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Kenneth Joseph Woodard v. Navient Solutions, LLC (In re Woodard), Ch. 13, BK08-81442, A21-8023-TLS (Mar. 8, 2023)

The court approved the formation of a circuit-wide class action to challenge alleged violations of the § 524(a) discharge injunction in connection with the collection of student loan debt. The court found that it has the authority to enforce discharge orders other than ones it entered because such orders operate by the statutory authority of § 524(a)(2) and the court’s power under § 105(a), and are not individualized, hand-crafted orders that require interpretation.

The court also found that the purported waiver (contained in the promissory note) by the debtor of the right to bring a class action arose only in the context of arbitration proceedings. The court here had denied the defendant’s motion to compel arbitration, so the waiver provision was inapplicable.

The court then discussed the necessary elements of a class action under Federal Rule of Civil Procedure 23 (Fed. R. Bankr. P. 7023), and found that the plaintiff had established each element of Rule 23(a) – numerosity, commonality, typicality, and adequacy of class representation. The court further found the plaintiff had satisfied the requirements of Rule 23(b)(3) because “the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” While the matter of calculating restitution and damages will require individual findings for each class member, that by itself is an inadequate reason to deny certification when liability can be determined for the whole class.

Because the plaintiff established under the elements of Rule 23 that a class action should be approved in this litigation as an efficient and equitable method of resolving the issue of whether the defendant violated the discharge injunction and, if so, what remedies are responsive to that violation, the motion for class certification will be granted by the terms of an order to be submitted.

Wednesday, March 8, 2023
Judge Thomas L. Saladino