US ex rel. Jon H. Oberg v. Kentucky Higher Ed., et al., No. 10-2320 (4th Cir. 2012)Annotate this Case
Relator brought a qui tam action under the False Claims Act (FCA), 31 U.S.C. 3729 et seq., alleging that appellees defrauded the United States Department of Education by knowingly making fraudulent claims by engaging in various non-economic transactions to inflate their loan portfolios eligible for Special Allowance Payments (SAP), a federal student loan interest subsidy. The district court granted appellees' motions to dismiss on the ground that they were "state agencies" and therefore not subject to suit under the FCA as interpreted in Vermont Agency of Natural Resources v. United States ex rel. Stevens. Because the district court did not employ the arm-of-the-state analysis in determining whether each of the appellees was a state agency subject to suit under the FCA, the court vacated its judgment and remanded the case for the court to apply this analysis in the first instance.