UNITED STATES OF AMERICA et al v. EDUCATION MANAGEMENT CORPORATION et al
Filing
110
MEMORANDUM ORDER denying #103 Motion for Leave to file Interlocutory Appeal as explained therein. Signed by Judge Terrence F. McVerry on 7/23/13. (mh, )
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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
UNITED STATES OF AMERICA
ex rel. JASON SOBEK,
Plaintiff,
v.
EDUCATION MANAGEMENT, LLC
SOUTH UNIVERSITY, LLC, doing business as
SOUTH UNIVERSITY ONLINE
ARGOSY EDUCATION GROUP, INC.,
doing business as ARGOSY UNIVERSITY
ONLINE, THE ART INSTITUTES
INTERNATIONAL, LLC doing business as THE
ART INSTITUTES ONLINE and EDUCATION
MANAGEMENT CORPORATION,
Defendants.
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Civil Action No. 10-131
MEMORANDUM ORDER
Now pending before the Court is DEFENDANTS’ MOTION FOR CERTIFICATION
PURSUANT TO 28 U.S.C. § 1292(b) (ECF No. 89). Defendants (collectively “EDMC”) filed a
brief in support, Plaintiff filed a response in opposition, EDMC filed a reply, and the motion is
ripe for disposition.
Factual and Procedural History
This is a qui tam False Claims Act (“FCA”) case. Relator Jason Sobek alleges that
EDMC made false certifications of compliance regarding its eligibility to receive federal student
loan funding. On October 22, 2012, Magistrate Judge Cynthia Eddy issued a Report and
Recommendation (“R&R”) which recommended that EDMC’s motion to dismiss be granted in
part as to Counts III, V and VI and denied in part as to Counts I, II and IV. On May 31, 2013,
the Court overruled EDMC’s objections and adopted the R&R as the opinion of the Court.
EDMC seeks an interlocutory appeal of this decision pursuant to 28 U.S.C. § 1292(b).
Discussion
The statutory text of 28 U.S.C. § 1292(b) provides:
When a district judge, in making in a civil action an order not otherwise
appealable under this section, shall be of the opinion that such order involves a
controlling question of law as to which there is substantial ground for difference
of opinion and that an immediate appeal from the order may materially advance
the ultimate termination of the litigation, he shall so state in writing in such order.
The Court of Appeals which would have jurisdiction of an appeal of such action
may thereupon, in its discretion, permit an appeal to be taken from such order, if
application is made to it within ten days after the entry of the order: Provided,
however, That application for an appeal hereunder shall not stay proceedings in
the district court unless the district judge or the Court of Appeals or a judge
thereof shall so order.
Litigants must leap a high hurdle to obtain interlocutory relief. As recently explained in Glover
v. Udren, 2013 WL 3072377 (W.D. Pa. June 18, 2013) (citations and punctuation omitted):
[A] non-final order may only be certified for interlocutory appeal if the court
determines that it: (i) involves a controlling question of law; (ii) for which there is
substantial ground for difference of opinion; and (iii) which may materially
advance the ultimate termination of the litigation if appealed immediately. Each
of the elements must be satisfied for certification, and even if all the elements are
satisfied, the ultimate decision to grant certification is within the district court's
sole discretion. The party seeking interlocutory review has the burden of
persuading the district court that exceptional circumstances exist that justify a
departure from the basic policy of postponing appellate review until after the
entry of final judgment. Certification under section 1292(b) should be “sparingly”
applied and only be employed in “exceptional cases.”
EDMC contends that this standard is met because this case turns on the interpretation of
United States ex rel Wilkins v. United Health Group, 659 F.3d 295 (3d Cir. 2011) (“Wilkins”).
Both sides agree that Wilkins is the most important case law authority interpreting the FCA in the
Third Circuit. Because EDMC seeks review of a decision which denied its motion to dismiss, by
definition, the requested relief involves a controlling question of law (i.e., whether Plaintiff has
stated valid claims) and a contrary decision by the Court of Appeals would materially advance
the ultimate termination of the litigation.
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On the other hand, the Court is not convinced that there are “substantial grounds” for
differences of opinion. A “substantial ground for difference of opinion” must arise out of doubt
as to the correct legal standard, such as conflicting precedent, the absence of controlling law, or
complex statutory interpretation. In re Dwek, 2011 WL 487582 at *4 (D.N.J. 2011). Strong
disagreement with the Court's ruling does not constitute a “substantial ground for difference of
opinion.” Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010). Nor does a dispute over
the application of settled law to a particular set of facts. Id. (citations omitted). As explained in
this Court’s May 31 Opinion, Wilkins held that similar alleged violations of the Anti-Kickback
statute (“AKS”) would survive a motion to dismiss. In cases involving PPA’s and regulations in
the education context, several other courts have held that similar alleged violations would
survive a motion to dismiss. EDMC does not point to conflicting precedent, the absence of
controlling law, or complex statutory interpretation. Rather, EDMC simply disagrees with this
Court’s interpretation and application of Wilkins.
In any event, even assuming arguendo that grounds for substantial differences of opinion
exist, EDMC has not demonstrated that “exceptional” circumstances warrant interlocutory
appeal in this case. Certification pursuant to § 1292(b) represents a “narrow exception to the
final judgment rule.” Couch, 611 F.3d at 633. The arguments set forth by EDMC are present, to
some degree, in every case in which the Court denies a motion to dismiss – yet such decisions
are generally not appealable. The Court is not persuaded that this case is so different that a
piecemeal appeal should be permitted. Indeed, the ultimate merits of EDMC’s arguments may
benefit from the fuller evidentiary record developed during discovery.
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Conclusion
In accordance with the foregoing, DEFENDANTS’ MOTION FOR CERTIFICATION
PURSUANT TO 28 U.S.C. § 1292(b) (ECF No. 89) is DENIED.
SO ORDERED this 23rd day of July, 2013.
BY THE COURT:
s/Terrence F. McVerry
United States District Judge
cc:
All counsel of record
Via CM/ECF
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