Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 86 C 333--James B. Parsons, Judge.
Bauer, Chief Judge, Flaum and Easterbrook, Circuit Judges.
Michael Toney applied for and received two Illinois Guaranteed Student Loans during 1978 and 1979. The loans were provided by the First National Bank of Chicago, and repayment was guaranteed by the Illinois State Scholarship Commission (ISSC). Toney failed to meet his repayment obligations, and on December 15, 1983 the ISSC reimbursed the bank. Meanwhile, Toney took a job with the State of Illinois. On January 11, 1984, the ISSC sent Toney a letter informing him that it had the power to request the Comptroller, Roland Burris, to offset the money owed the State from Toney's paycheck under Ill.Rev.Stat.ch. 15, para. 210.05. Soon thereafter, Toney and the ISSC agreed on a plan for repayment of the money owed the ISSC in monthly installments without resort to the Comptroller. Toney failed to meet his obligations under the new agreement as well, and the ISSC sent notifications on December 7, 1984, April 22, 1985, and January 6, 1986 that it would seek an offset from Toney's state paycheck. The letters did not inform Toney of any right to challenge the asserted indebtedness.
On April 12, 1986, the Comptroller notified Toney that an offset had been requested by the ISSC, and that money had been withheld from Toney's paycheck. The letter explained that Toney had thirty days in which to protest before the withheld money would be released to the ISSC. Toney filed suit in the district court under 42 U.S.C. § 1983 alleging that the absence of an opportunity to challenge the debt before the withholding constituted a deprivation of property without due process of law.*fn2
The district court certified Toney's suit as a class action, with a plaintiff class consisting of all persons who have had or will have funds withheld pursuant to Ill. Rev.Stat.ch. 15, para. 210.05. Furthermore, the district court agreed with Toney that the procedures provided were inadequate to constitute due process. Toney v. Burris, 650 F. Supp. 1227 (N.D. Ill. 1986). The court declared the statute unconstitutional on its face and as applied, and enjoined its further implementation. On appeal, this court took judicial notice of the fact that the regulations implementing ch. 15, para. 210.05 had been amended between the time the action was filed and the time it was decided. We noticed that the new regulations could possibly answer Toney's due process concerns. We ruled that, if there were no ongoing violations of constitutional rights, the Eleventh Amendment would bar the suit, and that if a court were assured that the violations (if they were violations) would not be resumed, then the case would be moot. We remanded the case to the district court for a determination of whether the statute as implemented by the new regulations was constitutional. Toney v. Burris, 829 F.2d 622 (7th Cir. 1987).
On remand, Judge Parsons, in an order published at 699 F. Supp. 687 (N.D.Ill. 1988), found that under the regulations now in effect, persons who had defaulted on student loans are given constitutionally adequate notice and opportunity to be heard before any moneys are withheld. Judge Parsons was convinced that the Comptroller would not return to his former practices, and therefore dismissed the case as moot. Toney appeals.
The Present Statutes and Regulations
Ill. Rev. Stat. ch. 15, para. 210.05 states that: Whenever any person shall be entitled to a warrant from the treasury . . . against whom there shall be any account or claim in favor of the State, then due and payable, the Comptroller, upon notification thereof, shall ascertain the amount due and payable to the State, as aforesaid, and draw a warrant on the treasury . . . stating the amount for which the party was entitled to a warrant . . . the amount deducted therefrom, and on what account, and directing the payment of the balance . . . . The Comptroller may deduct the entire amount due and payable to the State in accordance with the request of the notifying agency . . . .
The Comptroller has issued regulations implementing that statute, which can be found at 74 Ill.Admin.Code §§ 285.1100 - 285.1109. The relevant section is § 285.1102, Request for Processing a Claim under Section 10.05 of the Act:
a) The Comptroller will not process a claim under Section 10.05 of the Act until he has received notification from the State agency that the debt has been established through notice and opportunity to be heard.
b) For purposes of Section 10.05 of the Act and this Part promulgated pursuant thereto, "notification" of an account or claim eligible to be offset shall be deemed to occur when the State agency in favor of which the account or claim has arisen has submitted to the Comptroller, on a Form C-33, a written statement thereof, which statement must contain the following information:
1) the name, address and Social Security number or Federal Employer's Identification Number of the person ...