Prologue — Oakland City City University University University v. United States (No. 05-1035)

C)) rea:

No. . Gs

@51035FFH 1 2 2006

Jr OH eOFFICE OF THE CLERK

Supreme Court of the Anited States

*

OAKLAND CITY UNIVERSITY,

founded by GENERAL BAPTISTS, INC.

d/b/a OAKLAND CITY UNIVERSITY,

Petitioner,

Vv.

UNITED STATES OF AMERICA ex rel.

JEFFREY E. MAIN,

Responden

*

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEAL§,

FOR THE SEVENTH CIRCUIT

Pe"

—_ CoO

PETITION FOR WRIT OF CERTIORARI

WITH APPENDIX

%

Michael J. McManus James D. } nnson

Counsel of Record RUDOLPH, FINE, PORTER

Jeffrey J. Lopez & JOHNSON, LLP

Jonathan D. Tarnow 221 N.W.-Fifth Street

Brooke E. McDonough Second Floor

DRINKER BIDDLE & REATH LLP P.O. Box 1507

1500 K Street, N.W. Evansville, Indiana 47708

Suite 1100 (812) 422-9444

Washington, DC 20005-1209

(202) 842-8800

Counsel for Petitioner Counsel for Petitioner

THE LEX GROUP®*C ¢ 1750 K Street N.W. @ Suite 475 ¢ Washington, DC 20006

(202) 955-0001 @ (800) 815-3791 @ Fax: (202) 955-0022 www.thelexgroupdc.com

QUESTION PRESENTED

The District Court dismissed relator’s claim

under the False Claims Act (“FCA”), 37 U.S.C. 3729

(2000), et seq., finding that an uncertified statement

by Petitioner, a university participating in the

federal student aid program under the Higher

Education Act of 1965 (“HEA”), in its Program

Participation Agreement (“PPA”) with the United

States Department of Education (“ED”) could not be

the basis of FCA liability because the PPA is not a

claim for federal funds. On appeal, a panel of the

Seventh Circuit reversed, finding, in conflict with

decisions of the Second, Fourth, Fifth, Ninth, and

District of Columbia Circuit Courts of Appeal, that

uncertified statements made in a federal program

participation agreement may constitute false

statements uncer the FCA. The Seventh Circuit’s

decision also directly conflicts with a decision of the

Fifth Circuit which, on substantially identical facts,

held that a statement in the PPA could not be used

to support FCA liability against a university.

A single question is presented for review:

1. Whether an institution’s statement that it

will comply with general regulatory conditions, made

in an agreement to participate in a federal program,

May constitute a false statement under the False

Claims Act, even where the statement is uncertified

and is not a condition of payment under the

program,

LIST OF PARTIES

The parties named in the caption are the only

parties to this proceeding. The Department of

Justice declined to intervene before the district

court, but filed a Statement of Interest before the

district court and appeared as amicus curie before

the court of appeals. This petition is timely filed on

February 15, 2006.

CQRPORATE DISCLOSURE STATEMENT

Pursuant to this Courts Rule 29.6,

undersigned counsel states that Petitioner Oakland

City University (“OCU”), founded by General

Baptists, Incorporated, d/b/a Oakland City

University has no parent company, and no publicly

held company owns 10% or more of its stock.

ili

TABLE OF CONTENTS

Page

QUESTION PRIEBIENTED ....0:cccsiccssceccoscossorscovssnssceses i

I I ai sitickisinpecicannviirecaercaneicaiacainiagl ii

CORPORATE DISCLOSURE STATEMENT. ........... ii

TABLE OF COT MIIG .nncicccccssccscciscivneyscsensaccsvenses iii

TABLE OF AUTHORITIES oo.ssscsssecsesosssssssoeore v

een ne ee eee PELE sie pee 1

STATEMENT OF JURISDICTION ..........ccccecesessseees 1

STATUTORY PROVISIONS INVOLVED ................. 1

STATA OF THE CAG. ci. ccsciscieseccosncoctssoon 2

The Federal Student Aid and PPA Process ....... | ean! 3

The Action Below bids canadien ded masnbenaidacais ceaimuniolne: 7

REASONS FOR ALLOWANCE OF THE

5 | gemeesereainen escPatesisnet Nera oon ane Missin renin enue” H

I. Review Is Warranted To Resolve

A Circuit Split Regarding

Whether FCA Liability May

Arise From An _ Uncertified

Statement That Is Not A

Precondition Of Payment. ................... 12

iv

IT. Review Is Necessary To Resolve

A Circuit Split Regarding

Whether FCA Liability Can

Attach To False Statements

PROG TR BT, vhcnesisiseccccsvccrvind cn 17

A. The PPA is not a claim

made to the government

and contains no

CRPCRTNCOCIOY soi os diccvccadsccccsacexiuns 17

B. The Seventh Circuit’s

decision conflicts with the

Fifth Circuit’s holding that

only a certified statement

in the PPA can be the

basis of FCA liability ................ 20

III. Review Of The Seventh Circuit’s

Decision Is Necessary To Limit

The FCA To False Claims for

Government Payment ................c00eeeeee 23

CU ree iesdiser thekicinsshrsepdannnicieictacanntateninenons 29

APPENDIX

TABLE OF AUTHORITIES

i Page(s)

CASES

Ab-Tech Constr., Inc. v. United States,

31 Fed. Cl. 429 (Fed. Cl. 1994)................ccs0 15

Cook County v. United States ex rel. Chandler,

Re Fe 0 ee TIED ccvecsnducdunucosscechaseveenenevcociens 12

Harrison v. Westinghouse Savannah River Co.,

176 F.3d 776 (4th Cir. 1999)................ 8, 14, 24

Shaw v. AAA Eng’g & Drafting, Inc.,

213 F.3d 519 (10th Cir. 2000).................000000 15

United States ex rel Bowan v.

Educ. America, Inc.,

No. 00-3028, slip op.

(S.D. Tex. Jan 7, 2004), affd, 7

116 Fed. Appx. 531, No. 04-20384,

2004 U.S. App. LEXIS 24673

(5th Cir. 2004), cert denied,

Ra es Ae CIEE ccvedneacovcsnssentensesoviaceseuths 22

United States ex rel Gay v.

Lincoln Technical Inst.,

No. 3:01-CV-505-,

2003 U.S. Dist. LEXIS 25968, affd,

111 Fed. Appx. 286,

2004 U.S. App. LEXIS 21489, cert denied,

RE is ere: Ie ITE i vas Sattariencdinceeynibeenertoriens 22

United States ex rel Graves v. ITT Educ. Sves.,

284 F. Supp. 2d 487 (S.D. Tex. 2003),

affd per curium,

No. 03-20460,

2004 U.S. Dist. LEXIS 21799 (5th Cir.)

cert denied,

TZO GS. CE. TAOS CIO] oceviccceccccsicsviccecesvie passim

United States ex rel. Gross v.

AIDS Research Alliance,

415 F.3d 601 (7* Cir. 2005) .............00scc0eess 9,16

United States ex rel. Hendow v.

Univ. of Phoenix

No. S-03-CV-457,

2004 U.S. Dist LEXIS 28990

(E.D. Cal. May 20, 2004), appeal docketed,

No. 04-16247 (June 21, 2004 9th Cir.) ....11, 22

United States ex rel. Hopper v. Anton,

91 F.3d 1261 (Oth Cir. 1996)................. passim

United States ex rel. Lamers v. Green Bay,

168 F.3d 1013 (7th Cir. 1999)..........0...0..0... oe?

United States ex rel. Mikes,

274 F.3d 687 (2d Cir. 2001)............2....... passim

United States ex rel. Ortega v.

Columbia Healthcare, Inc.,

240 F. Supp. 2d. 8 (D.D.C. 2003)..............0.... 28

United States ex rel Siewick v.

Jamieson Science and Eng'g, Inc.,

214 F.3d 1372 (D.C. Cir. 2000).................. 9,15

Vil

Columbia/Hi” Wealtheare Corp.,

125 F. * 399 (5th Cir. 1997)...........004.. 8,13, 14

United States v. Southland Mgmt. Corp.,

326 F.3d 669 (5th Cir. 2003) .............sssccceeseees 13

STATUTES

Be Tae © BE av scccssntctesvscstiarechintbbiiapenitnniniaiben 1

20 U.S.C. § 1002....... be ne 1

TP Ts © RU vi csiissitninsaiavenivinscinciiicanmenmamenaed 1

BO UA. FOTOS OE, sevciiccicrisissssnieainiainen 2

eS ies & ME ie kacdensncincexsteenenssinvinsteapsncmbbciaiasaned ae

Be Us Se ivciickinevpavcstesicincentnsee ea, 18

Fee RRA PI sishsncisinsessctveceateen omens 1

PF AS As: FI vctccnsstninstscsonsssnitasetabiolaidsidignegiens 22

20 U.S.C. § 1094 (C).....seseesecseessersestesseereeneeeteeeecens 25, 26

20 USL. § LOBES MB MID «. osccccscnnescuscsessenosscressoanens 26

SE A ait EO aicicriivdstsiiectidnlcorsiocsicaeamenaen 1, 26

MU (EY 1

MUSC 1G. ea ae

viii

Nee ceummiacsooneao: 1

TE 12

Ne i. capucpumeieeaceanetane 2

OR OD oa cucsnscoavenrsesesacesseevevoserécasoreococe 1

a scsecevevomseeseissarins 2

REGULATIONS

Me FOOTE onc ccccsceccseccsscosoecsecscsce 2

iis cscoacevsecessveosesecsioconsocsccesons 4,18

cic nccskcessesecescsovecsescescevesscn, 4,18

ii covcdenssconsorssesrreesecsceneres 4,18

Oe a cccssceccoveareconevseccecoossscouss 26

Oe BN on cocccecccsccescossntsovesovsscecececsoece, 18

Be WO ID oon ccs cocecessoeccnsccosocessesedsosssce 18

| a REE 2

SO ee 5, 6

ee 19

TX 2

Ne BR ooo ocesencaousecsvsvissceerasonsonscvennese 2,6, 19

OG SA nies ee Disiedeciesencccinscsahandonsibssninsientatonn 4, 27

6 CF tke F GO BO ecrcsrscccsessevitornestsenevereeesons ervvvehy 27

SF ies Ne ites petenn nc tapntenncicinilaipsimiinandiiana 18

ee Oe SUE tissnbviv<aihivecibiabeivihaianscatenainiaiabiasiasa 18

Se ale ese sini ciacecbsncasekcieciesibesscnincbiiebans 18, 19

S46 CPR. § GGG. IGE ....ccesescvcsessoceses visiddipapibclisaknamibaieiies 19

34 C.F.R. § 668.166............... ‘das Necocvesiucbiiaiaucesiba pivessascae

ae SGT sii cisibctstiontneoicaeianninsanciaiboonsvlipaienteniein 6

OTHER AUTHORITIES

The College Board, Trends in Student Aid

United States Department of Education,

National Center for Education Statistics,

2003—04 National Postsecondary Student Aid

FE GING TIED estes cismsrvisnncsttinseceinbtdequienmnietiaieninincae

OPINION BELOW

The opinion of the United States Court of

Appeals fur the Seventh Circuit is reported at 426

F.3d 914 (7th Cir. 2005). (Reproduced at App. 1a.)

The court of appeals denied OCU’s Petition for Panel -

Rehearing with Suggestion for Rehearing En Banc

on November 17, 2005 in an unreported decision.

(Reproduced at App. 25a.) The opinion of the United

States District Court for the Southern District of

Indiana granting OCU’s motion to dismiss is

unreported. (Reproduced at App. 9a.)

STATEMENT OF JURISDICTION

The jurisdiction of this Court is invoked under

28 U.S.C. § 1254(1) (2000). The district court had

jurisdiction over relator’s claim pursuant to 31

U.S.C. § 3730(b) (2000). The court of appeals had

jurisdiction to review the final judgment of the

district court pursuant to 28 U.S.C. § 1291 (2000).

The court of appeals filed its opinion on October 10,

2005. It denied OCU’s timely petition for panel

rehearing or rehearing en banc on November 17,

2005.

STATUTORY AND REGULATORY

PROVISIONS

Attached as appendices:

20 U.S.C. § 1001-1003 (at App. 25a—40a)

20 U.S.C. § 1094 (at App. 45a)

20 U.S.C. § 1099c (at App. 66a)

31 U.S.C § 3729 (at App. 83a)

31 U.S.C. § 3730 (at App. 87a)

34 C.F.R. § 600.1-600.11 (at App. 97a)

34 C.F.R. § 600.20-600.21 (at App. 144a)

34 C.F.R. § 668.13— 668.14 (at App. 159a)

STATEMENT OF THE CASE

Oakland City University (“OCU”) is a

private, non-profit institution of higher education

founded in 1885 by the General Association of

General Baptists. OCU is accredited by the Higher

Learning. Commission of the North Central

Association of Colleges and Schools, the Association

of Theological Schools and the National Council for

Accreditation of Teacher Education. While the

University enrolls significant numbers of traditional

undergraduate students, it also focuses on serving

qualified students from low income families and

adults for whom higher education is not always

accessible. OCU is a participant in federa’ -tudent

aid programs under Title IV of the Higher Education

Act of 1965, as amended (20 U.S.C. § 1070 (2000) et

seq.) (“HEA”).

Respondent Jeffrey Main (“Main”), a former

OCU admissions representative, alleges that OCU

paid its admissions staff commissions, bonuses, and

other incentives based on their success in securing

the enrollment of new students in violation ot United

States Department of Education (“ED”) regulations.

Main seeks to benefit financially from this alleged

regulatory violation by his filing of a qui tam action

against OCU under the False Claim Act, 37 U.S.C. §

3729 (2000) (“FCA”). Ajthough regulatory violations

are not generally actionable under the FCA, Main