Labickas v. Arkansas State University, 95-2936

Decision Date25 March 1996
Docket NumberNo. 95-2936,95-2936
Citation78 F.3d 333
Parties107 Ed. Law Rep. 527 Steven C. LABICKAS, Appellant, v. ARKANSAS STATE UNIVERSITY; Rita Toland, in her official and individual capacity as Financial Aid Administrator for the Beebe Campus, Appellees.
CourtU.S. Court of Appeals — Eighth Circuit

Appeal from the United States District Court for the Eastern District of Arkansas, George Howard, Jr., Judge.

Steven C. Labickas, pro se in this appeal.

Patricia Van Ausdall, Little Rock, Arkansas, (Winston 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's 1 dismissal of his complaint seeking damages from Arkansas State University and Rita Toland for violations of Title IV of the Higher Education Act (HEA) (20 U.S.C. §§ 1070-1099) and state common law.

Labickas, a full-time student at Arkansas State University (ASU), alleged that when he applied through ASU for a federally-subsidized Stafford loan, Toland, an ASU financial aid administrator, informed Labickas that as part of the application process, he would have to authorize ASU to review his credit. Labickas refused to grant ASU that permission, insisting that his credit record is private. ASU refused to certify his Stafford loan application. Labickas argued that ASU's policy of requiring credit checks of Stafford loan applicants is not authorized by the HEA. Labickas also asserted pendent state law claims of breach of fiduciary duty, outrageous conduct, and breach of contract.

On defendants' motion, the district court 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 passed; (2) was there a legislative intent to create or deny 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 state 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 other 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 action 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 regulate educational institutions' compliance with the HEA;...

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