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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

CHRISTIAN WELLISCH,

Plaintiff,

v.

PENNSYLVANIA HIGHER EDUCATION 

ASSISTANCE AGENCY, et al.,

Defendants.

Case No. 17-cv-00213-BLF 

ORDER DENYING DEFENDANT’S

MOTION FOR LEAVE TO FILE 

MOTION FOR RECONSIDERATION

AND SUA SPONTE AMENDMENT OF

ORDER ON MOTIONS TO DISMISS

[Re: ECF 46]

Presently before the Court is Defendant Pennsylvania Higher Education Assistance 

Agency (“PHEAA”)’s motion for leave to file a motion for reconsideration. Mot., ECF 46. The 

instant motion pertains to this Court’s Order Granting Defendants’ Motions to Dismiss with Leave 

to Amend (“Order”). ECF 43. Having carefully reviewed PHEAA’s motion and Plaintiff’s 

opposition, the Court DENIES Defendant’s motion because it has determined sua sponte that 

amendment of the order, rather than reconsideration, is appropriate under these circumstances. 

As the parties are aware, the Court found that Plaintiff, Captain Wellisch, failed to state a 

claim upon which relief could be granted. In analyzing Wellisch’s claim under the Federal 

Servicemembers Civil Relief Act (“SCRA”), the Court wrote that PHEAA is subject to the SCRA, 

as it “plainly falls under section 3911’s definition of a ‘court’,” and suggested that PHEAA’s 

student loan servicing activities might constitute a “civil action or proceeding” under section 3932 

of the SCRA. Order 5. PHEAA, through its motion for leave to file a motion for reconsideration, 

asks the Court to reconsider this suggestion in light of a recent decision in Heejoon Chung v. U.S. 

Bank, NA, No. 16-0017, 2017 WL 1395605 (D. Haw. Apr. 17, 2017). 

As a preliminary matter, the Court notes that it does not find the decision in Heejoon 

Chung relevant because there, the court found only that the SCRA does not cover non-judicial 
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United States District Court

Northern District of California

foreclosures. 2017 WL 1395605, at *9. At issue here, by contrast, is PHEAA’s servicing of 

Wellisch’s student loans. For this reason, Heejoon Chung tells this court nothing about whether 

PHEAA’s conduct constitutes a “civil action or proceeding.” 

Upon review of PHEAA’s motion, the Court recognized that its order swept too broad, as 

the Court did not intend to suggest that all of PHEAA’s student loan servicing activity constituted 

a “civil action or proceeding.” For this reason, the Court issued an order with its proposed 

amendment, and afforded Plaintiff an opportunity to respond. ECF 49. The Court proposed the 

following amendment to page 5, lines 10–18 of the Order: 

As Wellisch correctly points out, section 3912 of the SCRA 

provides, “[t]his chapter applies to any judicial or administrative 

proceeding commenced in any court or agency in any jurisdiction 

subject to this chapter.” Opp’n to PHEAA Mot. 4 (quoting 50 

U.S.C. § 3912). Moreover, section 3911 defines “court” as “a court 

or any administrative agency of the United States or of any State 

(including any political subdivision of a State)[.]” 50 U.S.C. § 

3911(5). While the Court agrees that PHEAA could be subject to 

the SCRA, as “a statutorily created instrumentality of the 

Commonwealth of Pennsylvania,” PHEAA Reply 5, ECF 21, 

Wellisch has failed to allege facts showing that PHEAA initiated, at 

any point, a “judicial or administrative proceeding” while servicing 

Wellisch’s loans. Wellisch merely alleges that “[t]he SCRA applies 

to defendant PHEAA, whether PHEAA is deemed an administrative 

agency or political subdivision of the Commonwealth of 

Pennsylvania.” Compl. ¶ 39. Thus, without deciding whether 

PHEAA is acting as a court or agency when it performs its function 

as a loan servicer, the Court finds that Wellisch has failed to allege 

facts supporting that PHEAA was acting in such a capacity. 

Accordingly, Wellisch has failed to state a claim under the SCRA.

Wellisch filed an opposition to this proposed amendment. ECF 50. In his opposition, 

Wellish notes, as does the Court, that the Court did not state, “that the business of student loan 

servicing, in its entirety, is an administrative proceeding,” and that Heejoon Chung is inapposite. 

Id. at 1–2. Wellisch also contends that the Court’s proposed amendment goes against Ninth 

Circuit precedent finding that the SCRA is intended to be liberally construed. Id. at 2–3. The 

Court agrees with this assertion as well, but does not believe that the proposed amendment 

suggests a narrow interpretation of the SCRA. Rather, the Court merely finds that Captain 

Wellisch must allege facts sufficient to support his allegation that PHEAA was acting as a court or 

agency when it denied his IBR request. Finding Wellisch’s opposition unavailing, the Court will 
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United States District Court

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issue the aforementioned amendment in a separate order. 

Based on the foregoing, the Court has sua sponte addressed the substantive issue raised by 

PHEAA in its motion for reconsideration, and on that basis, DENIES leave to file a motion for 

reconsideration. 

The Court’s previous order allowing Plaintiff to file an amended complaint on or before 

July 14, 2017, remains the Order of the Court. 

IT IS SO ORDERED.

Dated: June 21, 2017

______________________________________

BETH LABSON FREEMAN

United States District Judge