The Washington Post (Daniel Douglas Gabriel) covers this story in an article titled, “Student loan servicer MOHELA tells advocacy group to stop making 'misleading claims.'” The article links to his MOHELA demand letter and concludes:
This letter provides the SBPC. [the Student Borrower Protection Center] You acknowledge that the above statements and insinuations are false. Therefore, if SBPC continues to make and publish any of these false and misleading statements, MOHELA will hold that continuation as having been made with knowledge of the falsehood of the statements or with reckless disregard for their truth. treatment, may lead to punitive damages based on defamation. Act and other relevant laws. MOHELA hopes that you understand that if you persist, MOHELA will take all appropriate steps necessary to stop this behavior. MOHELA takes its rights and reputation very seriously and intends to vigorously protect and vigorously enforce its rights.
However, MOHELA is a government agency, and government agencies cannot sue for defamation. No matter what It can also be a knowing or reckless falsehood.
[1.] first, Biden vs. Nebraska (2023), the court recognized MOHELA as a government agency. It did so there for the purpose of determining whether harm to the mohera is harm to the state, but the logic extends to other constitutional contexts as well. To quote the court:
MOHELA is a national “public institution”. Mo.Rev.Stat. §173.360. Missouri created the authority to perform the “essential public function” of helping Missourians access the student loans they need to pay for college. To accomplish this public purpose, the agency is authorized by the state to invest in or finance student loans, including by issuing bonds. §§ 173.385(1)(6)-(7). We may also process loans and charge a “reasonable fee” for doing so. §§ 173.385(1)(12), (18). Proceeds help fund education in Missouri. MOHELA provides $230 million in development projects for Missouri universities and nearly $300 million in grants and scholarships to Missouri students.
The authorities are subject to state supervision and control. The board is made up of two state officials and five members appointed by the governor and confirmed by the Senate. §173.360. The governor may dismiss a director if there is a reason. Same as above. MOHELA is required to submit an annual financial report to the Missouri Department of Education detailing its income, expenses, and assets. §173.445. The authorities are therefore “directly responsible” to the state. Status “set”[s] Only the state can abolish the “conditions of existence” [MOHELA] Then, set the conditions for dissolution. ”
By law and function, MOHELA is a Missouri state agency. MOHELA is established by the state to further public purposes, is managed by state employees and state appointees, reports to the state, and may be dissolved by the state.
Or, to quote a brief co-signed by the Missouri Attorney General in this case:
MOHELA is a state-established and state-controlled public body that performs essential public functions for the state. Therefore, MOHELA is part of the state of Missouri….
From the second half of the summary,
MOHELA is part of the Missouri State Government. First, Congress created MOHELA by special act. Second, Missouri declares: [MOHELA] Third, the governor appoints five of MOHELA's seven members, the remaining two being employees of other state agencies.and all 7 are “delete”[able] by the Governor.”
See below for another example where courts recognized this type of company as a private entity. Revlon v. National Railroad Passenger Corporation (1995), which held that “Notwithstanding any private designation by Congress, Amtrak is a government for constitutional purposes, organized under federal law to accomplish governmental purposes, and is organized by federal appointees.'' (quoting a later lawsuit). Therefore, MOHELA is likewise a state agency for constitutional purposes.
[2.] Generally speaking, the law cannot punish making false statements about a government agency, even when the lie is known, because it damages the agency's reputation. In the words of New York Times vs. Sullivan (1964) (citing and supporting old state law cases),
With good reason, “no final court in this country has ever held, or even suggested, that defamation charges against the government have any place in the American jurisprudence.''
And in that context, the court was applying that principle to civil liability (which is exactly what this issue concerns) sullivan) Not just criminal prosecution. Similarly, Rosenblatt v. Baer (1966) state that “impersonal attacks on government operations may be used to establish defamation against those controlling the operations in the absence of sufficient evidence that the attacks were focused on the plaintiff.'' I can't do that,” he said. Claims “based on defamation of the government” rather than specific government officials are “constitutionally insufficient.”
And it provides more First Amendment protections than the better-known law. sullivan A rule that provides that civil or criminal liability for defamation of a public official does not arise unless the person discloses a knowing or reckless lie. Allegations of defamation against the government cannot lead to such liability. This principle has been consistently applied in lower court precedents. for example,, Nampa Charter School, Inc. v. Delapaz (State of Idaho, 2003) (“For purposes of this libel and slander action against Dela Paz, NCS should be treated like a school district and is a governmental entity with respect to its ability to sue or be sued. . Sullivan, Rosenblatt and several weeks, A school cannot maintain a libel or slander action against an individual if the individual is making a statement about a matter of public interest. ”)
MOHELA's general counsel was contacted for comment via email. If we get an answer, we'll update this post accordingly.
