The court of appeals reversed a district court judgment and remanded the action for further proceedings. The court held that qui tam relators should have been afforded leave to amend their complaint where additional facts would have rendered plausible their claims challenging a college’s alleged violation of the Higher Education Act’s ban on recruiter-incentive compensation in order to receive federal education funds.
Nyoka Lee and Talala Mshuja (Lee), qui tam relators, brought suit on behalf of the United States against Corinthian Colleges, Inc., various individual defendants, and Ernst & Young LLP (EY). Lee alleged that Corinthian, with the help of EY, falsely certified to the Department of Education (DOE) its compliance with the Higher Education Act’s (HEA) ban on recruiter-incentive compensation in order to receive federal education funds, thereby violating the False Claims Act (FCA).
