Case 3:17-cv-07210-SK Document 140 Filed 11/05/19 Page 1 of 3

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JOSEPH H. HUNT
Assistant Attorney General
DAVID L. ANDERSON
United States Attorney
MARCIA BERMAN
Assistant Branch Director
R. CHARLIE MERRITT
KEVIN P. HANCOCK
Trial Attorneys
Civil Division, Federal Programs Branch
U.S. Department of Justice
919 East Main Street, Suite 1900
Richmond, VA 23219
Telephone: (202) 616-8098
Fax: (804) 819-7417
E-mail: robert.c.merritt@usdoj.gov
Attorneys for Defendants

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UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA

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MARTIN CALVILLO MANRIQUEZ, et al.,
No. 3:17-cv-7210-SK
Plaintiffs,

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v.
NOTICE OF WITHDRAWAL OF
MOTION FOR LEAVE TO FILE
MOTION FOR PARTIAL
RECONSIDERATION

UNITED STATES DEPARTMENT OF
EDUCATION and BETSY DEVOS, in her
official capacity as Secretary of Education,
Defendants.

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Notice of Withdrawal of Motion for Leave to File
Motion for Partial Reconsideration
3:17-cv-7210-SK
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 Case 3:17-cv-07210-SK Document 140 Filed 11/05/19 Page 2 of 3

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On November 1, 2019, Defendants filed a motion for leave to file a motion for partial

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reconsideration, in which they represented that the Court should reconsider its imposition of a

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$100,000 monetary sanction, see Order Regarding Sanctions, ECF No. 130 (“Sanctions Order”)

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because Defendants were at that time, and at “the time of the Sanctions Order, in full compliance

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with the preliminary injunction and have remediated the harm to affected borrowers.” Motion for

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Leave to File Motion for Partial Reconsideration at 2, ECF No. 133 (“Motion”). Defendants

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hereby withdraw the Motion.

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Later in the day on November 1, 2019, the U.S. Department of Education’s (“Department”)

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office of Federal Student Aid (“FSA”), filed a monthly compliance report, see ECF No. 136-1

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(“November Compliance Report”), as required by the Sanctions Order. In that report, FSA

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explained that it had increased its estimate of potential class members by approximately 14,000.

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November Compliance Report at 4. Specifically, FSA stated:

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First, the potential certified class continues to grow as Corinthian borrowers file
new, potentially qualifying borrower defense to repayment applications. Second, as
part of its efforts to ensure that it has identified all potential class members, the
Department is, out of an abundance of caution, examining the records of certain
borrowers whose applications most likely do not qualify them for class
membership. This set includes Corinthian borrower defense applicants who are
tagged in the Department’s systems as either (1) having no Direct Loans after May
2010, (2) having filed an incomplete borrower-defense application, or (3) for whom
100% discharges, as a result of another federal loan discharge process, are in
process for some of the borrowers’ federal student loans, but are not yet complete.
Although [FSA] is confirming its data, which indicates that these three groups of
borrowers are likely excludable from the potential class, FSA has no knowledge
that any of these additional, estimated 14,000 borrowers were impacted by the
Department’s non-compliance.

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Id.
While the Department continues the process of reviewing and confirming its data,
Defendants cannot fairly represent that they are in “full compliance” with the Court’s preliminary
injunction and have remediated the harm to all affected borrowers. Motion at 2. Defendants clarify
for the record that the description in the Motion and in the attached Declaration of General Mark
A. Brown, Chief Operating Officer of FSA, of remediation efforts with respect to known harm is
accurate, namely that by October 24, 2019:
Notice of Withdrawal of Motion for Leave to File
Motion for Partial Reconsideration
3:17-cv-7210-SK
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 Case 3:17-cv-07210-SK Document 140 Filed 11/05/19 Page 3 of 3

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[T]he Department working with the Department of the Treasury (“Treasury”), had
ensured that refunds had been issued to all Corinthian borrowers who had been
identified as having been subject to involuntary collection efforts, and that the
refunds would be exempt from offset against other federal debts. Brown Decl. ¶ 7.
The Department had also ensured that refunds had been issued to each Corinthian
borrower that the Department could confirm made an erroneous payment. Id. ¶¶ 810. As explained in the declaration, this did not include a small set of borrowers
that either do not appear to have actually make a payment or are believed to have
deliberately chosen to make a payment notwithstanding the fact that they were not
required to. Id. ¶¶ 9-10. The Department is following up with this latter set of
borrowers and will process refunds for any such borrower who requests one after
being informed of the potential harm that could result from such refund. Id. ¶ 10.
Finally, the Department and its servicers had corrected the credit reports of all 847
Corinthian borrowers who had been identified as having been subject to adverse
credit reporting. Id. ¶ 11.
Motion at 4.
Defendants anticipate that they may be able to renew their Motion once FSA completes its
review and confirmation process for the approximately 14,000 additional borrowers described in
the November Compliance Report. At this time, however, Defendants withdraw their motion for
leave to file a motion for partial reconsideration.
Dated: November 5, 2019

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Respectfully submitted,
JOSEPH H. HUNT
Assistant Attorney General

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MARCIA BERMAN
Assistant Branch Director

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/s/ R. Charlie Merritt
R. CHARLIE MERRITT (VA Bar No. 89400)
KEVIN P. HANCOCK
Trial Attorneys
U.S. Department of Justice
Civil Division, Federal Programs Branch
919 East Main Street, Suite 1900
Richmond, VA 23219
Telephone: (202) 616-8098
Fax: (804) 819-7417
robert.c.merritt@usdoj.gov

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Counsel for Defendants

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Notice of Withdrawal of Motion for Leave to File
Motion for Partial Reconsideration
3:17-cv-7210-SK
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