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University of Phoenix (UPX), subsidiary of Apollo Group, Inc. (Nasdaq: APOL), today asked the United States Supreme Court to review a decision of the Ninth Circuit Court of Appeals that dramatically expands the scope of the False Claims Act, a statute designed to remedy false or fraudulent claims for payment submitted to the federal government. If the Ninth Circuit’s decision is not corrected, it will expose all higher education institutions, as well as other companies that receive funds from the federal government, to an increase in meritless litigation and the risk of substantial False Claims Act liability that Congress never intended to authorize.
In United States ex rel. Hendow v. University of Phoenix, the trial court dismissed a False Claims Act suit by two former admissions counselors at UPX. The suit alleged the institution violated a federal regulation stipulating that while admissions staff may be compensated based in part on the number of students they enroll, it cannot be the sole factor for determining their compensation. The Ninth Circuit reinstated the case, even though compliance with the regulation in question is not a condition of UPX receiving financial aid payments from the federal government and other federal courts of appeals would not have allowed such a False Claims Act suit to proceed.
In the brief it filed today, UPX asks the Supreme Court to review the Ninth Circuit’s decision because it conflicts with the decisions of several other federal courts and extends the False Claims Act far beyond the bounds Congress intended.
UPX has retained former United States Solicitor General Theodore B. Olson, co-chair of the Appellate and Constitutional Law Practice Group at Gibson, Dunn & Crutcher LLP, to lead its legal team before the Supreme Court. A decision by the Supreme Court on whether to hear the UPX case is expected in the early spring. A complete copy of UPX’s petition is available at: http://www.apollogrp.edu/Investor/Presentations.aspx
About Apollo Group, Inc., parent company to the University of Phoenix
Apollo Group, Inc. has been providing higher education programs to working adults for more than 30 years. Apollo Group, Inc. operates through its subsidiaries: the University of Phoenix, the Institute for Professional Development, the College for Financial Planning and Western International University. The consolidated enrollment in its educational programs makes it the largest private institution of higher education in the United States. It offers educational programs and services at 100 campuses and 159 learning centers in 39 states, Puerto Rico, Washington D.C., Alberta, British Columbia, Netherlands and Mexico.For more information about Apollo Group, Inc. and its subsidiaries, call 1-800-990-APOL or visit Apollo on the company web site at: www.apollogrp.edu.
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