United States District Court, W.D. Virginia, Roanoke Division
WILLIE HENDERSON, individually and behalf of all others similarly situated, Plaintiff,
GENERAL REVENUE CORPORATION, et al., Defendants.
Glen E. Conrad Senior United States District Judge
case is presently before the court on the plaintiffs motion
for leave to file a second amended complaint. For the reasons
set forth below, the court will grant the plaintiffs motion.
June 22, 2017, plaintiff Willie Henderson filed the instant
action against General Revenue Corporation ("GRC"),
alleging that GRC violated the Fair Debt Collection Practices
Act ("FDCPA"), 15 U.S.C. §§ 1692-1692p,
in its efforts to collect federal student loan debts from
Henderson and others similarly situated. Henderson's
original complaint was based on a letter dated February 7,
2017, in which GRC advised Henderson that he had defaulted on
his student loan debt and owed over $100, 000 in principal,
interest, and collection costs.
December 21, 2017, the court granted Henderson's motion
for leave to file an amended complaint. The amended complaint
included additional facts regarding GRC's alleged
violations of the FDCPA. It also added claims against a new
defendant, Pioneer Credit Recovery, Inc.
("Pioneer"), stemming from Pioneer's
communications with Henderson. Both GRC and Pioneer are
subsidiaries of Navient Corporation ("Navient").
August 14, 2018, Henderson filed a motion for class
certification. Henderson then moved to stay the deadlines for
briefing the certification motion pending discovery. That
motion was granted and the parties were given until January
21, 2019 to complete discovery.
time Henderson moved for class certification, he knew that
GRC and Pioneer were performing the debt collection
activities at issue pursuant to agreements with Navient
Portfolio Management, LLC ("NPM"), another
subsidiary of Navient. In January of 2019, the defendants
produced a copy of the "Master Servicing Agreement"
between NPM and several loan guarantors, including United
Student Aid Funds, Inc. ("USAF"), the guarantor of
Henderson's alleged debt. Under the terms of the Master
Servicing Agreement, NPM is obligated to "perform all
customary and usual portfolio management and collection
services and duties associated with the collection of
defaulted educational loans." Master Servicing Agreement
§ A(1), Dkt. No. 93-1. The agreement further provides
that NPM "shall use commercially reasonable efforts . .
. to obtain payment in full of the principal balance, accrued
interest, and collection charges on a Loan."
Id.. § A(5). The agreement permits NPM to
utilize the services of "Subordinate Servicers,"
with the understanding that NPM "shall have sole
responsibility for contracting with, compensation, oversight,
and audit of such servicers. Id. § A(4).
February 4, 2019, Henderson filed the instant motion for
leave to file a second amended complaint. The proposed
amended pleading adds NPM as a defendant and asserts claims
of vicarious liability against NPM. That same day, in
accordance with a briefing order entered on October 22, 2018,
Henderson filed a memorandum in support of his motion for
light of the tandem filings by the plaintiff, the existing
defendants requested a status conference, which was held on
February 11, 2019. Following the status conference, the court
entered an order establishing a briefing schedule for the
plaintiffs second motion to amend. The court advised the
parties that it would set new deadlines for additional
briefing on the issue of class certification following the
disposition of that motion. The court tentatively rescheduled
the hearing on the issue of class certification for April 26,
the period for amending a complaint as a matter of right has
expired, "a party may amend its pleading only with the
opposing party's written consent or the court's
leave." Fed.R.Civ.P. 15(a)(2). Rule 15 provides that
leave should be freely given when justice so requires.
Id. "The Supreme Court has declared that
'this mandate is to be heeded.'" Edwards v.
City of Goldsboro. 178 F.3d 231, 242 (4th Cir. 1999)
(quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).
"The law is well settled 'that leave to amend a
pleading should be denied only when the amendment
would be prejudicial to the opposing party, there has been
bad faith on the part of the moving party, or the amendment
would be futile.'" Id. (emphasis in
original) (quoting Johnson v. Oroweat Foods Co.. 785
F.2d 503, 509 (4th Cir. 1986)).
opposing the pending motion, GRC and Pioneer argue that the
motion is untimely and that the proposed amendments would be
futile. For the following reasons, the court finds both
first to the timing of the motion, Henderson does not dispute
that he was aware of NPM's contractual relationship with
GRC and Pioneer as early as March of 2018, when he received
copies of the defendants' respective agreements with NPM.
However, Henderson emphasizes that the full extent of
NPM's role in the debt collection efforts undertaken by
GRC and Pioneer did not become clear until the defendants
produced the Master Services Agreement in January of 2019.
Less than one month later, Henderson filed the instant motion
seeking leave to add NPM as a defendant. Under these
circumstances, the court does not believe that the timing of
the motion weighs against amendment.
even assuming that the motion could have been filed earlier,
the United States Court of Appeals for the Fourth Circuit has
made clear that"[d]elay alone is an insufficient reason
to deny leave to amend." Edwards, 178 F.3d at
242. "Rather, the delay must be accompanied by
prejudice, bad faith, or futility." Id. In
their brief in opposition to the pending motion, GRC and
Pioneer suggest that granting leave to amend would prejudice
NPM's ability to "defend against certification of
class-action claims." Defs.' Br. Opp'n 5, Dkt.
No. 98. However, the court made clear at the previous status
conference that it would allow NPM sufficient time to respond
to the motion for class certification if the court granted
leave to file a second amended complaint. The court
tentatively rescheduled the hearing on the certification
motion for April 26, 2019, with the understanding that the
hearing would be postponed if necessary to allow NPM ...