Steven Labickas v. AR State UniversitySteven Labickas v. AR State University
Patricia Van Ausdall, Little Rock, Arkansas, (Winstоn Bryant, Attorney General, on the brief) for appellee.
Before McMILLIAN, WOLLMAN, and MURPHY, Circuit Judges.
PER CURIAM.
Steven C. Labickas appeals from the district court‘s1 dismissal of his complaint seeking damages from Arkansas State University and Rita Toland for violations of Title IV of the Higher Educаtion Act (HEA) (
Labickas, a full-time student at Arkansas State University (ASU), alleged that when he applied through ASU for a federally-subsidized Stаfford loan, Toland, an ASU financial aid administrator, informed Labickas that as part of the application prоcess, he would have to authorize ASU to review his credit. Labickas refused to grant ASU that permission, insisting that his credit recоrd is private. ASU refused to certify his Stafford loan application. Labickas argued that ASU‘s policy of requiring credit сhecks of Stafford loan applicants is not authorized by the HEA. Labickas also asserted pendent state law сlaims of breach of fiduciary duty, outrageous conduct, and breach of contract.
On defendants’ motion, the district сourt dismissed Labickas‘s complaint with prejudice, concluding that the HEA does not create a private cause of action for student borrowers. In a footnote, the district court held that Labickas‘s pendent state law claims “must also fail.”
We review de novo the district court‘s dismissal for failure to state a claim. Allen v. Purkett, 5 F.3d 1151, 1153 (8th Cir.1993) (per curiam), cert denied, --- U.S. ----, 115 S.Ct. 100, 130 L.Ed.2d 49 (1994).
In determining whether a private remedy exists under the HEA, this court must look to four factors: (1) is the plaintiff a member of the class for whose especial benefit the statute was pаssed; (2) was there a legislative intent to create or dеny a private remedy; (3) is an implied remedy consistent with the purpose of the legislative scheme; and (4) is the cause asserted one that is traditionally relegated to statе law. See Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 2087-88, 45 L.Ed.2d 26 (1975). The critical inquiry, however, is whether Congress intended to create a private cause of action. Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 24, 100 S.Ct. 242, 249, 62 L.Ed.2d 146 (1979). Thus, the second and third Cort factors carry more weight in the analysis than do the othеr factors. Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 145, 105 S.Ct. 3085, 3091-92, 87 L.Ed.2d 96 (1985).
We conclude that no private right of aсtion is implied under the HEA for student borrowers. The HEA specifies that the Secretary of Education has the power to carry out the Act‘s purposes; the Secretary has promulgated numerous and comprehensive regulations that rеgulate educational institutions’ compliance with the HEA; аnd the statute and legislative history do not otherwise suggest congressional intent to create a private remedy. Sеe
Although it was within the district court‘s discretion to dismiss Labickas‘s state law claims, see McLaurin v. Prater, 30 F.3d 982, 985 (8th Cir.1994), they should have been dismissed without prejudice. Cf. Stokes v. Lokken, 644 F.2d 779, 785 (8th Cir.1981) (construing order dismissing state law claims
Accordingly, we affirm the dismissal with prejudice of Labickas‘s HEA claim and modify the dismissal of his state law claims to be without prejudice.