United States District Court, C.D. Illinois
April 21, 2004.
CAMMILLE SORRELL, Plaintiff,
ILLINOIS STUDENT ASSISTANCE COMMISSION, Defendant
The opinion of the court was delivered by: RICHARD MILLS, Senior District Judge
The Plaintiff brings this action against a State Agency.
The State of Illinois has not consented to be sued in federal court
pursuant to the claims brought by the Plaintiff.
Nor has Congress abrogated the State's sovereign immunity.
Therefore, this case must be DISMISSED.
Cammille Sorrell alleges that she has been employed as a Legal Investigator at the Illinois Environmental Protection Agency since
January 16, 2001. She owes an educational student loan totaling $14,200
to the Illinois Student Assistance Commission ("Defendant" or "ISAC").
Sorrell alleges that the Defendant is a financial aid center which
distributes educational grants, scholarships, loans, and tuition support
within the State of Illinois, and also functions as a collection agency
for payments of its student loans and reports such actions to the major
consumer credit reporting agencies.
Sorrell claims that on July 13, 1998, the United States Bankruptcy
Court for the Western District of Texas entered an agreed order requiring
her to make monthly payments of $100 to the Defendant for her student
loan debt. The payments were to commence on November 1, 1998, and
continue monthly until the loan was paid in full. The order provided that
no interest would accrue as long as the payments were timely made, and
that Sorrell was no more than 60 days delinquent on any one payment.
Sorrell says that on November 19, 2002, she was informed by the
Comptroller of the State of Illinois that $285.23 had been withheld from her paycheck. The reason for this action was that ISAC had advised
the Comptroller that she was in default in paying her student loan.
Sorrell was not notified before the action was taken. After she contacted
the Illinois EPA Payroll Department, the Defendant ISAC, and the
Comptroller, Sorrell alleges that it was determined that the wage
garnishment was in error and that she would be issued a check for the
garnished wages within one week.
Sorrell states that she received a letter in August 2003 from Discover
Personal Loans notifying her that her application for a personal loan had
been rejected. The reasons given for the rejection were collection
activity on her credit reports and past and/or present delinquent credit
obligations. Sorrell says that on October 7, 2003, she sent ISAC a letter
requesting that it revise the information it was reporting to the various
consumer credit reporting agencies. She claims that her credit reports
were erroneously indicating that a $900 balance was past due and her
account was 120 days past due. Sorrell asserts that ISAC responded with a
letter dated October 10, 2003, wherein it stated that it had reported
erroneous account information to the three major credit reporting agencies, and it
would continue to report erroneous information until its billing
statements could be fixed.
Sorrell next alleges that she received from Discover Platinum a credit
card application rejection letter dated October 17, 2003. A primary
reason given for the rejection was collection activity on her credit
report. She claims that she received from People's Bank of Connecticut a
letter dated October 29, 2003, informing her that her application for a
credit card had been rejected. A primary reason given for the rejection
was that her accounts were 90 days past due on her credit report. She
states that she received from US Bank a letter dated October 30, 2003,
wherein she was informed that her application for a credit card had been
rejected. The primary reasons given for the rejection were delinquency in
account payments and collection activity on her credit report.
Sorrell relates that on October 30, 2003, she sent Defendant ISAC a
notice of her intent to pursue legal action because of ISAC's failure to
revise its credit reporting procedures and credit information pertaining
to her account and due to its illegal garnishment of her wages. Sorrell
subsequently asserted this pro se action pursuant to the Fair Debt
Collection Practices Act, 15 U.S.C. § 1692 et
seq. ("FDCPA") and the Fair Credit Reporting Act,
15 U.S.C. § 1681 et seq. ("FCRA"). She purports to allege three
claims pursuant to the FDCPA and three claims pursuant to the FCRA.
A. The Legal Standard
In ruling on a motion to dismiss, the Court must accept all
well-pleaded allegations of the complaint as true. See Hishon v.
King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232 (1984):
Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1104 (7th
Cir. 1984). Although a complaint is not required to contain a detailed
outline of the claim's basis, it nevertheless must contain either direct
or inferential allegations respecting all the material elements necessary
to sustain a recovery under some viable legal theory. Car
Carriers, 745 F.2d at 1106. Dismissal should not be granted "unless it appears beyond doubt that the plaintiff can
prove no set of facts in support of his claim which would entitle him to
relief." See Conley v. Gibson. 355 U.S. 41, 45-46,
78 S.Ct. 99, 102 (1957).
B. The Parties' Allegations
Defendant ISAC has proffered several reasons as to why it argues the
Plaintiff's complaint should be dismissed. First, the Defendant contends
that Congress has not unequivocally expressed its intent to abrogate the
State's sovereign immunity under the FDCPA or the FCRA. Because the
Defendant is a State agency which is regulated by State statute,
therefore, the Plaintiff's claims are against the State of Illinois and
are barred by the Eleventh Amendment. Second, the Defendant asserts that
no private cause of action exists under the FCRA and, finally, the
Defendant contends that any abrogations of sovereign immunity contained
in the statutes at issue are not valid exercises of congressional power
pursuant to section 5 of the Fourteenth Amendment.
In her response brief, the Plaintiff contends that 11 U.S.C. § 106
of the Federal Bankruptcy Code preempts the sovereign immunity of the
State granted by the Eleventh Amendment. Specifically, she asserts that,
pursuant to section 106, a governmental unit that has filed proof of a
claim in a bankruptcy case is deemed to have waived sovereign immunity
with respect to a claim against the governmental unit that is property of
the estate and that arose out of the bankruptcy transaction. Sorrell also
alleges that Congress has unequivocally expressed its intent to abrogate
the State's sovereign immunity under the FDCPA and the FCRA. She next
argues that common law provides extensive precedent for a private right
of action against a State agency for illegal debt collection and debt
reporting practices and, finally, Sorrell argues that the FDCPA and the
FCRA are the most appropriate enforcement vehicles to address ISAC's
illegal debt collection and debt reporting practices.
In its reply brief, the Defendant contends that the Bankruptcy Code
does not abrogate the State's sovereign immunity as to claims brought
pursuant to non-bankruptcy law. Accordingly, the Plaintiff's FDCPA and
FCRA claims against the State are barred by the Eleventh Amendment. C. Sovereign Immunity
The Eleventh Amendment states, "The Judicial power of the United States
shall not be construed to extend to any suit in law or equity, commenced
or prosecuted against one of the United States by Citizens of another
State, or by Citizens or Subjects of any Foreign State." U.S. Const.
amend. XI. The Eleventh Amendment has been interpreted to provide
immunity to unconsenting States "from suits brought in federal courts by
her own citizens as well as by citizens of another State." Edelman
v. Jordan, 415 U.S. 651, 662-63, 94 S.Ct. 1347, 1355 (1974).
However, a State's immunity from suit is not absolute. "Congress may
abrogate the State's Eleventh Amendment immunity when it both
unequivocally intends to do so and acts pursuant to a valid grant of
constitutional authority." "[T]he Eleventh Amendment, and the principle
of state sovereignty which it embodies, are necessarily limited by the
enforcement provisions of § 5 of the Fourteenth Amendment."
Nanda v. Board of Trustees of the University of Illinois,
303 F.3d 817, 822-23 (7th Cir. 2002) (internal citations and quotations
omitted). D. Plaintiff's FDCPA Claims
The Defendant contends there is no indication that Congress sought to
waive the Eleventh Amendment immunity of States as to claims pursuant to
the FDCPA. The Defendant notes that the FDCPA refers to "consumers" and
"debt collector[s]." A "debt collector" is defined as "any person who
uses any instrumentality of interstate commerce or the mails in any
business the principal purpose of which is the collection of any debts,
or who regularly collects or attempts to collect, directly or indirectly,
debts owed or due or asserted to be owed or due another."
15 U.S.C. § 1692a(6). There is a longstanding presumption that a
sovereign is not included within the term "person." "The presumption
is particularly applicable where it is claimed that Congress has
subjected the States to liability to which they had not been subject
before." United States ex rel. Chandler v. Cook County, IL.,
277 F.3d 969, 980 (7th Cir. 2002) (internal quotations
omitted). ISAC argues that, because Congress did not intend for a "debt
collector" to include a sovereign State, it is clear that the State's
sovereign immunity pursuant to the FDCPA has not been unequivocally
abrogated. Moreover, the Defendant asserts that there is no clear declaration by the
State of Illinois of its consent to be sued in federal court under the
FDCPA. Accordingly, the Defendant contends that the Plaintiff's FDCPA
claims should be dismissed.
It appears that there is only one circuit court of appeals that has
addressed whether FDCPA claims against the State are barred by the
Eleventh Amendment. In an unpublished opinion, the Ninth Circuit held
that a plaintiff's FDCPA claims were barred by the Eleventh Amendment.
See Codar. Inc. v. State of Arizona, 168 F.3d 498, 1999 WL
50904 (9th Cir. 1999). That court determined that Arizona had not waived
its immunity, and the FDCPA did not abrogate the State's immunity.
Id. The Plaintiff cites several bankruptcy court cases in support of
the proposition that when a State files proof of a claim in a bankruptcy
case, it is deemed to have waived sovereign immunity with respect to a
claim against it that is property of the estate and that arose out of the
bankruptcy transaction. As the Defendant notes, however, the applicable
statute relied on by those courts demonstrates the intent of Congress to
abrogate the State's sovereign immunity only as to claims brought pursuant to certain sections of
the Bankruptcy Code. See 11 U.S.C. § 106(a). Moreover, the
Seventh Circuit has held that Congress "lacked authority under Article I
of the Constitution to abrogate state sovereign immunity by enacting
Section 106(a) of the Bankruptcy Code." Nelson v. La Crosse County
District Attorney, 301 F.3d 820, 838 (7th Cir. 2002).
Because the State of Illinois has not waived its sovereign immunity,
and Congress has not unequivocally expressed an intent to abrogate the
State's immunity, this Court holds as a matter of law that the
Plaintiff's claims pursuant to the FDCPA are barred by the Eleventh
Amendment. Accordingly, the Court will ALLOW the Defendant's motion to
dismiss as to those claims.
E. Plaintiff's FCRA Claims
Defendant ISAC asserts that the Plaintiff's FCRA claims are also barred
by the Eleventh Amendment. The Defendant notes that the FCRA provides, "
[T]he Commission may commence a civil action to recover a civil penalty
in a district court of the United States against any person that violates this subchapter." 15 U.S.C. § 1681s(a)(2)(A). For the
purpose of that subchapter, the word "person" "means any individual,
partnership, corporation, trust, estate, cooperative, association,
government or governmental subdivision or agency, or other entity."
15 U.S.C. § 1681 (b). The Defendant argues that, even if the definition
of "person" arguably could encompass a State pursuant to this statute,
such an inference is not an unequivocal expression of Congress's intent
to abrogate the State's sovereign immunity.
In an unreported case, the Southern District of New York held that
because Congress enacted the FCRA pursuant to its Commerce Clause
power-instead of its power under section 5 of the Fourteenth Amendment-it
lacked the authority to abrogate a State's sovereign immunity through
that statute. See O'Diah v. New York City, 2002 WL 1941179, at
*6 (S.D. N.Y. 2002) (citing Seminole Tribe of Florida v.
Florida, 517 U.S. 44, 59, 116 S.Ct. 1114 (1996)). See also
Richmond v. TRW Services Div., 1997 WL 1037886, at *4 (S.D. Cal.
1997) (dismissing the plaintiff's FCRA claims because there was no
indication that California waived or Congress abrogated the State's immunity).
This Court hereby follows the same rationale and holds as a matter of
law that Plaintiff Sorrell's claims pursuant to the FCRA are barred by
the Eleventh Amendment.*fn1 Accordingly, the Court ALLOWS Defendant
ISAC's motion to dismiss as to all of the Plaintiff's claims pursuant to
Ergo, the Defendant's motion to dismiss the Plaintiff's
complaint is ALLOWED.