With the expansion of the educational sector’s use of government funding, institutions find themselves facing an increased risk under the False Claims Act. The Act makes institutions that receive government funding prime candidates for litigation, posing new challenges related to liability. The escalating risk comes from a number of sources, such as federal financial aid for students, federal research grants, and state aid.
In a recent development, a number of settlements provide valuable insights into new theories of liability that educational institutions may confront, particularly those that heavily rely on governmental sources of funding. These settlements also propose specific procedures that can be implemented to mitigate such exposure.
The matter has been elaborately discussed by James Zelenay and Jeremy Ochsenbein from Gibson Dunn in a recent article they co-authored. They offer an intricate understanding of this issue and suggest plausible ways for educational institutions to navigate new liability challenges under the False Claims Act.