July 24, 2015
On July 22, 2015, the Eleventh Circuit struck a blow to one of two qui tam relators in a decade-long False Claims Act lawsuit. The appeals court declined to reconsider its March ruling that affirmed summary judgment as to former Kaplan University worker Jude Gillespie. Wednesday’s Order also secured the court’s previous decision to allow former Kaplan instructor Carlos Urquilla-Diaz to pursue his allegations against the university.

Mr. Urquilla-Diaz is now the sole remaining plaintiff in an action that calls Kaplan an “online diploma mill” that pressured professors to inflate grades and maintain graduation rates. The FCA action is based on an allegation that Kaplan lied about its Rehabilitation Act compliance to fraudulently obtain billions of dollars in federal funding. The suit also alleges that the university provided recruiters with cash, trips, and other incentives to reward student recruitment and enrollment.

In its March decision, the court ruled that, unlike Mr. Gillespie, Urquilla-Diaz presented enough evidence to bring a claim under the FCA over the alleged incentive-based pay policy. The court stated that Mr. Urquilla-Diaz sufficiently stated a claim under the FCA, in part because he identified specific Kaplan employees whose salaries varied with the number of student enrollments.

The case is U.S. ex rel. Gillespie et al. v. Kaplan University et al., 13-13672, in the U.S. Circuit Court of Appeals for the Eleventh Circuit. A copy of the Eleventh Circuit’s March decision can be found here.