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New Cases and Developments

NACUA's Legal Resources staff summarizes current higher education cases and developments and provides the full text of selected cases to members. New cases and developments are archived here for up to 12 months.  Cases provided by Fastcase, Inc.

Selected Topics: Research False Claims Act
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Research; False Claims Act

Klee v. McHenry County College (N.D. Ill. July 26, 2017)

Order denying McHenry County College’s Motion to Dismiss. The College terminated Plaintiff, the former Director of the Office of Financial Aid and Veteran Services, for the misuse of the College’s computer systems when he deleted his social security number from his employee records and caused the system to crash. Claiming instead that he was fired in retaliation for reporting that the College was making fraudulent financial aid claims, Plaintiff filed suit alleging violations of the False Claims Act (FCA) and state law. The court found Plaintiff’s reports of financial impropriety sufficient to qualify as a protected activity. Additionally, construing the allegations in the light most favorable to Plaintiff, the court declined to conclude that Plaintiff was a “fraud-alert” employee held to a higher notice standard for informing his employer of potential fraudulent activity. Although Plaintiff was responsible for reporting on matters related to financial aid, none of his alleged duties included fraud detection or investigation. Therefore, Plaintiff sufficiently alleged that the College knew of his protected activity. Finally, Plaintiff provided adequate evidence indicating that the College retaliated at least in part due to his protected activity, which was enough to allow his FCA retaliation claim to survive a Motion to Dismiss. 

7/27/2017
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False Claims Act; Research

United States ex rel. Cain v. Salish Kootenai College, Inc. (9th Cir. July 10, 2017)

Opinion reversing the district court’s judgment and remanding for further proceedings. Three former employees of Salish Kootenai College (SKC), a Native American tribal college, filed a qui tam action against the College, the Salish Kootenai College Foundation, and eight of the College’s board members, claiming that Defendants submitted to the federal government false student progress reports in order to continue qualifying for grants from the Department of Health and Human Services and the Indian Health Service. The district court dismissed the Complaint against SKC and its Foundation, holding that the College, as an arm of the Confederated Salish Kootenai Tribes, was entitled to the Tribes’ sovereign immunity. On appeal by SKC, the Ninth Circuit panel divided the relevant inquiry into two questions, asking first whether the Tribe is a “person” under the FCA and second whether SKC is an arm of the Tribe. It answered the former question in the negative and remanded the case for further fact-finding on the second question under the standard articulated in White v. University of California.

7/12/2017
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Research; False Claims Act

United States ex rel. Doughty v. Oregon Health and Sciences University (D. Or. Apr. 11, 2017)

Opinion and Order granting Oregon Health and Sciences University’s (OHSU) Motion to Dismiss and granting Plaintiffs leave to file an amended complaint. Plaintiff-Relator filed a qui tam action against OHSU alleging that the University had violated the False Claims Act (FCA) by applying improper reimbursement rates to certain federally-sponsored projects. The United States intervened on behalf of Plaintiff-Relator. Citing Oregon Supreme Court precedent, the court found that OHSU is an arm of the state and thus not a “person” subject to FCA liability. Additionally, the court rejected Plaintiff-Relators’ claim that the United States may nonetheless bring an FCA action against OHSU, noting that although a Supreme Court concurring opinion in Vermont Agency of Natural Resources v. U.S. ex rel. Stevens, 529 U.S. 765 (2000), supports that position, the court was obliged to follow the majority opinion, which relied on the “longstanding interpretive presumption that ‘person’ does not include the sovereign.”

4/12/2017
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False Claims Act; Sex Discrimination; Research; Race and National Origin Discrimination; Retaliation; Discrimination, Accommodation, & Diversity

Salagh v. Virginia International University (E.D. Va. Mar. 13, 2017)

Memorandum Opinion and Order granting Virginia International University’s Motion to Dismiss on all claims. Plaintiff, a naturalized American citizen of Arab descent, claimed that she was demoted from her position as director to a full-time instructor on account of her sex and national origin, and that her supervisor “consistently acted in a manner demonstrating disrespect for Arabs” and demonstrated an “intolerance for women over the age of 30 and strong American women in leadership positions.” She filed a Title VII suit against the University and claimed that she was demoted in retaliation for filing an Equal Employment Opportunity Commission (EEOC) complaint and for reporting various legal violations by other employees. The Court found that Plaintiff failed to plead sufficient facts to plausibly assert that her alleged demotion was based on national origin or sex discrimination, or in retaliation for her EEOC complaint. Similarly, Plaintiff’s whistleblower claim failed because she did not identify any whistleblower cause of action or statute, nor did she allege conduct that could reasonably lead to a viable False Claims Act action. 

3/14/2017
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Financial Aid; False Claims Act

United States ex rel. Jackson v. University of North Texas

Plaintiff alleged that the University of North Texas violated the False Claims Act with regard to his student loans. The University initially failed to factor in his athletic scholarship in calculating his cost of attendance and, when it realized its mistake, did not relinquish the funds to Plaintiff for fear of violating National Collegiate Athletic Association rules. Had the University accounted for the athletic scholarship, Plaintiff would not have been eligible for student loans. After Plaintiff defaulted on his loan repayments, he sued, asserting that the University violated the False Claims Act by submitting a false claim for payment to the government, given that Plaintiff was not actually eligible to receive the loans. The Fifth Circuit affirmed the district court’s dismissal, finding that Plaintiff’s claim was time-barred.

12/14/2016
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Students; Research; Financial Aid; False Claims Act

United States ex rel. Jackson v. University of North Texas

Plaintiff alleged that the University of North Texas violated the False Claims Act with regard to his student loans. The University initially failed to factor in his athletic scholarship in calculating his cost of attendance and, when it realized its mistake, did not relinquish the funds to Plaintiff for fear of violating National Collegiate Athletic Association rules. Had the University accounted for the athletic scholarship, Plaintiff would not have been eligible for student loans. After Plaintiff defaulted on his loan repayments, he sued, asserting that the University violated the False Claims Act by submitting a false claim for payment to the government, given that Plaintiff was not actually eligible to receive the loans. The Fifth Circuit affirmed the district court’s dismissal, finding that Plaintiff’s claim was time-barred.

12/14/2016
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False Claims Act

U.S. & Ill. ex rel. Edmondson v. Bd. of Trs. of Ill. E. Cmty. Colls. (S.D. Ill., Feb. 17, 2016)

Memorandum and Order from the U.S. District Court for the Southern District of Illinois, granting Plaintiff's Motion for a voluntary dismissal without prejudice. In granting Plaintiff's motion, the Court found that Plaintiff's right to seek dismissal outweighed the interests asserted in the College's opposition because (1) the litigation had not proceeded to an advanced stage; (2) the bulk of Defendant's efforts thus far pertained to an investigation by the United States and the State of Illinois, regarding whether or not to intervene, (3) discovery deadlines were still 9 months away, with a trial scheduled for 2017.
2/19/2016
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False Claims Act

U.S. & Mass. ex rel. Willette v. Univ. of Mass. (1st Cir., Jan. 27, 2016)

Decision from the First Circuit Court of Appeals, affirming District Court's decision that the University of Massachusetts Medical School is an arm of the State and thus exempt from claims under the False Claims Act.

2/1/2016
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