Missouri Government Agency Threatens Libel Suit Against Critic


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The following are some of the ways to get in touch with each other: Washington Post (Danielle Douglas Gabriel). Covers the story in an article entitled “Student loan servicer MOHELA warns advocacy group to stop making false claims.” The article links MOHELA’s Demand letterThe closing phrase is,

This letter provides SBPC [the Student Borrower Protection Center] The falsehood of the statements and insinuations described above will be brought to the attention of the SBPC. MOHELA may impose punitive damages if SBPC continues to make or publish false or misleading statements. MOHELA hopes you will understand MOHELA’s commitment to take all necessary action in order to stop your conduct. MOHELA values its reputation and rights and will aggressively enforce them.

MOHELA is not a private entity. Government entities are not liable for libel. If you’re not sure, Falsehood can be deliberate or reckless.

[1.] First, let’s look at the in Biden v. Nebraska (2023)The Court recognized MOHELA as a government body. This was done in order to determine whether a damage to MOHELA would be a damage to the state. But the logic applies equally to other constitutional contexts. To quote the Court:

MOHELA has been designated as a “public instrumentity” by the State. Mo. Rev. Stat. § 173.360. Missouri established the Authority for the “essential” public function of helping Missourians obtain student loans necessary to pay college. The Authority is empowered to invest or finance student loans by the State, including by issuing bonds, in order to fulfill this public purpose. §§ 173.385(1)(6)-(7). It can also service loans, and collect “reasonable” fees for doing so. §§ 173.385(1)(12), (18). MOHELA’s profits have helped fund education in Missouri. MOHELA has provided nearly $300 million in grants and scholarship for Missouri students and $230 million in development projects for Missouri colleges and Universities.

The Authority is under the supervision and control of the State. The board consists of five members, two state officials, appointed by Governor and approved by Senate. § 173.360. The Governor has the right to remove any member of the board for good cause. Ibid. MOHELA is required to submit annual financial reports detailing its income, expenses, and assets, to the Missouri Department of Education. § 173.445. The Authority is, therefore, “directly responsible” to the State. The State “set[s] The State is the only one who can abolish the contract. [MOHELA] And set the terms for its dissolution.”

MOHELA, by law and by function, is an instrumentality for Missouri: It is created by the state to further a purpose, it is governed by officials and appointees of the state, it reports to the state, and the state can dissolve it.

Or, to quote the Missouri Attorney General’s brief in that case.

MOHELA is an entity created and controlled by the state that performs important public functions on behalf of the state. As such, MOHELA is part of Missouri ….

Later in the brief:

MOHELA is part and parcel of Missouri’s government. MOHELA was created by special law. Second, Missouri declares “the exercise by [MOHELA] The “performance of an essential function” is one of the powers granted to MOHELA, which includes ensuring that Missouri students can access loans. Third, the Governor appoints 5 of MOHELA’s 7 members. The remaining 2 are officials from other state entities. All seven are “removable”.[able] “By the Governor” for Cause

See also this example of a court recognizing a corporation of this type as a private entity. Lebron v. National Railroad Passenger Corporation (1995)“held that Amtrak, despite its congressional designation, was the Government under constitutional law; it was organized to achieve governmental objectives, and was controlled and directed by federal appointees.” (to quote a Later case). MOHELA, therefore, is also a government entity in constitutional terms.

[2.] Generally speaking, the law can’t punish false statements about government entities—even knowing lies—on the grounds that they damage the government entities’ reputation. In the words New York Times v. Sullivan (1964) (quoting an older case of state law and endorsing it)

For good reason, no court of last recourse in this country has ever ruled, or even implied, that prosecutions for libel of government have anyplace in the American system.

In context, in the case at hand, the Court applied this principle to civil responsibility (the issue involved in the case). Sullivan) and not just criminal prosecutions. Likewise, Rosenblatt v. Baer (1966) The court made it clear that “in absence of sufficient proof that the attack was directed at the plaintiff, a non-personal attack on government operations cannot be used to establish the libel of the people administering those operations.” A claim “based on the libel against government” rather than a specific government official is “constitutionally insufficient.”

This is a better First Amendment protection than other famous films Sullivan Rule that an alleged libel by a public official cannot lead to civil or criminal responsibility without a showing that the falsehood was knowingly or recklessly committed. An alleged libel by the government is not liable. This principle has consistently been applied in lower court decisions. See, e.g.Nampa Charter School, Inc. v. DeLaPaz (Idaho 2003) “For the purposes of libel and defamation against DeLaPaz NCS should treated similarly to a district school and is a government entity in terms of being able to sue or to be sued. Under Sullivan, Rosenblatt, The following are some examples of how to get started: Weeks, The school cannot pursue a lawsuit for libel against a person who is speaking out about a matter of public concern.”).

I have emailed MOHELA General Counsel to get a comment. If I do, I will update the post.


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