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State Higher Ed Entities Face Arm-of-the-State Test

June 25, 2012

In US ex rel. Oberg v. Ky. Higher Educ., the Fourth Circuit considered whether corporate entities created by several states to provide higher education financing (and accused of making false claims to DOE) are "persons" subject to FCA liability. The court stated that "the critical inquiry is whether [the entities] are truly subject to sufficient state control to render them a part of the state, and not a 'person,'" and instructed that Eleventh Amendment "arm-of-the-state" analysis applies to determine if they are subject to liability.

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Stephen J. McBrady
Partner – Washington, D.C.
Phone: +1.202.624.2547