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Amicus Brief Case 21-888, Document 49, 07/28/2021, 3146569, Page1 of 32 In the United States Court of Appeals for the Second Circuit New York Legal Assistance Group, Plaintiff-Appellant, v. Miguel A. Cardona, in His Official Capacity as Secretary of Education, and United States Department of Education, Defendants-Appellees. On Appeal from the United States District Court for the Southern District of New York BRIEF OF MASSACHUSETTS, CALIFORNIA, CONNECTICUT, DELAWARE, THE DISTRICT OF COLUMBIA, HAWAII, ILLINOIS, MAINE, MARYLAND, MICHIGAN, MINNESOTA, NEW JERSEY, NEW MEXICO, NEW YORK, NORTH CAROLINA, OREGON, PENNSYLVANIA, RHODE ISLAND, VERMONT, VIRGINIA, WASHINGTON, AND WISCONSIN AS AMICI CURIAE IN SUPPORT OF PLAINTIFF-APPELLANT MAURA HEALEY ROB BONTA Attorney General of Massachusetts Attorney General of California Yael Shavit Nicklas A. Akers Miranda Cover Senior Assistant Attorney General Max Weinstein Bernard A. Eskandari Assistant Attorneys General Supervising Deputy Attorney General One Ashburton Place 455 Golden Gate Avenue Boston, MA 02108 San Francisco, CA 94102 (617) 963-2197 (415) 510-3364 [email protected] [email protected] Attorneys for Amicus Curiae the Attorneys for Amicus Curiae the State Commonwealth of Massachusetts of California (Additional counsel listed on signature page) Case 21-888, Document 49, 07/28/2021, 3146569, Page2 of 32 TABLE OF CONTENTS Page Introduction and Statement of Interest .......................................................... 1 Argument ....................................................................................................... 5 The 2019 Borrower Defense Rule Is Not the Product of Lawful Agency Decisionmaking ........................................................... 5 A. ED Irrationally Adopted an Insurmountable Standard of Proof that Functions as an Effective Bar to Relief for Victimized Borrowers ......................... 7 B. ED Ignored Substantial Record Evidence and Failed to Explain Its Change of Position When It Rescinded the Group Discharge Process ...................... 12 C. ED Improperly Premised the 2019 Rule on the Baseless Assertion that Borrowers Widely Submit “Frivolous” Claims ....................................................... 18 Conclusion ................................................................................................... 20 Certificate of Compliance ............................................................................ 27 i Case 21-888, Document 49, 07/28/2021, 3146569, Page3 of 32 TABLE OF AUTHORITIES Page CASES Animal Legal Def. Fund, Inc. v. Perdue 872 F.3d 602 (D.C. Cir. 2017) ................................................................. 20 Islander E. Pipeline Co. v. McCarthy 525 F.3d 141 (2d Cir. 2008) .................................................................. 5, 6 Kan. Gas & Elec. Co. v. FERC 758 F.2d 713 (D.C. Cir. 1985) ................................................................. 11 Massachusetts, et al. v. Cardona, et al. (N.D. Cal. No. 20-0477, filed July 15, 2020) .............................................4 Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State Farm Mut. Auto. Ins. Co. 463 U.S. 29 (1983)............................................................................. 12, 18 Nat. Res. Def. Council, Inc. v. U.S. Envtl. Prot. Agency 961 F.3d 160 (2d Cir. 2020) .......................................................................6 New York Pub. Int. Rsch. Grp., Inc. v. Johnson 427 F.3d 172 (2d Cir. 2005) .................................................................... 19 New York v. U.S. Dep’t of Health & Human Servs. 414 F. Supp. 3d 475 (S.D.N.Y. 2019) ..................................................... 20 NRDC v. U.S. Dep’t of Energy 362 F. Supp. 3d 126 (S.D.N.Y. 2019) ..................................................... 11 Penobscot Air Servs. v. F.A.A. 164 F.3d 713 (1st Cir. 1999).......................................................................6 Rodolico v. Unisys Corp. 199 F.R.D. 468 (E.D.N.Y. 2001) ............................................................. 16 ii Case 21-888, Document 49, 07/28/2021, 3146569, Page4 of 32 TABLE OF AUTHORITIES (continued) Page U.S. Dep’t of Homeland Sec. v. Regents of the Univ. of Cal. 140 S. Ct. 1891 (2020) ................................................................................6 Vargas v. I.N.S. 938 F.2d 358 (2d Cir. 1991) .......................................................................7 Williams v. DeVos No. 16-11949, 2018 WL 5281741(D. Mass. Oct. 24, 2018) ................... 14 XY Planning Network v. S.E.C. 963 F.3d 244 (2d Cir. 2020) .......................................................................6 STATUTES 5 U.S.C. § 706 ......................................................... 2, 4, 5, 6, 7, 11, 12, 17, 20 20 U.S.C. § 1087e ............................................................................................2 20 U.S.C. § 1221e-3 ...................................................................................... 17 Cal. Civ. Code §§ 1788.90-1788.93 ............................................................. 17 Fed. R. App. P. 29 ............................................................................................2 Fed. R. Civ. P. 23 .......................................................................................... 16 OTHER AUTHORITIES 34 C.F.R. § 685.206 .........................................................................................7 59 Fed. Reg. 61,671 ................................................................................. 3, 18 81 Fed. Reg. 75,937 ...................................................................................... 10 81 Fed. Reg. 75,965 ...................................................................................... 12 81 Fed. Reg. 75,971 ...................................................................................... 15 83 Fed. Reg. 37,244 ...................................................................................... 16 iii Case 21-888, Document 49, 07/28/2021, 3146569, Page5 of 32 TABLE OF AUTHORITIES (continued) Page 84 Fed. Reg. 49,793 ...................................................................................... 18 84 Fed. Reg. 49,798 ................................................................................ 12, 13 84 Fed. Reg. 49,799 ................................................................................ 13, 14 84 Fed. Reg. 49,800 ............................................................................ 5, 18, 19 84 Fed. Reg. 49,807 .............................................................................. 7, 9, 10 84 Fed. Reg. 49,843 .........................................................................................4 84 Fed. Reg. 49,879 .................................................................................. 5, 13 84 Fed. Reg. 49,895 .................................................................................. 3, 10 Attorney General Kamala D. Harris, Incoming U.S. Education Secretary John King Announce Expanded Debt Relief Options for Corinthian College Students (Nov. 2015), https://oag.ca.gov/news/press-releases/attorney-general- kamala-d-harris-incoming-us-education-secretary-john-king ....................8 Testimony of Sec. DeVos Responding to Questions Submitted by Senator Patty Murray (June 13, 2019), https://www.help.senate.gov/imo/ media/doc/SenMurrayQFRresponses32819LHHS hearing.pdf ............................................................................................... 19 iv Case 21-888, Document 49, 07/28/2021, 3146569, Page6 of 32 INTRODUCTION AND STATEMENT OF INTEREST The Commonwealth of Massachusetts, by and through Attorney General Maura Healey; the State of California, by and through Attorney General Rob Bonta; the State of Connecticut, by and through Attorney General William Tong; the State of Delaware, by and through Attorney General Kathy Jennings; the District of Columbia, by and through Attorney General Karl Racine; the State of Hawaii, by and through Attorney General Clare Connors; the People of the State of Illinois, by and through Attorney General Kwame Raoul; the State of Maine, by and through Attorney General Aaron Frey; the State of Maryland, by and through Attorney General Brian Frosh; the State of Michigan, by and through Attorney General Dana Nessel; the State of Minnesota, by and through Attorney General Keith Ellison; the State of New Jersey, by and through Acting Attorney General Andrew J. Bruck; the State of New Mexico, by and through Attorney General Hector Balderas; the State of New York, by and through Attorney General Letitia James; the State of North Carolina, by and through Attorney General Josh Stein; the State of Oregon, by and through Attorney General Ellen Rosenblum; the Commonwealth of Pennsylvania, by and through Attorney General Josh Shapiro; the State of Rhode Island, by and through Attorney General Peter Neronha; the State of Vermont, by and through Attorney General Thomas J. Donovan Jr.; the Commonwealth of Virginia, by and through Attorney General Mark 1 Case 21-888, Document 49, 07/28/2021, 3146569, Page7 of 32 Herring; the State of Washington, by and through Attorney General Bob Ferguson; the State of Wisconsin, by and through Attorney General Joshua Kaul (collectively, “Amici States”) submit this brief under Federal Rule of Appellate Procedure 29(a) to assist the Court in determining whether the final agency action at issue in this litigation is arbitrary and capricious in violation of the Administrative
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