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Betty L. Davis, On Behalf of the United v. Point Park University

October 17, 2011

BETTY L. DAVIS, ON BEHALF OF THE UNITED STATES OF AMERICA, PLAINTIFFS,
v.
POINT PARK UNIVERSITY, SANDRA CRONIN, AND BRIDGIT MANCOSH, DEFENDANTS



The opinion of the court was delivered by: Arthur J. Schwab United States District Judge

ELECTRONICALLY FILED MEMORANDUM ORDER RE: DEFENDANTS' MOTION FOR SUMMARY JUDGMENT (Doc. No. 55)

I. Introduction

Presently before this Court is Defendants‟ Motion for Summary Judgment seeking dismissal of both Amended Complaints at civil action nos. 10-1156 and 10-1157.*fn1 Doc. No. 27. Defendants seeks summary judgment on Plaintiff‟s three claims under the False Claims Act ("FCA"), as well as her claims for retaliation under the FCA, and under the Pennsylvania Whistleblower Law ("PWL"), 43 P.S. § 1423(a). After carefully reviewing and considering the positions of the parties as set forth in their thorough briefing and voluminious accompanying material, this Court will DENY Defendants‟ Motion for Summary Judgment.

II. Standard of Review

Summary judgment is only proper when there is no genuine issue of material fact in the case and the moving party is entitled to judgment as a matter of law. Reedy v. Evanson, 615 F.3d 197, 2010 (3d Cir. 2010), citing Fed. R. Civ. P. 56(c)(2). This Court, in deciding summary judgment, may not "weigh the evidence or to determine the truth of the matter, but only to determine whether the evidence of record is such that a reasonable jury could return a verdict for the nonmoving party." Id. citing Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 581 (3d Cir.2009). If so, summary judgment can not be granted. The Court must view the facts in the light most favorable to the non-moving party, who is "entitled to every reasonable inference that can be drawn from the record." Id. citing Merkle v. Upper Dublin Sch. Dist., 211 F.3d 782, 788 (3d Cir.2000). "[W]hen there is a disagreement about the facts or the proper inferences to be drawn from them, a trial is required to resolve the conflicting versions of the parties." Peterson v. Lehigh Valley Dist. Council, 676 F.2d 81, 84 (3d Cir.1982).

III. Discussion

It is on this standard that this Court has reviewed Defendants‟ motion, Plaintiff's response, Defendants‟ reply, and Plaintiff‟s Sur-Reply thereto. Based on the pleadings and evidence of record, and the briefs filed in support and opposition thereto, this Court concludes, as a matter of law, that genuine disputes remain as to material facts which precludes summary judgment in this matter.

The FCA establishes liability for anyone who "knowingly presents, or causes to be presented, to an officer or employee of the United States Government . . . a false or fraudulent claim for payment or approval" or "knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government." 31 U.S.C. § 3729(a)(1),(2)(1994). The qui tam provision, 31 U.S.C. § 3730(b)(1)(1998), allows an individual to sue, on behalf of the government, a person who the relator knows to have violated Section 3729. The remedial provisions of the FCA permit recoveries of three times the amount of damages sustained by the government plus penalties of $5,500 to $11,000 per claim. Under the qui tam provision, the relator can recover a portion of the damages to which the government is entitled. 31 U.S.C. § 3730(d).

In order to set forth a valid claim for FCA liability, Plaintiff must demonstrate that Defendants knowingly (either with actual knowledge, with deliberate ignorance, or with reckless disregard for the truth or the falsity of the information), submitted a false or fraudulent claim for payment by the government. U.S. ex rel. Watson v. Connecticut General Life Ins. Co., 2003 WL 303142 (E.D. Pa. 2003). Innocent mistakes or negligence are not actionable under this section. Hefner v. Hackensak University Medical Center., 2005 WL 3542471 (D. N.J. 2005).

At the outset, Defendants reiterate the same argument as in their motion to dismiss, that Plaintiff has not sufficiently pled a cause of action under either the express or implied false certification theory under the FCA because the compliance with the regulations at issue is not a condition of payment for the receipt of Federal Supplemental Educational Opportunity Grant Funds (FSEOG), and again cites U.S. ex rel. Wilkins, __ F.3d __, 2011 WL 2573380 at *9 (3d Cir. June 30, 2011). In Wilkins, the United States Court of Appeals for the Third Circuit stated that in FCA cases, [t]o state a claim under [the implied false certification] theory it is necessary to allege not only a receipt of federal funds and a failure to comply with applicable regulations, but also that the payment of the federal funds was in some way conditioned on compliance with those regulations. Thus, under this theory a plaintiff must show that if the Government had been aware of the defendant's violations of the [applicable] laws and regulations that are the bases of a plaintiff's FCA claims, it would not have paid the defendant's claims.

U.S. ex rel. Wilkins, __ F.3d __, 2011 WL 2573380 at *9 (3d Cir. June 30, 2011)(emphasis added). Here, Defendants assert that Plaintiff's claim, "fails because PPU‟s compliance with § 676.10 or 676.19 is not a condition of payment." Doc. No. 56, at 4.

This Court previously held that Plaintiff has sufficiently plead a cause of action under the implied false certification theory of liability under the FCA, and the cases cited by Defendants, including Wilkins, deal primarily with the motion to dismiss phase of the case, and what allegations are required in order to survive a motion to dismiss. Doc. Nos. 41-42. The Court will decline Defendants‟ request for the Court to reconsider its ruling that Plaintiff has adequately pled a cause of action under the implied false certification theory under the FCA.

To reiterate, in order to set forth a valid claim for FCA liability, Plaintiff must demonstrate that Defendants submitted a claim with knowledge of the falsity of the claim. U.S. ex rel. Watson, 2003 WL 303142 at *14. The knowledge element may be established through recklessness and/or deliberate ignorance. Id.

Defendants argue that there is no evidence to show that Defendants knew or showed reckless disregard for § 676.10 or any other legal requirement in PPU‟s FSEOG awarding practices. The Court finds that has Plaintiff set forth ample facts that could demonstrate that PPU improperly denied financial aid to needy part-time/non-resident students, and that once Davis reported to Mancosh, the Senior Vice President of Finance and Operations, that PPU was violating federal regulations in this manner, that Mancosh rejected Davis‟ discovery without asking Cronin, the Director of Financial Aid, the basis for PPU‟s policy, reading the statute, calling the United States Department of Education ("DOE"), consulting with PPU‟s auditors, or consulting with any outside authority. These facts ...


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