UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-2202
LEE PELE,
Plaintiff - Appellant,
v.
PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY, d/b/a
American Education Services,
Defendant – Appellee.
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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Vacated and remanded by unpublished per curiam opinion.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 &
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Unpublished opinions are not binding precedent in this circuit.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 Lee Pele filed suit against the Pennsylvania
Higher Education Assistance Agency (“PHEAA”) under the Fair
Credit Reporting Act, 15 U.S.C. § 1681 et seq. Concluding that
PHEAA was an arm of the Commonwealth of Pennsylvania entitled to
share in the Commonwealth’s Eleventh-Amendment immunity from
suit, the district court granted PHEAA’s motion for summary
judgment and dismissed the action. We vacate the district
court’s judgment and remand.
I.
Absent consent by the state or valid Congressional
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 politic constituting a public corporation and
government instrumentality,” 24 Pa. Stat. § 5101, for the
purpose of “improv[ing] access to higher education by
originating, financing, and guaranteeing student loans,” United
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States ex rel. Oberg v. Pa. Higher Educ. Assistance Agency
(“Oberg II”), 745 F.3d 131, 135 (4th Cir. 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). In Oberg III, we concluded that PHEAA is not an
arm of the Commonwealth because: PHEAA is financially
independent from the Commonwealth and supports itself with
revenues generated through PHEAA’s commercial financial-services
activities; PHEAA is statutorily vested with and in fact
exercises control over its commercially generated revenues,
notwithstanding the deposit of these revenues in the
Pennsylvania Treasury; and PHEAA, through its board of
directors, sets policy and makes the 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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