A federal judge has rejected the latest attempt by the University of Phoenix to shortcircuit a potentially massive lawsuit it faces, increasing the chances that the five-year-old case actually goes to trial.
The case, which has been rattling around the federal courts since 2002, hinges on the question of whether the enormous for-profit university violated federal law by paying its recruiters based on how many students they enrolled. A federal appeals court ruled last fall that Phoenix had to defend itself against the charges brought by two former instructors on behalf of the federal government under the False Claims Act, which allows individuals who believe they have identified fraud committed against the government to sue, hoping to be joined by the U.S. Justice Department. (The plaintiff then shares in any financial penalties, which can include trebled damages.)
Phoenix officials had their way in the early court battles, with a federal district court twice dismissing the lawsuit in 2004. But the university’s fortunes began to ebb with the September 2006 ruling by the U.S. Court of Appeals for the Ninth Circuit that was seen by many college lawyers as one of several recent decisions expanding the applicability of the False Claims Act to higher education. Since then, the entire Ninth Circuit court denied a Phoenix petition asking it to rehear the case, and the U.S. Supreme Court refused to hear Phoenix’s appeal. . . .
Tuesday, August 21, 2007
Still Waiting for the U of Phoenix to Crash
From Inside Higher Ed: