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Friday, April 27, 2018

Judge Dismisses Most Of Charlotte Law Prof's Whistleblower Lawsuit Because Claims Had Been Publicized On Law Prof Blogs, But Blasts InfiLaw's Business Model

Charlotte Logo (2016)Daily Business Review, For-Profit Law School Whistleblower Suit Survives—Barely:

A federal judge has kept a whistleblower lawsuit against the for-profit law school consortium InfiLaw Corp. alive, albeit on life support.

Judge Roy Dalton Jr. of the U.S. District Court for the Middle District of Florida on Monday granted InfiLaw’s motion to dismiss the qui tam suit filed in 2016 by former Charlotte School of Law professor Barbara Bernier, who alleges the school and its corporate owners defrauded the federal government of more than $285 million by admitting unqualified students in order to pocket their government-issued loans. Dalton ruled that InfiLaw’s myriad problems had already been publicly disclosed in news stories and posts written on law faculty blogs before Bernier file her suit.

But Dalton granted Bernier leave to file an amended complaint on a far narrower set of issues, and her attorney said Tuesday that she will push forward with claims under the parameters set forth in Dalton’s decision. ...

Bernier was a professor at the now-shuttered Charlotte School of Law from 2013 to 2016. She filed her False Claims Act suit shortly after leaving the school, alleging that the school’s admissions practices, academic program and grading, bar passage and employment practices and treatment of faculty were all designed to bring in and retain students without regard to their qualifications or ability to succeed into order to keep student loan dollars flowing in. Following an investigation, the government declined to intervene in the suit and it was unsealed last August.

Dalton’s opinion offers a scathing take on InfiLaw’s business model.

“Basically, InfiLaw’s schools charged students a pretty penny to attend—on the Government’s dime—but the students and the Government didn’t get any bang for their buck,” he wrote.

InfiLaw schools “opened their admissions floodgates” once they obtained American Bar Association accreditation, and did, “whatever they could to prevent low-achieving students from taking the bar exam while allowing them to stay in school and continue to funnel them federal funds,” Dalton wrote.

Despite those issues, Dalton found that Bernier was not an original source for those allegations, as mandated under the FCA’s public disclosure bar. Rather, most of InfiLaw’s practices had been disclosed before her filing suit through a variety of news articles, law professor blog posts, lawsuits filed against InfiLaw schools, and in one case a brochure put out by the Charlotte School of Law.

“Looking at all of these exhibits together, the Court finds that the news media unearthed InfiLaw and [Charlotte School of Law’s] fraudulent scheme to obtain federal funding,” Dalton wrote.

Bernier had argued that blog posts don’t constitute “news media” under the FCA. ...

However, Dalton’s ruling allows Bernier to replead four of her allegations that he found had not been publicly disclosed before the suit, including that InfiLaw made incentive payments to staff for recruiting students; that InfiLaw used improper trust accounting procedures; that Charlotte misused copyrighted material; and that Charlotte failed to create a code of conduct to prevent conflicts of interest concerning federal funding.

Prior TaxProf Blog coverage:

http://taxprof.typepad.com/taxprof_blog/2018/04/federal-judge-dismisses-most-of-charlotte-law-profs-whistleblower-lawsuit-because-claims-had-been-pu.html

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Comments

It’s tragic to see this professor vilified for her attempt to bring racial awareness to her community. What she did in no way resembles the blackface minstrel shows, which are truly horrific.

Posted by: Beau Baez | Apr 27, 2018 6:38:10 AM