Why Eugene Is Probably Right About MOHELA's Inability To Sue For Libel

As Eugene mentioned yesterday, the Missouri Higher Education Loan Association (MOHELA), has threatened to bring a lawsuit for libel. but New York Times v. Sullivan, among other cases, say the constitution forbids libel suits brought by the government. The Washington Post ran a story about this, and asked me (and Sam Bray) for a comment in light of our writing about the constitutional status of MOHELA in the context of Biden v. Nebraska. (Amicus brief; HLR Case Comment).

I wrote back: "It is not clear whether the Supreme Court's ruling that a harm to MOHELA is necessarily a harm to Missouri also means that MOHELA is the same as the state for other legal purposes," and a paraphrase of my comment was added to the story. Since it might look like Eugene and I are in some kind of disagreement here, I thought I would explain:

My main point was that the state standing question resolved in Biden v. Nebraska seemed to be intentionally separate from many other legal questions one might ask about the state status of MOHELA.

For instance, there has been a dispute in the lower courts about whether or not MOHELA is an "arm of the state" of Missouri for purposes of state sovereign immunity -- and I think the better view is that MOHELA is not an "arm of the state." But the Supreme Court avoided saying anything about that question, even though some of the earlier briefing in the case had turned on it. Similarly, the Supreme Court avoided ever saying that MOHELA "is" the state, describing it instead as a "public corporation," "government corporation," "instrumentality of the state of Missouri," etc, whose injury was necessarily an injury to the state. So whether the New York Times v. Sullivan principle applies to such entities strikes me as a different and further question from what Biden v. Nebraska resolved.

Consider the example of a state official. A state official is a "state actor" for some purposes -- their official acts are constrained by the Constitution, and if they violate the Constitution you can sue them. But state officials, unlike governments, are allowed to bring libel lawsuits (subject to the actual malice standard). So is MOHELA more like a state official, or is it a government itself? That's an interesting question, but again, not the one fully answered by Biden v. Nebraska.

That said, in emailing with Eugene afterwards, I learned that there is a substantial body of lower court case law holding that governmental nonprofit corporations and the like are covered by the no-libel-suits-brought-by-government rule. Eugene cited:

Beedle v. Wilson, 422 F.3d 1059 (10th Cir. 2005) (applying state action analysis under sec. 1983 to decide whether a hospital was barred from suing for libel) … ACLU of Minn. v. Tarek ibn Ziyad Acad., No. CIV.09-138(DWF/JJG), 2009 WL 4823378 (D. Minn. Dec. 9, 2009) (charter school); Nampa Charter Sch., Inc. v. DeLaPaz, 140 Idaho 23 (2004) (charter school); Cap. Dist. Reg'l Off-Track Betting Corp. v. Ne. Harness Horsemen's Ass'n, 92 Misc. 2d 232 (N.Y. Sup. Ct. 1977) ("public benefit corporation organized under the provisions of the Regional Off-Track Betting Corporation Law of the State of New York"); Beedle v. Darby, 2000 OK 1 (nonprecedential) (hospital); Cox Enterprises v. Carroll City/County Hosp. Auth., 247 Ga. 39 (1981) (hospital); Atlanta Humane Soc. v. Mills, 274 Ga. App. 159 (2005) (Humane Society).

These citations persuade me that the general rule seems to be that non-human entities that are state actors seem to be covered by the anti-libel principle, and so Eugene is probably right about the bottom line.