(stating that an issue of statutory construction is “a task which we are
competent to perform without the administrative record”); Alphapointe
v. Dep’t of Veterans Affs., 475 F. Supp. 3d 1, 12 (D.D.C. 2020) (stating
that resolving the plaintiffs’ notice-and-comment challenge “requires no
obvious need for the administrative record”).
The cases on which Defendants rely are not to the contrary. In each
case, the issue was whether the agency’s actions were “arbitrary and
capricious,” which concerns the reasonability of an agency’s decision-
making process. See ECF No. 35 at 3–4; Citizens to Pres. Overton Park,
Inc. v. Volpe, 401 U.S. 402, 414 (1971), abrogated by Califano v. Sanders,
430 U.S. 99, 105 (1977); Dep’t of Com. v. New York, 139 S. Ct. 2551, 2564
(2019). Plaintiffs bring no such claim. See ECF No. 3. Nor does the data
underlying the Secretary’s decision have any bearing on any of
Plaintiffs’ claims. So even if the data underlying the Secretary’s decision
created a fact issue, that fact issue would not be material as it would not
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B. Jurisdiction
For the Court to reach the merits, Plaintiffs must establish the
Court’s jurisdiction. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 561
(1992). Article III of the Constitution limits federal-court jurisdiction to
“cases” and “controversies.” U.S. CONST. art. III, § 2. To satisfy this
requirement, a plaintiff must establish that he has standing—a
“personal stake” in the lawsuit. See Davis v. Fed. Election Comm’n, 554
U.S. 724, 732–33 (2008). At the summary-judgment stage, a plaintiff
must provide evidence of “specific facts” to establish standing. Id. Mere
allegations will not suffice. Lujan, 504 U.S. at 560
1. Standing
Standing contains three requirements. Lujan, 504 U.S. at 560. First,
there must be a concrete injury in fact that is not conjectural or
hypothetical. Whitmore v. Arkansas, 495 U.S. 149, 149 (1990). Second,
there must be causation—a fairly traceable connection between a
plaintiff’s injury and the complained-of conduct of the defendant. Simon
v. E. Ky. Welfare Rts. Org., 426 U.S. 26, 41–42 (1976). Third, there must
be redressability—a likelihood that the requested relief will redress the
alleged injury. See Lujan, 504 U.S. at 562. These three requirements
constitute the core of Article III’s case-or-controversy requirement. See
FW/PBS, Inc. v. Dallas, 493 U.S. 215, 231 (1990). But these
requirements are relaxed when a plaintiff asserts a deprivation of a
procedural right coupled with an associated concrete interest. See Texas
v. United States, 809 F.3d 134, 150–51 (5th Cir. 2015).
10
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legislative action for which there isn’t an appropriate plaintiff.” ECF No.
32 at 57. Defendants’ main contention, however, is that Plaintiffs lack
standing. ECF No. 24 at 8. Thus, the Court first addresses whether
anybody has standing to challenge the Program. And if so, whether
Plaintiffs have standing.
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the APA’s procedural requirements. Texas v. EEOC, 933 F.3d 433, 447
(5th Cir. 2019) (citing Summers v. Earth Island Inst., 555 U.S. 488, 496
(2009)). But a bare assertion of a procedural right violation is not enough
to confer Article III standing. See Shrimpers & Fishermen of RGV v. Tex.
Comm’n on Env’t Quality, 968 F.3d 419, 426 (5th Cir. 2020). A plaintiff
must instead show a concrete injury stemming from that procedural
violation. Id.
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ii. Causation
Second, Plaintiffs argue that their injury is traceable to Defendants’
actions because Plaintiffs lost the chance to obtain more debt
forgiveness, which flows directly from Defendants’ promulgation of the
Program’s eligibility requirements that failed to undergo a notice-and-
comment period. ECF No. 4 at 11–13. Defendants do not contest this
argument. And the Court agrees with Plaintiffs.
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iii. Redressability
Third, Plaintiffs contend that there is at least some possibility that
Defendants would reconsider the eligibility requirements of the
Program if it were enjoined or vacated, which fulfills the lighter
redressability requirement that applies when a procedural injury is
alleged. ECF No. 26 at 3–4. The Court agrees. To establish standing, a
plaintiff must normally prove that a favorable ruling would redress its
entire injury at the hands of a defendant. See Clapper v. Amnesty Intern.
USA, 568 U.S. 398, 409 (2013). But “when a litigant is vested with a
procedural right, that litigant has standing if there is some possibility
that the requested relief will prompt the injury-causing party to
reconsider the decision that allegedly harmed the litigant.”
Massachusetts v. EPA, 549 U.S. 497, 518 (2007) (emphasis added). Even
if this lighter standard applies, a plaintiff must still show that it is
“likely, as opposed to merely speculative, that a favorable decision will
redress the [injury].” S. Christian Leadership Conf. v. Sup. Ct. of State
of La., 252 F.3d 781, 788 (5th Cir. 2001).
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2. Judicial Review
When a party challenges the legality of agency action, the Court must
also ensure that the agency action at issue is reviewable under the APA.
Data Mktg. P’ship, LP v. U.S. Dep’t of Lab., 45 F.4th 846, 853 (5th Cir.
2022). An agency action is reviewable if (1) there has been a final agency
action and (2) the plaintiff’s injury is within the zone of interests of the
statute allegedly violated. See 5 U.S.C. § 704; Match–E–Be–Nash–She–
Wish Band of Pottawatomi Indians v. Patchak, 567 U.S. 209, 224 (2012).
Neither party disputes that the Program is reviewable under the APA.
Still, judicial review implicates jurisdiction. Data Mktg. P’ship, 45 F.4th
at 853. As a result, the Court must consider whether the Program is
reviewable under the APA to ensure that it does “not exceed the scope
of [its] jurisdiction.” Henderson v. Shinseki, 562 U.S. 428, 434 (2011).
14 See, e.g., Lincoln, 508 U.S. at 191 (1993) (holding that an agency’s use of lump-
sum appropriation funds with no designation fell within the agency’s discretion);
Franklin v. Massachusetts, 505 U.S. 788, 817, (1992) (holding that an agency’s decision
to fire employee fell within the agency’s discretion); Heckler v. Chaney, 470 U.S. 821,
830, (1985) (holding that an agency’s decision not to enforce their own policy fell within
the agency’s discretion).
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Finality requires two things: (1) the action must be the ending result
or “consummation” of the entire agency decision-making process—not a
tentative or intermediate step in the process—and (2) the action must
determine rights or obligations that produce legal consequences. U.S.
Army Corps of Eng’rs v. Hawkes Co., 578 U.S. 590, 597, 599 (2016).
b. Zone of Interests
Along with the finality requirement, the Court may review an agency
action only if a plaintiff’s interests are “arguably within the zone of
interests to be protected or regulated by the statute that he says was
violated.” Patchak, 567 U.S. at 224. A plaintiff with Article III standing
satisfies the requirement unless their “interests are so marginally
related to or inconsistent with the purposes implicit in the statute that
it cannot reasonably be assumed that Congress intended to permit the
suit.” Thompson v. N. Am. Stainless, LP, 562 U.S. 170, 177 (2011)
(quotation omitted). But doing so is not “especially demanding,” and “the
benefit of any doubt goes to the plaintiff.” Patchak, 567 U.S. at 225.
Here, Plaintiffs have Article III standing. And because the Secretary
considers Plaintiffs “affected individuals” under the HEROES Act and
are federal loan recipients excluded from the Program, they satisfy the
zone-of-interest test. The Court may thus review the agency’s
implementation of the Program.
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C. Summary Judgment
Article I of the Constitution allows Congress to “delegate” some of its
legislative powers to administrative agencies. U.S. CONST. art. I, § 8, cl.
3; see Mistretta v. United States, 488 U.S. 361, 372 (1989). When
administering their delegated authority, agencies must comply with the
APA’s procedural and substantive requirements. See 5 U.S.C. § 553. The
procedural requirements obligate agencies to subject their substantive
rules to notice and comment unless an exception applies. See 5 U.S.C. §
553. The substantive requirements “‘requires courts to hold unlawful
and set aside agency action’ that is ‘in excess of statutory jurisdiction,
authority, or limitations.’” See Texas v. United States, 50 F.4th 498, 525
(5th Cir. 2022) (quoting 5 U.S.C. § 706(2)(C)).
Plaintiffs argue that the Program violates the APA’s procedural and
substantive requirements. The Court addresses each in turn.
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Thus, because the Program was issued under the HEROES Act,
which exempts notice and comment, the Program did not violate the
APA’s procedural requirements. Whether the HEROES Act authorized
the Program is a different story.
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23. 18 But this statement is untrue. See Kentucky v. Biden, 23 F.4th 585,
606–08 (6th Cir. 2022) (applying the major-questions doctrine to vaccine
mandate for federal employees); Georgia v. President of the U.S., 46
F.4th 1283, 1295–96 (11th Cir. 2022) (same). And even if this were true,
the Court would not presume that the doctrine does not apply to an
agency decision of vast economic and political significance because it
involves the disbursement of a federal benefit. Instead, the Court must
“presume that ‘Congress intends to make major policy decisions itself,
not leave those decisions to agencies.’” West Virginia, 142 S. Ct. at 2609
(quoting U.S. Telecom Ass’n v. FCC, 855 F.3d 381, 419 (D.C. Cir. 2017)).
21
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Both factors weigh against remand. First, the agency’s misstep is not
correctible on remand—it is a complete usurpation of congressional
authorization implicating the separation of powers required by the
Constitution. Second, the Program does not require a significant
administrative winddown period, as loan forgiveness has not started.
Thus, remand is not the appropriate remedy.
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CONCLUSION
This case involves the question of whether Congress—through the
HEROES Act—gave the Secretary authority to implement a Program
that provides debt forgiveness to millions of student-loan borrowers,
totaling over $400 billion. Whether the Program constitutes good public
policy is not the role of this Court to determine. 21 Still, no one can
plausibly deny that it is either one of the largest delegations of
legislative power to the executive branch, or one of the largest exercises
of legislative power without congressional authority in the history of the
United States.
The Court is not blind to the current political division in our country.
But it is fundamental to the survival of our Republic that the separation
of powers as outlined in our Constitution be preserved. And having
interpreted the HEROES Act, the Court holds that it does not provide
“clear congressional authorization” for the Program proposed by the
Secretary.
21 Under our system of government, public policy is typically made by the Congress
through a negotiated-and-reasoned process among the members, with input from the
President, and based on how Congress legislated, those members would then be held
accountable by their constituents each election cycle. See Speaker Sam Rayburn,
quoted in D.B. Hardeman & Donald C. Bacon, RAYBURN: A BIOGRAPHY 429 (1987) (“A
[politician] who is not willing to get out and defend what he has done will ultimately
find himself in poor shape politically.”). As President Lyndon Johnson was found of
admonishing Congress, “Come now, let us reason together.” JOHN BARTLETT, FAMILIAR
QUOTATIONS 872 (15th ed. 1980).
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Mark T. Pittman
UNITED STATES DISTRICT JUDGE
26