Urquilla-Diaz v. Kaplan University, No. 13-13672 (11th Cir. 2015)Annotate this Case
In a consolidated qui tam action, three relators brought claims under the False Claims Act against an educational institution for falsely certifying to the government that it was in compliance with various federal statutes and regulations to receive Title IV financial-aid funds. The district court ruled against the relators. After final judgment was entered, two of the relators appealed. Relator Carlos Urquilla-Diaz appealed from the district court’s dismissal with prejudice of his claims under the False Claims Act against Defendants Kaplan University, Kaplan Higher Education Corp., and Kaplan, Inc. (Kaplan). Relator Jude Gillespie appealed the district court’s grant of summary judgment to Kaplan on his claims under the False Claims Act as well as several other orders. Diaz worked for Kaplan University from August 2004 through April 2005 as a professor of paralegal studies. In April 2007, he filed his qui tam action against Kaplan, alleging that Kaplan had violated several provisions of the Higher Education Act and its implementing regulations. These violations in turn rendered Kaplan ineligible to receive Title IV funds. And because these violations were committed with the requisite scienter, Kaplan was liable under the False Claims Act. Gillespie, began working for Kaplan University in 2004 as an associate professor of paralegal studies. He was promoted to department chair. Two months later, he informed Kaplan that he had a medical disorder and requested several accommodations. His requests were granted. Even so, in April 2005, Gillespie complained an associate general counsel for Kaplan, Inc., that Kaplan’s grievance policies violated section 504 the Rehabilitation Act and its implementing regulations. At that time, he indicated that he planned to file an administrative complaint with the Department of Education’s Office of Civil Rights (the OCR). The following day, Kaplan fired him for job abandonment because he had refused to perform his job duties. After investigating Gillespie’s allegations against Kaplan, the OCR rejected his individual claims. The agency found that Kaplan did not discriminate or retaliate against him, but did take issue with some of Kaplan's policies and procedures regarding disabled employees in the Kaplan Higher Education Corporation Employee Handbook, Kaplan Field Employee Handbook, and Kaplan University Faculty Handbook. Kaplan voluntarily entered into a resolution agreement with the OCR to change its policies. In doing so, Kaplan did not admit to any violation of or noncompliance with section 504 of the Rehabilitation Act or its implementing regulations. In April 2007, Gillespie filed his qui tam action against Kaplan, alleging that Kaplan violated the False Claims Act by making false statements in its 2004 and 2007 program participation agreements when it certified that it would “comply with . . . Section 504 of the Rehabilitation Act and the implementing regulations 34 C.F.R. Part 104 (barring discrimination on the basis of physical handicap).” The Fifth Circuit affirmed the district court’s dismissal of Diaz’s claims against Kaplan that were based on its alleged violations of the Department of Education’s satisfactory-progress regulation and the accreditation requirement. But the Court modified the judgment of dismissal to be without prejudice with respect to the government. The Court reversed the district court’s dismissal of Diaz’s claims against Kaplan to the extent that they were based on its alleged violation of the incentive-compensation ban, and remanded for further proceedings. The Court affirmed the district court’s grant of summary judgment to Kaplan on all of Gillespie’s claims.