Davis v. Navient Corp.

Davis v. Navient Corp.

Opinion

REPORT AND RECOMMENDATION

Before the court is the motion of defendants Navient Corporation ("Navient") and Navient Solutions, LLC ("Navient Solutions") to dismiss the Complaint pursuant to Fed. R. Civ. P. ("Rule") 12(b)(6), or in the alternative to strike the class allegations pursuant to Rule 23 [13].¹ Having reviewed the parties' submissions [13, 18, 23], and heard oral argument on February 16, 2018 [24], I recommend that the motion be granted in part and denied in part.

BACKGROUND

Plaintiff's claims arise from loans which he received under the Federal Family Education Loan Program ("FFELP"). Complaint , ¶¶13, 27, 28. He alleges that Navient is a holding company that holds "the nation's largest portfolio" of FFELP loans, which are serviced by Navient Solutions, f/k/a Sallie Mae, Inc., its wholly-owned subsidiary. Id. ¶¶7, 8, 11, 12, 16.

In connection [*2]  with plaintiff's FFELP loans, he signed a Federal Stafford Loan Master Promissory Note ("MPN"). Id., P28; [13-2], pp. 2-7 of 7. Plaintiff alleges that "Navient Solutions and/or Sallie Mae Inc. was the lender pursuant to the MPN". Complaint , P33. He alleges that he was enrolled in "Income Based Repayment", and that as directed by the MPN and Navient's website, he "consulted his loan servicer Navient Solutions regarding his best options for repayment" in the Fall of 2014. Id., ¶¶34-35. He alleges that during these conversations, "Navient Solutions purposely omitted from its conversations with [him] the best repayment option for him: direct consolidation of his existing FFELP loans through the Department of Education", which offered a discounted interest rate. Id., ¶¶18, 37.

As a result of this conduct, plaintiff alleges that Navient Solutions breached an implied covenant of good faith and fair dealing (id., Count 1), and that Navient tortiously interfered with the MPN by directing Navient Solutions to purposefully withhold from borrowers the fact that the best repayment option was a direct consolidation loan with the Department of Education. Id., Count 2. Separately, plaintiff alleges that [*3]  Navient Solutions breached the MPN by "releasing personal information regarding [his] FFELP loans" to "Studebt and other fraudulent student debt companies", who used that information to "defraud and injure". Id., ¶¶97-99, Count 3.² Plaintiff purports to assert these claims on behalf of himself and a class of "[a]ll persons who held a FFELP loan with . . . Navient Solutions, formerly known as Sallie Mae, Inc., from the years 2010 to the present". Id., ¶¶68, 69.

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