United States District Court, D. Maine
JANE C. FORRESTER WINNE, Plaintiff,
NATIONAL COLLEGIATE STUDENT LOAN TRUST 2005-1, et al., Defendants.
ORDER ON PLAINTIFF'S MOTION FOR LEAVE TO AMEND
THE COMPLAINT FOR THE SECOND TIME
LEVY U.S. DISTRICT JUDG.
Plaintiff, Jane C. Forrester Winne, moves pursuant to Federal
Rule of Civil Procedure 15(a)(2) to amend her complaint for a
second time. ECF No. 64. The Proposed Second Amended
Complaint adds three plaintiffs, seventeen defendants, and
three causes of action, in addition to providing additional
information in support of class certification. Id.
at 1. Defendants Citizens Bank, N.A. (“Citizens”),
U.S. Bank National Association (“US Bank”), PNC
Bank, N.A. (“PNC”), National Collegiate Student
Loan Trust 2005-1 (“NCSLT 2005-1”), National
Collegiate Student Loan Trust 2005-3 (“NCSLT
2005-3”), Transworld Systems, Inc.
(“Transworld”), and Turnstile Capital Management,
LLC (“Turnstile”) oppose the motion. ECF No. 71;
ECF No. 72, ECF No. 73; ECF No. 74. Oral argument on the
motion was held before me on November 17, 2016.
First Amended Complaint centered on debt collection
activities related to two private student loans that Winne
allegedly took out in 2004 and 2005. She contends that NCSLT
2005-1 and NCSLT 2005-3 are attempting to collect on these
loans, having purportedly acquired them from Citizens and
PNC, respectively. Winne denies receiving the proceeds from
the loans and claims she has never made a payment toward
either loan. She seeks to certify the suit as a class action
on behalf of “vulnerable Maine students who are being
unlawfully pursued on alleged private student loan debts they
do not owe, were fraudulently procured, or both.” ECF
No. 3 at 2.
proposed Second Amended Complaint would join three additional
plaintiffs who also claim to have been the subjects of debt
collection efforts related to private student loans allegedly
owned by various National Collegiate Student Loan Trusts
(“NCSLTs”). It would add fifteen NCSLTs as
defendants, as well as Wilmington Trust Company, a statutory
trust that is allegedly an owner trustee of the NCSLTs, and
The First Marblehead Corporation, a company that is alleged
to have served as Administrator to the NCSLTs. The Proposed
Second Amended Complaint also includes new causes of action
for fraud, fraudulent concealment, and breach of contract.
of the defendants named in the First Amended
Complaint-Citizens, PNC, and U.S. Bank-moved to dismiss the
claims against them. I have addressed those motions in a
separate order, dated January 11, 2017, that grants dismissal
as to Citizens and PNC, and denies dismissal as to U.S. Bank.
See ECF No. 109.
the time for amendments as a matter of course has passed, a
party may amend its pleading with leave of the court, which
should be freely given “when justice so
requires.” Fed.R.Civ.P. 15(a)(2). Accordingly, leave to
amend should be granted where there is no “undue delay,
bad faith or dilatory motive on the part of the movant,
repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by
virtue of allowance of the amendment, [or] futility . . .
.” Foman v. Davis, 371 U.S. 178, 182 (1962);
see also Chiang v. Skeirik, 582 F.3d 238, 244 (1st
Cir. 2009). If leave to amend is sought before discovery is
complete and neither party has moved for summary judgment, a
proposed amendment will be denied if the amendment fails to
state a claim and is, therefore, futile. See Hatch v.
Dept. for Children, Youth and Their Families, 274 F.3d
12, 19 (1st Cir. 2001). “Futility” is gauged by
the criteria of Federal Rule of Civil Procedure 12(b)(6)
governing motions to dismiss for failure to state a claim.
survive a Rule 12(b)(6) motion to dismiss, “a complaint
must contain sufficient factual matter, accepted as true, to
‘state a claim for relief that is plausible on its
face.'” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570 (2007)). In considering the merits of a
motion to dismiss, the Court must accept as true all
well-pleaded factual allegations in the complaint and draw
all reasonable inferences in the plaintiff's favor.
Gargano v. Liberty Intern. Underwriters, Inc., 572
F.3d 45, 48 (1st Cir. 2009). The complaint must contain facts
that support a reasonable inference “that the defendant
is liable for the misconduct alleged.” Iqbal,
556 U.S. at 678. “If the factual allegations in the
complaint are too meager, vague, or conclusory to remove the
possibility of relief from the realm of mere conjecture, the
complaint is open to dismissal.” Haley v. City of
Boston, 657 F.3d 39, 46 (1st Cir. 2011) (quotation and
internal citations omitted).
of fraud and fraudulent concealment are subject to the higher
pleading standard of Federal Rule of Civil Procedure Rule
9(b). See Fed. R. Civ. P. 9(b). The complaint must
“be specific about the ‘time, place, and content
of an alleged false representation[.]'” Murtagh
v. St. Mary's Reg'l Health Ctr., 2013 WL
5348607, at *6 (D. Me. Sep. 23, 2013) (quoting Hayduk v.
Lanna, 775 F.2d 441, 444 (1st Cir. 1985)). Mere
conclusory allegations will not satisfy the particularity
requirement. See Hayduk, 775 F.2d at 444. Rule 9(b)
also requires that plaintiffs identify a basis for inferring
scienter on the part of the defendant. N. Am. Catholic
Educ. Programming Found., Inc. v. Cardinale, 567 F.3d 8,
13 (1st Cir. 2009).
objects to Winne's motion to amend the complaint on the
ground that the amendment would be futile. ECF No. 71 at 6.
Citizens claims that none of the causes of action asserted
against it in the Proposed Second Amended Complaint state a
claim sufficient to survive a motion to dismiss under Rule
12(b)(6). Id. Winne and the additional plaintiffs
propose claims against Citizens under the Truth in Lending
Act, 15 U.S.C.A. § 1601, et seq., and the Maine
Unfair Trade Practices Act, 5 M.R.S.A. § 205-A, et
seq. (2016), as well as common law claims alleging
fraud, fraudulent concealment, and breach of contract. ECF
No. 64-1 at 45-50.
Truth in Lending Act (“TILA”) and Maine Unfair
Trade Practices Act (“MUTPA”)
analyzed the claims against Citizens under TILA and the MUTPA
in my separate order on Citizens' motion to dismiss, and
found that the TILA claim is time-barred by the statute of
limitations and the MUTPA claim may not be asserted against a
bank such as Citizens. ECF No. 109 at 2-6. There is nothing
contained in the proposed Second Amended Complaint that
changes this analysis. Accordingly, with respect to the TILA
and MUTPA claims asserted against Citizens, Winne's
motion to amend the complaint is denied as futile.
state a claim for fraud under Rule 9(b), the Plaintiffs must
plead facts which, if true, would demonstrate that Citizens
made a false statement of material fact, with knowledge of
its falsity or reckless disregard for its truth or falsity,
with the purpose of inducing the Plaintiffs to rely on the
statement, and the Plaintiffs must have in fact justifiably
relied on it and suffered damages. See Rutland v.
Mullen, 2002 ME 98, ¶ 14, 798 A.2d 1104.
only statement alleged in the proposed Second Amended
Complaint that can be attributed to Citizens is the
disclaimer on the Loan Request/Credit Agreement, which states
that the loan agreement is a consumer credit transaction. ECF
No. 64-1 at 30, ¶ 203. Plaintiffs claim that this
statement is false, because the loans were in fact
“pipeline loans feeding a huge commercial beast,
” rather than consumer transactions. Id. at
48, ¶ 311. This metaphor appears to refer to loans ...