Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-13-16588/USCOURTS-ca9-13-16588-0/pdf.json

Parties Involved:
Mark J. Falcon
Appellant
United States of America
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Counter-defendantAppellee,

v.

MARK J. FALCON,

Defendant-Counter-claimantAppellant.

No. 13-16588

D.C. No. 

4:11-cv-00006-

FRZ

OPINION

Appeal from the United States District Court

for the District of Arizona

Frank R. Zapata, Senior District Judge, Presiding

Submitted October 23, 2015*

San Francisco, California

Filed November 9, 2015

Before: Michael Daly Hawkins, Barry G. Silverman, and

Morgan Christen, Circuit Judges.

Per Curiam Opinion

* The panel unanimously concludes this case is suitable for decision

without oral argument. See Fed. R. App. P. 34(a)(2).

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2 UNITED STATES V. FALCON

SUMMARY**

Student Loans

The panel affirmed the district court’s judgment in favor

of the United States in the government’s action to collect

unpaid federally insured student loans.

The panel held that the Higher Education Technical

Amendments of 1991, which eliminated all statutes of

limitations on actions to recover on defaulted federally

guaranteed student loans, did not violate a student loan

debtor’s due process rights. The panel also held that the

student loan debtor failed to raise a genuine issue of material

fact or a question as to liability for the amount of

indebtedness alleged in the complaint.

COUNSEL

Vincent Lee Rabago, Tucson, Arizona, for DefendantCounter-claimant-Appellant.

John S. Leonardo, United States Attorney, Robert L. Miskell,

Appellate Chief, and Denise Ann Faulk, Assistant United

States Attorney, Tucson, Arizona, for Plaintiff-Counterdefendant-Appellee.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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UNITED STATES V. FALCON 3

OPINION

PER CURIAM:

This appeal arises from the United States’ action to

collect unpaid federally reinsured student loans from

defendant-appellant Mark J. Falcon. Falcon obtained several

student loans between 1983 and 1991. Falcon then allegedly

defaulted. We affirm the district court’s grant of summary

judgment to the United States, and its denial of Falcon’s

motion to alter or amend the judgment. 

FACTUAL AND PROCEDURAL BACKGROUND

The material facts are not in dispute. Between 1983 and

1991, Falcon signed several promissory notes to secure

guaranteed student loans, known as “Stafford Loans,” totaling

$47,900. On or about October 2, 1990, Falcon signed another

promissory note to secure a guaranteed loan from the Higher

Education Loan Plan, a so-called HELP Loan, in the amount

of $4,000. The promissory notes Falcon signed in connection

with his Stafford Loans and HELP Loan include promises to

pay all amounts disbursed, plus interest and fees. The loan

obligations evidenced by these notes were guaranteed by a

guaranty agency, and the guarantor was reinsured by the U.S.

Department of Education. 

The government contends that Falcon defaulted on his

HELP Loan in 1993 and on his Stafford Loans in 1994 and

1997. As a result of the alleged defaults, the guaranty agency

paid the holders of the loans, and Department of Education

reimbursed the guaranty agency under a reinsurance

agreement. On May 6, 2005, the rights and title to Falcon’s

unpaid loans were assigned to DOE. 

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4 UNITED STATES V. FALCON

On January 4, 2011, the government filed this action. On

its motion for summary judgment, the United States argued

that Falcon owed a total of $112,563.51 on the Stafford

Loans, consisting of $53,697.74 in principal and $58,865.77

in accrued interest as of October 5, 2010, and that interest

continues to accrue on the principal balance at a rate of

$11.76 per day. It further contended that Falcon owed a total

of $10,088.21 for the HELP Loan, consisting of $4,778.74 in

principal and $5,309.47 in accrued interest as of October 10,

2010, and that interest continues to accrue on the principal

balance at a rate of $0.46 per day. The district court entered

judgment in favor of the United States. Falcon timely moved

to alter or amend the judgment under Fed. R. Civ. P. 59(e),

and raised a constitutional argument that Congress’

elimination of the statute of limitations for federally

guaranteed student loan collection actions violates his due

process rights. The district court denied Falcon’s motion, and

Falcon timely appealed.

STANDARD OF REVIEW

We review de novo the district court’s summary

judgment, and we review the denial of a motion under Rule

59(e) for an abuse of discretion. McCarthy v. Mayo, 827 F.2d

1310, 1314 (9th Cir. 1987). 

DISCUSSION

The Higher Education Technical Amendments of 1991

(“HETA”) eliminated all statutes of limitations on actions to

recover on defaulted federally guaranteed student loans. 20

U.S.C. § 1091a(a)(2); see also United States v. Phillips, 20

F.3d 1005, 1007 (9th Cir. 1994) (“Congress not only

eliminated [the prior] six-year statute of limitations period,

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UNITED STATES V. FALCON 5

but also revived all actions which would have otherwise been

time-barred.”).

Falcon’s primary argument is that HETA violates his due

process rights because, he contends, it creates eternal

indebtedness for a class of borrowers. Other circuits have

held that HETA’s retroactive abrogation of the statute of

limitations does not violate a student loan debtor’s due

process rights. See, e.g., United States v. Distefano, 279 F.3d

1241, 1244 (10th Cir. 2002); United States v. Hodges, 999

F.2d 341, 342 (8th Cir. 1993); see also Campbell v. Holt, 115

U.S. 620, 629–30 (1885) (holding that a legislature may

repeal or extend a statute of limitations, without violating the

Constitution, even after a right of action is barred). We join

the other circuits in holding that HETA’s elimination of the

limitations period for actions to collect on federally

guaranteed student loans does not result in a denial of due

process.

Falcon relies on Chase Securities Corp. v. Donaldson,

325 U.S. 304 (1945) to argue that Congress’ repeal of his

statute of limitations defense violates federal due process

because it generates oppressive effects and has created a

special hardship. He acknowledges, however, that no court

has found the repeal of a limitations period to work any such

hardship. In Chase Securities, the Court rejected the notion

that a change in the statute of limitations worked “special

hardships” on the defendant because his “conduct would have

been different if the present rule had been known and the

change foreseen.” Chase Sec., 325 U.S. at 316. Chase

Securities held that the existence of a legislatively provided

statute of limitations, and its subsequent repeal, did not give

rise to “a constitutional right against change of policy before

final adjudication.” Id. 

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6 UNITED STATES V. FALCON

HETA’s change in law presents a weaker case for Falcon

than the change at issue in Chase Securities. HETA did not

revive an otherwise untimely action to collect as to Falcon’s

debt. Not only did HETA not resuscitate otherwise timebarred claims in this case, but Falcon would not have had a

defense under the prior six-year statute.1 And even if he had,

congressional repeal of a statute of limitations does not

violate the due process clause. See In re Lewis, 506 F.3d 927,

932–33 (9th Cir. 2007) (rejecting due process challenge to

retroactive amendment of the Bankruptcy Code as to the

dischargeability of certain student loans).

Because Falcon’s constitutional challenge to summary

judgment fails, we must consider whether genuine issues of

material fact exist regarding the loan amounts alleged in the

complaint and Falcon’s default. The government established

a prima facie case through certificates of indebtedness, which

were signed under the penalty of perjury, showing that Falcon

executed promissory notes to secure loans, defaulted on the

loans, and owed the United States certain amounts after

offsets from various sources. See United States v.

Petroff–Kline, 557 F.3d 285, 290 (6th Cir. 2009). Falcon, on

the other hand, failed to present testimony for consideration

1 Before Congress enacted HETA, the statute of limitations for actions

to recover on defaulted student loans was six years, commencing from the

date on which the loan was assigned to DOE. See Higher Education Act

of 1965 as amended by the Consolidated Omnibus Budget Reconciliation

Act of 1985, Pub. L. No. 99-272 (1986); see also United States v.

Menatos, 925 F.2d 333, 335 (9th Cir. 1991), superseded by statute,

HETA, Pub. L. No. 102-26, 105 Stat. 123, as recognized in United States

v. Phillips, 20 F.3d 1005, 1007 (9th Cir. 1994). Under the prior law, the

government’s action would have accrued when Falcon’s loans were

assigned to DOE. This occurred in 2005 – less than six years before the

government filed suit. 

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UNITED STATES V. FALCON 7

on summary judgment to refute the government’s showing

that it was entitled to a judgment in the amount sought. As

the district court held, Falcon “failed to present sufficient

evidentiary facts to raise a genuine issue of material fact or a

question as to liability for the indebtedness alleged in Counts

I and II of the Complaint.” See Celotex Corp. v. Catrett, 477

U.S. 317, 324 (1986) (quoting Fed. R. Civ. P. 56(e)).

AFFIRMED.

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