Conclusion – Misrepresentation-Created States May possibly not be Preempted

Conclusion – Misrepresentation-Created States May possibly not be Preempted

The court’s finding of a clear distinction between the mandatory disclosures in Chae and the voluntary statements made by Great Lakes may be subject to further litigation. After all, a servicer of a federal student loan could hardly be expected to tell a borrower that the servicer can’t answer questions about the PLSF Program. While the Eleventh Circuit was considering an appeal from a dismissal (which required the allegations in the complaint to be accepted as true), that part of its holding could be challenged as the case progresses.

While the majority of the opinion focused on express preemption, the court also addressed Great Lakes’s other preemption arguments. The court went on to conclude there was no conflict preemption because where Congress has explicitly addressed preemption there is implication that it did not intend to preempt other areas of state law. Chae decision. Finally, the court dispatched Great Lakes’ argument of field preemption, calling it the “weakest of its preemption arguments” because the HEA does not occupy the field of debt collection practices and does not impliedly preempt state laws.

That it reverse of the district court’s dismissal from a course step provides a serious development in the fresh constant preemption controversy, and servicers away from government student education loans is always to shell out variety of awareness of the decision whenever contrasting brand new preemption security

Although this choice is joining on Eleventh Circuit (Alabama, Fl, and you may Georgia), courts in several other jurisdictions supply otherwise will undoubtedly be dealing with it preemption material:

The latest legal after that found no argument preemption as uniformity – once the High Lakes debated try a goal on federal student loan program – is actually, indeed, not a goal of the new HEA, inspite of no credit check title loans in Harrogate the contrary glance at pulled from the

• Oral argument took place on , in Commonwealth regarding Pennsylvania v. Navient Corp,ainsi que al., where the Third Circuit Court of Appeals will decide whether the HEA preempts state claims that a servicer of federal student loans did not disclose details about federal student loans. The district court held that the HEA did not expressly or through conflict preemption foreclose the Commonwealth’s state law claims brought under the Pennsylvania Unfair Trade Practices and Consumer Protection Law.
• The Seventh Circuit Court of Appeals reversed the district court’s decision in Nelson v. High Ponds Instructional Loan Properties, Inc., holding the HEA did not preempt affirmative misrepresentation claims. The court noted that, “when a plaintiff alleges a defendant’s false affirmative misrepresentation, recasting the claim as imposing a ‘disclosure requirement’ is not necessary and may not even be appropriate,” which was similar reasoning to the Eleventh Circuit’s decision in Lawson-Ross.
• In Minner v. Navient Corp., the United States District Court for the Western District of New York held that the HEA did not preempt state law claims that a student loan servicer’s statements to a borrower steered him into repayment options that allegedly harmed him financially.
• A federal district court in the Central District of California held in Winebarger v. Pennsylvania Higher education Direction Company that the HEA did preempt state law claims brought by a student loan borrower against a servicer alleging that the servicer failed to disclose information about the PSLF Program’s application related to the borrower’s loans. The district court reasoned that the borrowers’ state law claims rest “on an alleged misrepresentation – that [the servicers] provided an inaccurate qualifying payment count for [Public Service Loan Forgiveness Program] eligibility – and, thus, the Court concludes that these claims are preempted because the failure to provide accurate information is, in essence, nothing more than a disclosure claim.”