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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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False Claims Act; Veterans & USERRA; Faculty & Staff; Research

Hamilton v. Yavapai Community College District, et al. (D. Ariz. April 13, 2018)

Order granting-in-part and denying-in-part Defendants’ Motion for Summary Judgment. Plaintiff, a terminated employee of Yavapai Community College (YCC), alleged under the False Claims Act (FCA) that YCC and its flight program partner, Defendant Guidance Academy, LLC, conspired to defraud and defrauded the Department of Veteran Affairs (VA) by obtaining funding in violation of 38 C.F.R. § 21.401 (85/15 Rule) and by submitting claims for in-flight training that never occurred. Plaintiff further alleged FCA retaliation and a number of intentional interference claims against Defendants. Addressing whether YCC violated the 85/15 Rule by calculating a single 85/15 ratio for its entire aviation program, rather than calculating four distinct ratios based on its four concentrations within the aviation program, the court found it reasonable for YCC to believe that it was properly calculating and reporting its compliance in 2015 based on the VA’s review of its program from June 1, 2013 to May 6, 2014 and evidence that another area college similarly calculated its 85/15 ratio. However, the court found that YCC’s practice of counting high school students who participated in its aviation program towards the 15% of “nonsupported” students created several issues of material fact as to whether Defendants knowingly miscalculated the 85/15 ratio and whether this alleged failure to comply was material to the VA’s disbursement of funding. The court allowed Plaintiff’s FCA conspiracy and  retaliation, intentional interference with education and employment, and deprivation of liberty claims  to proceed. The court also allowed  Defendants’ counterclaims for defamation and international interference with contract relations to proceed. However, the court dismissed Plaintiff’s allegation that Defendant Guidance violated the FCA by failing to provide students with contracted flight hours, as well as dismissing Plaintiff’s intentional interference with contractual relations claims against Defendant Morgan and YCC due to his lack of a valid contractual relationship with NorthAire Aviation, an alternative flight training school he tried to work for and attend.

4/17/2018
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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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