United States District Court, E.D. Virginia, Alexandria Division
For Lee Pele, Plaintiff: Alexander Hugo Blankingship, III, LEAD ATTORNEY, Blankingship & Christiano PC, Reston, VA.
For Pennsylvania Higher Education Assistance Agency, doing business as American Education Services, Defendant: Jill Marie deGraffenreid, LEAD ATTORNEY, Hunton & Williams, McLean, VA.
James C. Cacheris, UNITED STATES DISTRICT JUDGE.
The Court must decide whether the Pennsylvania Higher Education Assistance Agency (" Defendant" or " PHEAA" ) is an " arm of the state" of Pennsylvania, such that it would enjoy immunity from suit under the Eleventh Amendment to the Constitution. Now before the Court is PHEAA's Motion for Summary Judgment on that affirmative defense of immunity, [Dkt. 57], and Plaintiff Lee Pele's (" Plaintiff" or " Pele" ) cross-motion for Partial Summary Judgment, [Dkt. 68]. For the following reasons, the Court holds that PHEAA is an arm of the state of Pennsylvania and entitled to immunity under the Eleventh Amendment. Therefore, the Court will grant PHEAA's Motion for Summary Judgment.
A. Factual Background
This case arises out of alleged violations of the Fair Credit Reporting Act (" FCRA" ), 15 U.S.C. § 1681 et seq. Pele, a resident and citizen of Virginia, alleges that he received federal student loans that were serviced by PHEAA, a company that furnishes information to consumer reporting agencies as contemplated by FCRA. (Am. Compl. [Dkt. 8] ¶ ¶ 1-3.) Pele claims that PHEAA listed defaulted student loans on his credit file that " he never authorized, initiated, received the proceeds [from] or guaranteed." (Id. ¶ ¶ 5, 6.) Consequently, Pele received phone calls from debt collector Windham Professionals (" Windham" ) seeking over $137,000 in defaulted student loans. (Id. ¶ 7.) Pele maintained that he " did not initiate, guaranty, or receive any benefit" from these loans. (Id.) Pele sent credit dispute letters to credit reporting agencies TransUnion, Equifax, and Experian. (Id. ¶ 14.) In response, the credit reporting agencies sent four Automated Credit Dispute Verifications (" ACDV" ) to PHEAA. (Id. ¶ ¶ 21-23.) PHEAA responded to all four ACDVs " by modifying, but not deleting, the information from Mr. Pele's credit file." (Id. ¶ 24.) Pele alleges that as a result, " PHEAA continued to attribute debts to Mr. Pele to the credit reporting agencies." (Id.)
B. Procedural Background
Pele filed the original complaint in this matter on December 13, 2013, [Dkt. 1], and filed an amended complaint as a matter of right under the federal rules on February 3, 2014 [Dkt. 8]. PHEAA moved to dismiss the amended complaint, arguing that PHEAA is an arm of the Commonwealth of Pennsylvania (" Commonwealth" or " State" ) and entitled to immunity under the Eleventh Amendment. [Dkt. 12] The Court addressed this question by applying the Fourth Circuit's nonexclusive four-factor test. (Mem. Op. [Dkt. 18] at 8-21 (citing Md. Stadium Auth. v. Ellerbe Becket Inc., 407 F.3d 255 (4th Cir. 2005)); see also U.S. ex rel. Oberg v. Pa. Higher Educ. Assistance Agency, 745 F.3d 131 (4th Cir. 2014) (" Oberg II" ).) This Court concluded that PHEAA did not meet its burden of showing an entitlement to Eleventh Amendment immunity " at this stage," (Mem. Op. at 21.), and denied the motion to dismiss, (Order Denying Mot. to Dismiss [Dkt. 19]).
On August 21, 2014, PHEAA filed its Motion for Summary Judgment [Dkt. 57] and accompanying brief in support [Dkt. 58]. Before filing an opposition brief, Pele filed his own cross-motion for Partial Summary Judgment [Dkt. 68] on PHEAA's sovereign immunity affirmative defense, and on five other affirmative defenses asserted by PHEAA, with an accompanying brief in support [Dkt. 69] on September 4, 2014. Both parties timely filed opposition [Dkts. 77, 86] and reply briefs [Dkt. 84, 89]. The ...