On January 5,  the U.S. District Court for the Middle District of Florida denied a motion for judgment on the pleadings filed by a state-affiliated student loan servicer in Missouri, holding that the agency was not entitled to Eleventh Amendment immunity in a dispute over alleged identity theft and debt collection practices. The case centered on a plaintiff who alleged that two student loan accounts were fraudulently opened in his name, purportedly leading to persistent debt collection efforts and adverse credit reporting. The plaintiff alleged violations of the FCRA and the Florida Consumer Collection Practices Act.

The court analyzed whether the student loan servicer functions as an “arm of the state,” and applied the four-factor test established by the 11th Circuit to determine whether an entity would be entitled to Eleventh Amendment immunity. While Missouri law defines the agency as a public instrumentality, the court found that the agency operated with significant independence, generated its own revenue, and was solely responsible for its liabilities. The court concluded that, although the agency’s enabling statute contains some indications of state control, the other three factors weighed against sovereign immunity. Thus, the court denied the motion for judgment on the pleadings, thereby allowing the case to proceed.