The Court of Appeals for the Third Circuit has reversed a lower court’s ruling and concluded that a plaintiff has standing in federal court to pursue a class-action lawsuit against trusts that owned a student loan and the collection agency that was managing the account.
A copy of the ruling in the case of Browne v. National Collegiate Student Loan Trust, Transworld Systems, Wilmington Trust, and US Bank can be accessed by clicking here.
Back in 2007, the plaintiff co-signed for a student loan. Ten years later, the plaintiff asked the servicer of the loan to identify the current creditor. The plaintiff alleges the servicer identified the trusts as the owner of the loan and that he then made payments to the trust for three years when the loan was paid off in full. About a year later, the plaintiff filed suit in state court, alleging the trusts violated state law by collecting on the debt without having the proper license to do so. The case was removed to federal court, where it was dismissed for lack of standing and remanded back to state court. The plaintiff filed an amended complaint, which was again removed to federal court, at which point the plaintiff sought to have it remanded back to state court. The District Court remanded the case back to state court, which the defendants appealed to the Third Circuit.
This one was an easy ruling for the Third Circuit, because the plaintiff suffered a concrete injury by making payments on the loan for three years — which were either made to the wrong creditor or were not owed at all. Quoting the Supreme Court’s ruling in TransUnion v. Ramirez
