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FCA suit against Univ. of Phoenix will proceed to trial

A federal judge in Sacramento has rejected an attempt by the University of Phoenix to have a False Claims Act suit dismissed. The school had claimed that $9.8 million it paid the U.S. Dept. of Education to resolve similar allegations should have ended the suit.

The suit was originally filed in 2003 by two former instructors under the qui tam provisions of the FCA. They allege that the school violated the FCA by paying recruiters based on how many students they enrolled.

The suit has had a complicated history, having been dismissed twice by the district court, reinstated by the Ninth Circuit, denied a rehearing by the Ninth Circuit, and denied certiorari by the Supreme Court.

Plaintiffs argued, and the judge agreed, that the prior settlement could not be seen as an alternative remedy because the Justice Department must sign off on all False Claims Act resolutions, and the attorney general had played no role in the Education Department’s settlement with Phoenix.

We’ve blogged about this case on June 27, 2007, April 26, 2007 and September 8, 2006.

The most recent developments were reported in the August 21, 2007 issues of the Los Angeles Times and Inside Higher Ed.

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