UNPUBLISHED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.

------------------------------

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Vacated and remanded by unpublished per curiam opinion.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 & 
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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Unpublished opinions are not binding precedent in this circuit.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.