Lee Pele v. Pennsylvania Higher Education
Filing
UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 1:13-cv-01531-JCC-TRJ Copies to all parties and the district court/agency. [999682817].. [14-2202]
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-2202
LEE PELE,
Plaintiff - Appellant,
v.
PENNSYLVANIA HIGHER EDUCATION
American Education Services,
ASSISTANCE
AGENCY,
d/b/a
Defendant – Appellee.
-----------------------------JON H. OBERG,
Amicus Supporting Appellant.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. James C. Cacheris, Senior
District Judge. (1:13-cv-01531-JCC-TRJ)
Argued:
May 12, 2015
Decided:
October 21, 2015
Before TRAXLER, Chief Judge, and GREGORY and KEENAN, Circuit
Judges.
Vacated and remanded by unpublished per curiam opinion.
ARGUED: Scott Matthew Michelman, PUBLIC CITIZEN LITIGATION
GROUP, Washington, D.C., for Appellant.
Paul D. Clement,
BANCROFT PLLC, Washington, D.C., for Appellee.
ON BRIEF: A.
Hugo Blankingship, III, Thomas B. Christiano, BLANKINGSHIP &
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CHRISTIANO, P.C., Reston, Virginia; Allison M. Zieve, PUBLIC
CITIZEN LITIGATION GROUP, Washington, D.C., for Appellant. Jill
M. deGraffenreid, McLean, Virginia, Joseph P. Esposito, William
E. Potts, Jr., HUNTON & WILLIAMS LLP, Washington, D.C.; George
W. Hicks, Jr., Raymond P. Tolentino, BANCROFT PLLC, Washington,
D.C., for Appellee. Bert W. Rein, Michael L. Sturm, Christopher
M. Mills, Brendan J. Morrissey, Stephen J. Obermeier, WILEY REIN
LLP, Washington, D.C., for Amicus Curiae.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Plaintiff
Higher
Lee
Education
Pele
filed
Assistance
suit
against
Agency
the
(“PHEAA”)
Pennsylvania
under
Credit Reporting Act, 15 U.S.C. § 1681 et seq.
the
Fair
Concluding that
PHEAA was an arm of the Commonwealth of Pennsylvania entitled to
share
in
suit,
the
judgment
the
Commonwealth’s
district
and
court
dismissed
Eleventh-Amendment
granted
the
PHEAA’s
action.
We
immunity
motion
for
from
summary
vacate
the
district
valid
Congressional
court’s judgment and remand.
I.
Absent
consent
by
the
state
or
abrogation, the Eleventh Amendment bars an action in federal
court seeking money damages against a state.
See, e.g., Bland
v. Roberts, 730 F.3d 368, 389-90 (4th Cir. 2013); Lee-Thomas v.
Prince George’s Cty. Pub. Sch., 666 F.3d 244, 248 (4th Cir.
2012).
“This
immunity
also
protects
state
agents
and
state
instrumentalities, meaning that it protects arms of the State
and State officials.”
Bland, 730 F.3d at 389-90 (citations and
internal quotation marks omitted)).
PHEAA was created by the Commonwealth in 1963 as a “body
corporate
and
government
purpose
of
politic
constituting
instrumentality,”
24
“improv[ing]
access
a
Pa.
to
public
Stat.
§
higher
corporation
5101,
and
for
the
education
by
originating, financing, and guaranteeing student loans,” United
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States
(“Oberg
ex
Filed: 10/21/2015
rel.
II”),
Oberg
745
v.
F.3d
Pa.
131,
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Higher
135
Educ.
(4th
Assistance
Cir.
Agency
2014).
After
discovery focusing on the nature of PHEAA’s relationship to the
Commonwealth, PHEAA moved for summary judgment, arguing that it
is an “arm” of the Commonwealth and therefore protected from
Pele’s lawsuit by the Eleventh Amendment.
Considering
the
evidence
developed
through
discovery
in
light of the factors this court has identified as relevant to
the
arm-of-state
question,
see,
e.g.,
Md.
Stadium
Auth.
v.
Ellerbe Becket Inc., 407 F.3d 255, 261 (4th Cir. 2005), the
district court concluded that PHEAA had carried its burden of
proving that it is an arm of the Commonwealth, see Hutto v. S.C.
Ret. Sys., 773 F.3d 536, 543 (4th Cir. 2014) (holding that in
the Eleventh-Amendment context, whether a state-created entity
is an arm of its creating state is an affirmative defense that
must be proven by the entity asserting immunity).
Pele appeals.
Pele argues that the evidence and relevant
state statutes do not support the district court’s conclusion
but
instead
establish
that
PHEAA
is
not
an
arm
of
the
Commonwealth.
II.
Whether a state-created entity is an arm of its creating
state and therefore entitled to assert the state’s sovereign
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immunity is a question of law reviewed de novo.
Hutto, 773 F.3d
at 542.
In an opinion also filed today, we addressed PHEAA’s status
as an arm of the Commonwealth in connection with claims asserted
against PHEAA under the False Claims Act (“FCA”), 31 U.S.C. §§
3729-33.
See United States ex rel. Oberg v. Pa. Higher Educ.
Assistance Agency (“Oberg III”), No. 15-1093 (4th Cir. filed
Oct. 21, 2015).
arm
of
the
independent
In Oberg III, we concluded that PHEAA is not an
Commonwealth
from
the
because:
PHEAA
Commonwealth
and
is
financially
supports
itself
with
revenues generated through PHEAA’s commercial financial-services
activities;
exercises
PHEAA
control
notwithstanding
Pennsylvania
directors,
is
statutorily
over
its
vested
commercially
the
deposit
of
Treasury;
and
PHEAA,
sets
policy
and
makes
these
the
with
and
generated
fact
revenues,
revenues
through
in
in
the
its
board
of
substantive
fiscal
and
operational decisions for the corporation.
Although there are some procedural differences between this
case and Oberg, the arm-of-state question in Oberg was governed
by the same factors applicable here and was otherwise materially
identical to the arm-of-state question presented in this case. *
*
The FCA imposes civil liability on “any person” who makes
or presents a false claim for payment to the federal government,
31 U.S.C. § 3729(a)(1), a term that does not include states or
(Continued)
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Because the district court’s analysis is inconsistent with our
decision in Oberg III, we hereby vacate the district court’s
order and remand for further proceedings on the merits of Pele’s
claims against PHEAA.
VACATED AND REMANDED
state agencies, see Vt. Agency of Nat. Res. v. United States ex
rel. Stevens, 529 U.S. 765, 787-88 (2000). In Oberg II, we held
that because “personhood” is an element of an FCA plaintiff’s
case, the FCA plaintiff bears the burden of proving that a
state-created entity is not an arm of the state. See Oberg II,
745 F.3d at 136.
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