No. 15-0524 – Karen Adams v. Pennsylvania Higher Education Assistance Agency
                                                                                         FILED
                                                                                      June 3, 2016
                                                                                      released at 3:00 p.m.
                                                                                    RORY L. PERRY II, CLERK
Chief Justice Ketchum, concurring, in part, and dissenting in part:               SUPREME COURT OF APPEALS
                                                                                       OF WEST VIRGINIA

              I agree with the result in this case.        I disagree with the majority’s

conclusion that a portion of the plaintiff’s claim was not barred by federal preemption.

              In my opinion, there is complete preemption of the West Virginia

Consumer Credit & Protection Act, W.Va. Code § 46A-1-1 et seq. [1974] (“WVCCPA”),

by the regulations of the Federal Family Education Loan Program, 20 U.S.C. §§ 1071 to

1087-4 (“FFELP”).       The Ninth Circuit addressed whether the FFELP preempted

Oregon’s unlawful debt collection statute in Brannan v. United Student Aid Funds, Inc.,

94 F.3d 1260, 1264-65 (9th Cir. 1996). The Ninth Circuit concluded that the Oregon

statue was preempted by federal law, reasoning that:

                      If student loan guarantors were exposed to liability
              under fifty different sets of statutes, regulations and case law,
              conducting diligent pre-litigation collection activity could be
              an extremely uncertain and risky enterprise. Exposure to
              liability under state law would provide a significant
              disincentive to pursue loan collection, and the cost advantages
              gained by concentrating [FFELP] loan collection in a
              centrally-administered system would be lost. Preemption does
              deprive some defaulters of the ability to receive damages
              under state law; however, the congressional purpose in
              enacting the [FFELP] was not to make it easier for defaulters
              to get money from loan collectors, but to protect the millions
              of students who would suffer irremediable loss if Congress
              had to shut down the [FFELP] program.




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              Similarly, the Northern District of West Virginia concluded that the

WVCCPA is completely preempted by the FFELP. In Seals v. Nat’l Student Loan

Program, 2004 WL 3314948 (Aug. 16, 2004, N.D. W.Va.), the court noted that:

                      The Secretary of Education has published an
              interpretation of this specific issue. In this interpretation, the
              Secretary states that the Guaranteed Student Loan (“GSL”)
              regulations, enacted under the HEA [Higher Education Act],
              were intended “to preempt contrary or inconsistent state law
              to the extent necessary to permit compliance with the Federal
              regulations.” Stafford Loan, Supplemental Loan for Students,
              PLUS, and Consolidation Loan Programs, 55 Fed.Reg.
              40120 (Oct. 1, 1990). The Secretary further explains that
              state law is inconsistent with the GSL regulations when it
              “would prohibit, restrict, or impose burdens” on the pre-
              litigation collection efforts of third parties. Id. at 40121.
              Consequently, any state law is preempted that “would hinder
              or prohibit any activity” taken by these third parties prior to
              litigation. Id.

              I agree with the Ninth Circuit and with the Northern District Court’s ruling

in Seals. Therefore, I dissent to the majority’s conclusion that part of the plaintiff’s claim

was not barred by federal preemption.




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