Thursday, December 17, 2009

Qui tam suits in action

The University of Phoenix recently settled a False Claim Act qui tam action in California federal court.
The lawsuit alleged that the the University of Phoenix had defrauded the government by paying enrollment counselors for enrolling students, a practice prohibited for educational institutions that receive federal funds for student aid.

The case settled for $67.5 million to be paid to the government and $11 in attorneys fees.  This is a big payday for plaintiffs lawyers pursuing qui tam actions.  But it is a risky strategy -- this case is notable because it is unusual for plaintiffs to win these cases where the government chooses not to intervene.

Additional reporting available here at MSN and here at The Recorder.

RJE

http://lawprofessors.typepad.com/civpro/2009/12/qui-tam-suits-in-action.html

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