Appeals Court Reinstates Whistleblower Lawsuit Against ITT

On Monday, a federal appeals court reinstated a whistleblower lawsuit brought against ITT Educational Services, Inc. by a former employee. The lawsuit accused the for-profit education provider of submitting false claims to the U.S. Department of Education in order to receive federal student aid money.

A federal judge in Indiana dismissed the suit last year, arguing that the court lacked jurisdiction over the case after finding that the employee's allegations had already been disclosed publicly and that the employee was not the original source of her claims against the company, as is required under the False Claims Act, the Chronicle of Higher Education reported. The court also granted penalties of nearly $395,000 against three law firms representing the plaintiff for having brought, in the judge's words, a "frivolous" lawsuit.

A unanimous three-judge panel of the U.S. Court of Appeals for the Seventh Circuit sharply disagreed this week, reversing the penalties and sending the case back to the lower court. In its ruling, the appeals panel said that the former ITT employee's allegations were sufficiently distinct from prior public disclosures, and ruled that the plaintiff should be allowed to pursue her case on its merits.


Related Links

U.S. Court of Appeals for the Seventh Circuit Ruling

The Chronicle of Higher Education