from the United States Bankruptcy Court for the Southern
District of Texas
KING, HIGGINSON, and DUNCAN, Circuit Judges.
opinion previously filed in this case is withdrawn and the
following is substituted.
after Stephanie Marie Henry took out a student loan, she
filed for bankruptcy and received a discharge. Henry and the
company that currently holds her loan, Educational Financial
Service, a Division of Wells Fargo Bank, N.A., disagree about
whether Henry's discharge applies to that
loan. Henry filed an adversary proceeding in
bankruptcy court raising that issue, but Wells Fargo moved
the bankruptcy court to compel arbitration. The bankruptcy
court denied that motion, and for the following reasons, we
Marie Henry borrowed money from Wachovia Bank of Delaware,
N.A.-the predecessor in interest of Educational Financial
Service, a Division of Wells Fargo Bank, N.A. ("Wells
Fargo")-to attend the Ultrasound Diagnostic School in
Houston. The documentation for the loan contained the
following arbitration provision:
14. Arbitration. Any controversy or claim arising out of or
related to this Note, or an alleged breach of this Note,
shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon the arbitration award may be
entered in any court having jurisdiction.
signed that documentation on November 11, 2002.
than a decade later, Henry filed for bankruptcy under Chapter
13 of the Bankruptcy Code in the United States Bankruptcy
Court for the Southern District of Texas. Wells Fargo filed a
proof of claim in Henry's bankruptcy proceeding. The
bankruptcy court confirmed Henry's Chapter 13 plan on
April 25, 2013. Over the next five years, Henry made payments
to her creditors, including Wells Fargo, as required by her
plan. Because Henry completed her Chapter 13 plan, the
bankruptcy court entered a discharge order on May 17, 2018.
Henry received her discharge, her attorney sent a letter to
Wells Fargo. That letter stated that Henry's debt to
Wells Fargo had been discharged and asked Wells Fargo:
"Please acknowledge that you recognize the discharge of
this loan, and report it accurately on [Henry's] credit
reports." Wells Fargo sent a reply letter to Henry's
lawyer, stating that Wells Fargo had processed his
"request to cease all communication with Stephanie
Henry" about her loan. Wells Fargo indicated that future
correspondence would be sent to the lawyer-not Henry-and
asked the lawyer: "Once Stephanie Henry is no longer
your client, please contact our office . . . to let us know
communication should resume with Stephanie Henry." Wells
Fargo sent a different letter to Henry, telling her that it
had "received a request from Austin C. Smith ESQ to
cease all communication on" Henry's loan. Both of
Wells Fargo's letters contained the following postscript:
"The laws of some states require us to inform you that
this communication is an attempt to collect a debt and . . .
information obtained will be used for that purpose."
Fargo's correspondence prompted Henry to initiate an
adversary proceeding in the bankruptcy court on her own
behalf and on behalf of a putative class of similarly
situated individuals. According to Henry, Wells Fargo
violated the bankruptcy court's discharge order by
attempting to collect a discharged debt. See 11
U.S.C. § 524(a)(2) (stating that a discharge
"operates as an injunction against . . . an act, to
collect, recover or offset" a discharged debt). Henry
sought injunctive relief, a declaratory judgment, damages,
and attorney's fees.
Fargo moved the bankruptcy court to compel arbitration. Wells
Fargo asserted that Henry's claim fell within the scope
of the arbitration provision in her loan documentation, and
Wells Fargo argued that the Federal Arbitration Act
("FAA") required the bankruptcy court to enforce
that provision. Wells Fargo acknowledged that, under our
precedents, the bankruptcy court had discretion to refuse to
compel arbitration in an action to enforce a discharge order.
Wells Fargo maintained, however, that the Supreme Court's
decision in Epic Systems Corp. v. Lewis, 138 S.Ct.
1612 (2018) cast doubt on those precedents.
bankruptcy court denied Wells Fargo's motion. The
bankruptcy court reasoned that Henry's claims did not
"arise under the loan agreement between the
parties," because Wells Fargo's "obligation to
comply with the Court's discharge order and the statutory
injunction provided under 11 U.S.C. § 524 is not, and
cannot be, part of a contractual negotiation between private
parties." The bankruptcy court found Epic
Systems to be "inapplicable to the instant
case," because "Henry's claims do not arise out
of an arbitrable contract between the parties," and
because "the Supreme Court gave no indication in
Epic that it intended its decision to reach"
the Bankruptcy Code. The bankruptcy court certified its order
for an ...