852 F. Supp. 2d 1190
N.D. Cal.2012Background
- Putative class action by Tina Ubaldi against SLM Corporation and Sallie Mae entities for late charges on Private Education Loans.
- Plaintiff alleges late charges are unlawful liquidated damages under California Civil Code §1671 and unfair under the UCL, and seeks unjust enrichment.
- Sallie Mae allegedly acted as the de facto lender despite loan documents listing Stillwater National Bank as lender, via a forward purchase arrangement.
- Plaintiff claims Sallie Mae imposes daily interest plus a late charge, resulting in double payment for late loans.
- NBA preemption is raised as a defense, arguing state-law claims are preempted for loans originated by a national bank.
- Court denies in part and grants in part the motion to dismiss, allowing discovery on the de facto-lender issue and dismissing unjust enrichment with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is plaintiff’s claim preempted by the NBA express preemption? | De facto lender theory may defeat express preemption. | Express preemption applies if the loan was made by a national bank; form controls over real party. | DENIED: court allows discovery on de facto-lender question, not dismissing preemption. |
| Does the FAC state a claim under California law (UCL and unjust enrichment) if preemption does not apply? | Late fees violate Cal. Civ. Code §1671 and are unfair under §17200; unjust enrichment asserted. | State-law claims are preempted or fail to state a claim under California law. | UCL claims viable; unjust enrichment claim dismissed with prejudice. |
| Whether the de facto-lender issue should be resolved at this stage? | Affirmative discovery should determine the true lender. | Proceeding should use form documents unless need for factual development. | Discovery on de facto-lender issue permitted; case not dismissed on preemption at this stage. |
Key Cases Cited
- Chae v. SLM Corp., 593 F.3d 936 (9th Cir. 2010) (preemption framework under NBA and OCC regulations; conflicts and field preemption)
- Flowers v. EZPawn Oklahoma, Inc., 307 F.Supp.2d 1191 (N.D. Okla. 2004) (de facto lender concept; preemption not conclusively decided)
- Krispin v. May Dept. Stores, 218 F.3d 919 (8th Cir. 2000) (originating bank vs. assignee; real party in interest under NBA)
- Hudson v. Ace Cash Express, Inc., 2002 WL 1205060 (S.D. Ind. 2002) (discussed de facto lender; unpublished WL not official reporter (cited for reasoning))
- Whitman v. Raley’s Inc., 886 F.2d 1177 (9th Cir. 1989) (distinguishes complete preemption jurisdictional issue from substantive preemption)
- Easter v. American West Financial, 381 F.3d 948 (9th Cir. 2004) (consideration of de facto lender concepts; not addressing preemption directly)
- In re Community Bank of N. Va., 418 F.3d 277 (3d Cir. 2005) (non-bank entity involved in lending scheme; preemption context)
- Lattimore v. Bank, 656 F.2d 139 (5th Cir. 1981) (NBA §85 partial assignment preemption considerations)