Judges Beverly Martin and William Pryor, U.S. Court of Appeals for the Eleventh Circuit. Photos: John Disney and Diego M. Radzinschi

An opinion affirming one of the nation's leading federal student loan guaranty agencies isn't liable for its aggressive tactics trying to collect a nonexistent debt ignited the second textualist split in a week at the U.S. Court of Appeals for the Eleventh Circuit.

The ruling written by Circuit Judge William Pryor provoked a strong dissent from fellow Circuit Judge Beverly Martin, who chastised Pryor and D.C. Circuit Judge Gregory Katsas. He joined Pryor in affirming dismissal of the case against the Pennsylvania Higher Education Assistance Agency.

Martin argued the majority's result could "only be achieved by a grammatically incoherent reading" of the law.

Pryor took issue with Martin's critique in his majority opinion, writing, "Our dissenting colleague is wrong."

The majority consisted of two Republican appointees. Martin was confirmed as a Democratic nominee on a court that shifted in November to majority Republican appointees.

Katsas was appointed by President Donald Trump in 2017. Pryor, a George W. Bush appointee, has twice been on Trump's short list for the U.S. Supreme Court. Martin was appointed by President Barack Obama.

The textualist philosophy is based on legal interpretations tied to wording alone stripped of any attempt to consider the purpose or legislative intent of the statute at issue.

In the other recent decision with a textualist element, Eleventh Circuit Judge Elizabeth Branch, another Trump appointee, wrote a dissent challenging colleague Charles Wilson's majority opinion affirming the right of the Alabama State Conference of the NAACP to sue Alabama under the Voting Rights Act.

The latest ruling came in a pro se case brought by a part-time student after the lender garnished Hope Darisaw's wages over four student loans she said she didn't owe. After she appealed the dismissal of her case in the Southern District of Georgia, the Eleventh Circuit granted oral arguments.

Martin signed an order appointing attorney Frederick Hall of Kellogg, Hansen, Todd, Figel & Frederick in Washington as pro bono counsel.

Darrisaw claimed the lender wrote her in April 2016 to say it purchased four defaulted student loans in her name and she was required to immediately pay $18,812. Darrisaw contacted the agency and wastold it had no record of any outstanding debt in her name. But in July 2016, the agency sent a garnishment order to Darrisaw's employer demanding 15% of her pay and threatened to sue if the employer didn't comply.

Darrisaw sued, contending the agency made misleading representations and was engaging in fraudulent business practices in violation of the Fair Debt Collection Practices Act. Agency lawyers countered that it was not a debt collector because of existing loan guaranty contracts with the U.S. Department of Education that required it to collect unpaid loans from borrowers on the government's behalf. Bowen agreed and dismissed the case.

The agency is represented by a team of attorneys from Alston & Bird in Atlanta.

Pryor sided with Bowen, finding the federal Fair Debt Collection Practices Act "makes clear" that anyone who attempts to collect a debt as part of a "bona fide fiduciary obligation" to a third party is exempt from legal limitations placed on debt collectors.

"Congress easily could have written the act to impose liability on persons who attempt to collect nonexistent debts pursuant to a fiduciary obligation," Pryor wrote. "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."

In her dissent, Martin countered that although the Pennsylvania agency and others like it are exempt from federal fair debt collection laws when they are attempting to collect a federal student loan debt, that exemption does not extend to nonexistent debts.

Martin challenged the majority's finding that a loan guaranty agency is exempt from limitations placed on debt collectors whenever it "acts in good faith to collect a debt."

"The majority says a plaintiff bringing an FDCP claim against a guaranty agency must specifically plead that the agency acted in 'bad faith,' " Martin wrote. "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."

Related stories:

11th Circuit Majority Says Dissent Would Upend 50 Years of Civil Rights Law in Voting Case

With Lagoa Confirmed to 11th Circuit, Trump Flips a Third Appeals Court to GOP Majority