Apollo Group

United States of America ex rel. Hendow v. University of Phoenix


Case Summary

This lawsuit is not about false claims. It is about the manipulation of a legal standard by two former disgruntled employees and their opportunistic trial lawyers. The plaintiffs are trying to twist a routine regulatory matter, previously resolved with the U.S. Department of Education, into a federal case of fraud.

University of Phoenix in January asked the Supreme Court to review a recent decision in the case, one by the Ninth Circuit Court of Appeals that dramatically expands the scope of the False Claims Act, the statute through which the lawsuit was filed. The False Claims Act increasingly is being abused as it includes a provision enabling those who bring these lawsuits to reap windfall rewards, from 15-30 percent of any recovery or settlement. If the Ninth Circuit's decision is not corrected, it will expose all higher education institutions, as well as anyone who conducts business with the federal government, to an increase in meritless litigation and to the risk of substantial False Claims Act liability, which Congress never intended to authorize. This case is yet another example of lawsuit abuse.

Prior to the Ninth Circuit's erroneous decision, the trial court twice dismissed this case, ultimately with prejudice. The U.S. Department of Justice has declined to join in pursuing the matter. University of Phoenix has, and will continue, to vigorously defend itself against this baseless lawsuit.

For more information on the case, click here.

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Court Orders, Opinions and Filings


Defense, Health Care and Education Industries Join University of Phoenix in Asking U.S. Supreme Court to Curb Abuse of False Claims Act
March 26, 2007: Brief of the National Defense Industrial Association as Amicus Curiae in Support of the Petition for a Writ of Certiorari PDF 1.2MB
Brief of Amicus Curiae the Career College Association in Support of Petitioner 176KB
Brief for the American Health Care Association and the National Association for the Support of Long Term Care as Amici Curiae in Support of Petitioner 236KB

University of Phoenix Seeks Dismissal of False Claims Act Case
June 18, 2007: Defendant University of Phoenix’s Reply in Support of its Motion to Dismiss Relators’ Second Amended Complaint PDF 108KB
March 22, 2007: Defendant’s Memorandum of Points and Authorities in Support of its Motion to Dismiss Relators’ Second Amended Complaint PDF 136KB

University of Phoenix Asks United States Supreme Court to Curb Abuse of False Claims Act
April 3, 2007: Reply Brief for Petitioner PDF 164 KB
January 22, 2007: Petition for a Writ of Certiorari PDF 92KB
 
University of Phoenix Answers Baseless False Claims Act Allegations
December 20, 2006: Answer of Defendant University of Phoenix to Second Amended Complaint PDF 1.4MB
 
Ninth Circuit Court of Appeals Denies University of Phoenix’s Request for Full-court Rehearing
October 24, 2006: Order PDF 28KB
 
University of Phoenix Asks Ninth Circuit Court of Appeals for Full-court Rehearing Given Panel's Dramatic Expansion of False Claims Act
September 25, 2006: Petition for Rehearing and Rehearing En Banc PDF 2.8MB
 
Ninth Circuit Court of Appeals Panel Reinstates Case
September 5, 2006: Opinion PDF 92KB
 
University of Phoenix Asks Ninth Circuit Court of Appeals Not to Reverse District Court's Rightful Dismissal of Baseless False Claims Act Allegations
January 28, 2005: Appellee University of Phoenix Answering Brief PDF 3.3MB

United States District Court for Eastern District of California Dismisses Baseless False Claims Act Allegations
May 19, 2004: Order Dismissing Second Amended Complaint PDF 204KB
February 19, 2004: Order Dismissing First Amended Complaint PDF 280KB
 
University of Phoenix Asks United States District Court for Eastern District of California to Dismiss Baseless False Claims Act Allegations
April 26, 2004: Defendant’s Reply Brief in Support of its Motion to Dismiss Relators’ Second Amended Complaint PDF 1.6MB
March 22, 2004: Defendant’s Memorandum of Points and Authorities in Support of its Motion to Dismiss Relators’ Second Amended Complaint PDF 1.7MB
October 20, 2003: Defendant University of Phoenix’s Memorandum of Points and Authorities in Support of its Motion to Dismiss PDF 1.4MB

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Background

 
Arizona State Board of Private Postsecondary Education Verifies University of Phoenix's Compliance with Statute and Rule and Dismisses Complaint
June 1, 2005: Letter of Complaint Dismissal PDF 20KB
March 30, 2005: Investigative Report PDF 76KB
 
University of Phoenix and U.S. Department of Education Resolve Flawed Program Review Report with Terms Constituting Implicit Rejection of Report's Allegations
September 7, 2004: Settlement Agreement PDF 172KB
For more on the flawed program review report, click here.
 
Leading Accounting Firm Validates Compliance of University of Phoenix's Compensation System
March 22, 2004: Presentation Prepared for U.S. Department of Education POWER POINT 236KB
 
U.S. Department of Education Clarifies Incentive Compensation Standard
November 1, 2002: Federal Register PDF 256KB
August 8, 2002: Federal Register PDF 188KB
 
U.S. Department of Education Issues Policy Regarding Incentive Compensation Issues, Directing That They be Treated as Compliance Matters
October 2002: Memorandum from Department of Education Deputy Secretary PDF 88KB

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News


April 23, 2007:

Statement on Petition to United States Supreme Court

March 27, 2007:

Defense, Health Care and Education Industries Join University of Phoenix in Asking U.S. Supreme Court to Curb Abuse of False Claims Act

March 22, 2007:

Statement on Motion to Dismiss False Claims Act Case

January 22, 2007:

University of Phoenix Asks United States Supreme Court to Curb Abuse of False Claims Act

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Timeline of Key Events

For more information on the timeline of key events, click here. PDF 48KB Hendow Case Timeling of Key Events

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Links

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