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`100 S. West Street, Suite 400 • Wilmington, DE 19801
`Telephone 302.576.1600 • Facsimile 302.576.1100
`www.ramllp.com
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`January 20, 2020
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`Direct Dial 302.576.1604
`gmoritz@ramllp.com
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`Garrett B. Moritz
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`VIA FILE & SERVEXPRESS
`AND HAND DELIVERY
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`
`The Honorable Joseph R. Slights III
`Court of Chancery
`Judicial Chambers
`417 South State Street
`Dover, Delaware 19901
`
`Re: The Nat’l Collegiate Student Loan Master Tr. v. Pa. Higher Educ.
`Assistance Agency, C.A. No. 12111-VCS;
`The Nat’l Collegiate Master Student Loan Tr. I v. U.S. Bank Nat’l Ass’n,
`C.A. No. 2018-0167-JRS;
`AG Mortg. Value Partners Master Fund v. VCG Owners Tr.,
`C.A. No. 2018-0825-JRS;
`NC Residuals Owners Tr. v. Wilm. Tr. Co., C.A. No. 2019-0880-JRS
`
`Dear Vice Chancellor Slights:
`Pursuant to Your Honor’s January 15, 2020 letter, the parties conferred in an
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`effort to prepare a joint response to the questions set forth in Your Honor’s letter.
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`Unfortunately, the parties have not been able to agree on a joint response.
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`I therefore write on behalf of the Owners regarding the questions set forth in Your
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`Honor’s January 15 letter.
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`EFiled: Jan 20 2020 04:59PM EST
`Transaction ID 64637250
`Case No. Multi-Case
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`The Honorable Joseph R. Slights III
`January 20, 2020
`Page 2
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`Question 1: How, if at all, do the parties envision the rulings in the
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`Odyssey case will impact the proposed contract interpretation issues?
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`The rulings in the Odyssey case are a final judgment. To the extent that
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`rulings in the Odyssey case overlap with issues that parties seek to argue in the
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`Chancery actions, the Owners expect that the rulings in the Odyssey case will have
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`preclusive effect on the parties to the Odyssey case and those in privity with them.
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`The fact that the Odyssey case is currently on appeal to the Third Circuit does not
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`change that. See, e.g., 18A CHARLES ALAN WRIGHT & ARTHUR R. MILLER,
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`FEDERAL PRACTICE & PROCEDURE § 4433 (3d ed.) (“[T]he preclusive effects of a
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`lower court judgment cannot be suspended simply by taking an appeal that remains
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`undecided.”); Pyott v. LAMPERS, 74 A.3d 612, 615 n.2 (Del. 2013) (holding that
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`the Court of Chancery must give collateral estoppel effect to California federal
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`judgment that was on appeal to the Ninth Circuit, and noting that “[i]f the appellate
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`court reverses, [the precluded party] will be able to file a motion [in the Delaware
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`Court of Chancery] for relief from the judgment under Ch. Ct. Rule 60(b)”).
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`The Owners do not expect that all parties will agree on the preclusive effect
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`of the rulings in the Odyssey case. The Owners therefore anticipate that the extent
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`of such preclusive effect is likely to be a subject of briefing and argument in this
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`Court.
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`The Honorable Joseph R. Slights III
`January 20, 2020
`Page 3
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`In addition, and in any event, the rulings in the Odyssey case also may have
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`persuasive value that this Court may take into account regardless of any preclusive
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`effect.
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`Question 2: In what procedural posture do the parties anticipate the
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`Court in the CFPB Action will decide this threshold question? And, relatedly,
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`do the parties envision asking the Court in the CFPB Action to stay its
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`proceedings if the Court of Chancery were to take up the proposed contract
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`interpretation issues?
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`The Owners are not parties in the CFPB Action.1 Accordingly, the Owners
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`acknowledge that they may not be as familiar as others with the procedural posture
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`in which the Court in the CFPB Action will decide the threshold questions
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`regarding the Proposed Consent Judgment.
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`Nonetheless, it is the Owners’ understanding that the District Court will
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`consider the threshold questions in the CFPB Action on the CFPB’s pending
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`Motion to Approve Consent Judgment. Presumably, the standards for approval of
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`consent judgments will apply. See, e.g., United States v. SEPTA, 235 F.3d 817,
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`822 (3d Cir. 2000) (affirming district court’s approval of CERCLA consent decree)
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`1
`In addition, the CFPB, which is the plaintiff in the CFPB Action, is not a
`party to the Chancery actions. The Trusts, which are the defendants in the CFPB
`Action, are currently not represented in that Action.
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`The Honorable Joseph R. Slights III
`January 20, 2020
`Page 4
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`(holding district court’s decision on a motion for entry of a consent decree is
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`discretionary, based on deference owed to regulatory agency and the policy of
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`encouraging settlement); 18A WRIGHT & MILLER, FEDERAL PRACTICE &
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`PROCEDURE § 4443 (“In most circumstances, it is recognized that consent
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`agreements ordinarily are intended to preclude any further litigation on the claim
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`presented but are not intended to preclude further litigation on any of the issues
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`presented. Thus settlement agreements and consent judgments ordinarily support
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`claim preclusion but not issue preclusion.”).
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`The Owners are not parties in the CFPB Action and do not currently
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`envision requesting a stay of the CFPB Action. Rather, as the parties set forth in
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`their joint letter to the Court dated January 10, 2020, no party objects to Your
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`Honor calling the Judge in the CFPB Action to discuss the possibility of informal
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`coordination.
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`*
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`*
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`*
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`As always, counsel are available at the Court’s convenience if Your Honor
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`has any questions.
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`Respectfully submitted,
`/s/ Garrett B. Moritz
`Garrett B. Moritz (Bar No. 5646)
`Words: 692
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`
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`The Honorable Joseph R. Slights III
`January 20, 2020
`Page 5
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`cc: Register in Chancery (via File & ServeXpress)
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`Kevin G. Abrams (via File & ServeXpress)
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