Appeal from the United States District Court for the Northern District of Illinois, Eastern Division, No. 86 C 3333, Susan Getzendanner, Judge.
Wood, Jr., Cudahy, and Coffey, Circuit Judges.
WOOD, JR., Circuit Judge.
The plaintiff, Michael Toney, brought suit under 42 U.S.C. § 1983 for declaratory and injunctive relief against Roland Burris, Comptroller of the State of Illinois, on behalf of himself and all others who have had or will have funds withheld pursuant to the State Comptroller Act, § 10.05, Ill. Ann. Stat. ch. 15, para. 210.05 (Smith-Hurd Supp. 1987). The plaintiff is a state employee whose paychecks were being offset to reduce the balance due the state under his student loans. The plaintiff alleged that the statutory offset provision was unconstitutional because it deprived him and others similarly situated of property and failed to provide them with predeprivation notice and a meaningful opportunity to be heard. The district court certified a class consisting of "all persons who have had or will have their funds withheld by the defendant acting pursuant to Ill. Rev. Stat. ch. 15, § 210.05," and held that the statute was unconstitutional on its face and as it was applied to plaintiff. Toney v. Burris, 650 F. Supp. 1227, 1243 (N.D. Ill. 1986). The district court therefore granted plaintiff's motion for summary judgment and enjoined the defendant from enforcing Ill. Rev. Stat. ch. 15, para. 210.05 and its implementing regulations. The defendant appealed.
The parties do not dispute the essential facts of this case.
The plaintiff applied for and received two Illinois Guaranteed Student Loans totaling $6,860 in principal. The loans were provided to him in 1978 and 1979 at an interest rate of seven percent by the First National Bank of Chicago. The Illinois State Scholarship Commission ("ISSC") acted as guarantor of plaintiff's obligation to repay this debt to the bank. When receiving his loans, the plaintiff signed a Statement of Borrower's Responsibilities.
On May 5, 1983, the ISSC received a Lender Request for Purchase of the plaintiff's loans from the bank. The plaintiff had failed to sign the required payout notes. Pursuant to this request, the ISSC reimbursed the bank on December 15, 1983.
By letter dated January 11, 1984, the ISSC notified the plaintiff that it had the authority to request the Comptroller to offset funds from plaintiff's state paycheck. The letter invited the plaintiff to discuss the matter with his supervisor or with the writer, a representative of the ISSC's collection department. On January 17, 1984, the ISSC acknowledged a conversation with the plaintiff in which an agreement was reached regarding repayment of the plaintiff's student loans. The letter specified monthly payment due dates and amounts and directed plaintiff to contact the ISSC if an anticipated increase in payments on April 24, 1985, proved to be "unrealistic." On March 8, 1984, the plaintiff sent to the ISSC his first installment payment.
The plaintiff soon fell into arrears in his new payment agreement.*fn1 Plaintiff was sent notifications of ISSC's intention to seek offsets on December 7, 1984, April 22, 1985, and January 6, 1986.
The January 6, 1986, letter informed the plaintiff that the ISSC intended to request the defendant to offset funds from the plaintiff's paycheck to reduce plaintiff's indebtedness to the state. The defendant included in the record a copy of the form letter used for this purpose. The letter asserts that the plaintiff's student loan account is "seriously past due," and that the state is statutorily authorized to offset his entire paycheck, or a portion thereof, to reduce the plaintiff's debt. In order to avoid this procedure, the letter advises the plaintiff to remit the arrearages immediately. The letter does not inform the plaintiff of any opportunity to challenge his indebtedness.
On February 13, 1986, the ISSC requested the Comptroller to deduct $280 from wage payments due the plaintiff. The Comptroller withheld the requested amount and, by letter dated April 12, 1986, notified the plaintiff of his action. The letter informed the plaintiff of his right to protest to the Comptroller's office in writing and within thirty days of the withholding; if no protest was received within thirty days, the money would be sent to the ISSC.
On February 19, 1985, and on April 1, 1986, the plaintiff and his wife filed petitions for bankruptcy. They were discharged "from all dischargeable debts" on August 11, ...