Walker v. Higher Education Loan Authority of the State of Missouri
1:21-cv-00879
E.D. Cal.Jul 26, 2024Background
- Melissa Walker was the victim of identity theft; two federal student loans were fraudulently taken out in her name.
- MOHELA serviced these loans, which were later deemed fraudulent by the Department of Education and discharged for Walker.
- Walker alleged that MOHELA continued to report the loans as delinquent to credit reporting agencies, negatively impacting her credit, even after being notified of the dispute and identity theft.
- Walker filed suit, asserting claims under the Fair Credit Reporting Act (FCRA) and California Consumer Credit Reporting Agencies Act (CCRAA), seeking damages for inaccurate reporting and inadequate investigation of her credit dispute.
- Both parties filed cross-motions for summary judgment; MOHELA asserted Eleventh Amendment immunity as an arm of the State of Missouri.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Eleventh Amendment Sovereign Immunity (is MOHELA immune) | MOHELA is a separate legal entity from Missouri; not immune | MOHELA is part/arm of Missouri and entitled to immunity | MOHELA is not entitled to Eleventh Amendment immunity |
| FCRA Liability: MOHELA is a "furnisher" | MOHELA furnished disputed information to CRAs | Dispute over status after loans transferred and reverification | MOHELA is a furnisher under FCRA |
| FCRA/CCRAA: Accuracy of MOHELA’s reporting & investigation | Reporting was inaccurate and investigation unreasonable | Reporting was accurate at time; investigation met requirements | Genuine issues of fact preclude summary judgment for either party |
| Damages for inability to obtain home loan | Credit harm caused inability to get home loan | No application made; damages are speculative | Damages for home loan are speculative and not recoverable |
Key Cases Cited
- Adickes v. S.H. Kress & Co., 398 U.S. 144 (summary judgment standard)
- Celotex Corp. v. Catrett, 477 U.S. 317 (burden-shifting on summary judgment)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (genuine issue of material fact standard)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (standard for summary judgment)
- Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (duties of furnishers under FCRA)
- Hess v. Port Auth. Trans-Hudson Corp., 513 U.S. 30 (arm of the state analysis for sovereign immunity)
- Menorah Med. Ctr. v. Health & Educ. Facilities Auth., 584 S.W.2d 73 (distinct legal identity of state instrumentalities)