in re subpoena served on expedited motion to …

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

Fort Pierce Division

Case No. 2:21mc14073-MARTINEZ-MAYNARD

Case Pending in the U.S. District Court for the Northern District of California:

Sweet, et al. v. Zais [Rosenfeldt], et al., 3:19-cv-03674-WHA (N.D. Cal.)

IN RE SUBPOENA SERVED ON ELISABETH DEVOS

EXPEDITED MOTION TO TRANSFER ELISABETH DEVOS’S MOTION TO QUASH

TO THE NORTHERN DISTRICT OF CALIFORNIA AND INCORPORATED MEMORANDUM OF LAW

Manuel J. Dominguez FL Bar No.: 0054798 Email: [email protected] COHEN MILSTEIN SELLERS & TOLL PLLC 11780 U.S. Highway One | Suite N500 Palm Beach Gardens, FL 33408 Telephone: (561) 515-1400 Facsimile: (561) 515-1401

Margaret E. O’Grady (pro hac vice pending) Email: [email protected] Rebecca C. Ellis (pro hac vice pending) Email: [email protected] LEGAL SERVICES CENTER OF HARVARD LAW SCHOOL 122 Boylston Street Jamaica Plain, MA 02130 Tel.: (617) 390-3003 Fax: (617) 522-0715

Case 2:21-mc-14073-JEM Document 12 Entered on FLSD Docket 02/11/2021 of 20

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NOTICE OF EXPEDITED MOTION

PLEASE TAKE NOTICE THAT before the Honorable Magistrate Judge Shaniek

Maynard, Theresa Sweet, Chenelle Archibald, Daniel Deegan, Samuel Hood, Tresa Apodaca,

Alicia Davis, and Jessica Jacobson, representatives of the class certified in the underlying action,

(the “Sweet Plaintiffs” or “Plaintiffs”) will and hereby do move the Court pursuant to Rule 45(f)

of the Federal Rules of Civil Procedure to transfer the Motion to Quash Rule 45 Deposition

Subpoena (ECF No. 1) (“Motion to Quash”) in this matter to the Northern District of California,

to be heard by Judge William Alsup in the matter of Sweet, et al. v. Zais, et al., 3:19-cv-03674-

WHA (N.D. Cal.). Plaintiffs’ motion is based on this submission and the authorities cited herein.

The Sweet Plaintiffs request expedited treatment of this motion pursuant to Local Rule

7.1(d)(2), and request a ruling on or before February 23, 2021. A ruling on or before this date is

necessary because the Motion to Quash is part of a larger set of discovery disputes that are ongoing

in the Northern District of California, for which a hearing is scheduled for February 24, 2021.

Clarity as to whether the Motion to Quash will be heard by the Sweet Court will facilitate

management of these discovery disputes. The Sweet Plaintiffs are seeking to resolve these disputes

prior to the due date for their opening brief in support of summary judgment, currently set for

March 11, 2021.

The necessity for expedited disposition has not been caused by a lack of due diligence on

the part of the Sweet Plaintiffs. The Motion to Quash was filed on February 8, 2021, and counsel

for the Sweet Plaintiffs acted promptly in identifying local counsel, seeking pro hac vice

admittance to this Court, and filing the instant motion. The Sweet Plaintiffs aver that they have

made a bona fide effort to resolve this matter without the necessity of expedited briefing and have

been unable to do so.


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In the alternative, if the Court does not grant expedited treatment of this motion, the Sweet

Plaintiffs respectfully request that the due date for their opposition to the Motion to Quash

(currently set for February 22, 2021) be continued until seven days after the Court rules on

Plaintiffs’ Motion to Transfer.

Plaintiffs respectfully submit that oral argument is not necessary to resolve this motion.

MEMORANDUM OF LAW

I. INTRODUCTION

The Sweet Plaintiffs, on behalf of themselves and all others similarly situated, are a

certified class of Plaintiffs who have been engaged in litigation against the U.S. Department of

Education (“Department”) and its Secretary (together, the “Sweet Defendants” or “Defendants”)

in the Northern District of California since June 2019. See generally Sweet, et al. v. Zais, et al.,

No. 3:19-cv-03674-WHA (N.D. Cal.) (Alsup, J.). Until January 7, 2021, the former U.S. Secretary

of Education, Elisabeth DeVos, was a named defendant in the Sweet case. On that date, Ms. DeVos

abruptly resigned her position.

At the time of her resignation, the Sweet Plaintiffs were seeking to depose Ms. DeVos,

pursuant to a discovery order the California court had entered in October 2020. See generally Order

Denying Class Settlement, to Resume Discovery, and to Show Cause [hereinafter “Discovery

Order”], Sweet, No. 3:19-cv-03674-WHA (N.D. Cal. Oct. 19, 2020), ECF No. 146 (appended

hereto as Exhibit 1). On January 11, 2021, Plaintiffs filed a letter brief explaining why the

deposition was justified. See Discovery Letter Brief re: Deposition of Former Secretary DeVos

[hereinafter “DeVos Letter”], Sweet, No. 3:19-cv-03674-WHA (N.D. Cal. Jan. 11, 2021), ECF No.

171 (appended hereto as Exhibit 2). The court ruled on Plaintiffs’ letter almost immediately,

instructing that, due to the former Secretary’s resignation, “if counsel pursues such deposition, it


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must subpoena Ms. DeVos” as a private citizen. Order Re Discovery Letter and Related Matters

[hereinafter “DeVos Order”], Sweet, No. 3:19-cv-03674-WHA (N.D. Cal. Jan. 12, 2021), ECF No.

172 (appended hereto as Exhibit 3).

Accordingly, the Plaintiffs served a deposition subpoena on Ms. DeVos, via the same

counsel that has been litigating the Sweet case in California. The court in the Northern District of

California has already considered related issues (and is in the process of actively managing other

discovery disputes). That court is the appropriate forum for resolution of the former Secretary’s

Motion to Quash.

Pursuant to Federal Rule of Civil Procedure Rule 45(f), the Sweet Plaintiffs move to

transfer Ms. DeVos’s Motion to Quash to the Northern District of California, to be heard by the

same judge that is managing the Sweet litigation. The circumstances of this case fit squarely within

the definition of “exceptional circumstances,” Fed. R. Civ. P. 45(f), as delineated by district courts

across the country. First, deciding the Motion to Quash separately from the rest of the Sweet case

threatens to disrupt the California proceedings. Second, deciding the Motion in this District would

risk inconsistent rulings. Third, as Ms. DeVos’s Motion makes clear, both the interpretation of

Judge Alsup’s prior orders and factual familiarity with the Sweet case will be key to resolving her

Motion, and the issuing court is in a better position to address both factors. Fourth, and finally,

transfer will impose no burden on Ms. DeVos or her counsel, particularly in light of federal courts’

remote operations due to the COVID-19 pandemic, her representation by the same attorneys

litigating the Sweet matter, and private counsel from a national law firm with an office in San

Francisco.


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For these reasons, and as detailed further herein, the Sweet Plaintiffs respectfully request

that this Court transfer Ms. DeVos’s Motion to Quash to Judge Alsup’s docket in the Northern

District of California.

II. FACTUAL BACKGROUND

On June 25, 2019, the Sweet Plaintiffs filed a complaint against the Department and then-

Secretary DeVos in the Northern District of California, alleging that the Defendants had violated

Section 706 of the Administrative Procedure Act (APA) by unlawfully withholding or

unreasonably delaying action on the Sweet Plaintiffs’ applications for borrower defense to

repayment of their student loans. See Complaint, Sweet, No. 3:19-cv-03674-WHA (N.D. Cal. June

25, 2019), ECF No. 1; Discovery Order at 4. The court certified a nationwide class of

approximately 160,000 borrowers in October 2019. See Discovery Order (Ex. 1) at 4. The

Department certified an administrative record a month later, and the parties cross-moved for

summary judgment. Id. But before the court ruled on those motions, the parties entered into a

settlement agreement. The court granted preliminary approval of the settlement on May 22, 2020.

Id. at 5.

“Then came the snag.” Id. Counsel for the Sweet Plaintiffs discovered that the Defendants

had been issuing “alarmingly curt,” pro forma denial notices to tens of thousands of class members,

contrary to Plaintiffs’ understanding of what was required by the settlement agreement and the

APA. Id. This led Plaintiffs to seek an order from the court that the Defendants had breached the

settlement agreement, even before final approval had been granted. See id. at 6. On October 1,

2020, hundreds of student loan borrowers attended the fairness hearing on the proposed settlement

agreement (held over Zoom), and fourteen representatives selected by the court spoke about their

“serious concern with the proposed settlement, particularly in light of the Secretary’s recent string


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of form denials.” Id. Following the hearing, the court denied final approval of the settlement

agreement, finding that there had been no “meeting of the minds” about what a “final decision” on

a borrower defense application required. Id. at 10.

Going further, the court explained that, “[f]or eighteen months, the Secretary refused” to

issue decisions on any borrower defense applications, “largely on the grounds that such answers

required backbreaking effort and, thus, substantial time. Now, the Secretary has begun issuing

decisions at breakneck speed. But most are a perfunctory ‘Insufficient Evidence’ — without

explanation.” Id. at 6. The court found that the Secretary’s actions brought “cause for alarm,” id.

at 7, because “[b]orrowers cannot possibly understand why their applications have been denied.

They do not believe the Secretary has reviewed their borrower-defense applications in good faith

and do not know, realistically, how to proceed. It’s no wonder borrowers are confused. The

Secretary’s perfunctory denial notice does not explain the evidence reviewed or the law applied.

It provides no analysis. And, the borrower’s path forward rings disturbingly Kafkaesque.” Id. at 8.

The court concluded that “[q]uestions of legality plague the Secretary’s new perfunctory denial

notice, and the circumstances of its use appear to contradict one of the primary justifications for

her original delay.” Id. at 11. Accordingly, the court ordered “an updated record and updated

discovery to determine what is going on.” Id.

Specifically, the court opened an expedited two-month discovery period, during which the

Sweet Plaintiffs could “take both written discovery and up to five fact depositions of relevant

decisionmakers to inquire into, broadly,” three topics relating to the Department’s actions with

respect to borrower defense applications (briefly, “[t]he development and use of the form denial

letters”; “[t]he extent to which the difficulty of reviewing borrower-defense applications actually

caused or justified the Secretary's eighteen-month delay”; and “[t]he extent to which the Secretary


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has denied applications of students who have attended schools subject to findings of misconduct”).

Id. at 16. The court also stated that “class counsel may not yet depose the Secretary,” id. (emphasis

added), but noted that “[e]xtraordinary circumstances, however — for example, if the Secretary

has unique first-hand knowledge or necessary information cannot be obtained through other, less

intrusive means — may justify such a deposition at a later date.” Id. The court ordered the Plaintiffs

to file a letter brief if they sought to expand or extend discovery. See id.

During the discovery period, the Sweet Plaintiffs deposed the current and former Under

Secretaries of the Department, the current head of the Federal Student Aid division, and the current

head of the Borrower Defense Unit. These four deponents consistently disclaimed responsibility

for or personal knowledge of two out of the court’s three discovery topics. Accordingly, on January

6, 2021, counsel for the Sweet Plaintiffs informed counsel for the Defendants that they would be

filing a letter brief with the court to request leave to depose then-Secretary DeVos. Discovery to

date had made it clear that, as the senior-most policy-setting individual at the agency during the

relevant time period, Ms. DeVos had “unique first-hand knowledge or necessary information” that

could not be — because it had not been — obtained through other, less intrusive means. See DeVos

Letter (Ex. 2) at 1.

Ms. DeVos abruptly resigned as Secretary of Education the next day, on January 7, 2021.

The Sweet Plaintiffs nonetheless sought the court’s leave to depose her, as contemplated by the

October 2020 discovery order. See id. On January 12, 2021, the court entered a brief order on

Plaintiffs’ letter brief: “The Court appreciates class counsel’s request to depose Elisabeth DeVos,

but the prior order restricted deposition of ‘the Secretary’ . . . . It imposed no such restriction

regarding Citizen DeVos. Now, given her new status, if counsel pursues such deposition, it must

subpoena Ms. DeVos.” DeVos Order (Ex. 3) at 1.


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So that is what the Sweet Plaintiffs did. On January 13, 2021, the day after receiving the

court’s order, Plaintiffs’ counsel emailed government counsel to inquire whether government

counsel would accept service of a subpoena on behalf of Ms. DeVos. See Email from M. O’Grady

to R. Merritt et al., dated Jan. 13, 2021 (appended hereto as Exhibit 4). The next week, on January

18, 2021, government counsel responded that they would accept service “if we can negotiate the

subpoena’s place of compliance.” Email from K. Hancock to M. O’Grady et al., dated Jan. 18,

2021 (Ex. 4). Plaintiffs’ counsel stated their understanding that the “place of compliance” would

be over Zoom (as the other depositions in the Sweet matter had been). Email from M. O’Grady to

K. Hancock et al., dated Jan. 19, 2021 (Ex. 4). Government counsel responded that “the former

Secretary currently resides at her home in Vero Beach, Florida,” and therefore they would “accept

service of a subpoena noticing a Zoom deposition in Vero Beach, Florida.” Email from K. Hancock

to M. O’Grady et al., dated Jan. 22, 2021 (Ex. 4). On January 26, 2021, Plaintiffs served a

deposition subpoena on Ms. DeVos, via government counsel, listing the place of compliance as

“via remote technology, with witness located in Vero Beach, Florida.” ECF No. 1-1.

On February 5, 2021, government counsel emailed Plaintiffs’ counsel to state that they

would be “filing our motion to quash Plaintiffs’ subpoena for former Secretary DeVos in the

Southern District of Florida in the near future.” Email from K. Hancock to M. O’Grady et al., dated

Feb. 5, 2021 (appended hereto as Exhibit 5). Pursuant to Rule 45(f), Plaintiffs’ counsel sought

government counsel’s consent to transfer the motion to quash, once filed, to the Northern District

of California. See Email from R. Ellis to K. Hancock et al., dated Feb. 5, 2021 (Ex. 5). Government


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counsel refused.1 See Emails from K. Hancock to R. Ellis et al., dated Feb. 5, 2021 and Feb. 8,

2021 (Ex. 5).

III. LEGAL STANDARD

Federal Rule of Civil Procedure 45(f) provides that “[w]hen the court where compliance

[with a subpoena] is required did not issue the subpoena, it may transfer a motion under this rule

to the issuing court if the person subject to the subpoena consents or if the court finds exceptional

circumstances.” The proponent of transfer bears the burden of showing that exceptional

circumstances are present. See Fed. R. Civ. P. 45(f) advisory committee’s note to 2013

amendment.2 Transfer is appropriate if the exceptional circumstances “outweigh the interests of

the nonparty served with the subpoena in obtaining local resolution of the motion.” Id.

“In determining whether ‘exceptional circumstances’ exist, courts consider several factors,

including the ‘complexity, procedural posture, duration of pendency, and the nature of the issues

pending before, or already resolved by, the issuing court in the underlying litigation.’” U.S.

Plywood Integrity Coalition v. PFS Corp., No. 20-5042 BHS, 2021 WL 409968, at *3 (W.D.

Wash. Feb. 5, 2021) (quoting Judicial Watch, Inc. v. Valle Del Sol, Inc., 307 F.R.D. 30, 34 (D.D.C.

2014)); see also, e.g., United States v. Roy, No. 18-20898-MC, 2018 WL 1894731, at *3 (S.D. Fla.

Mar. 21, 2018). “[T]ransfer may be warranted in order to avoid disrupting the issuing court’s

management of the underlying litigation, as when that court has already ruled on issues presented

1 At the time of this email exchange, Plaintiffs’ counsel did not know the identity of Ms. DeVos’s private counsel. Government counsel has since represented to Plaintiffs’ counsel that, on the issue of transferring the motion to quash, they are empowered to speak on Ms. DeVos’s behalf. 2 “Courts applying Rule 45(f) routinely refer to the 2013 Note’s language in determining its scope.” U.S. Plywood Integrity Coalition v. PFS Corp., No. 20-5042 BHS, 2021 WL 409968, at *2 (W.D. Wash. Feb. 5, 2021) (citing cases).


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by the motion . . . .”3 Fed. R. Civ. P. 45(f) advisory committee’s note to 2013 amendment; see also

Roy, 2018 WL 1894731, at *3-4; Walgreen Co. v. Wyeth, Inc., No. 19-MC-60417-CIV, 2019 WL

2406338, at *1 (S.D. Fla. Mar. 26, 2019). Some courts have found judicial economy to be a

sufficiently exceptional circumstance. See In re Managed Care Litig., No. 3:20-MC-00852-IM,

2020 WL 6044557, at *4 (D. Or. Oct. 13, 2020) (citing Wright & Miller, 9A Fed. Prac. & Proc.

Civ. § 2451 (3d ed.)). The “prime concern” in deciding whether transfer is warranted “should be

avoiding burdens on local nonparties subject to subpoenas.” Id. at *3; see also Roy, 2018 WL

1894731, at *3.

IV. EXCEPTIONAL CIRCUMSTANCES JUSTIFY TRANSFER OF MS. DEVOS’S MOTION TO QUASH

Exceptional circumstances, as defined by the body of relevant case law, exist to justify

transfer of Ms. DeVos’s motion to the Northern District of California. Indeed, all of the

circumstances support transfer; there is no supportable reason for maintaining this motion in the

Southern District of Florida.

A. Litigating the Motion to Quash Separately Will Disrupt the California Proceedings.

Litigating Ms. DeVos’s Motion to Quash separately from the rest of the underlying

litigation raises a significant risk of disrupting the California proceedings. The Sweet case is a

“complex class action” that has been pending for over a year and a half. Glob. Agility Sols., Inc. v.

Barker, No. 1:19-CV-987-TWP, 2020 WL 2494625, at *2 (W.D. Tex. May 14, 2020) (transferring

motion to quash to issuing court). Indeed, Ms. DeVos spends approximately half of the pages of

her (over-length) memorandum reciting the procedural history and facts regarding discovery in the

3 “Judges in compliance districts may find it helpful to consult with the judge in the issuing court presiding over the underlying case while addressing subpoena-related motions.” Fed. R. Civ. P. 45(f) advisory committee’s note to 2013 amendment.


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underlying litigation. The California court is actively managing ongoing discovery in the matter:

for instance, there is a hearing on the Sweet Plaintiffs’ motion to compel discovery from the Sweet

Defendants scheduled for later this month. See Sweet, No. 3:19-cv-03674-WHA (N.D. Cal.), ECF

Nos. 177, 179, 180.

Although Ms. DeVos is no longer a named party to the underlying litigation, the arguments

in her Motion to Quash are “necessarily intertwined with” the Sweet case, as the question of

whether she must sit for a deposition “requires a full understanding of the complexities of” the

California litigation. U.S. Plywood, 2021 WL 409968, at *3. This is made apparent by former

Secretary DeVos’s arguments against her deposition. Specifically, she argues that Plaintiffs failed

to use other, less intrusive means to obtain the information they seek; that her information is not

relevant to the ultimate relief that Plaintiffs seek in the Sweet case; and that the deposition subpoena

is an impertinent attempt at harassment. See Motion to Quash at 17-25. In support, she appends

over 100 pages of exhibits, including deposition transcripts and written discovery responses, the

volume of which emphasizes that “resolution of the motion . . . requires delving into substantive

issues in the highly complex underlying litigation.” Fed. Home Loan Mortgage Corp. v. Deloitte

& Touche LLP, 309 F.R.D. 41, 43 (D.D.C. 2015). Her arguments are intertwined with issues

already presented to the issuing court, which is “versed” in the “nuances” of the relevant factual

and legal issues, and thus “better positioned to assess” the necessity of obtaining former Secretary

DeVos’s testimony, CFA Inst. v. Am. Soc’y of Pension Prof’ls & Actuaries, No. 1:20-MC-00018

(TNM), 2020 WL 1695050, at *2 (D.D.C. Apr. 7, 2020).

Under these circumstances, Ms. DeVos’s Motion to Quash should be treated together with

the other ongoing discovery disputes in the Sweet case. See, e.g., U.S. Plywood, 2021 WL 409968,

at *3 (“Not transferring the motion to quash . . . risks ‘disrupting the issuing court’s management


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of the underlying litigation’ and interfering with the discovery and resolution timeline . . . .”

(quoting Fed. R. Civ. P. 45(f) advisory committee’s note to 2013 amendment); Fed. Home Loan

Mortgage Corp., 309 F.R.D. at 43 (“[N]othing in the Advisory Committee Note, or subsequent

case law, precludes this Court from relying on other aspects of case management, such as

impending discovery deadlines and case-specific issues, to transfer a subpoena-related motion.”);

Glob. Agility Sols., 2020 WL 2494625, at *2 (“The underlying case has been on file since March

2019, and the court there has been immersed in the dispute for some time. . . . This Court,

meanwhile, has no familiarity with the details of the case, the scope of discovery, or the special

protection that may be required for certain evidence.”).

B. Separate Litigation Risks Inconsistent Rulings.

Moreover, although the California court has not directly ruled on the validity of the January

26, 2021 subpoena to depose Ms. DeVos, it has already considered a related issue and been

presented with some of the same arguments that Ms. DeVos raises in her Motion to Quash. The

propriety and necessity of deposing Ms. DeVos has been contemplated by the court at least since

October 2020, when Judge Alsup ordered expedited supplemental discovery in the Sweet case. See

Discovery Order (Ex. 1) at 16. In that order, Judge Alsup permitted the depositions of five

Department officials, as well as written discovery, and noted that Plaintiffs could seek the

deposition of the Secretary at a later date via letter brief. See id. After taking four depositions of

Department officials and reviewing the Defendants’ document production and written discovery,

Plaintiffs requested via letter brief an order permitting the deposition of Ms. DeVos. In Plaintiffs’

letter and its exhibits, Plaintiffs put before the California court the issues at the heart of the Motion

to Quash: whether Ms. DeVos has unique, firsthand information that cannot be obtained from other

sources. See generally DeVos Letter (Ex. 2). The court responded that, due to the Secretary’s


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resignation, she could be subpoenaed directly as a private citizen. In short: Judge Alsup has already

had this very issue before him.

“[N]umerous district courts have found exceptional circumstances” when motion practice

“in the issuing court . . . raises similar arguments to those raised in the motion sought to be

transferred.” E4 Strategic Sols., Inc. v. Pebble Ltd. P’ship, 2015 WL 12746706, at *3 (C.D. Cal.

Oct. 23, 2015); cf. In re Nonparty Subpoenas to PPG Indus., Inc., No. 2:20-MC-00296-RJC, 2020

WL 1445844, at *4 (W.D. Pa. Mar. 25, 2020) (granting transfer where “this Court’s consideration

of the merits of PPG’s Motion to Quash presents the risk of a decision inconsistent with [the issuing

court’s] ruling . . . regarding the relevance of the Rule 30(b)(6) deposition at issue”). And with

good reason: otherwise, subpoenaed parties would be encouraged to go forum-shopping, which is

exactly what happened here. Plaintiffs’ letter to the California court (Ex. 2) set forth Plaintiffs’

legal and factual justification for taking the deposition of Ms. DeVos. Her Motion to Quash in this

District is, in effect, a refutation of the arguments Plaintiffs made in the California court. Quite

simply, the Sweet Defendants did not like the direction signaled by the California court’s order,

and went searching for a different outcome by filing what is essentially an opposition brief in

another Court.

To make matters worse, Defendants have taken this opportunity to impugn the motives of

Plaintiffs, baselessly accusing them of a “transparent attempt at harassment.” Motion to Quash

(ECF No. 1) at 25. This accusation is inappropriate and plainly inaccurate. The California court

made clear in October 2020 that although “class counsel may not yet depose the Secretary”

(emphasis added), extraordinary circumstances could justify the deposition at a later date.

Discovery Order (Ex. 1) at 16. That later date has arrived — not because of improper motives on

the part of 160,000 class members who have been “h[u]ng[] out to dry” by the Department, id. at


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15, but because, as Judge Alsup found, “we are faced with a strong showing of agency pretext”

and “[w]e need to know what is really going on.” Id. Plaintiffs have determined, as they detailed

in their letter to the California court in January, that Ms. DeVos has unique knowledge about the

issues at the heart of this case. See DeVos Letter (Ex. 2) at 1-3. Seeking her deposition — precisely

as the California court contemplated Plaintiffs might have cause to do after deposing other officials

— is not only appropriate, but a necessary step to properly advocate for the interests of the class,

who have suffered “shared trauma.” Discovery Order (Ex. 1) at 17. While Ms. DeVos seeks to

dismiss Plaintiffs’ advocacy as a “PR campaign,” Motion to Quash (ECF No. 1) at 25, the

California court, after eighteen months of litigation, stated plainly that this is “not an attorney-

driven case. Class members have a genuine interest; they sought opportunity via higher education

only to be deceived by for-profit institutions and, at least in some cases, saddled with crushing

debt.” Discovery Order (Ex. 1) at 17.

C. The Motion to Quash Requires Interpretation of the Issuing Court’s Prior Rulings.

Ms. DeVos’s memorandum in support of her Motion to Quash makes clear that the

interpretation and application of the California court’s discovery order will be key to adjudicating

her motion. Indeed, the Motion to Quash spends four pages summarizing the discovery order and

the means by which the Sweet Plaintiffs have sought Ms. DeVos’s testimony. See Motion to Quash

at 7-10; see also id. at 17-25 (detailing conduct of discovery in Sweet case, including disputes

between the parties regarding the proper scope of discovery). Integrated throughout the Motion

are citations to the discovery order that contradict its plain meaning. See, e.g., Motion to Quash at

24 (claiming that Judge Alsup “did not authorize the unbounded inquiry into the supposed ‘real’

reasons for the delay”); id. at 22 (claiming that the discovery sought by Plaintiffs in accordance


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with the discovery order is “not essential—and indeed, irrelevant—to the merits of this APA

case”).

Moreover, considering the merits of Ms. DeVos’s Motion to Quash will require a court to

interpret not just one, but two of the issuing court’s orders: the October 23, 2020 Order regarding

the scope of expedited discovery (Ex. 1), and the January 12, 2021 order responding to Plaintiffs’

letter brief detailing the necessity of Ms. DeVos’s testimony (Ex. 3). As to the first, Judge Alsup

set the parameters for the supplemental discovery of which the DeVos deposition is a crucial part.

As to the second, the issuing court would be in the best position to explain what that streamlined

order meant in relation to the arguments Plaintiffs put forward in their letter brief. In these

circumstances, the issuing court “would be in the best position to interpret and rule on the effect

of” the issuing court’s own orders. In re Managed Care Litig., 2020 WL 6044557, at *5.

D. Transfer Does Not Impose Any Burden on Ms. DeVos or Her Counsel.

Litigating the Motion to Quash in the Northern District of California will not impose any

burden on Ms. DeVos or her counsel, particularly in light of how federal courts are currently

operating to address the COVID-19 pandemic.

First, all of the depositions in the Sweet litigation thus far have been conducted remotely,

and the parties have already agreed (and Ms. DeVos’s subpoena provides) that Ms. DeVos will be

deposed remotely as well.4 See ECF No. 1-1. This is now standard practice, of course. Because of

COVID-19, both the Southern District of Florida and the Northern District of California have

issued administrative orders recommending that hearings be conducted via remote technology. See

4 Notably, when the Sweet Plaintiffs noticed the deposition of another former Department official—former Acting Under Secretary James Manning—government counsel agreed to accept service of a subpoena noticing a remote deposition of Mr. Manning without raising any issue regarding the “place of compliance.”


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In re: Coronavirus Public Emergency, Sixth Order Concerning Jury Trials and Other Proceedings,

Administrative Order 2020-53, ¶ 12 (S.D. Fla., filed Aug. 11, 2020), available at

https://web.flsd.uscourts.gov/uploads/adminOrders/2020/2020-53.pdf (“strongly encouraging”

judges “to conduct court proceedings by telephone or video conferencing where practicable”);

General Order No. 72-6: In re: Coronavirus Disease Public Health Emergency, at 1 (N.D. Cal.

Sept. 16, 2020), available at https://www.cand.uscourts.gov/wp-content/uploads/general-

orders/GO_72-6_In_Re_COVID_Public_Health_Emergency_9-16-2020.pdf (all civil hearings

“will be held via telephone or video conference”).

Numerous courts have found that, because of the remote proceedings necessitated by

COVID-19, “there is no practical difference between appearing before” one court or another for

purposes of Rule 45(f). Bright House Networks, LLC v. MarkMonitor, Inc., No. 20-MC-80083-

TSH, 2020 WL 4464882, at *3 (N.D. Cal. Aug. 3, 2020).5 Accordingly, any burden on Ms. DeVos

or her counsel from transferring the Motion to Quash to the Northern District of California is

greatly minimized because of these efforts. See Fed. R. Civ. P. 45(f) advisory committee’s note to

2013 amendment (“[J]udges are encouraged to permit telecommunications methods to minimize

the burden a transfer imposes on nonparties . . . .”).

Second, even though the agreed-upon Zoom deposition is the relevant event as to Ms.

DeVos’s burden, it is worth emphasizing that Ms. DeVos herself was, of course, the Defendant in

this litigation up until her abrupt resignation last month. As such, she has certainly “participated

in the underlying litigation” in California such that the burden of transfer to her is “minimal.” See

5 See also, e.g., U.S. Plywood, 2021 WL 409968, at *4; In re Managed Care Litig., 2020 WL 6044557, at *5; Hayward Prop., L.L.C. v. Commonwealth Land Title Ins. Co., No. 20-50286, 2020 WL 3104288, at *2 (E.D. Mich. June 11, 2020); Glob. Agility Sols., 2020 WL 2494625, at *2; In re Nonparty Subpoenas to PPG Indus., Inc., No. 2:20-MC-00296-RJC, 2020 WL 1445844, at *4 (W.D. Pa. Mar. 25, 2020).


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Exist, Inc. v. Shoreline Wear, Inc., No. 15-61917-MC, 2015 WL 13694080, at *3 (S.D. Fla. Oct.

16, 2015); see also Parks, LLC v. Tyson Foods, Inc., No. 15-634, 2015 U.S. Dist. LEXIS 110490,

at *5 (W.D. Pa. Aug. 20, 2015) (finding that a nonparty will not be burdened by transferring the

motion to the issuing court because “although [nonparty] is not a named party . . . it is by no means

a stranger to matter”).

Third, Ms. DeVos’s private and government counsel are both easily able to litigate in the

Northern District of California, at no additional cost to themselves or Ms. DeVos. Government

counsel has, of course, been litigating the Sweet case there since June 2019. See, e.g., Roy, 2018

WL 1894731, at *5 (finding “comparatively minor” interest in local resolution for the subpoenaed

party where he had previously represented the defendant before the issuing court); CFA Inst., 2020

WL 1695050, at *2 (transfer would “impose an insignificant burden on” individuals who were

“represented by the same Washington, D.C. law firm that has been representing the Defendants in

the underlying case”); cf. United States v. 3M Co., No. CIV120MC00320LGRPM, 2020 WL

6587052, at *3 (S.D. Miss. Nov. 10, 2020) (noting that, where the subpoenaed individual was

“being represented by the U.S., presumably at no expense of his own,” transfer would not impose

“any potential undue costs to him” (citing Judicial Watch, 307 F.R.D. at 34–35)).

Ms. DeVos’s private counsel belongs to a large national law firm that maintains an office

in San Francisco,6 and he himself has appeared before the Ninth Circuit previously. Further, Rule

45(f) specifically provides that Ms. DeVos’s private counsel “may file papers and appear on the

motion as an officer of the issuing court,” thus obviating any need to obtain local counsel in

California. See Collins v. Benton, No. 219CV01970JADDJA, 2019 WL 5963709, at *2 (D. Nev.

Nov. 12, 2019) (citing Fed. R. Civ. P. 45(f)). On the other hand, Plaintiffs’ counsel need to be

6 See https://www.bsfllp.com/locations/san-francisco.html.


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admitted pro hac vice into the Southern District of Florida, which is an additional burden on them

that would not be imposed on Defendants’ counsel in the event of transfer.

V. CONCLUSION

For the foregoing reasons, the Sweet Plaintiffs respectfully request that this Court transfer

Ms. DeVos’s Motion to Quash to Judge Alsup’s docket in the Northern District of California.

If the Court does not grant expedited treatment of this motion, the Sweet Plaintiffs

respectfully request that the due date for their opposition to the Motion to Quash (currently set for

February 22, 2021) be continued until seven days after the Court rules on Plaintiffs’ Motion to

Transfer.

CERTIFICATE OF GOOD FAITH CONFERENCE

Pursuant to Local Rule 7.1(a)(3)(B), I certify that counsel for the Movants have conferred

with all parties or non-parties who may be affected by the relief sought in the motion in a good

faith effort to resolve the issues raised by the attached motion and have been unable to do so.

Dated: February 11, 2021 Respectfully submitted,

/s/ Manuel J. Dominguez Margaret E. O’Grady (pro hac vice

pending) Email: [email protected] Rebecca C. Ellis (pro hac vice pending) Email: [email protected] LEGAL SERVICES CENTER OF HARVARD LAW SCHOOL 122 Boylston Street Jamaica Plain, MA 02130 Tel.: (617) 390-3003 Fax: (617) 522-0715


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Manuel J. Dominguez FL Bar No.: 0054798 Email: [email protected] COHEN MILSTEIN SELLERS & TOLL PLLC 11780 U.S. Highway One | Suite N500 Palm Beach Gardens, FL 33408 Telephone: (561) 515-1400 Facsimile: (561) 515-1401 Attorneys for Movants


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CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on February 11, 2021, the foregoing Expedited Motion to Transfer

Elisabeth DeVos’s Motion to Quash to the Northern District of California, brief in support, and

exhibits were served on all parties to this action using the CM/ECF electronic filing system.

/s/ Manuel J. Dominguez__________

Manuel J. Dominguez


Exhibit 1

Case 2:21-mc-14073-JEM Document 12-1 Entered on FLSD Docket 02/11/2021 Page 1 of 18

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

THERESA SWEET, et al.,

Plaintiffs,

v.

ELISABETH DEVOS, et al.,

Defendants.

No. C 19-03674 WHA

ORDER DENYING CLASS SETTLEMENT, TO RESUME DISCOVERY, AND TO SHOW CAUSE

INTRODUCTION

Following preliminary approval of a proposed class settlement meant to restart

Department of Education review of student-loan borrower-defense applications under the

Higher Education and Administrative Procedure Acts, the Secretary’s new perfunctory denial

notices undermine the proposed settlement, contradict her original justification for delay, raise

substantial questions under the APA, and may impose irreparable harm upon the class of

student-loan borrowers. Final approval of the proposed class settlement is DENIED.

DISCOVERY shall resume immediately. Both parties shall SHOW CAUSE why the Secretary

should not be enjoined from further perfunctory denials. This case resumes on the merits.

STATEMENT

Title IV of the Higher Education Act directs the Secretary of Education “to assist in

making available the benefits of postsecondary education to eligible students” through

financial-assistance programs. Education affords most a significant opportunity, but all too

Case 3:19-cv-03674-WHA Document 146 Filed 10/19/20 Page 1 of 17Case 2:21-mc-14073-JEM Document 12-1 Entered on FLSD Docket 02/11/2021 Page 2 of 18

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often, for-profit colleges, using fraudulent enrollment tactics (such as inflated job-placement

numbers), leave students saddled with debt and little to show for it. To remedy this

misconduct, Title IV authorizes the Secretary to cancel a federal student loan (in whole or part)

and directs her to “specify in regulations which acts or omissions of an institution of higher

education a borrower may assert as a defense to repayment of a loan.” 20 U.S.C. §§ 1070,

1087e(h).

In 1994, Secretary Richard W. Riley promulgated the first variation of the “borrower

defense” rule for certain federal loans, which allowed a borrower to “assert as a defense against

repayment of his or her loan ‘any act or omission of the school attended by the student that

would give rise to a cause of action against the school under applicable State law.’” 60 Fed.

Reg. 37,768, 37,770 (July 21, 1995). Yet the system lay dormant for the next twenty years

(AR 505).

In May 2015, Corinthian Colleges, Inc., a for-profit college with more than 100

campuses and over 70,000 students, collapsed. Secretary John B. King found “that the college

had misrepresented its job placement rates.” Predictably, Corinthian students submitted a

“flood” of student-loan borrower-defense applications. So, Secretary King quickly moved to

update the infrastructure for adjudicating borrower-defense applications and appointed a

special master in June 2015 “to create and oversee a process to provide debt relief for these

Corinthian borrowers.” 81 Fed. Reg. 39,329, 39,330, 39,335 (June 16, 2016). But it remained

a game of catch up.

Over the next year, the special master granted full loan discharges to 3,787 applicants.

Yet by December, borrowers had submitted 6,691 defense applications, and by June 2016,

they’d submitted 26,603. The newly created “Borrower Defense Unit” (“BDU”) took over and

by October approved 11,822 applications and denied 245, for a total of 15,609 approvals and a

98.5% grant rate. But by that time, borrowers had submitted a total of 72,877 defense

applications (AR 339–40, 347, 369, 384–85, 392–94, 502).

In November 2016, the BDU promulgated the new borrower-defense regulations —

scheduled to take effect on July 1, 2017 — to codify the process for adjudication and to set a


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new standard for borrower-defense claims. 81 Fed. Reg. 75,926 (Nov. 1, 2016). The

regulations would require a borrower to submit an application with evidence supporting his or

her claim and allow the Secretary to designate an official to resolve the claim. See 34 C.F.R.

§§ 685.206, 685.222 (2018).

In the new year, the Secretary approved another 16,164 applications, but failed to

discharge the loans before January 20. In total, by the end of the Obama Administration, the

Secretary had approved 31,773 applications for discharge (though not necessarily effected

relief) and found 245 ineligible, for a 99.2% grant rate. Borrowers, however, had had

submitted 72,877 applications (AR 392–94, 502–03).

With the new administration came new policy. In March 2017, newly-installed Secretary

Elisabeth DeVos (our present defendant) created a Borrower Defense Review Panel to examine

the entire review process and recommend changes. After the panel also requested an Inspector

General review, the BDU “was advised” that “no additional approvals would be processed”

until the completion of both the panel and IG reviews. Nevertheless, the panel honored — and

the Secretary approved, though “with extreme displeasure” — the 16,164 borrower-defense

applications that the prior administration had approved but not discharged before January 20,

2017. By July, however, borrowers had submitted 98,868 applications in total (AR 348–49,

502–05; Dkt. No. 66-3, Ex. 7).

The IG ultimately recommended only “improved documentation and information

systems” and “did not recommend any changes to existing review processes and protocols.”

The Secretary, however, decided to develop new method for awarding relief to eligible

borrowers. She disagreed with the previous administration, which had granted full loan

discharges on (as the Secretary puts it) the assumption that borrowers subject to school

misconduct had received no value from their education. Instead, the new method would

discharge more or less of a loan based empirically upon the difference between the average

earnings of borrowers subjected to school misconduct and of students who completed similar

programs from other, misconduct-free schools (AR 006–007, 349–50, 590–91).


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Between December 2017 and May 2018, the Department reportedly decided more than

26,000 more claims — approving over 16,000 and denying over 10,000 — before a court in

this district preliminarily enjoined this new “partial relief methodology” for its likely violation

of the Privacy Act, 5 U.S.C. § 552a (AR 006–07, 350). Calvillo Manriquez v. DeVos, 345 F.

Supp. 3d 1077 (N.D. Cal. 2018) (Magistrate Judge Sallie Kim). So, in total by June 2018, the

Secretary had granted 47,942 applications (though not necessarily effected relief) and denied

or closed 12,314, for a 79.6% grant rate (or, Secretary DeVos’s decisions taken alone, a 61.5%

grant rate). Yet the flood continued. By that point, borrowers had submitted, in total, 165,880

applications, leaving 105,998 still to be decided (AR 401).1

Then, despite the backlog, the decisions stopped. By September, 139,021 applications

awaited review. That count rose to 158,110 by the end of December, and to 179,377 by the

end of March 2019. By June 2019, borrowers had filed 272,721 applications and 210,168

languished. For eighteen months, from June 2018 until December 2019 — well into this suit

— the Secretary issued no decisions at all (AR 397–404, 587–88).

Plaintiffs Theresa Sweet, Chenelle Archibald, Daniel Deegan, Samuel Hood, Tresa

Apodaca, Alicia Davis, and Jessica Jacobson filed borrower-defense applications. Contending

the Secretary’s delay to be unlawful stonewalling, they sued in June 2019 to compel the

Secretary to begin deciding applications again. An October 2019 order certified a nationwide

class of approximately 160,000 borrower-defense applicants who still awaited decision and

were not already members of Calvillo Manriquez v. DeVos, No. C 17-07210 SK, 2018 WL

5316175 (N.D. Cal. Oct. 15, 2018) (Magistrate Judge Sallie Kim).

In November, the Secretary certified an administrative record to explain her delay and

cross motions for summary judgment followed (Dkt. Nos. 56, 63, 67). On December 10, 2019,

with around 225,000 claims pending, the Secretary released an updated “tiered relief

methodology” which, similar to the previously enjoined method, would award partial loan

1 Additionally, shortly before the 2016 regulations’ effective date (July 1, 2017), the Secretary had stayed the regulations under Section 705 of the APA. In September 2018, the District Court for the District of Columbia found the delay arbitrary and capricious. Bauer v. DeVos, 325 F. Supp. 3d 74 (D.D.C. 2018) (Judge Randolph Moss).


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discharges based upon the difference in earning potential between borrowers subjected to

school misconduct and those not; though this method appeared to use data gathered at a higher

level to assuage the earlier privacy concerns (AR 589–601).

The next day, the Secretary issued 16,045 decisions; but in a marked departure from the

previous grant-denial ratio, she approved only 789 applications and denied the remaining

15,256 (AR 587–88). Previously, as noted, the Secretary’s grant ratio had been 61.5%. These

December decisions, however, represented a 95.1% denial rate. Though class counsel knew of

these early numbers, they maintain that they did not learn of the form denials, and, it seems,

could not know of the scope of their use, until later (Dkt. Nos. 121 at 13–14; 129-1 at 2–3).

Before the undersigned ruled on the motions for summary judgment, however, the parties

apparently reached a proposed class settlement. A May 22, 2020, order preliminarily approved

the proposal as it appeared to impose an adequate eighteen-month deadline for the Secretary to

decide claims and a twenty-one month deadline to effect relief, penalties for the Secretary’s

failure, reporting requirements, and it did not prejudice the merits of borrowers’ applications.

Following preliminary approval, the parties distributed class notice and solicited comments in

time for the October 1 fairness hearing. About one hundred thirty borrowers timely responded.

Then came the snag. Class counsel discovered that the Secretary had been issuing

alarmingly-curt denial notices for several months, in violation (as class counsel put it) of both

the spirit of the proposed settlement and the Administrative Procedure Act. The undersigned

requested more information from the Secretary and, given the lack of briefing, reserved the

problem for the October 1 fairness hearing (Dkt. No. 121).

In her requested response, the Secretary admitted to using four different form denial

notices. Continuing her rate of denials from December, the Secretary had, as of April, granted

only 8,800 applications and denied 36,200. By August, she had approved 13,500 applications,

yet denied 118,300, for an 89.8% denial rate. Of those applications from our class of


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borrowers, the Secretary has denied 74,000 applications and granted only 4,400, for a 94.4%

denial rate (Dkt. No. 116).2

As the fairness hearing approached, it became clear the parties could not jointly move for

approval. A September 16 order kept the fairness hearing on calendar to ensure borrowers

would be heard, whatever the outcome, but invited the parties to move for relief as they wished

on the standard 35-day track (Dkt. No. 123).

On October 1, approximately 620 participants, counsel, borrowers, and members of the

public joined the proposed-settlement fairness hearing by telephone. Of the approximately

three hundred requests to speak, the Court chose fourteen representative borrowers to comment

on the proposed settlement. The representatives expressed serious concern with the proposed

settlement, particularly in light of the Secretary’s recent string of form denials.

In the meantime, class counsel have moved for approval of the proposed settlement and

for its enforcement, seeking an order requiring the Secretary, in denying applications, to issue

explanatory details under the Department’s own regulations, the Administrative Procedure Act,

and due process. The Secretary would consent to approval of the settlement as written, but

opposes class counsel’s view of it. This motion has been fully briefed. Time is of the essence.

The parties have been heard at two recent hearings. This motion is appropriate for disposition

on the papers.

ANALYSIS

One hundred sixty thousand student-loan borrowers, defrauded by for-profit schools and

saddled with debilitating debt, have asked the Secretary of Education for the relief which

Congress has provided. All may not be entitled to relief, but all are entitled to a

comprehensible answer. For eighteen months, the Secretary refused, largely on the grounds

that such answers required backbreaking effort and, thus, substantial time. Now, the Secretary

has begun issuing decisions at breakneck speed. But most are a perfunctory “Insufficient

Evidence” — without explanation.

2 It remains unclear on this record when borrowers filed these newly-decided applications.


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1. THE SETTLEMENT IS DENIED; ENFORCEMENT IS MOOT.

A class settlement must offer fair, reasonable, and adequate relief. Lane v. Facebook,

Inc., 696 F.3d 811, 818 (9th Cir. 2012). Our proposed settlement primarily offered a timeline

for the Secretary to decide the delayed student-loan borrower-defense applications. Given the

borrower-defense applications had already languished without decision for eighteen months

(and some had languished much longer), allowing the Secretary another eighteen months from

final approval to decide the applications hardly gave cause to celebrate. But the proposed

settlement did offer the substantial benefit that neither party would seek appellate relief. Upon

final approval, the class would face acceptable delay; the Secretary would hit the ground, well,

not running, but at least moving forward.

Upon closer inspection, however, this long-awaited restart of borrower-defense

application review brings cause for alarm. The Secretary has been issuing four different form

denial notices over the past several months, since even before the settlement. The class

appears to challenge only the fourth form (Dkt. Nos. 116-4, 129 at 9). This one reads, as

received by class member Y. Colon:

Applicable Law

For Direct Loans first disbursed prior to July 1, 2017, a borrower may be eligible for a discharge (forgiveness) of part or all of one or more Direct Loans if the borrower’s school engaged in acts or omissions that would give rise to a cause of action against the school under applicable state law. See § 455(h) of the Higher Education Act of 1965, as amended, 20 U.S.C. § 1087e(h), and 34 C.F.R. § 685.206(c) and 685.222 (the Borrower Defenseregulations). ED recognizes a borrower’s defense to repayment ofa Direct Loan only if the cause of action directly relates to theDirect Loan or to the school’s provision of educational services forwhich the Direct Loan was provided. 34 C.F.R. §§685.206(c)(1),685.222(a)(5); U.S. Department of Education, Notice ofInterpretation, 60 Fed. Reg. 37,769 (Jul. 21, 1995).

Why was my application determined to be ineligible?

ED reviewed your borrower defense claims based on any evidence submitted by you in support of your application, your loan data from National Student Loan Data System (NSLDS®), and evidence provided by other borrowers.

Allegation 1: Educational Services You allege that Sanford-Brown College engaged in misconduct related to Educational Services. This allegation fails for the


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following reason(s): Insufficient Evidence. Your claim for relief on this basis therefore is denied.

Allegation 2: Other You allege that Sanford-Brown College engaged in misconduct related to Other. This allegation fails for the following reason(s): Insufficient Evidence. Your claim for relief on this basis therefore is denied.

Allegation 3: Transferring Credits You allege that Sanford-Brown College engaged in misconduct related to Transferring Credits. This allegation fails for the following reason(s): Insufficient Evidence. Your claim for relief on this basis therefore is denied.

Allegation 4: Employment Prospects You allege that Sanford-Brown College engaged in misconduct related to Employment Prospects. This allegation fails for the following reason(s): Insufficient Evidence. Your claim for relief on this basis therefore is denied.

What evidence was considered in determining my application’s ineligibility?

We reviewed evidence provided by you and other borrowers who attended your school. Additionally, we considered evidence gathered from the following sources:

NY Attorney General’s Office PA Attorney General’s Office Evidence obtained by the Department in conjunction with its regular oversight activities Publicly available securities filings made by Career Education Corporation (now known as Perdoceo Education Corporation) Multi-State Attorney General Assurance of Voluntary Compliance (effective January 2, 2019)

(Dkt. No. 108-16 at 183–85). In both written letters to the court and in the Zoom chat at the

October 1 fairness hearing, many borrowers reported receiving almost identical denial notices

(Dkt. No. 141). Borrowers cannot possibly understand why their applications have been

denied. They do not believe the Secretary has reviewed their borrower-defense applications in

good faith and do not know, realistically, how to proceed.

It’s no wonder borrowers are confused. The Secretary’s perfunctory denial notice does

not explain the evidence reviewed or the law applied. It provides no analysis. And, the

borrower’s path forward rings disturbingly Kafkaesque. Any request for reconsideration must:

(1) explain “[w]hy you believe that ED incorrectly decided your borrower defense to

repayment application;” and (2) “[i]dentify and provide any evidence that demonstrates why


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ED should approve your borrower defense to repayment claim under the applicable law set

forth above” (Dkt. No. 116-4). Without any meaningful analysis of the evidence under the

law, how might a borrower articulate such bases for reconsideration? It is, after all, impossible

to argue with an unreasoned decision.

Class counsel contend this perfunctory denial notice violates the Administrative

Procedure Act, which (they argue) requires the Secretary’s denial notices to contain not just the

conclusion but a meaningful statement of reasoning that could actually be reviewed for error.

Counsel acknowledge the APA does not require much, but it does at least require that a “notice

shall be accompanied by a brief statement of the grounds for denial.” 5. U.S.C. § 555(e). That

is, “[t]he agency’s statement must be one of ‘reasoning’; it must not be just a ‘conclusion’; it

must ‘articulate a satisfactory explanation’ for its action.” Butte County, Cal. v. Hogen, 613

F.3d 190, 194 (D.C. Cir. 2010). Counsel also argue that an unexplained application denial

violates due process, which requires a benefits determination to “provide claimants with

enough information to understand the reasons for the agency’s action,” and the Secretary’s

own regulations, which require her to resolve applications “through a fact-finding process”

resulting in a notification “of the reasons for the denial [and] the evidence that was relied

upon.” See Kapps v. Wing, 404 F.3d 105, 123 (2d Cir. 2005); 34 C.F.R. § 685.222. Against

this backdrop, then, class counsel contend that the Secretary has not, in fact, been issuing “final

decisions” and move not only for approval of the settlement, but also for the Court to enforce

counsel’s reading of “final decision” as used in the settlement agreement.

The Secretary responds that this case only concerns the timeline of decision —

emphatically not the substance of the decisions — and that the proposed settlement merely

requires her to “issue final decisions,” i.e. “decision[s] . . . resolving . . . borrower defense

application[s]” (Prop. Agmt., Dkt. No. 97-2 at § IV.A.1). In the Secretary’s view, the form

denials do just that and the APA, to the extent it applies, requires no more. The Secretary

stresses that she had been issuing this perfunctory denial notice for months before and

throughout the settlement negotiations and expected to continue that course. At bottom, the

Secretary says that if she had understood a “final decision” to require any more then she would


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not have agreed to the eighteen-month decision timeline. Thus, the Secretary does not oppose

approval of the proposed settlement as written, but opposes any enforcement or approval of the

class’s interpretation of the proposed settlement.

The essence of the problem is that we have no meeting of the minds. Federal common

law governs contracts with the United States and “we look to general principles.” Klamath

Water Users Prot. Ass’n v. Patterson, 204 F.3d 1206, 1210 (9th Cir. 1999). “[W]here there

appears to be a manifestation of assent initially, but, following appropriate interpretation or

construction, it becomes clear that the parties’ apparent assent did not in fact indicate assent at

all . . . there is no contract.” 1 WILLISTON ON CONTRACTS § 3:4 (4th ed. 2020). During

settlement negotiations, our parties used the term “final decision” to refer to the Secretary’s

work product. Each incorrectly believed its interpretation to be peerless. The Secretary

interpreted “final decision” to encompass her perfunctory denial notices, while class counsel

(yet unaware of the new form of notice) believed otherwise. The Secretary would not have

agreed to counsel’s more rigorous interpretation, and counsel would not have agreed to the

Secretary’s more liberal interpretation. Simply put, the parties bargained for materially

different rights and duties and, thus, never reached an agreement.

Counsel appears to argue that under the APA and due process the Secretary could only

have agreed to counsel’s interpretation of “final decision.” But the Secretary didn’t have to

agree to the settlement at all. If the Secretary agreed to anything, it would surely have been

her understanding of the proposed settlement. On appeal, we will, first, lose any hope of

keeping to the eighteen-month timeline (the primary benefit offered by proposed settlement)

and, second, the Secretary will very reasonably argue that she negotiated under a consistent,

material course of conduct and fairly expected the agreement to encompass that course of

conduct. We will not saddle the class with the risk of moving forward with a disputed

settlement that may fall out from underneath their feet on appeal. In these circumstances, we

ought to step back and resolve the dispute on the merits, moving as expeditiously as

circumstances permit. Final approval of the proposed class settlement is denied and counsel’s

motion to enforce falls moot.


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* * *

The Court is disappointed that it has come to this. This settlement was supposed to

jumpstart a long delayed regulatory process, intended to at least get reasoned decisions, even if

reasoned denials, to hundreds of thousands of student-loan borrowers. We will return to

litigating the merits. Questions of legality plague the Secretary’s new perfunctory denial

notice, and the circumstances of its use appear to contradict one of the primary justifications

for her original delay. We need an updated record and updated discovery to determine what is

going on before we again attempt to resolve the merits of this case. And, in the meantime, we

need to decide whether the Secretary may continue issuing this challenged form of denial to

borrowers.

2. EXPEDITED DISCOVERY IS ORDERED.

Absent a showing otherwise, an agency’s certified record, in support of either action or

inaction, enjoys a presumption of completeness and regularity. See Portland Audubon Soc. v.

Endangered Species Comm., 984 F.2d 1534, 1548 (9th Cir. 1993); Dep’t of Commerce v. New

York, 588 U.S. ___, 139 S. Ct. 2551, 2573–74 (2019). Narrow circumstances, such as a

showing of agency bad faith, permit consideration of evidence outside the administrative

record. Lands Council v. Powell, 395 F.3d 1019, 1029–30 (9th Cir. 2005). Here, in reviewing

agency inaction, the scope of review broadens (as no specific dates bound the record). Even

so, our review would ordinarily remain bounded by what the agency directly or indirectly

considered. Independence Mining Co. v. Babbitt, 105 F.3d 502, 511 (9th Cir. 1997);

Thompson v. U.S. Dep’t of Labor, 885 F.2d 551, 555 (9th Cir. 1989).

Yet meaningful review of agency conduct (activity or not) depends utterly on the record

adequately reflecting the basis for that conduct. Commerce, 139 S. Ct. at 2573. “An

incomplete record must be viewed as a ‘fictional account of the actual decisionmaking

process.’” Portland, 984 F.2d at 1548 (citing Home Box Office, Inc. v. FCC, 567 F.2d 9, 54

(D.C. Cir. 1977)) (emphasis added). In these cases, record supplementation and, in

“compelling” cases, discovery become appropriate. Portland, 984 F.2d at 1548–49; Public


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Power Council v. Johnson, 674 F.2d 791, 793–95 (9th Cir. 1982) (Kennedy, J.). We have such

a case here.

Pretext is the paradigm of agency bad faith. Even where the challenged agency conduct

itself may ultimately be lawful,

[A]gencies [must] offer genuine justifications for importantdecisions, reasons that can be scrutinized by courts and theinterested public. Accepting contrived reasons would defeat thepurpose of the enterprise. If judicial review is to be more than anempty ritual, it must demand something better . . . .

Commerce, 139 S. Ct. at 2573–76.

Here, “[w]e are presented . . . with an explanation for agency action that is incongruent

with what the record reveals about the agency’s priorities and decisionmaking process.” Id. at

2575. In justifying her delay of borrower-defense decisions at summary judgment, the

Secretary expounded upon the work involved in evaluating each application:

[T]he Department must determine whether the borrower’s schoolengaged in acts or omissions which would give rise to a cause ofaction against the institution under applicable State law. Applyingsuch a standard necessarily involves a legal analysis of what statelaw applies to a given application and whether evidence providedby the borrower establishes a cause of action under the applicablestandard.

* * *

[T]the Department has primarily focused its efforts to date onidentifying certain categories of claims, based on systemicinstitutional conduct. For each such category that has beenapproved, the Department’s BDU has analyzed and summarizedthe relevant evidence, determined and applied applicable law,established criteria for approval of that type of claim, and draftedclaim-specific review protocols.

* * *

[F]or each claim that does not fit within an established category . . .the BDU must individually review the application and anyaccompanying evidence from the borrower and determine whetherthe borrower has established a defense under the relevantregulation.

* * *

In addition to its work processing claims and determining their eligibility on the merits for borrower defense relief, the BDU has also initiated review and analysis of evidence pertaining to


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additional schools and campuses, which will allow the Department to make streamlined determinations about whether borrowers who attended those programs can meet the regulatory standards for asserting a defense and, ultimately, whether they are entitled to loan relief as a result.

and, most importantly:

Issuing final decisions on such claims is time-consuming and complex, with many steps in the adjudicatory process, and agencies must be given, within reason, the time necessary to analyze the issues presented so that they can reach considered results.

(Dkt. No. 63 at 18–19) (cleaned up) (emphasis added).

And yet, these form denial letters bear no indication of such “time-consuming,”

“complex,” legal analysis of both borrower-submitted and agency evidence, “under applicable

State law,” to “reach considered results.” Recall the perfunctory recitation of law in Ms.

Colon’s denial notice:

Applicable Law

For Direct Loans first disbursed prior to July 1, 2017, a borrower may be eligible for a discharge (forgiveness) of part or all of one or more Direct Loans if the borrower’s school engaged in acts or omissions that would give rise to a cause of action against the school under applicable state law. See § 455(h) of the Higher Education Act of 1965, as amended, 20 U.S.C. § 1087e(h), and 34 C.F.R. § 685.206(c) and 685.222 (the Borrower Defenseregulations). ED recognizes a borrower’s defense to repayment ofa Direct Loan only if the cause of action directly relates to theDirect Loan or to the school’s provision of educational services forwhich the Direct Loan was provided. 34 C.F.R. §§685.206(c)(1),685.222(a)(5); U.S. Department of Education, Notice ofInterpretation, 60 Fed. Reg. 37,769 (Jul. 21, 1995).

the recitation of evidence:

What evidence was considered in determining my application’s ineligibility?

We reviewed evidence provided by you and other borrowers who attended your school. Additionally, we considered evidence gathered from the following sources:

NY Attorney General’s Office PA Attorney General’s Office Evidence obtained by the Department in conjunction with its regular oversight activities Publicly available securities filings made by Career Education Corporation (now known as Perdoceo Education Corporation)


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Multi-State Attorney General Assurance of Voluntary Compliance (effective January 2, 2019)

and analysis:

Allegation 1: Educational Services You allege that Sanford-Brown College engaged in misconduct related to Educational Services. This allegation fails for the following reason(s): Insufficient Evidence. Your claim for relief on this basis therefore is denied.

(Dkt. No. 108-16 at 183–85).

This lack of explanation becomes more all the more galling given Ms. Colon, as so many

of our borrowers did, attended a school that has since been found to have misled students.

Indeed, after the New York Attorney General sued Sanford-Brown College, Ms. Colon

received a restitution check. Her denial notice even acknowledges that the Secretary had the

NY AG’s evidence (Dkt. Nos. 129 at 11; 142; 145). Which begs the question, why did a

student who already qualified for relief based on her school’s misconduct under state law not

now qualify for relief based on a claim “that would give rise to a cause of action against the

school under applicable State law?” See 34 C.F.R. § 685.206(c). These cases call for adequate

explanation — just as the Secretary told us they would when justifying her delay — and yet the

Secretary’s perfunctory denial notice does not come close to offering such an explanation.

We also cannot ignore that these perfunctory denial notices have accompanied a drastic

increase in both the pace of decisions and the rate of denials. In the 19 months leading up to

January 2017, the previous administration decided 32,018 applications, granting 31,773

(including those 16,164 that had been approved and for which Secretary DeVos later

authorized relief), for a 99.2% percent grant rate. When Secretary DeVos took control and

began deciding claims for the first time under her first iteration of the partial relief

methodology, she approved about 16,000 applications and denied 10,000, for a 61.5% grant

rate. In the ten months since she began issuing decisions again, however, the Secretary has

denied 118,300 of the 131,800 applications decided, an 89.8% denial rate. For our class of

borrowers specifically, the Secretary has denied 74,000 of the 78,400 applications reviewed —

a 94.4% denial rate.


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Simply put, where there’s smoke, there’s fire. After justifying eighteen months of delay

largely on the backbreaking effort required to review individual applications, distill common

evidence, and “reach considered results,” the Secretary has charged out of the gate, issuing

perfunctory denial notices utterly devoid of meaningful explanation at a blistering pace. Set

aside even the question of whether this form denials is, in fact, a legally sufficient “final

decision” under the proposed agreement, the APA, department regulations, and due process.

The issue here is that “the evidence tells a story that does not match the explanation the

Secretary gave for h[er] decision.” Judicial review of agencies is deferential — not naïve.

Courts will not suffer pretext in the review of agency conduct. Ibid.

In an ordinary case, pretext leads to remand so the agency may explain itself. Id. at 2576.

Extraordinary circumstances, however, such as a pressing deadline, compel discovery. See

Public Power, 674 F.2d at 793–95; Portland, 984 F.2d at 1548–49.

Here, time is of the essence. We don’t enjoy the luxury of seeking simply to forestall

harm — it descended upon the class long ago. Our borrowers live under the severe financial

burden of their loans. They have waited for relief, or at least decision, for eighteen months.

Many have waited much longer; and many are still waiting. In the meantime, we have lost a

full eight months chasing this failed settlement. The time to direct supplementation of the

record was eight months ago.

Atop this, the harm from delay has been compounding for the last eight months. This

form denial puts borrowers in worse positions than they started. They may have a “decision”

(though that is hotly contested), but they have neither a meaningful explanation nor (as

discussed above) any meaningful opportunity to appeal or request the Secretary’s

reconsideration. The form denial, frankly, hangs borrowers out to dry.

In sum, we are faced with a strong showing of agency pretext and the class has been

prejudiced by delay enough. We need to know what is really going on. This compels

expedited discovery. Bearing in mind that discovery against agencies is disfavored, it will be

limited, but broad enough to be effective.


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Two months should do it. The class may take both written discovery and up to five fact

depositions of relevant decisionmakers to inquire into, broadly:

1. The development and use of the form denial letters, including:(a) the submission, timeline of review, and disposition of anyrequests for reconsideration; and (b) the form of denial issuedbefore this suit and under the previous administration;

2. The extent to which the difficulty of reviewing borrower-defense applications actually caused or justified the Secretary’seighteen-month delay;

3. The extent to which the Secretary has denied applications ofstudents who have attended schools subject to findings ofmisconduct by the Secretary or any other state or federal body oragency, and the rationale underlying those denials.

For now, discovery is limited to the offices of Federal Student Aid, Postsecondary Education,

and Career, Technical, and Adult Education within the Office of the Under Secretary.

Additionally, at this time, given “[h]eads of government agencies are not normally subject to

deposition,” class counsel may not yet depose the Secretary. Kyle Engineering Co. v. Kleppe,

600 F.2d 226, 231 (9th Cir. 1979). Extraordinary circumstances, however — for example, if

the Secretary has unique first-hand knowledge or necessary information cannot be obtained

through other, less intrusive means — may justify such a deposition at a later date. See, e.g.,

Lederman v. New York City Dep’t of Parks & Rec., 731 F.3d 199, 203 (2d Cir. 2013).

The class may seek further depositions, or expansion or extension of discovery via letter

brief, to which the Secretary will have the opportunity to respond. At the end of this discovery

period, the class shall move for summary judgment as to the lawfulness of the Secretary’s

delay and the lawfulness of the perfunctory denial notice. The Secretary may then oppose

and/or cross move for the same.

3. ORDER TO SHOW CAUSE.

This leads to the final question. May the Secretary keep issuing potentially unlawful

perfunctory denials while we complete discovery and litigate the merits?

Through the class comment period and at the October 1 hearing, the undersigned has

been struck by the scope of the problem here. The consistency and passion with which the

nearly one hundred thirty written commenters, three hundred speaking requests, and the


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fourteen speakers at the fairness hearing have told their stories leads to the conclusion that their

voices are not individual, special cases within the class, but representatives of the class’s

shared trauma. This is not an attorney-driven case. Class members have a genuine interest;

they sought opportunity via higher education only to be to be deceived by for-profit institutions

and, at least in some cases, saddled with crushing debt.

To maintain the status quo until the merits can be litigated, the question arises whether

the denials ought to be preliminarily enjoined. Both parties shall show cause why the

Secretary should not be enjoined from further denial of class members’ borrower-defense

applications until a ruling on that form of denial can be had.

CONCLUSION

Final approval of the proposed settlement is DENIED. Discovery (within the bounds

described above) closes DECEMBER 24. The class’s motion for summary judgment is due

JANUARY 7 AT NOON, to be heard on the ordinary 35-day track (subject to the Secretary’s cross

motion). The October 22 hearing is VACATED. The parties SHALL SHOW CAUSE why the

Secretary should not be enjoined as described above by OCTOBER 30 AT NOON.

IT IS SO ORDERED.

Dated: October 19, 2020.

WILLIAM ALSUP UNITED STATES DISTRICT JUDGE


Exhibit 2


1

LEGAL SERVICES CENTER OF HARVARD LAW SCHOOL CENTRO DE SERVICIOS LEGALES

122 Boylston Street Jamaica Plain, Massachusetts 02130-2246

TEL: (617) 522-3003 • FAX: (617) 522-0715 January 11, 2021 Re: Sweet v. DeVos, No. 19-cv-3674-WH (N.D. Cal.) To the Honorable Judge Alsup:

Pursuant to Paragraph 34 of Your Honor’s Supplemental Standing Order (February 2018) and the October 19, 2020 Order regarding discovery in the above-captioned case (ECF No. 146), Plaintiffs write to ask the Court to order the deposition of former Secretary of Education Elisabeth (“Betsy”) DeVos, who abruptly resigned on Jan. 7, 2021. The parties met and conferred about this issue via telephone on Jan.6, 2021, and exchanged letters on Jan. 7, 2021 (prior to the Secretary’s resignation), Jan. 8 and 11, 2021.1

This Court authorized Plaintiffs to take written discovery and up to five fact depositions “to inquire into, broadly,” three topics, including “[t]he development and use of the form denial letters” (“Topic 1”) and “[t]he extent to which the difficulty of reviewing borrower defense applications actually caused or justified the Secretary’s eighteen-month delay” (“Topic 2”). (ECF No. 146 at 16.) Plaintiffs have engaged in written discovery,2 and have taken four depositions of Department officials to date:

• Colleen Nevin, Dir. of Borrower Defense at Fed. Student Aid (FSA) (excerpts attached as Ex. E);

• Mark Brown, Chief Operating Officer of FSA (excerpts attached as Ex. F);

• Diane Auer Jones, Principal Deputy Under Secretary, delegated to perform the duties of Under Secretary at the Department of Education (excerpts attached as Ex. G); and

• James Manning, former Acting Under Secretary of Education and former Acting Chief Operating Officer of FSA (excerpts attached as Ex. H). Taken together, these four deponents account for, and have personal knowledge of, the operations

of FSA and the Office of the Under Secretary (OUS) for the relevant time period. Each has testified that the political appointees at the agency set policy, while FSA implements (and never makes) policy. (Nevin 29:2-7; Jones 20:23-21:5.) However, both FSA and political deponents have disclaimed responsibility for or personal knowledge of Topics 1 and 2. This has made it clear that only Secretary DeVos, as the senior-most policy-setting individual at the agency during the relevant time period, “has unique first-hand knowledge or necessary information [that] cannot be obtained through other, less intrusive means.” ECF No. 146 at 16 (stating that “class counsel may not yet depose the Secretary”).3 She must be deposed.

Secretary DeVos Has Unique and Otherwise Unavailable Information About Topic 1. Plaintiffs have exhausted the available means of discovery and have been unable to extract

information about Topic 1. By written interrogatory (No. 16, attached as Ex. I), Plaintiffs requested information about the process and individuals involved in drafting and reviewing the Form Denial Letters at issue. Defendants’ Response is one paragraph long, provides no names, and concludes: “Based on 1 Counsel’s letters about this issue are attached as Exhibits A through D. 2 The Plaintiffs have propounded document requests and interrogatories. The Defendants provided a document production on Dec. 23, 2020, and will be producing a small number additional documents by Jan. 14, 2021. The Defendants have responded to some of the Plaintiffs’ written discovery, but negotiations between the Parties regarding the proper scope of Defendants’ responses are ongoing. The Parties have committed to reaching an understanding of Defendants’ position by January 14, 2021. 3 Plaintiffs also note that because the Secretary resigned on Jan. 7, 2020, she is now a private citizen, such that any concerns about a deposition interfering with the Secretary’s ability to perform her duties no longer apply.


2

Defendants’ current inquiry, Defendants lack knowledge or information to provide a further response to this interrogatory.”4

The deponents were no more forthcoming. When asked about the development of Forms A-D, Ms. Nevin testified that her team did not draft them: “[T]hese are not our letters.” (Nevin 86:2-4.) She stated that Mr. Brown “would probably be a better person to ask” (id. 87:3-8), and that OUS “would provide input on” “any kind of written communications” with borrowers (id. 36:3-9, 36:19-20).

Mr. Brown, however, disclaimed any involvement in the development and approval process. (Brown 181:22–183:22.) First, he stated that the “forms are a collaboration between our [policy] liaison office and our borrower defense office.” (Id. 182:20-23; see also id. 119:17 (referring to the “policy liaison office”)) But ultimately, Mr. Brown testified, the form denial letters are “statement[s] of policy” subject to “ultimate approval through the Under Secretary [Diane Auer Jones].” (Id. 173:8-21.)5

But Ms. Jones stated that she was not the person who gave final sign-off on the form denial templates, and that she did not know who did. (Jones 202:2-8.) Indeed, Ms. Jones expressed surprise at certain aspects of the templates, including the lack of identified state law underpinning the decision. (Id. 215:1-12.) Ms. Jones testified that she “would have been in an editing role in response to somebody else’s document” (id. 202:16-17), but neither Ms. Jones, nor any other deponent, nor the Defendants responding to the Interrogatories, appears to have any idea who “somebody” is.

Notably, however, both Ms. Jones and Ms. Nevin pointed to Secretary DeVos as the person in a position to approve the form denial notices. Ms. Jones stated that the Secretary is involved in implementing certain policies, and “in some cases where there’s a formal decision on loans, for example, the [S]ecretary, you know, would be the person who would sign off.” (Jones 22:4-23.)

Secretary DeVos Has Unique and Otherwise Unavailable Information Regarding Topic 2. This Court also ordered discovery into the actual cause or justification for “the Secretary’s eighteen-

month delay.” ECF No. 146 at 16. Plaintiffs have been unable to discover the real reasons for the delay, because each deponent has disclaimed any responsibility for ordering, or knowledge of the rationale for, the delay. Defendants admit that somebody told FSA to stop issuing borrower defense decisions from June 2018 through December 2019. (See, e.g., Nevin Decl., ECF No. 56-4 ¶ 65.)6 But none of the deponents were willing or able to identify the person or persons who issued that directive (Jones 180:21-181:7; Brown 224:14-18; Manning 98:22-100:17), or explain, with any consistency, the actual reasoning behind the stoppage. The deponents variously suggested that the preliminary injunction in the Calvillo Manriquez v. DeVos litigation prevented the Department from issuing any borrower defense decisions at all (Jones 138:1-9, 173:11-18, 177:4-14; Brown 98:17-25)7; that the agency would not issue any decisions until it developed a new partial relief methodology (Brown 110:11-17, 134:13-15); that it would not issue denials until it could also issue approvals, which it could not do for some reason or another (Jones 173:23-174:11, 175:14-19, 178:15-24; 184:25-185:5); that the Borrower Defense Unit was woefully understaffed (Brown 47:8-16, 88:12-17, 239:16-20); and that the agency’s IT systems needed updating (id. 88:12-20; 91:4-9; 191:8-23; 239:16-20). Notably, none of the deponents testified that the delay was due to the difficulty of reviewing applications. To the contrary, Ms. Nevin testified to exactly the opposite: “[T]he pace of the adjudications was affected by various things that made it difficult, but that didn’t mean that they couldn’t be issued. That

4 Counsel for Defendants have stated that they may provide a supplemental response to this Interrogatory. 5 Mr. Brown continued: “All of our forms … are elements of policy; they’re extensions of policy. And, so, rightfully so, they are staffed through the department, the Office of the General Counsel, the Office of the Under Secretary in order to get final approvals.” (Brown 218:19–219:1.) 6 This work stoppage followed another period in which someone ordered FSA to stop adjudicating borrower defense applications from spring 2017 through late fall 2017. (See, e.g., Nevin Decl., ECF No. 56-4 ¶¶ 56, 59, 63.) 7 See also Jones 182:17-183:7 (testifying, alternatively, that the Calvillo injunction prevented only some decisions from issuing, but others were withheld anyway, for unspecified reasons.)


3

was related to a decision up the food chain.” (Nevin 224:10-14 (emphasis added)). Likewise, none of the four deponents took responsibility for setting, developing, or even

understanding what agency policy was regarding borrower defense. Indeed, Ms. Jones testified that OUS did not make any policy decisions regarding granting or denying borrower defense applications at all during her tenure. (Jones 299:21-24 (“Q: Okay. And in terms of granting or denying borrower defense, have there been any – step one, have there been any policy decisions? A: Not to my knowledge.” ).)8

Secretary DeVos has been named as the only individual with authority to stop or restart issuing borrower defense decisions. (Manning 123:18-24; 238:24–239:1.) Mr. Manning testified that he himself had not issued such a decision while he was Acting Under Secretary, and he did not know whether he would have had the authority to do so. (Manning 237:10–238:3.) Likewise, Ms. Jones stated when asked who made the decision to stop issuing denials in light of the injunction in the Calvillo Manriquez: “[B]ecause there was pending litigation around borrower defense, I am not a senior enough official to have decision-making authority…I don’t know who made all the decisions, but I do know it wasn’t me.” Jones 182:20-183:7. But if the Under Secretary is not “senior enough,” who is? The Secretary, of course.

Indeed, is clear that Secretary DeVos maintained a close involvement with borrower defense policy. She personally requested the Inspector General Report “to review the Department’s handling of BD claims in the prior administration” in March 2017. (Manning 214:20-215:7; see also DOE00002157). She was instrumental in setting the pace of review (or lack thereof) of borrower defense applications: after the Parties reached their preliminary settlement in this case, the Secretary pushed to clear the “backlog” of applications as soon as possible, and demanded continual updates on its progress.9 Further, Secretary DeVos has made clear her hostility to the borrower defense program, for example, signing off on discharges for Corinthian claims held over from the previous administration “with extreme displeasure.” (Jones Dep. Ex. 7 (attached as Ex. H) at 5; Manning 69:12-70:17.) All of these factors point to the conclusion that Secretary DeVos is highly knowledgeable about borrower defense policy – something that cannot be said, apparently, of the other Department officials who have testified in this case.

Conclusion This Court’s concern when it ordered supplemental discovery was pretext. (ECF No. 146 at 15.)

All discovery thus far suggests that former Secretary DeVos drove the policies that caused the delay, developed and disseminated the pretextual excuses for the delay, and has knowledge about the development of the denial letters. Plaintiffs have not been able to get straight answers from her subordinates, and Plaintiffs and this Court deserve to know what really happened and why. As this Court recognized, “where there’s smoke, there’s fire.” Id. All signs here point to former Secretary DeVos herself being the one striking the match.

/s/ Margaret E. O’Grady Counsel for Plaintiffs

8 But see Jones 20:2-21:5 (“I’m responsible for overseeing the Office of Postsecondary Education and that includes both the regulatory, the policy and regulatory division[.]”); Brown 25:22-26:5 (“Diane Jones controls the policy…element of the department…. She is delegated the duties of the oversight of FSA from the secretary specifically as it relates to policy.”). 9 Nevin 101:22–102:1 (“The secretary set the elimination of the backlog, and my understanding is that, based on the numbers that were pending at the time, that Mark Brown just did the math essentially and set a target of us for 5,000 adjudications per week.”); see also Jones 128:2-130:16 (testifying that the Secretary requested regular updates, which were provided to her by Mark Brown, and which “include[ed] how many pending claims were there. Sometimes he would give updates on how many new claims had come in, and at some point he would report on, excuse me, how many claims had been adjudicated, and by adjudication meaning how many claims had the attorneys reviewed for a determination on the merit, et cetera.”).


EXHIBIT A


U.S. Department of Justice Civil Division, Federal Programs Branch

1100 L Street N.W. Washington, DC 20005

R. Charlie Merritt Tel.: (202) 616-8098 Trial Attorney [email protected]

January 7, 2021

VIA EMAIL

Margaret O’Grady Rebecca Ellis Eileen Conner Toby Merrill Legal Services Center of Harvard Law School 122 Boylston Street Jamaica Plain, MA 02130

Re: Sweet v. DeVos, No. 19-cv-3674-WH (N.D. Cal.)

Dear Counsel:

We are writing as a follow up to our call on January 6, 2021, in which you expressed your intention to seek the Court’s leave to depose Betsy DeVos, Secretary of the United States Department of Education. As the Court made clear, the well-established rule is that “‘[h]eads of government agencies are not normally subject to deposition,’” and for that reason, “class counsel may not yet depose the Secretary.” Order at 16, ECF No. 146 (Oct. 19, 2020) (quoting Kyle Engineering Co. v. Kleppe, 600 F.2d 226, 231 (9th Cir. 1979)); see also Simplex Time Recorder Co. v. Sec’y of Labor, 766 F.2d 575, 586 (D.C. Cir. 1985) (“top executive department officials should not, absent extraordinary circumstances, be called to testify regarding their reasons for taking official actions”).

In light of this high standard, we request that you let us know precisely the information that you seek to solicit from the Secretary that you have not been able to obtain elsewhere. See Oct. 19 Order at 16 (noting that a deposition of a cabinet head can only be justified by “[e]xtraordinary circumstances,” such as “if the Secretary has unique first-hand knowledge or necessary information cannot be obtained through other, less intrusive means”). The Court authorized five depositions of relevant decisionmakers in “the offices of Federal Student Aid, Postsecondary Education, and Career, Technical, and Adult Education within the Office of the Under Secretary,” id., and so far you have only taken four such depositions. Once we have a better understanding of the information you seek in a deposition of the Secretary, we are open to further conferring about a different deponent who might have relevant knowledge. We are also open to exploring other, less intrusive means of providing your requested discovery. To the extent you claim that any of our responses to your interrogatories are deficient, and seek to obtain from the Secretary information requested in any of those interrogatories, the parties have until January 14 to determine whether we can reach an agreement regarding the interrogatory responses. See ECF No. 170.

We appreciate your attention to this matter.


Sincerely,

/s/

R. Charlie Merritt


EXHIBIT B




TEL: (617) 522-3003 • FAX: (617) 522-0715

January 8, 2021

Via Email R. Charlie MerrittU.S. Department of JusticeCivil Division


Counsel: Thank you for your letter. Though the Court acknowledged that “[h]eads of government agencies are not normally subject to deposition,” Judge Alsup clearly anticipated that Plaintiffs might require the deposition of (now former) Secretary DeVos. ECF No. 146 at 16 (not allowing class counsel to depose the Secretary “at this time” or “yet,” and noting that “the class may seek further depositions, or expansion or extension of discovery via letter brief….”). Here, as we briefly summarized on Wednesday’s call, the “extraordinary circumstances” justifying a deposition of the Secretary are clearly present. As you are well aware, having attended all four depositions in the last two months, we have questioned the relevant Acting Under Secretaries, the Chief Operating Officers, and the Director of Borrower Defense about the three discovery topics ordered by the Court. They all left holes that can only be filled by Secretary DeVos’s personal knowledge. Specifically, the deponents made clear that Secretary DeVos “has unique first-hand knowledge or necessary information [that] cannot be obtained through other, less intrusive means.” ECF No. 146 at 16, including but not limited to the following:

• The development and approval of Form Denial Notices A-D. See, e.g., Nevin 86:2-4 (“[T]heseare not our letters”); see also Brown 173:8-21 (the form denial letters are “statement[s] of policy”subject to “ultimate approval through the Under Secretary [Diane Auer Jones]”); but see Jones202:2-8 (stating that she was not the person who gave final sign-off on the form denial templates,and that she did not know who did).

• Who ordered FSA to stop issuing borrower defense decisions from June 2018 throughDecember 2019 and why; i.e., the actual cause or justification for “the Secretary’s eighteen-month delay.” ECF No. 146 at 16. See, e.g., Manning 238:24–239:1; 123:18-24 (identifyingSecretary DeVos as the only individual with authority to stop or restart issuing borrower defensedecisions); see also Nevin 224:10-14 (“[T]he pace of the adjudications was affected by variousthings that made it difficult, but that didn’t mean that they couldn’t be issued. That was related toa decision up the food chain.”).

• Borrower Defense Policy. See DOE00002157 (Secretary DeVos ordered the IG Report to review


the prior administration’s handling of BD policy); Manning 214:20-215:7; Nevin 101:22–102:1; see also Jones 128:13-131:21 (regarding updates about BD adjudication pacing requested by Secretary DeVos); Nevin 29:2-7 (FSA implements, but does not set policy); compare Jones 299:21-24 (disclaiming involvement in borrower defense policy), with id. at 20:2-21:5) and Brown 25:19-26:5 (defining the Under Secretary’s policy role).

As you note in your letter, you have agreed to respond to our December 10, 2020 letter regarding the proposed narrowed document requests and let us know whether you will supplement your response to Interrogatory No. 16 by January 14, 2021. However, as we noted throughout the process of negotiating our Stipulation to Modify Deadlines, nothing in the revised schedule forecloses any potential letter brief to expand discovery. See ECF No. 170 ¶ 7 (“This proposal is without prejudice to Plaintiffs’ ability to ‘seek further depositions, or expansion or extension of discovery via letter brief,’ as specified by the Court, or to Defendants’ ability to ‘respond’ in opposition to such a request. Oct. 19 Order at 16. Any such letter brief by Plaintiffs shall not be required to be included in the omnibus discovery motion contemplated above.”). And, of course, as noted above, the grounds to depose Secretary DeVos are extensive and would not be satisfied by a more fulsome response to Interrogatory No. 16. Please let us know your position by Monday, January 11 at 9:30 am ET.

Thank you,



EXHIBIT C


U.S. Department of Justice Civil Division, Federal Programs Branch

1100 L Street N.W. Washington, DC 20005

R. Charlie Merritt Tel.: (202) 616-8098 Trial Attorney [email protected]

January 11, 2021

VIA EMAIL

Margaret O’Grady Rebecca Ellis Eileen Conner Toby Merrill Legal Services Center of Harvard Law School 122 Boylston Street Jamaica Plain, MA 02130


Dear Counsel:

We are writing in response to your letter of Friday, January 8, 2021. We appreciate that you articulated with specificity the information that you seek to obtain in a deposition of former Secretary DeVos, which is an important first step in being able to sufficiently meet and confer regarding whether that information is truly not obtainable through “other, less intrusive means.” Order at 16, ECF No. 146 (Oct. 19, 2020). As we noted in our prior letter, your request to take the deposition of a cabinet secretary is extraordinary—“[h]igh-ranking government officials are not normally subject to depositions.” Thomas v. Cate, 715 F. Supp. 2d 1012, 1048 (E.D. Cal. 2010); accord Zimmerman v. Al Jazeera Am., LLC, 329 F.R.D. 1, 6 (D.D.C. 2018). Because this general rule can only be overcome based on the existence of extraordinary circumstances, such as “where it is shown that other persons cannot provide the necessary information,” Thomas, 715 F. Supp. 2d at 1048 (citation omitted), we want to make sure we know exactly what information you seek so we can determine whether that information can be provided by alternative means (for example, the testimony of other officials).

We have shared your letter with our contacts at the Department, who are looking into the issue. We believe it is appropriate to allow a reasonable amount of time for the Department to continue this investigation and for the parties to continue to meet and confer about the necessity of a deposition of the former Secretary. We do not think your demand for our position by Monday, January 11 at 9:30 am EST—less than one full business day after you sent us your letter—is consistent with the requirement to pursue this information through less intrusive means. The inquiry necessary to address the many important issues raised by your extraordinary request and to have a productive meet and confer takes time even under normal circumstances, let alone when the Secretary has recently resigned. Nevertheless, we are still interested in pursuing internally whether there are less intrusive means available and, accordingly, will do our best to let you know our position by next Friday, January 22.


In the meantime, we hope to maintain an open dialogue to reach a solution that would avoid the drastic step of deposing a cabinet head. To that end, we note that even if, assuming arguendo, the Secretary may have knowledge that the four individuals you deposed lacked about certain topics, that would not establish that the Secretary has “unique first-hand knowledge.” Oct. 22 Order at 16 (emphasis added). For example, you claim that James Manning identified the Secretary as “the only individual with authority to stop or restart issuing borrower defense decisions,” but he testified only that he “expects that the Secretary has that authority,” Manning Dep. Tr. 123:24-25. He did not say that she was the only individual that would have such authority, that she was the individual who actually exercised that authority, or, most importantly, that she was the only individual with knowledge about how such a decision would be made or was made. Instead, Mr. Manning stated that he “would expect that [the Secretary would] be briefed by others, including general counsel on an issue before an action like that was taken.” Id. 123:25-124:2; see also Jones Dep. Tr. 22:4-23:8 (explaining that, depending upon the policy at issue, there are a “group of people” that could be involved in policy decisions, including, “in some cases,” “the secretary’s chief of staff” and “the deputy secretary”).

We are hopeful that we can continue the meet-and-confer process and work collaboratively to provide a way for you to obtain the information you seek through less intrusive means than the Secretary’s deposition.

Sincerely,

/s/

R. Charlie Merritt


EXHIBIT D


1



TEL: (617) 522-3003 • FAX: (617) 522-0715

January 11, 2021

Via Email

R. Charlie MerrittU.S. Department of JusticeCivil Division


Counsel:

Thank you for your letter. We disagree that we have not given you enough time to consider our request. We informed you by phone last Wednesday, January 6, 2021, that we plan to seek permission from the Court to depose (now former) Secretary DeVos. This action was clearly contemplated by the Court in its October 2020 Order (ECF No. 146 at 16). And, by mutual agreement, we filed a stipulation on December 18, 2020 that expressly contemplated a letter brief to expand discovery beyond the Court’s Order. Finally, you are aware, because you were in attendance, that each of the four depositions established the need to depose the former Secretary.

You offer to continue to pursue the meet-and-confer process to obtain the information we seek via “less intrusive means,” but those “less intrusive means” have already been tried. We have propounded interrogatories and document requests and taken four depositions. You have produced some documents, and have agreed to provide a response to our narrowed requests by January 14, 2021. However, the instant meet and confer is about one concrete question: will the former Secretary accede to a deposition in this case? Your letter, in effect, answers the question in the negative, and today w e will move the Court accordingly.

As you witnessed during nearly 28 hours of depositions, and as summarized in our prior letter, the four deposed officials did not have the requisite knowledge about a number of key issues, in large part because they did not know who gave directives to delay the issuance of Borrower Defense decisions and they themselves did not have the authority to do so. We do not see the value in your returning to the same, or other officials, who would all also be former Secretary DeVos’s subordinates, to get the same non-answers.

In addition, given the Secretary’s sudden resignation on January 7, 2021, any concerns about a deposition interfering with the Secretary’s ability to perform her duties no longer apply.

In sum: the four depositions we have taken, and the approximately 2500 documents you have thus far produced, do not fully answer the questions at the heart of this case. Secretary DeVos can. We will, as the Court contemplated, seek the Secretary’s deposition on the basis that she has “unique firsthand knowledge” and “necessary information” that “cannot be obtained through other, less intrusive means.” ECF No. 146 at 16.

Sincerely,



EXHIBIT E


1· ·borrower defense application was decided under the

·2· ·'95 reg had wanted to ask for reconsideration of a

·3· ·denial, would they have had the option to do that?

·4· · · · A· · ·At what point in time?

·5· · · · Q· · ·Before the Bauer decision put the 2016

·6· ·regs into effect.

·7· · · · A· · ·No, there was no reconsideration

·8· ·process before that.

·9· · · · Q· · ·So, as you know, this case primarily is

10· ·about why there was such a long delay in issuing

11· ·borrower defense decisions.

12· · · · · · · In your view, what are the main reasons

13· ·why so few borrower defense decisions were issued

14· ·between January 2017 and January 2020?

15· · · · · · · MR. MERRITT:· Objection on the scope of

16· ·that question and to the characterization of the

17· ·case.

18· · · · · · · MS. ELLIS:· Can the witness answer?

19· · · · · · · MR. MERRITT:· Yes.

20· · · · · · · THE WITNESS:· I don't know that there's

21· ·one answer for that entire time period.· Can you

22· ·maybe break it up for me?

23· · · · BY MS. ELLIS:

24· · · · Q· · ·Sure.

25· · · · · · · Well, let's start in 2017.

Page 223·1· · · · A· · ·Well, there were no decisions issued

·2· ·for many months in 2017 associated with the

·3· ·decision not to do anything with respect to what

·4· ·we had already adjudicated and not to have more

·5· ·claims pending the review panel and the AG review

·6· ·and then the release methodology -- the

·7· ·development of the release methodology.· So that

·8· ·was 2017.

·9· · · · · · · We did issue decisions between end of

10· ·2017 and May of 2018 primarily on Corinthian

11· ·cases.

12· · · · · · · And then in 2018 to November 2019, I

13· ·think it was tied to the relief methodology issue

14· ·and the policy to not issue decisions on denials

15· ·while they couldn't issue decisions on approvals

16· ·or felt that they couldn't issue decisions on

17· ·approvals.

18· · · · Q· · ·In your view, would it have been

19· ·possible to issue decisions on approvals in

20· ·between May 2018 and November 2019?

21· · · · A· · ·Not Corinthian job-placement-rate

22· ·decisions because of the relief methodology at

23· ·least under that methodology.

24· · · · · · · On the others, like I said, I think it

25· ·was a policy decision.

Page 224·1· · · · Q· · ·Was the difficulty of reviewing

·2· ·borrower defense applications a primary reason for

·3· ·the delay in issuing decisions?

·4· · · · A· · ·The difficulty affected the volume of

·5· ·the adjudication in the sense of -- you know, the

·6· ·cases got a lot more complicated when the 2016

·7· ·regulation went into effect in 2018 because now we

·8· ·have a lot of cases that are subject to both, and

·9· ·that determination needs to be made.

10· · · · · · · So I think that the -- the pace of the

11· ·adjudications was affected by various things that

12· ·made it difficult, but that didn't mean that they

13· ·couldn't be issued.· That was related to a

14· ·decision up the food chain.

15· · · · Q· · ·Was the staffing level of BDU a factor

16· ·in why there was a delay in issuing decisions?

17· · · · A· · ·It was a factor in the number of

18· ·decisions that were adjudicated.· So to the extent

19· ·that that was related, I guess it was a factor.

20· ·But it wasn't -- it didn't prevent decisions from

21· ·going out.

22· · · · Q· · ·Was the difficulty of discerning or

23· ·applying state law under the '95 regs a major

24· ·factor in why so few decisions were issued?

25· · · · A· · ·At what time?

Page 225·1· · · · Q· · ·Did -- did -- is the answer different

·2· ·at different times?

·3· · · · A· · ·Yeah, because the Corinthian cases were

·4· ·adjudicated under California law, so that once we

·5· ·had fully explored California law with respect to,

·6· ·you know, the first memo, that really wasn't a

·7· ·factor for Corinthian, which was our focus for a

·8· ·good percentage of the time period at issue.

·9· · · · Q· · ·Of the claims that have been

10· ·adjudicated since December 2019, why have there

11· ·been so few approvals?

12· · · · A· · ·Well, the premise of your question, I

13· ·think, is that, you know, it's not that the cases

14· ·are -- how do I frame that? -- we have a lot of

15· ·potential approvals, but they're not going out,

16· ·and we have a lot of decided approvals that are

17· ·not going out.· So we have -- I don't know what

18· ·the number is on Corinthian job-placement-rate

19· ·claims now, but we've proved well over 30,000 of

20· ·those over that time period that can't be issued.

21· ·So we've certainly done a lot of approvals on that

22· ·end.

23· · · · · · · We -- for sequencing purposes, like I

24· ·said, have focused on the cases that were the most

25· ·quickly adjudicated which was the Corinthian


http://www.uslegalsupport.com

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EXHIBIT F


· · · · · · · · · · · · · · · · · · · · · · · · · ·Page

·1· · · · · · · · · MS. BERMAN:· Are we wrapping up?

·2· · · · · · · · · THE VIDEOGRAPHER:· You want to go off

·3· · · ·the record?

·4· · · · · · · · · MS. BERMAN:· Sure.

·5· · · · · · · · · THE VIDEOGRAPHER:· Okay.· We're going

·6· · · ·off the record.· The time is 21:45 UTC.

·7· · · · · · · · · (Recess -- 4:47 p.m.)

·8· · · · · · · · · (After recess -- 4:55 p.m.)

·9· · · · · · · · · THE VIDEOGRAPHER:· We're now back on

10· · · ·the record.· The time is 21:55 UTC.

11· · · · · · BY MS. TORCHIANA:

12· · · · · · Q· · ·Okay.· Mr. Brown, I'm -- so there are a

13· · · ·couple of questions or topics that I wanted to

14· · · ·circle back on.· One thing we've been discussing

15· · · ·you mentioned earlier on that there was a decision

16· · · ·or guidance not to issue any decisions until the

17· · · ·tiered relief methodology was in place.

18· · · · · · · · · Could you tell me again who made that

19· · · ·decision?

20· · · · · · · · · MR. HANCOCK:· Objection: asked and

21· · · ·answered; misstates testimony.

22· · · · · · · · · THE WITNESS:· So I -- I couldn't -- I

23· · · ·couldn't speak to who, specifically the -- kind of

24· · · ·the inner workings of what happened at the

25· · · ·department.· But I can -- I can tell you that

Page 223· · · · · · · · · · · · · · · · · · · · · · · · · · ·Page

·1· · · ·policy decisions are -- come to me through the

·2· · · ·Office of the Under Secretary, and that -- and

·3· · · ·that this was no different.

·4· · · · · · BY MS. TORCHIANA:

·5· · · · · · Q· · ·So did Diane Auer Jones make the

·6· · · ·decision that the BDU wouldn't issue any decisions

·7· · · ·while the Calvillo injunction was in place?

·8· · · · · · · · · MR. HANCOCK:· Objection: asked and

·9· · · ·answered.

10· · · · · · · · · THE WITNESS:· I couldn't tell you who,

11· · · ·as I said earlier, because I don't know.· But I

12· · · ·could tell you that the Office of the Under

13· · · ·Secretary would have relayed that decision to me.

14· · · ·Lots, you know, could be going on in the decision

15· · · ·making process that I'm just not aware of on the

16· · · ·policy side.

17· · · · · · BY MS. TORCHIANA:

18· · · · · · Q· · ·Did you ask her who came up with that

19· · · ·decision?

20· · · · · · A· · ·No.

21· · · · · · Q· · ·Okay.· Do you know whether Ms. Colleen

22· · · ·Nevin had a role in making that decision?

23· · · · · · A· · ·So Colleen Nevin is the director of the

24· · · ·borrower defense unit, which is part of partner

25· · · ·participation and oversight which is within the

Page 224· · · · · · · · · · · · · · · · · · · · · · · · · · ·Page

·1· · · ·Office of Federal Student Aid.· And I said that to

·2· · · ·say that they executed decisions on policy.· They

·3· · · ·don't make them.

·4· · · · · · Q· · ·Do you think Robin Minor would have

·5· · · ·made that decision?

·6· · · · · · A· · ·So Robin Minor works directly for me as

·7· · · ·one of the deputy chief operating officers, and

·8· · · ·the borrower defense unit is under her.· So I say

·9· · · ·that to say that she works inside of Federal

10· · · ·Student Aid, so she would not make a policy

11· · · ·decision.· She would execute them.

12· · · · · · Q· · ·Okay.· And would Secretary DeVos have

13· · · ·made that decision?

14· · · · · · A· · ·So again, as I said earlier, I don't

15· · · ·know who made the decision.· The decisions on

16· · · ·policy come from the Department of Education and

17· · · ·are relayed to me through the Office of the Under

18· · · ·Secretary.

19· · · · · · Q· · ·Okay.· And similarly, for the denial

20· · · ·letters, who -- who has the authority -- just

21· · · ·going back -- back to that subject -- who has the

22· · · ·authority to authorize changes to the form of

23· · · ·denial letters?

24· · · · · · A· · ·Who has the authority to authorize --

25· · · · · · Q· · ·Any changes to the form of denial

Page 225· · · · · · · · · · · · · · · · · · · · · · · · · · ·Page

·1· · · ·letters?

·2· · · · · · A· · ·To the denial letter forms?· You mean

·3· · · ·take off question 3 and put on question 4, those

·4· · · ·kind of things?

·5· · · · · · Q· · ·Yeah.

·6· · · · · · A· · ·The final -- the final decision on what

·7· · · ·goes on at what -- what -- how the form will be

·8· · · ·constructed, what it will have on it is a -- is,

·9· · · ·in fact, an extension of policy.· It's a policy

10· · · ·decision.

11· · · · · · Q· · ·So would -- would Diane Auer Jones have

12· · · ·the final say over whether to approve any changes

13· · · ·to the denial forms?

14· · · · · · A· · ·So I couldn't tell you who, but I -- I

15· · · ·could tell you that those -- those policies would

16· · · ·go through the process of Office of General

17· · · ·Counsel, Office of Under Secretary, and we would

18· · · ·have to have something back in general from --

19· · · ·from those offices before we would move forward

20· · · ·with an approved form.

21· · · · · · Q· · ·And then to go back to another

22· · · ·question, when we spoke about the partial relief

23· · · ·methodology, part of that involves earnings

24· · · ·tables, it sounds like.· How many schools has the

25· · · ·department issued earnings relief tables for?



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EXHIBIT G


· · · · · · · · · · · · · · · · · · · · · · · · · ·Page

·1· · · ·more questions, yeah.

·2· · · · · · · · · MR. MERRITT:· Okay.

·3· · · · · · BY MS. O'GRADY:

·4· · · · · · Q· · ·So I just -- it sounds to me, and

·5· · · ·correct me if I'm wrong -- I really want to

·6· · · ·understand -- that your position, your

·7· · · ·understanding of the state of things at this point

·8· · · ·was that the injunction in Calvillo Manriquez

·9· · · ·prevented FSA from issuing any borrower defense

10· · · ·decisions?

11· · · · · · · · · MR. MERRITT:· Objection.· It's a

12· · · ·mischaracterization of her testimony.

13· · · · · · BY MS. O'GRADY:

14· · · · · · Q· · ·Okay.· Please -- please correct me if I

15· · · ·misstated that.

16· · · · · · A· · ·You misstated that.

17· · · · · · Q· · ·Okay.· So what was your understanding

18· · · ·of how Calvillo Manriquez affected FSA's ability

19· · · ·to send out borrower defense decisions?

20· · · · · · A· · ·What I -- what I'm trying to explain to

21· · · ·you is that because there was pending litigation,

22· · · ·whether a particular decision was related to that

23· · · ·litigation or not, because there's pending

24· · · ·litigation around borrower defense, I am not a

25· · · ·senior enough official to have decision-making

Page 183· · · · · · · · · · · · · · · · · · · · · · · · · · ·Page

·1· · · ·authority.

·2· · · · · · Q· · ·What was -- so who would have

·3· · · ·decision-making authority to -- if not you?

·4· · · · · · A· · ·I think that's what I'm trying to tell

·5· · · ·you is that I -- I -- I -- there's lots of people

·6· · · ·who could have it.· I don't know who made all the

·7· · · ·decisions, but I do know it wasn't me.

·8· · · · · · Q· · ·The policy decision not to issue

·9· · · ·denials until approvals could also be issued, is

10· · · ·it your understanding that began immediately with

11· · · ·the Calvillo injunction?

12· · · · · · A· · ·I don't know the precise timing.

13· · · · · · Q· · ·Okay.· Because I -- so -- and I really

14· · · ·want to get to the bottom of this.· I didn't think

15· · · ·they were related because I'm reading this bullet

16· · · ·point and you explained that it was about not

17· · · ·wanting to give borrowers the wrong idea.· And

18· · · ·then we have the Calvillo Manriquez injunction

19· · · ·that prevents the application of a certain partial

20· · · ·methodology towards a number of CCI students.

21· · · · · · · · · So -- so the approvals have been paused

22· · · ·because the approvals demand -- you know, the

23· · · ·approvals need that step-two determination of the

24· · · ·partial relief that's been enjoined, but the

25· · · ·denials don't need to involve step two, and if

Page 184· · · · · · · · · · · · · · · · · · · · · · · · · · ·Page

·1· · · ·there's denials ready to go out, why couldn't they

·2· · · ·have gone out?

·3· · · · · · · · · MR. MERRITT:· Objection: asked and

·4· · · ·answered.

·5· · · · · · · · · MS. O'GRADY:· It has indeed been asked.

·6· · · · · · · · · MR. MERRITT:· And it's been answered.

·7· · · · · · BY MS. O'GRADY:

·8· · · · · · Q· · ·Okay.· I'll ask again.· So you said you

·9· · · ·could not have reversed that decision because of

10· · · ·the litigation?

11· · · · · · A· · ·That's not exactly what I said.

12· · · · · · Q· · ·Okay.· And I -- I apologize.· I know

13· · · ·this is getting redundant and back and forth and I

14· · · ·really just want to make it clear.· I don't mean

15· · · ·to -- to be -- to be so repetitive.

16· · · · · · · · · I really do want to understand is there

17· · · ·a person or a number of people, and can you

18· · · ·identify them, who could have decided to begin

19· · · ·issuing those denials rather than deciding not to

20· · · ·issue them until approvals could also be issued?

21· · · · · · A· · ·It would be speculative, right. I

22· · · ·mean, there are any number of people, but because

23· · · ·I don't believe exactly who made each decision, it

24· · · ·would be speculative on my part.

25· · · · · · Q· · ·So who made the decision not to issue

Page 185· · · · · · · · · · · · · · · · · · · · · · · · · · ·Page

·1· · · ·denials until approvals could also be issued?

·2· · · · · · A· · ·I do not know.

·3· · · · · · Q· · ·You were just told of that decision and

·4· · · ·went along with it.· Okay.

·5· · · · · · A· · ·I was told that was the decision.

·6· · · · · · · · · MS. O'GRADY:· Okay.· I think we'll take

·7· · · ·a break now.· Thank you for those extra few

·8· · · ·minutes.

·9· · · · · · · · · THE WITNESS:· Uh-huh.

10· · · · · · · · · MS. O'GRADY:· How long do we want the

11· · · ·break to be?· Charlie --

12· · · · · · · · · THE VIDEOGRAPHER:· Hold on one second.

13· · · ·The time is 19:24 UTC time.

14· · · · · · · · · (Recess -- 2:24 p.m.)

15· · · · · · · · · (After recess -- 2:43 p.m.)

16· · · · · · · · · THE VIDEOGRAPHER:· Okay.· We're now

17· · · ·back on the record.· The time is 19:43 UTC time.

18· · · · · · · · · MS. O'GRADY:· For the record, I'm just

19· · · ·going to state the designations on the last two

20· · · ·exhibits.· So file name ECF NO 56-3, Exhibit 5,

21· · · ·2019 regulations which is a long PDF file is

22· · · ·Exhibit 11.

23· · · · · · · · · (Jones Deposition Exhibit 11 was marked

24· · · ·for identification and attached to the

25· · · ·transcript.)

Diane JonesNovember 20, 2020

U.S. LEGAL SUPPORT(877) 479-2484

Diane JonesNovember 20, 2020 182 to 185

U.S. LEGAL SUPPORT(877) 479-2484

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EXHIBIT H


1· · · · · · · · · ·- JAMES MANNING -

·2· ·Department, are you aware if the Department of

·3· ·Education stopped issuing borrower defense claims?

·4· · · · · · · ·MR. MERRITT:· Objection, asked and

·5· · · · answered.

·6· · · · · · · ·MR. JARAMILLO:· It's not asked and

·7· · · · answered.· I'm asking about the full

·8· · · · Department.

·9· · · · A.· · ·Okay, well, repeat the question then.

10· · · · Q.· · ·Are you aware at any time during your

11· ·tenure at the Department of Education in the Trump

12· ·Administration if the Department of Education

13· ·stopped issuing decisions on borrower defense

14· ·claims?

15· · · · A.· · ·I, I -- I don't recall specifically

16· ·that it was stopped -- issued.· I expect --

17· · · · Q.· · ·Go ahead.· I'm sorry.

18· · · · A.· · ·I'm trying to recall the facts and I

19· ·can't.· It's not coming to me.· If there's

20· ·something that could refresh my memory, it would

21· ·help that.· I -- I don't recall.

22· · · · Q.· · ·Between July, 2018 and the time you

23· ·left the Department of Education in March, 2019

24· ·are you aware of any borrower defense decisions

25· ·being noticed to borrowers?

Page 99·1· · · · · · · · · ·- JAMES MANNING -

·2· · · · A.· · ·Am -- am I aware of any -- of any

·3· ·what?

·4· · · · Q.· · ·Borrower defense decisions being

·5· ·noticed or issued to borrowers.

·6· · · · A.· · ·I don't recall.

·7· · · · Q.· · ·Between July -- July, 2018 and March,

·8· ·2019 when you left the Department, are you aware

·9· ·of any borrower defense applications being

10· ·approved?

11· · · · A.· · ·Did you say July, 2018 and '19?

12· · · · Q.· · ·Between July, 2018 and the time you

13· ·left in March, 2019 are you aware of any borrower

14· ·defense claims being approved by the Department?

15· · · · A.· · ·Between that time?· I don't recall.

16· · · · Q.· · ·Between July, 2018 and March, 2019

17· ·are you aware of any borrower defense applications

18· ·being denied?

19· · · · A.· · ·I've had a weekly report on -- on

20· ·numbers of applications that came in.· I cannot

21· ·recall whether or not there were reports on the

22· ·numbers that were acted upon or approved.

23· · · · Q.· · ·During July, 2018 and March, 2019 you

24· ·don't recall whether or not the Department of

25· ·Education issued final decisions on borrower


·2· ·defense applications?

·3· · · · A.· · ·Between the summer of '18 and when I

·4· ·left in '19, I -- I don't recall.

·5· · · · Q.· · ·Now, Mr. Manning, are you aware of

·6· ·what this case is about, Sweet versus DeVos?

·7· · · · A.· · ·Not specifically.

·8· · · · Q.· · ·Are -- are you aware of the

·9· ·allegations that the Department -- in this case

10· ·plaintiffs allege that the Department unreasonably

11· ·delayed in issuing borrower defense applications?

12· · · · A.· · ·I, I -- I've heard that previously at

13· ·one point.

14· · · · Q.· · ·Are you aware of any delay in issuing

15· ·borrower defense applications between July, 2018

16· ·and March, 2019?

17· · · · A.· · ·Am I aware, no.· I don't recall.

18· · · · Q.· · ·Are you aware of any delay in issuing

19· ·borrower defense applications during your tenure

20· ·in the Trump Administration at the Department of

21· ·Education?

22· · · · A.· · ·I don't recall delays specifically.

23· ·I -- I'll try to -- I'm trying to remember what,

24· ·if anything, happened around -- during the period

25· ·of the --


·2· · · · Q.· · ·Were you aware of any backlog in

·3· ·processing Borrowers Defense applications during

·4· ·the tenure -- your tenure at the Department of

·5· ·Education?

·6· · · · A.· · ·Yes.

·7· · · · Q.· · ·Okay.· Tell me about what your

·8· ·awareness is of that backlog.

·9· · · · A.· · ·Well, as I said earlier, I got a

10· ·legal report on the growing numbers.

11· · · · · · · ·MR. MERRITT:· Joe, just that we're

12· · · · getting close to a lunch break.

13· · · · · · · ·MR. JARAMILLO:· Yes, and I'm sorry,

14· · · · we did pass a little, but I want to ask a few

15· · · · more questions.· I think we'll be able to

16· · · · wrap up in -- in at least one or two minutes

17· · · · and then --

18· · · · · · · ·MR. MERRITT:· That's fine.· Thank

19· · · · you.· I just wanted to throw it out there.

20· · · · · · · ·MR. JARAMILLO:· Thank you, Mr.

21· · · · Merritt.

22· · · · A.· · ·So do you have a question, Joe?

23· · · · Q.· · ·Yes, Mr. Manning.· Just during your

24· ·tenure at the Department of Education, were you

25· ·satisfied with the pace at which the Department



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EXHIBIT I


• information and materials available on school websites;

• publicly available information and materials associated with litigation, settlements, or

consent judgments;

• relevant publicly available information and materials on the internet; and

• information and materials from public Congressional testimony or investigations.

Interrogatory No. 16

Identify the individuals who drafted and approved form Denials A, B, C, and D, and explain the

process for review and approval of the letters. See ECF No. 116.

Objections: Defendants object to this request to the extent it seeks information protected

by privilege, including but not limited to the attorney-client privilege and the deliberative process

privilege.

Response: Individuals in the Department’s Federal Student Aid office consulted with staff

in the Office of the General Counsel and other offices in the Department on the contents and form

of various drafts of the letters referenced in this request, as well as on the availability of data in the

Borrower Defense Unit’s platform to populate certain aspects of standard, automated

templates. FSA then provided draft letters to Department leadership and the Office of the General

Counsel for review. Based on Defendants’ current inquiry, Defendants lack knowledge or

information to provide a further response to this interrogatory. Defendants will continue to

conduct a reasonable inquiry and will supplement this response to the extent there is further

information to provide.

Interrogatory No. 17

Explain the reasoning behind the determination that an application is “from borrowers who did not

provide any evidence and who attended schools for which BDU is not aware of evidence that


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Exhibit 3


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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

THERESA SWEET, et al.,

Plaintiffs,

v.

ELISABETH DEVOS, United States Secretary of Education, et al.,

Defendants.

No. C 19-03674 WHA

ORDER RE DISCOVERY LETTER AND RELATED MATTERS

The Court appreciates class counsel’s request to depose Elisabeth DeVos, but the prior

order restricted deposition of “the Secretary” (Dkt. No. 146) (emphasis added). It imposed no

such restriction regarding Citizen DeVos. Now, given her new status, if counsel pursues such

deposition, it must subpoena Ms. DeVos. For that matter, the Department of Education shall

please identify our new defendant. The Clerk shall then please update the caption.

IT IS SO ORDERED.

Dated: January 12, 2021.

WILLIAM ALSUP UNITED STATES DISTRICT JUDGE


Exhibit 4


1

From: Hancock, Kevin P. (CIV) <[email protected]>Sent: Friday, January 22, 2021 10:14 AMTo: O'Grady, Margaret; Merritt, Robert C. (CIV); Kirschner, Adam (CIV)Cc: [email protected]; Claire Torchiana; Ellis, Rebecca C.; Connor, Eileen; Merrill, Toby;

Berman, Marcia (CIV)Subject: RE: Sweet v DeVos - Deposition of the former Secretary

Maggie,

Thanks. We have consulted with the former Secretary’s outside counsel and would accept service of your subpoena on her behalf under the following circumstances:

Regarding the date of compliance, to allow sufficient time for motion to quash briefing and a decision, we propose that the subpoena state, “February 25, 2021, or a date mutually agreed upon by the parties,” and that we then separately agree that this date should be stayed, if necessary, pending a final order on our motion to quash. Although the former Secretary’s schedule remains busy, she has cleared February 25, 2021 in the event there is a definitive court order requiring her to sit for a deposition by then. That date is also well prior to the March 11, 2021 deadline for Plaintiffs’ motion for summary judgment. But to account for the significant possibility that necessary litigation will not be complete by February 25, 2021, we will require an agreement to stay any compliance date pending a final order to accept service.

Regarding the place of compliance, Rule 45(c)(1)(A) allows for a deposition subpoena to require attendance within 100 miles of where the witness resides, and the former Secretary currently resides at her home in Vero Beach, Florida. We would therefore accept service of a subpoena noticing a Zoom deposition in Vero Beach, Florida.

Please let us know if you agree to these conditions or if you would like to discuss further.

Thanks, Kevin

From: O'Grady, Margaret <[email protected]> Sent: Tuesday, January 19, 2021 12:36 PM To: Hancock, Kevin P. (CIV) <[email protected]>; Merritt, Robert C. (CIV) <[email protected]>; Kirschner, Adam (CIV) <[email protected]> Cc: [email protected]; Claire Torchiana <[email protected]>; Ellis, Rebecca C. <[email protected]>; Connor, Eileen <[email protected]>; Merrill, Toby <[email protected]>; Berman, Marcia (CIV) <[email protected]> Subject: RE: Sweet v DeVos ‐ Deposition of the former Secretary

Kevin, thanks. Yes, we are amenable to the path forward you suggest. Regarding place of compliance, we assume the deposition will be via zoom. Let me know when you’d like to speak about timing. We are happy to negotiate a date that allows for briefing as necessary. That said, we’d like to do this as soon as possible. Best,


2

Maggie

From: Hancock, Kevin P. (CIV) [mailto:[email protected]] Sent: Monday, January 18, 2021 6:19 PM To: O'Grady, Margaret <[email protected]>; Merritt, Robert C. (CIV) <[email protected]>; Kirschner, Adam (CIV) <[email protected]> Cc: [email protected]; Claire Torchiana <[email protected]>; Ellis, Rebecca C. <[email protected]>; Connor, Eileen <[email protected]>; Merrill, Toby <[email protected]>; Berman, Marcia (CIV) <[email protected]> Subject: RE: Sweet v DeVos ‐ Deposition of the former Secretary

Maggie,

The Department is open to accepting service of your subpoena on behalf of the former Secretary if we can negotiate the subpoena’s place of compliance and a reasonable compliance date that would allow sufficient time for motion‐to‐quash briefing and a decision. Are Plaintiffs amenable to that path forward in concept? If so, we can discuss the particulars further.

Thanks, Kevin

From: O'Grady, Margaret <[email protected]> Sent: Friday, January 15, 2021 2:59 PM To: Hancock, Kevin P. (CIV) <[email protected]>; Merritt, Robert C. (CIV) <[email protected]>; Kirschner, Adam (CIV) <[email protected]> Cc: [email protected]; Claire Torchiana <[email protected]>; Ellis, Rebecca C. <[email protected]>; Connor, Eileen <[email protected]>; Merrill, Toby <[email protected]> Subject: RE: Sweet v DeVos ‐ Deposition of the former Secretary

Kevin, Please let me know when you will have an answer. Thanks a lot. Maggie

From: Hancock, Kevin P. (CIV) [mailto:[email protected]] Sent: Wednesday, January 13, 2021 12:36 PM To: O'Grady, Margaret <[email protected]>; Merritt, Robert C. (CIV) <[email protected]>; Kirschner, Adam (CIV) <[email protected]> Cc: [email protected]; Claire Torchiana <[email protected]>; Ellis, Rebecca C. <[email protected]>; Connor, Eileen <[email protected]>; Merrill, Toby <[email protected]> Subject: RE: Sweet v DeVos ‐ Deposition of the former Secretary

Maggie,

We will reach out to the Department and get back to you.


3

Thanks, Kevin

From: O'Grady, Margaret <[email protected]> Sent: Wednesday, January 13, 2021 11:52 AM To: Merritt, Robert C. (CIV) <[email protected]>; Hancock, Kevin P. (CIV) <[email protected]>; Kirschner, Adam (CIV) <[email protected]> Cc: [email protected]; Claire Torchiana <[email protected]>; Ellis, Rebecca C. <[email protected]>; Connor, Eileen <[email protected]>; Merrill, Toby <[email protected]> Subject: Sweet v DeVos ‐ Deposition of the former Secretary

Counsel: In light of yesterday’s order from Judge Alsup (ECF No. 172), please let me know if you will accept service of the deposition subpoena for former Secretary DeVos, as you did for former Acting Under Secretary Manning. Thank you. Maggie

Margaret (Maggie) O’Grady Legal Services Center of Harvard Law School (617) 390‐2541122 Boylston StreetJamaica Plain, MA 02130

www.projectonpredatorystudentlending.org


Exhibit 5


From: Hancock, Kevin P. (CIV)To: Ellis, Rebecca C.; O"Grady, Margaret; Connor, Eileen; Merrill, Toby; Joseph Jaramillo; Claire TorchianaCc: Merritt, Robert C. (CIV)Subject: RE: Sweet - motion to quash DeVos subpoenaDate: Monday, February 8, 2021 8:36:17 PMAttachments: image001.png

Rebecca, We continue to disagree that there are circumstances warranting transfer here, exceptional orotherwise, and we do not consent to transfer. Best,Kevin Signature

From: Ellis, Rebecca C. <[email protected]> Sent: Friday, February 5, 2021 8:11 PMTo: Hancock, Kevin P. (CIV) <[email protected]>; O'Grady, Margaret<[email protected]>; Connor, Eileen <[email protected]>; Merrill, Toby<[email protected]>; Joseph Jaramillo <[email protected]>; Claire Torchiana<[email protected]>Cc: Merritt, Robert C. (CIV) <[email protected]>Subject: RE: Sweet - motion to quash DeVos subpoena Kevin, Rule 45(f) provides that the court where compliance is required “may transfer a motion under thisrule to the issuing court if the person subject to the subpoena consents or if the court findsexceptional circumstances” (emphasis added). The former Secretary’s consent is a separate questionfrom, and does not require a finding of, exceptional circumstances. Should I take from your responsebelow that you will not consent to transfer regardless? In any event, we do believe there are circumstances to warrant transfer here. As the 2013committee notes to Rule 45(f) explain, transferring the motion to quash to N.D. Cal. “will avoiddisrupting the issuing court’s management of the underlying litigation,” and those interests“outweigh the interests of the nonparty served with the subpoena in obtaining local resolution ofthe motion” where, as here, the deposition (and likely any argument on the motion to quash) will beconducted remotely, and after the last 11 months, all parties are certainly well acquainted with the“telecommunications methods to minimize the burden a transfer imposes.” Thanks,Rebecca


From: Hancock, Kevin P. (CIV) [mailto:[email protected]] Sent: Friday, February 5, 2021 5:30 PMTo: Ellis, Rebecca C. <[email protected]>; O'Grady, Margaret <[email protected]>;Connor, Eileen <[email protected]>; Merrill, Toby <[email protected]>; JosephJaramillo <[email protected]>; Claire Torchiana <[email protected]>Cc: Merritt, Robert C. (CIV) <[email protected]>Subject: RE: Sweet - motion to quash DeVos subpoena

Rebecca,

Thank you for letting us know your positions. Regarding transfer, Rule 45(d)(3)(A) requires a motionto quash a subpoena to be filed in “the court for the district where compliance is required,” whichhere is the Southern District of Florida, where the former Secretary resides. And while Rule 45(f)allows for the possibility of transfer, it only does so if the proponent of transfer can demonstratethat “exceptional circumstances” requiring transfer exist. We disagree that exceptionalcircumstances exist here and so we would oppose any motion to transfer.

Best,Kevin

Signature

From: Ellis, Rebecca C. <[email protected]> Sent: Friday, February 5, 2021 2:50 PMTo: Hancock, Kevin P. (CIV) <[email protected]>; O'Grady, Margaret<[email protected]>; Connor, Eileen <[email protected]>; Merrill, Toby<[email protected]>; Joseph Jaramillo <[email protected]>; Claire Torchiana<[email protected]>Cc: Merritt, Robert C. (CIV) <[email protected]>Subject: RE: Sweet - motion to quash DeVos subpoena

Kevin,

Yes, we will be opposing the motion to quash. We do not oppose your motion for additional pages,and we will accept service of the motion to quash and motion for additional pages by email.

We’d also like to know whether you would consent to transferring the motion to quash, once filed,to Judge Alsup’s court pursuant to F.R.C.P. 45(f). Judicial economy favors having Judge Alsupcontinue to manage discovery issues in this case, and because we’d expect the parties to be briefingand arguing this motion remotely in any event, we don’t see any reason why the burden to litigate inthe Northern District of California would be greater than in the Southern District of Florida.


UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

Fort Pierce Division

Case No. 2:21mc14073

Case Pending in the U.S. District Court for the Northern District of California:

Sweet, et al. v. Zais, et al., 3:19-cv-03674-WHA (N.D. Cal.)

IN RE SUBPOENA SERVED ON ELISABETH DEVOS

[PROPOSED] ORDER

The Expedited Motion to Transfer Elisabeth DeVos’s Motion to Quash to the Northern

District of California, filed by Movants Theresa Sweet, Chenelle Archibald, Daniel Deegan,

Samuel Hood, Tresa Apodaca, Alicia Davis, and Jessica Jacobson, as representatives of a certified

class of Plaintiffs, is GRANTED. It is hereby

ORDERED that Elisabeth DeVos’s Motion to Quash Rule 45 Deposition Subpoena (ECF

No. 1) is TRANSFERRED to the Northern District of California, to the docket of Sweet, et al. v.

Zais, et al., 3:19-cv-03674-WHA (N.D. Cal.), before Judge William Alsup.

IT IS SO ORDERED.

DATE: ____________________ ____________________________________

UNITED STATES DISTRICT JUDGE


in re subpoena served on expedited motion to …

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