Opinion ID: 4237530
Heading Depth: 2
Heading Rank: 1

Heading: consumer protection act claim

Text: Nebraska’s CPA makes unlawful “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Neb. Rev. Stat. § 59-1602. 1 Although the parties agree that the MPN is a standardized form, neither party provides further explanation. We may take judicial notice that the standardized Federal Family Education Loan (FFEL) MPN is drafted by the Department of Education (DOE): Starting on January 1, 1994, all FFELs use a master promissory note (MPN) that is drafted by the United States Department of Education . . . . [I]n 2007 the MPN language was codified in the FFEL regulations [citing 34 C.F.R. § 682.209(g).] National Consumer Law Center, Consumer Credit and Sales Legal Practice Series, Student Loan Law (5th ed.) § 13.8.4.1. 2 No. 16-2224, Mirandette v. Nelnet, Inc., et al. “The CPA’s scope is limited to ‘the sale of assets or services and any commerce directly or indirectly affecting the people of the State of Nebraska.’” Eicher v. Mid. Am. Fin. Inv. Corp., 748 N.W.2d 1, 12 (Neb. 2008) (citing Neb. Rev. Stat. Ann. § 59–1601(2) (emphasis added)). The CPA applies to unfair or deceptive practices that affect the “public interest.” See Nelson v. Lusterstone Surfacing Co., 605 N.W.2d 136, 141 (Neb. 2000). However, the CPA exempts from its coverage any allegedly unfair or deceptive “actions or transactions otherwise permitted, prohibited, or regulated under laws administered by . . . any . . . regulatory body or officer acting under statutory authority of this state or the United States.” Neb. Rev. Stat. Ann. § 59-1617(1).2 The parties agree that the Department of Education (DOE) and Consumer Financial Protection Bureau (CFPB) have regulatory oversight of loan servicers. DOE and CFPB oversee lenders as well. The parties also agree that there are no regulations governing the specific conduct Mirandette alleges Defendants engage in: delaying or manipulating the date it credits installment loan payments made by paper check. PID 432-37/Dist. Ct. Op. 2 The CPA exemption provides in pertinent part: (1) Except as provided in subsection (2) of this section, the Consumer Protection Act shall not apply to actions or transactions otherwise permitted, prohibited, or regulated under laws administered by the Director of Insurance, the Public Service Commission, the Federal Energy Regulatory Commission, or any other regulatory body or officer acting under statutory authority of this state or the United States . . . . (2) Actions and transactions prohibited or regulated under the laws administered by the Director of Insurance shall be subject to section 59-1602 and all statutes which provide for the implementation and enforcement of section 59-1602. Actions and transactions prohibited or regulated under the laws administered by the Board of Funeral Directing and Embalming or administered by the Department of Agriculture and actions and transactions relating to loan brokers which are prohibited or regulated pursuant to sections 45-189 to 45-191.11 and administered by the Department of Banking and Finance shall be subject to the Consumer Protection Act. No penalty or remedy shall result from a violation of the Consumer Protection Act except as expressly provided in such act. Neb. Rev. Stat. Ann. § 59-1617. 3 No. 16-2224, Mirandette v. Nelnet, Inc., et al. In Kuntzelman v. Avco Financial Services of Nebraska, Inc., 291 N.W.2d 705, 706 (Neb. 1980), the Nebraska Supreme Court considered a CPA claim in which the conduct at issue was addressed by legislation only after suit had been filed. The Nebraska Supreme Court applied the exemption to conduct that had occurred before the new legislation, cautioning that even before the legislation the conduct complained of had been “subject to regulation,” although not yet regulated. Id. at 708 (emphasis added). This principle was reaffirmed in Hydroflo Corp. v. First National Bank of Omaha, 349 N.W.2d 615, 622 (Neb. 1984), (holding that the Department of Banking and Finance’s authority to oversee proper banking standards exempted a bank from CPA liability on a claim that the bank failed to properly require a corporate resolution upon opening a corporate account), and Wrede v. Exchange Bank of Gibbons, 531 N.W.2d 523, 529– 30 (Neb. 1995) (holding that where “the very act of making a loan [is] regulated” by an outside agency, the lender’s conduct in making that loan is exempt from CPA liability). Applying the Kuntzelman rule to this case, Defendants are exempt from CPA liability. The DOE has considerable regulatory authority over student loans. The Secretary of Education is given broad power to regulate under the Federal Family Educational Loan Program, see 20 U.S.C. § 1082(a)(1), and has regulated this area heavily. Indeed, the DOE drafted the MPN at issue here and has regulated with regard to borrower payments, see, e.g., 34 C.F.R. § 682.209 (outlining repayment procedures). This is sufficient to trigger the CPA exemption provision. See Neb. Rev. Stat. Ann. § 59-1617. Thus, we agree with the district court that Nebraska courts would deem Mirandette’s claim exempt under the CPA and we affirm the dismissal of this claim. 4 No. 16-2224, Mirandette v. Nelnet, Inc., et al.