Court Opinion

ID: 36521
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:41:42+00
Date Added: 2024-06-11T17:15:04.989684
License: Public Domain

United States Court of Appeals
                                                                      Fifth Circuit
                                                                   F I L E D
                   IN THE UNITED STATES COURT OF APPEALS
                                                                   October 20, 2004
                           FOR THE FIFTH CIRCUIT
                                                               Charles R. Fulbruge III
                           ______________________                      Clerk

                                No. 03-20460
                           ______________________

  UNITED STATES OF AMERICA, ex rel. Dan GRAVES and Susan Newman

                                                     Plaintiffs-Appellants
                                   versus

 ITT EDUCATIONAL SERVICES, INC., PRICE WATERHOUSE, COOPERS LLP,

                          and Rene R. Champagne,

                                                      Defendant-Appellees

         ___________________________________________________

           Appeals from the United States District Court for
                     the Southern District of Texas
                           (Civ. A. H-99-3889)
         ____________________________________________________

Before DeMOSS, DENNIS, and CLEMENT, Circuit Judges.

PER CURIAM:*

     In this False Claims Act case Relators Dan Graves and Susan

Newman sued ITT Educational Services, Inc. and its Chairman Rene R.

Champagne (together “ITT”) along with its auditor Pricewaterhouse

Coopers, LLP, alleging violations of the False Claims Act, 31

U.S.C.    §3729,    et   seq.   ITT   participated    in   federal    student

financial aid programs under Title IV of the Higher Education Act

     *
      Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

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of 1995, 20 U.S.C. §1078, et seq.         Under these programs the United

States   Government     insured   educational       loans   and   made   direct

educational grants to students enrolled at ITT.             Title IV, Part G,

§487(a)(20)    of    the    HEA   prohibits    participating      educational

institutions such as ITT from making commission or incentive

payments to admissions or recruitment personnel based on success in

securing enrollments or financial aid to students.                   Relators

contend that ITT and Champagne falsely promised to comply with the

statute and falsely certified that ITT would comply with it.

Relators also allege that Pricewaterhouse Cooopers, in its audits

of   ITT,   made    false   statements    as   to   ITT’s   attestations     of

compliance and as to whether ITT’s financial statements fairly

represented its financial condition.

      ITT moved to dismiss Relators’ complaint under Rule 12(b)(b)

and Pricewaterhouse Coopers moved to dismiss under Rules 12(b)(6)

and 9(b).   Based on the factual allegations in Relators’ complaint

and the facts presented in Relators’ exhibits, the district court

granted Defendants’ motions to dismiss with prejudice.                   Having

reviewed the record and fully considered the parties’ briefs and

oral arguments, we find no reversible error in the district court’s

judgment.     We therefore AFFIRM the district court’s judgment,

United States ex rel. Graves v. ITT Educational Services, Inc., 284

                                      2
F. Supp. 2d 487 (S.D. Tex. 2003), essentially for the reasons

stated in its memorandum opinion and order.2

     2
      For clarification purposes, we note shortly after the
district court issued its opinion, a panel of this Court in U.S.
ex rel. Willard v. Humana Health Plan, 336 F.3d 375 (5th Cir.
2003), stated: “While this Circuit has decided cases dealing with
FCA liability based on express certifications of compliance with
various statutes and regulations, we have not specifically
addressed whether FCA liability can be based on an ‘implied
certification’ theory.” Id. at 381. Therefore, we must excise
from an essential approval of the district court’s reasons its
statement that we have adopted an implied certification theory.
284 F.Supp. 2d at 497. Notwithstanding that statement, the
district court reached the correct result.

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