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                                                                                 [PUBLISH]



                  IN THE UNITED STATES COURT OF APPEALS

                            FOR THE ELEVENTH CIRCUIT
                              ________________________

                                    No. 17-12113
                              ________________________

                      D.C. Docket No. 3:16-cv-00082-DHB-BKE



HOPE D. DARRISAW,

                                                                        Plaintiff-Appellant,

                                            versus

PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY (PHEAA),

                                                                       Defendant-Appellee.

                              ________________________

                      Appeal from the United States District Court
                         for the Southern District of Georgia
                            ________________________

                                     (February 7, 2020)

Before WILLIAM PRYOR, MARTIN, and KATSAS, * Circuit Judges.

WILLIAM PRYOR, Circuit Judge:


       *
          Honorable Gregory G. Katsas, United States Circuit Judge for the District of Columbia
Circuit, sitting by designation.
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      This appeal presents the question whether a guaranty agency for federal

student loans qualifies as a “debt collector” under the Fair Debt Collection

Practices Act, 15 U.S.C. § 1692a(6), when it mistakenly attempts to collect a

nonexistent student-loan debt. Hope Darrisaw, a student-loan borrower, sued the

Pennsylvania Higher Education Assistance Agency under the Act after it tried to

collect a debt she never incurred. The district court dismissed her complaint on the

ground that the Agency, which guarantees federal student loans for the Secretary of

Education, is not a “debt collector” under the Act; it concluded that the Agency fell

within an exception for persons who collect debts “incidental to a bona fide

fiduciary obligation.” Id. § 1692a(6)(F)(i). We agree that the Agency falls within

this exception, so we affirm.

                                I. BACKGROUND

      Because this appeal is from the dismissal of a complaint, we accept the

allegations of the complaint as true. See Am. Dental Ass’n v. Cigna Corp., 605

F.3d 1283, 1288 (11th Cir. 2010). We recount the facts as alleged in the complaint.

And we construe them in the light most favorable to the plaintiff. See id.

      Hope Darrisaw obtained student loans to attend college. In July 2014, her

loan servicer, Nelnet, placed the loans in deferment because Darrisaw was

“enrolled in school at least half-time.” Nelnet scheduled the deferment to last from

July 2014 until December 2016, during which time no payments would be due.



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      In April 2016, Darrisaw received a letter from the Pennsylvania Higher

Education Assistance Agency stating that the Agency had “paid a default claim on

your student loan(s) identified below” and was “now the legal owner of your

loan(s).” The letter identified four loans and informed Darrisaw that because of her

default she was “required to pay [her] loan(s) in full immediately” to the Agency.

Darrisaw had not obtained those four loans and believed the letter was sent “in

error,” so she did not initially respond to the letter.

      The following month, May 2016, the Agency sent Darrisaw a second letter.

That letter warned Darrisaw that her defaulted loan was “now a federal debt” and

would be “subject to collection efforts” if she failed to remit payment in the

amount of $18,812.83. Concerned, Darrisaw called the Agency at “the number

listed on the Federal Student Aid website” because she “did not trust the

information in the letters.” She planned to “inquire about the debt” and “correct the

error.” But the representative Darrisaw called denied that she had an outstanding

debt with the Agency and terminated the call because the Agency’s “records did

not contain any reference to” Darrisaw.

      Darrisaw received a third letter from the Agency in June 2016. This letter

stated that the Agency would begin garnishing Darrisaw’s wages to collect her

defaulted student loans unless she established a repayment plan by the following

month. Because the Agency had denied the existence of the debt over the



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telephone, Darrisaw believed the collection letters were part of “a fake debt

collection scam,” so she continued to ignore them.

      In July 2016, the Agency sent a garnishment order to Darrisaw’s employer

directing it to deduct and remit to the Agency 15 percent of her disposable pay.

The Agency sent a second letter in September 2016 notifying Darrisaw’s employer

that it had not received any garnishment payments and explaining that the Agency

could take legal action if the employer failed to comply with the garnishment

order. Darrisaw’s employer began garnishing her wages shortly after receiving the

second letter.

      Darrisaw filed a pro se complaint against the Agency for alleged violations

of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. She also

brought claims under the Federal Trade Commission Act, 15 U.S.C. § 45, and

against James Preston, the President and CEO of the Agency. The district court

dismissed those claims after screening Darrisaw’s complaint, 28 U.S.C.

§ 1915(e)(2)(B), and Darrisaw does not appeal those dismissals.

      Darrisaw alleges that the debts the Agency sought to collect were “assigned

to [her] in error, either on the part of the lender, the [Department of Education], or

the [Agency].” She alleges that she “does not owe the debt” the Agency sought to

collect and that the Agency “abdicated its responsibilities . . . to maintain

procedures reasonably adapted to avoid such an error.” She also asserts that the



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Agency made “false or misleading representations,” was “negligen[t],” and

“fail[ed] to validate the debt.” And she accuses the Agency of engaging in

“fraudulent” business practices.

      The Agency moved to dismiss Darrisaw’s claim under the Fair Debt

Collection Practices Act. See Fed. R. Civ. P. 12(b)(6). The Agency argued it was

not a “debt collector” under the Act. As a federal guaranty agency, the Agency

argued it fell within an exception to the Act’s definition of “debt collector” for

persons “collecting or attempting to collect any debt owed or due or asserted to be

owed or due another to the extent such activity . . . is incidental to a bona fide

fiduciary obligation.” 15 U.S.C. § 1692a(6)(F)(i). The district court granted the

Agency’s motion to dismiss.

                           II. STANDARD OF REVIEW

      We review de novo the dismissal of a complaint. Culverhouse v. Paulson &

Co., 813 F.3d 991, 993 (11th Cir. 2016). We construe the allegations of a pro se

complaint liberally, in the light most favorable to the plaintiff. Dixon v. Hodges,

887 F.3d 1235, 1237 (11th Cir. 2018).

                                   III. DISCUSSION

      Congress enacted the Higher Education Act of 1965 “[t]o strengthen the

educational resources of our colleges and universities and to provide financial

assistance for students in postsecondary and higher education.” Higher Education



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Act of 1965, Pub. L. No. 89-329, 79 Stat. 1219, 1219; see also Cliff v. Payco Gen.

Am. Credits, Inc., 363 F.3d 1113, 1122 (11th Cir. 2004). Title IV of the Act

empowers “the Secretary of Education to administer several federal student loan

and grant programs, including the Federal Family Education Loan Program.” Cliff,

363 F.3d at 1122; see also 20 U.S.C. § 1071 et seq. Under the programs, “lenders

make guaranteed loans under favorable terms to students and their parents, and

these loans are guaranteed by guaranty agencies and ultimately by the federal

government.” Cliff, 363 F.3d at 1122; see also 34 C.F.R. § 682.100.

      Guaranty agencies are either states or nonprofit organizations that agree with

the Secretary to administer a loan-guarantee program under the Higher Education

Act. 20 U.S.C. § 1078(b)(1); 34 C.F.R. § 682.200(b). Under the agreements, these

agencies guarantee private lenders against loss when a borrower defaults on a

federal student loan. 34 C.F.R. § 682.100(b)(1). If a borrower defaults, the

guaranty agency pays the default claim to the lender and is reimbursed by the

Secretary. Id.; 20 U.S.C. § 1078(c)(1)(A). The guaranty agency must then attempt

to collect the unpaid loan from the borrower on behalf of the Secretary. 34 C.F.R.

§ 682.410(b)(6)(i); see 20 U.S.C. § 1078(c)(2)(A), (c)(6). The guaranty agency

returns most of any payments it collects to the Secretary but may keep a percentage

of the payments for use in its operating fund. 20 U.S.C. §§ 1078(c)(2)(D), (c)(6),

1072b(c)(5).



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      Because guaranty agencies must recover and safeguard money that belongs

to the federal government, federal law regulates their relationships with the

Secretary. The Higher Education Act requires the agreements between guaranty

agencies and the Secretary to establish procedures “to protect the United States

from the risk of unreasonable loss” and “to assure that due diligence will be

exercised in the collection of loans insured under the program.” Id.

§ 1078(c)(2)(A). The implementing regulations describe the relationship between a

guaranty agency and the Secretary as that of a fiduciary. 34 C.F.R. § 682.419(a)

(“The guaranty agency must exercise the level of care required of a fiduciary

charged with the duty of protecting, investing, and administering the money of

others.”).

      We must decide whether the Agency acted as a “debt collector” when it

attempted to collect student-loan debts from Darrisaw that she never incurred. 15

U.S.C. § 1692a(6). The Act excludes from its definition of “debt collector” “any

person collecting or attempting to collect any debt owed or due or asserted to be

owed or due another to the extent such activity . . . is incidental to a bona fide

fiduciary obligation.” Id. § 1692a(6)(F)(i). The Agency argues that it falls within

this exclusion because it sought to collect the debts from Darrisaw pursuant to its

fiduciary obligation to the Secretary. Although Darrisaw agrees that guaranty

agencies act “incidental to a bona fide fiduciary obligation” when they attempt to



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collect valid debts for the Secretary, she argues they do not fall within the

exclusion when they attempt to collect nonexistent debts. We agree with the

Agency.

      We have held that a guaranty agency acts “incidental to a bona fide fiduciary

obligation” when it attempts to collect a debt from a borrower who defaulted on a

federal student loan. Pelfrey v. Educ. Credit Mgmt. Corp., 208 F.3d 945, 945 (11th

Cir. 2000) (internal quotation marks omitted). In Pelfrey, we affirmed a judgment

in favor of a guaranty agency “on the ground that the [Act] does not apply to the

[guaranty agency]” because the agency fell within the exception for fiduciaries. Id.

(internal citation omitted). It was undisputed in Pelfrey that the guaranty agency

attempted to collect a student loan on which the borrower defaulted and that a

guaranty agency had paid a default claim to the private lender that made the loan.

See Pelfrey v. Educ. Credit Mgmt. Corp., 71 F. Supp. 2d 1161, 1162 (N.D. Ala.

1999). But unlike the borrower in Pelfrey, Darrisaw alleges she never incurred the

debts the Agency attempted to collect from her. She argues that allegation makes

all the difference.

      Darrisaw argues that a guaranty agency is not protecting federal assets when

it attempts to collect a nonexistent debt, so it does not act “incidental to a bona fide

fiduciary obligation” in that circumstance. She points to federal regulations

acknowledging that guaranty agencies sometimes perform tasks “outside of their



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[federal] guaranty activities” and requiring guaranty agencies “to ensure that

Federal funds are not subsidizing non-[federal] guaranty activity.” 61 Fed. Reg.

49,382, 49,382 (Sept. 19, 1996). She also maintains that the Higher Education Act

requires guaranty agencies to exercise “due diligence . . . in the collection of loans

insured under the program”—but not in the collection of false, nonexistent loans.

20 U.S.C. § 1078(c)(2)(A) (emphasis added). Because Darrisaw alleges she never

took out the loans the Agency attempted to collect from her, she argues there are

no federal funds at issue. And because the Agency was not acting to protect any

federal funds, Darrisaw argues it did not act “incidental to a bona fide fiduciary

obligation.” 15 U.S.C. § 1692a(6)(F)(i).

      The Agency responds that application of the fiduciary-obligation exception

does not depend on whether the debt a guaranty agency attempts to collect is valid

or nonexistent. It points to the text of the Act, which says the exception applies

whenever a person attempts to collect any debt that is “owed or due or asserted to

be owed or due another” if the activity “is incidental to a bona fide fiduciary

obligation.” Id. (emphasis added). To give effect to the phrase “or asserted to be

owed or due,” the Agency contends we must reject Darrisaw’s interpretation.

      We agree with the Agency that Darrisaw’s interpretation of the phrase

“incidental to a bona fide fiduciary obligation” would read out of the statute the

language about debts “asserted to be owed or due another.” Id. The text of the Act



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makes clear that a person may attempt to collect a debt “incidental to a bona fide

fiduciary obligation” whether the debt sought to be collected is “owed or due”

another or only “asserted to be owed or due another.” Id. To hold that a guaranty

agency can never act incidental to a bona fide fiduciary obligation when it attempts

to collect a debt that is only “asserted to be owed,” id., but not actually owed,

would cause that phrase to “have no operation at all.” Marbury v. Madison, 5 U.S.

(1 Cranch) 137, 174 (1803). A venerable canon makes clear that an interpreter

must, if possible, give effect to every word and phrase in a statute. See Antonin

Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts § 26, at

174 (2012). Although lawmakers sometimes use redundant terms in a statute, we

cannot adopt an interpretation that would render a term meaningless, as Darrisaw

asks us to do. See United States v. Butler, 297 U.S. 1, 65 (1936) (“These words

cannot be meaningless, else they would not have been used.”).

      Our dissenting colleague maintains that Darrisaw’s interpretation gives

effect to the phrase “asserted to be owed or due” and offers an example of how,

even under Darrisaw’s interpretation, a guaranty agency can act as a fiduciary

while collecting a debt that is only “asserted to be owed or due.” See Dissenting

Op. at 19–20. But the dissent’s example cannot withstand scrutiny. The dissent

says that a guaranty agency could qualify as a fiduciary if it tried to collect “a

federal student loan that has recently been paid off by the debtor.” Id. But that



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example instead contradicts the dissent’s interpretation because a guaranty agency

that tries to collect a debt that no longer exists is still trying “to collect a

nonexistent debt,” which according to the dissent means the agency cannot be

“acting ‘incidental to a fiduciary obligation.’” Id. at 18. When a guaranty agency

tries to collect an already-satisfied debt, it does not “act[] to recover and

safeguard” any “federal assets.” Id. at 20. We agree that a guaranty agency in that

circumstance could qualify as a fiduciary, but only because the fiduciary-obligation

exception can apply even when the debt a guaranty agency seeks to collect does

not exist.

       Congress easily could have written the Act to impose liability on persons

who attempt to collect nonexistent debts pursuant to a fiduciary obligation.

Congress could have narrowed the exception to the definition of “debt collector” to

cover only persons attempting to collect debts “owed or due” another—that is, it

could have omitted the phrase “asserted to be owed or due” from the exception.

But Congress made a different choice. And to give effect to that choice, we must

conclude that whether a debt is “owed” or only “asserted to be owed” is not

dispositive of whether the exception applies. What matters is not whether the debt

is real or nonexistent, but whether the guaranty agency acted “incidental to a bona

fide fiduciary obligation” in attempting to collect it. 15 U.S.C. § 1692a(6)(F)(i).

       Darrisaw contends that our interpretation of the fiduciary-obligation



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exception would allow a guaranty agency that sometimes collects valid debts for

the Secretary to commit fraud by collecting debts that it knows never existed, but

we disagree. To fall within the exception, a person must act “incidental to a bona

fide fiduciary obligation.” Id. (emphasis added). Bona fide means “[i]n or with

good faith; honestly, openly, and sincerely; without deceit or fraud.” Bona Fide,

Black’s Law Dictionary (5th ed. 1979); accord Bona Fide, Webster’s New

International Dictionary (2d ed. 1959) (“In or with good faith; without fraud or

deceit.”). If a guaranty agency knowingly attempted to collect nonexistent debt as

Darrisaw contemplates, it would not act incidental to a good-faith fiduciary

obligation. It would instead act in bad faith, with fraud and deceit, and so could not

claim the exception.

      The dissent argues that we must “rewrite” the fiduciary-obligation exception

to conclude that a guaranty agency does not act incidental to a good-faith fiduciary

obligation when it acts in bad faith to collect a nonexistent debt. Dissenting Op. at

21. Not true. To be sure, as the dissent points out, the adjective “bona fide”

modifies the term “fiduciary obligation.” Id. (quoting 15 U.S.C. § 1692a(6)(F)(i)).

That is, a good-faith fiduciary obligation is the kind of obligation a person must act

“incidental to” in order to claim the exception. 15 U.S.C. § 1692a(6)(F)(i). But we

do not see how a debt-collection activity taken in bad faith to collect a nonexistent

debt could be “incidental to” a good-faith fiduciary obligation. Id. And the dissent



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does not argue otherwise. Nor does it propose an alternative reading of the statute

that gives effect to the term “bona fide.” So our dissenting colleague is wrong to

say that our interpretation relies on “a grammatically incoherent reading” of the

statute. Dissenting Op. at 20.

      Although a guaranty agency may not claim the fiduciary-obligation

exception if it acts in bad faith, the text of the Act makes clear that it need not be

perfect. After all, the exception applies even to those who collect debts that are

only “asserted to be owed.” 15 U.S.C. § 1692a(6)(F). Like other fiduciaries, a

guaranty agency may act based on a good-faith fiduciary obligation even if it

makes an honest mistake. Cf. Stone ex rel. AmSouth Bancorporation v. Ritter, 911

A.2d 362, 370 (Del. 2006) (explaining that corporate directors failed to discharge

their fiduciary obligations in good faith only if they “knew that they were not

discharging their fiduciary obligations”). When a guaranty agency acts in good

faith to collect a debt that is mistakenly “asserted to be owed” the Secretary, it acts

incidental to a bona fide fiduciary obligation.

      The problem for Darrisaw is that her complaint fails to allege that the

Agency acted in bad faith. She alleges that the debts the Agency sought to collect

were “assigned to [her] in error, either on the part of the lender, the [Department of

Education], or the [Agency].” She accuses the Agency of “abdicat[ing] its

responsibilities . . . to maintain procedures reasonably adapted to avoid such an



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error.” And she asserts that the Agency made “false or misleading representations,”

was “negligen[t],” and “fail[ed] to validate the debt.” That is, Darrisaw’s complaint

alleges that the Agency negligently but mistakenly tried to collect a debt she did

not owe, not that the Agency purposefully sought to collect a debt it knew she did

not owe. When asked at oral argument whether the complaint alleged that the

Agency acted in bad faith, even Darrisaw’s counsel did not contend that the

complaint alleged the Agency knew the debt it sought to collect was nonexistent.

Oral Argument at 3:43–5:08 (Dec. 3, 2019). Although Darrisaw’s complaint

accuses the Agency of engaging in “fraudulent” business practices, that conclusory

allegation of “fraud” is a legal conclusion we are not required to accept as true. See

Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009).

      Considering only the factual allegations of the complaint, and construing

them liberally in the light most favorable to Darrisaw, she has not plausibly alleged

that the Agency acted with “[d]ishonesty of belief, purpose, or motive” in

attempting to collect the debts from her. Bad Faith, Black’s Law Dictionary (11th

ed. 2019). Because a defendant’s status as a “debt collector” is an element of a

plaintiff’s claim under the Act, it was Darrisaw’s burden to allege facts plausibly

establishing that the Agency qualifies as a debt collector. See Reese v. Ellis,

Painter, Ratterree & Adams, LLP, 678 F.3d 1211, 1216, 1218 (11th Cir. 2012).

She failed to do so, and the district court correctly dismissed her complaint.



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                       IV. CONCLUSION

We AFFIRM the dismissal of Darrisaw’s complaint.




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MARTIN, Circuit Judge, dissenting:

      The majority affirms dismissal of Ms. Darrisaw’s pro se complaint, giving

the reason that she did not plausibly allege that the Pennsylvania Higher Education

Assistance Agency’s (“PHEAA”) collection efforts were undertaken in bad faith. I

dissent because my reading of the statute that excepts those who are acting as

fiduciaries does not support this result. As I understand it, a guaranty agency acts

as a fiduciary to the Department of Education—and is thus exempt from

limitations put on debt collectors—only when it collects on a federal student loan

debt. Because Ms. Darrisaw’s complaint plausibly alleges that PHEAA directed its

debt-collection efforts toward her for a debt that did not exist, PHEAA cannot

qualify under the fiduciary-obligation exception. And even if I agreed with the

majority that PHEAA comes within the fiduciary-obligation exception (I don’t),

Ms. Darrisaw has stated a claim in any event because she plausibly alleges

PHEAA acted in bad faith.

                                          I.

      Under the Fair Debt Collection Practices Act (“FDCPA”), a person is not a

“debt collector” if they are “collecting or attempting to collect any debt owed or

due or asserted to be owed or due another to the extent such activity [] is incidental

to a bona fide fiduciary obligation.” 15 U.S.C. § 1692a(6)(F). In her complaint,

Ms. Darrisaw alleges that PHEAA is a debt collector and attempted to collect a



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debt from her that does not exist. We must accept this allegation as true when

reviewing a motion to dismiss. Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283,

1288 (11th Cir. 2010). Thus, the proper question before this Court is whether

PHEAA can act “incidental to a bona fide fiduciary obligation” when it tries to

collect a nonexistent debt. As I read the statute, it cannot.

      The majority is correct in recognizing that a guaranty agency like PHEAA

can act pursuant to a “bona fide fiduciary obligation” to the federal government

when attempting to collect defaulted student loan debt. See Pelfrey v. Educ. Credit

Mgmt. Corp., 71 F. Supp. 2d 1161, 1180 (N.D. Ala. 1999), aff’d, 208 F.3d 945

(11th Cir. 2000) (per curiam). That is because when a guaranty agency makes a

“default payment” to a private lender to acquire defaulted student loan debt, it does

so using federal funds. Id. Given that federal funds are used to acquire the

defaulted loans, they remain assets of the Department of Education throughout the

collection process. Id. (citing 20 U.S.C. § 1072(g)(1)). This means when a

guaranty agency collects defaulted federal student loan debt, it acts pursuant to its

fiduciary obligation to the federal government to recover and safeguard federal

assets. See Pelfrey, 71 F. Supp. 2d at 1173 (“Student loan guarantors collect

[federal] loans pursuant to a fiduciary obligation because they use [federal] funds

to acquire these loans[.]” (citing testimony of Larry Oxendine, then-Director of

Lender and Guarantor Oversight for the Department of Education)); 20 U.S.C.



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§ 1078(c)(2)(A) (providing that guaranty agencies are required, in their collection

activities, “to protect the United States from the risk of unreasonable loss”).

      As Ms. Darrisaw points out, however, this does not mean that an agency

acting as a fiduciary for some loans is given fiduciary status for everything else it

does. See Federal Family Education Loan (FFEL) Program, 61 Fed. Reg. 49,382,

49,382 (Sept. 19, 1996) (recognizing that guaranty agencies may act “outside of

their [federal loan program] guaranty activities”); see also Peete-Bey v. Educ.

Credit Mgmt. Corp., 131 F. Supp. 3d 422, 429 n.4 (D. Md. 2015) (observing that a

company which “often acts as a guarantor” does not always act in that capacity).

For example here, when a guarantee agency collects debt that is not part of a

federal loan program, it is not acting as a fiduciary to the federal government

because it is not attempting to recover or safeguard federal assets. See 20 U.S.C.

§ 1078(c)(2)(A) (requiring guaranty agencies to exercise due diligence in the

collection of loans “insured under the [federal student loan] program.”).

      Thus, an agency taking collection actions is not acting “incidental to a

fiduciary obligation” when it tries to collect a nonexistent debt. Certainly, a

nonexistent debt is, by definition, outside the scope of a federal student loan

program. And this is precisely what Ms. Darrisaw alleges in her complaint. She

claims she never incurred the loans referenced in PHEAA’s numerous collection

letters, and that even PHEAA representatives admitted they had “no record of



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[these debts].” Because Ms. Darrisaw plausibly alleges that PHEAA attempted to

collect student loan debt that never existed, I would hold that PHEAA’s collection

efforts were not “incidental to a bona fide fiduciary obligation.” This means those

collection efforts are not protected under the fiduciary-obligation exception. As a

result, I would reverse the District Court’s dismissal of Ms. Darrisaw’s complaint.

                                          II.

      The majority offers fiduciary protection to PHEAA by relying on what I

view as an erroneous interpretation of the fiduciary-obligation exception. I believe

the majority makes two principal mistakes in its analysis.

      a. The Majority Incorrectly Concludes That Ms. Darrisaw’s Interpretation
         of the Exception Renders Meaningless the Term “Assert[ed].”

      The majority says Ms. Darrisaw’s interpretation of the FDCPA, which limits

the exception to agencies collecting existing federal student loans, would render

inoperable the phrase “asserted to be owed or due.” Maj. Op. at 9–10. The

majority correctly points out that the fiduciary-obligation exception applies not

only to the collection of debts that are “owed or due,” but also to debts that are

merely “asserted to be owed or due.” 15 U.S.C. § 1692a(6)(F) (emphasis added).

But the majority is wrong when it says that accepting Ms. Darrisaw’s interpretation

would mean that a guaranty agency never acts incidental to a bona fide fiduciary

obligation when collecting debt that is “not actually owed.” Maj. Op. at 10. A

guaranty agency might, for instance, seek collection of a federal student loan that

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has recently been paid off by the debtor. That loan would not be “owed,” but only

“asserted to be owed.” Nonetheless, the guaranty agency’s collection activity is

incidental to its fiduciary obligation because the agency sought to collect a loan

that was acquired using federal funds, and thus acted to recover and safeguard

federal assets. 20 U.S.C. § 1078(c)(2)(A). Ms. Darrisaw’s interpretation of the

statute would not, therefore, render inoperable the term “assert[ed] to be owed or

due.”

        b. The Majority Incorrectly Concludes that a Guaranty Agency Must Act in
           Bad Faith to Fall Outside the Scope of the Exception.

        The majority opinion says the fiduciary-obligation exception applies even

when a guaranty agency attempts to collect a debt that never existed, as long as it

does so in “good faith.” Maj. Op. at 12. The majority opinion starts from the

premise that “bona fide” means “in or with good faith.” Id. (alteration adopted).

The opinion then says that a guaranty agency “acts incidental to a bona fide

fiduciary obligation” whenever it “acts in good faith to collect a debt.” Id. at 13. I

reject this interpretation of the statute.

        In my view, the majority’s result can only be achieved by a grammatically

incoherent reading of the exception. Substituting the words “good faith” for the

words “bona fide” in the statute, as the majority proposes, would make the

exception apply to “any person collecting or attempting to collect any debt owed or

due or asserted to be owed or due another to the extent such activity [] is incidental

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to a [good faith] fiduciary obligation.” 15 U.S.C. § 1692a(6)(F). Applying basic

grammar principles, the adjective “bona fide” (or, as the majority prefers, “good

faith”) should modify the term directly following it, which is “fiduciary

obligation.” But under the majority’s interpretation, which (unlike the statute)

requires only that a guaranty agency “act[] in good faith to collect a debt,” Maj.

Op. at 13, it is the agency’s collection efforts, rather than its fiduciary obligation,

which must be in good faith. For the majority’s interpretation to make sense,

therefore, the court must rewrite the fiduciary-obligation exception to cover “any

person collecting or attempting to collect [in good faith] any debt . . . to the extent

such activity is incidental to a bona fide fiduciary obligation.” That is something

we may not do. See Korman v. HBC Fla., Inc., 182 F.3d 1291, 1296 (11th Cir.

1999) (“It is not the business of courts to rewrite statutes.”).

                                          III.

      Based on this rewriting of the fiduciary-obligation exception, the majority

says a plaintiff bringing an FDCPA claim against a guaranty agency must

specifically plead that the agency acted in “bad faith.” Again, the words “bad

faith” do not appear in the statute, so imposing the obligation on Ms. Darrisaw to

specifically plead bad faith would have required her to be able to see into the future

to anticipate the interpretation of the statute given by the majority opinion here.




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Even if I were to accept the majority’s interpretation as correct, I would hold that

Ms. Darrisaw’s complaint adequately alleges PHEAA acted in “bad faith.”

      In an appeal from the dismissal of a complaint, we must “accept[] the factual

allegations in the complaint as true and constru[e] them in the light most favorable

to the plaintiff.” Fourth Estate Pub. Benefit Corp. v. Wall-Street.com, LLC, 856

F.3d 1338, 1339 (11th Cir. 2017) (quotation marks omitted). Complaints by pro

se litigants, “however inartfully pleaded, must be held to less stringent standards

than formal pleadings drafted by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94,

127 S. Ct. 2197, 2200 (2007) (per curiam) (quotation marks omitted). This more

liberal pleading standard for pro se plaintiffs requires federal courts to “look

beyond the labels” used in a complaint and instead to the substance of the

plaintiff’s allegations when determining if the plaintiff has stated a

claim. See Means v. Alabama, 209 F.3d 1241, 1242 (11th Cir. 2000) (per curiam).

      The gravamen of Ms. Darrisaw’s complaint is that PHEAA tried collecting

debt from her that did not exist, and that it continued its collection efforts even

after acknowledging that Ms. Darrisaw owed it nothing. She alleges, for instance,

that after PHEAA told her that “its records did not contain any reference to [the

debt],” she considered future collection attempts to be “dubious” and part of “a

fake debt collection scam.” She said that notwithstanding her efforts to obtain

information about this so-called debt from PHEAA, that it “concealed material



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facts” from her. Ms. Darrisaw also alleges that because PHEAA denied any

knowledge or record of her student loan debt, that it “knowingly violate[d] the

FDCPA” when it attempted to collect on the loan through a treasury offset.

Finally, she claims that after PHEAA denied, for a second time, that she had “an[y]

outstanding student loan debt with [PHEAA],” it “still characterize[d] the debt as

owed.” On these facts, Ms. Darrisaw has by any measure alleged bad faith on the

part of PHEAA. Cf. Westmoreland Cty. Emp. Ret. Sys. v. Parkinson, 727 F.3d

719, 726 (7th Cir. 2013) (observing that in the fiduciary context, “conscious”

wrongdoing constitutes “bad faith”).

      It’s true, as the majority notes, that Ms. Darrisaw’s complaint at times

describes PHEAA’s shortcomings as resulting from mere negligence. Maj. Op.

13–14. I recognize that Ms. Darrisaw’s complaint is not the paragon of clarity.

But as a pro se pleading, it need not be. See Erickson, 551 U.S. at 94, 127 S. Ct. at

2200. And while certain allegations in Ms. Darrisaw’s complaint suggest PHEAA

acted negligently, under our more lenient standard for reviewing pro se pleadings

we must focus on the substance of Ms. Darrisaw’s claims rather than the labels she

uses when explaining PHEAA’s activity. See Means, 209 F.3d at 1242. The

fundamental substance of Ms. Darrisaw’s claim is that PHEAA tried (and

succeeded) in collecting debt from her that did not exist, even after acknowledging




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that Ms. Darrisaw did not owe it anything. This allegation sounds in bad faith, not

negligence. 1

       Therefore, even applying the majority’s interpretation of the fiduciary-

obligation exception, I would reverse the District Court’s dismissal of Ms.

Darrisaw’s complaint. I respectfully dissent from the majority’s decision to allow

that dismissal to stand.




1
  The majority says that “Darrisaw’s counsel did not contend that the complaint alleged the
Agency knew the debt it sought to collect was nonexistent.” Maj. Op. at 14. I did not
understand counsel’s position that way. It’s true that when Darrisaw’s counsel was first asked
whether the complaint alleges PHEAA “knew that [the debt] was nonexistent,” counsel
responded that it was “not entirely clear.” Oral Argument at 4:48–4:52 (Dec. 3, 2019). But on
rebuttal, counsel said that Darrisaw’s allegation characterizing PHEAA’s efforts as a “fake debt
collection scam[,] . . . read in tandem with” other allegations in the complaint, suggest “there was
no basis to believe that this debt existed . . . at all.” Id. at 30:05–31:15. And even I were to
ignore counsel’s clarification of its position (as the majority opinion does), my analysis would
remain the same. As an initial matter, a pro se complaint need not be “entirely clear” to state a
claim. See Erickson, 551 U.S. at 94, 127 S. Ct. at 2200 (even “inartfully pleaded” pro se
complaints can state a claim). Beyond that, counsel’s statement does not bind us because it was
not a concession, let alone an unambiguous one. See Crowe v. Coleman, 113 F.3d 1536, 1542
(11th Cir. 1997) (“[W]aivers and concessions made in appellate oral arguments need to be
unambiguous to change the outcome of an appeal[.]”).


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