United States District Court, S.D. California
MARSHA D. SKELLY, Plaintiff,
v.
U.S. DEPARTMENT OF EDUCATION; FEDERAL STUDENT AID COMMISSION; FEDLOAN SERVICING, Defendants.
ORDER (1) GRANTING Plaintiff's MOTION FOR LEAVE
TO PROCEED IFP, AND (2) DENYING PLAINTIFF'S MOTION FOR
APPOINTMENT OF COUNSEL.
Hon.
Gonzalo P. Curiel United States District Judge
On
September 20, 2019, Plaintiff Marsha D. Skelly
(“Plaintiff”), proceeding pro se, filed the
instant action against Defendants U.S. Department of
Education, Federal Student Aid Commission, and FedLoan
Servicing (“Defendants”). Plaintiff seeks relief
from further collection of her student loan debt and the
return of money deducted from her Social Security Disability
Benefits. (ECF No. 1.)[1] On September 20, 2019, Plaintiff also
filed a motion to proceed in forma pauperis
(“IFP”) pursuant to 28 U.S.C. § 1915(a),
(ECF No. 2), and a motion for the appointment of counsel.
(ECF No. 3.) For the following reasons, the Court
GRANTS Plaintiff's motion to proceed
IFP, but DENIES the motion for appointment
of counsel.
I.
Factual Background
Plaintiff
earned a degree in business administration and accounting in
1988. (ECF No. 1 at 2.) Plaintiff incurred $16, 000 in
student loan debt during her studies. (Id.)
Plaintiff has been unable to work since 1993 due to physical
ailments. (Id.) Plaintiff subsequently filed for
Chapter 7 Bankruptcy and asserts her debts were discharged in
1994. (Id.) Plaintiff is unsure if she was afforded
the opportunity to request an adversary hearing during her
bankruptcy proceedings.[2] (Id.)
In
1997, the Social Security Administration awarded Plaintiff
disability benefits. (Id.) There was a settlement
from which the County of San Diego recovered money Plaintiff
owed. (Id.) The U.S. Treasury did not challenge the
disbursement of the remaining disability settlement funds
from Social Security. (Id.)
In 2008
and 2013, Plaintiff attempted to discharge her loans due to
disability but was denied. (Id.) After contacting a
U.S. Department of Education ombudsman in 2013, Plaintiff
attempted to consolidate her loans. (Id.) However,
the Federal Student Aid Commission contests that the loans
were consolidated, and the loan summary shows two sets of
loans. (Id.) Plaintiff contends that there is only
one set of loans outstanding. (Id.) In March of
2017, Plaintiff spoke to a second ombudsman who noted the
account was problematic and referred Plaintiff to a third
ombudsman without resolution. (Id.)
On May
18, 2017, Plaintiff received a letter from the Federal
Student Aid Commission. (ECF No. 1-2 at 4-6.) Plaintiff was
informed her loans could not have been discharged in
bankruptcy without an undue hardship determination from the
court and that Plaintiff has not provided evidence of such a
ruling. (Id. at 4.) The Commission thus concluded
Plaintiff's student loan debt was not discharged in
bankruptcy.[3] (Id.)
Plaintiff
asserts her student loan debt, now more than $83, 000, is an
extreme financial hardship. (ECF No. 1 at 2; ECF No. 1-2 at
3.) Plaintiff notes that she has been subject to U.S.
Treasury offsets to her Social Security and IRS refund
checks. (ECF No. 1 at 2.) These offsets to Plaintiff's
limited income caused her to relocate multiple times to more
affordable properties. (Id.) During the pendency of
these offsets, Plaintiff received Medicaid health benefits
and Supplemental Nutrition Assistance Program benefits.
(Id.)
II.
Whether Plaintiff Has the Ability to Pay Her Filing
Fee.
All
parties instituting any civil action, suit, or proceeding in
a district court of the United States, except an application
for writ of habeas corpus, must pay a filing fee of $400. 28
U.S.C. § 1914(a). An action may proceed despite a
plaintiff's failure to prepay the entire fee only if she
is granted leave to proceed IFP. Andrews v.
Cervantes, 493 F.3d 1047, 1051 (9th Cir. 2007).
“The granting or refusing of permission to proceed
[IFP] is a matter committed to the sound discretion of the
district court.” Smart v. Heinze, 347 F.2d
114, 116 (9th Cir. 1965). To proceed IFP, a plaintiff must
submit an affidavit that contains a complete statement of her
assets and demonstrates her inability to pay the fee. 28
U.S.C. § 1915(a)(1). The plaintiff need not demonstrate
that she is completely destitute. Adkins v. E. I. DuPont
de Nemours & Co., 335 U.S. 331, 339-40 (1948).
Here,
Plaintiff declares her current monthly income is insufficient
to meet her current expenses. (ECF No. 2.) The Court finds
Plaintiff has sufficiently demonstrated her inability to pay
the required filing fee pursuant to 28 U.S.C. § 1915(a).
III.
Whether the Complaint States a Claim for Which Relief May Be
Granted. A. Legal Standard for Court's Sua
Sponte Review.
When a
Plaintiff proceeds IFP, the Court has a sua sponte
duty to screen the complaint. 28 U.S.C. § 1915(e)(2). If
the complaint is “frivolous or malicious; fails to
state a claim on which relief may be granted; or seeks
monetary relief against a defendant who is immune from such
relief” the court must dismiss the action. See
28 U.S.C. § 1915(e)(2)(B); Calhoun v. Stahl,
254 F.3d 845, 845 (9th Cir. 2001) (“[T]he provisions of
28 U.S.C. § 1915(e)(2)(B) are not limited to
prisoners.”) “The language of §
1915(e)(2)(B)(ii) parallels the language of Federal Rule of
Civil Procedure [“Rule”] 12(b)(6).”
Barren v. Harrington, 152 F.3d 1193, 1194 (9th Cir.
1998).
Dismissal
is warranted under Rule 12(b)(6) if the complaint lacks a
cognizable legal theory. Robertson v. Dean Witter
Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984);
see Neitzke v. Williams, 490 U.S. 319, 326 (1989)
(“Rule 12(b)(6) authorizes a court to dismiss a claim
on the basis of a dispositive issue of law.”). A
complaint may also be dismissed if it presents a cognizable
legal theory yet fails to plead essential facts under that
theory. Robertson, 749 F.2d at 534. While a
plaintiff need not give “detailed factual allegations,
” a plaintiff must plead ...