Debra Leveski v. ITT Educational Services, Inc
2013 U.S. App. LEXIS 13722
| 7th Cir. | 2013Background
- Debra Leveski, ITT employee, filed a qui tam FCA action alleging ITT violated HEA incentive-compensation prohibitions.
- District court dismissed for lack of jurisdiction as public disclosures from Graves dictated bar and Leveski was not an original source; sanctions were entered against her counsel.
- Leveski previously worked as Inside Recruitment Representative and later as Financial Aid Administrator (FAA); both roles allegedly tied compensation to recruiting metrics and federal funds.
- Graves v. ITT provided public disclosures pre-dating Leveski; Leveski sought to distinguish her later, two-department scheme (recruitment and financial aid) from Graves’ recruitment-only scheme.
- The district court concluded Leveski’s allegations were not sufficiently particular and barred by the 6-year SOL, prompting amended complaints and renewed motions.
- The Seventh Circuit reversed dismissal and sanctions, concluding Leveski’s allegations were not substantially similar to Graves and that she had direct, independent knowledge as the original source to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are Leveski's allegations substantially similar to Graves? | Leveski alleges a distinct, two-department HEA violation not contained in Graves. | Allegations largely overlap with Graves; public disclosure bars apply. | Not substantially similar; jurisdiction retained. |
| Is Leveski an original source with direct, independent knowledge? | Leveski possessed direct, independent knowledge from personal experience at ITT. | Knowledge was derived from attorney recruitment and public disclosures. | Leveski is an original source; knowledge is direct and independent. |
| Was the district court's dismissal for lack of jurisdiction proper under § 3730(e)(4)? | The district court misapplied the public-disclosure bar to a distinct, post-disclosure claim. | Graves/public disclosures bar jurisdiction; relator not original source. | Dismissal reversed; jurisdiction exists. |
| Were sanctions improper against Leveski's counsel given the jurisdiction ruling? | Sanctions were premature absent a merits ruling and based on an incorrect jurisdiction determination. | Sanctions were warranted for frivolous conduct. | Sanctions reversed on remand; not warranted at this stage. |
Key Cases Cited
- United States ex rel. Baltazar v. Warden, 635 F.3d 866 (7th Cir. 2011) (relator's knowledge need not be from disclosed reports; direct and independent knowledge suffices)
- United States ex rel. Glaser v. Wound Care Consultants, Inc., 570 F.3d 907 (7th Cir. 2011) (avoid treating 'based upon' disclosure too broadly; requires genuinely new material information)
- United States ex rel. Goldberg v. Rush Univ. Med. Ctr., 680 F.3d 936 (7th Cir. 2012) (rejects broad, high-level similarity in public disclosures; relator's inside detail can overcome bar)
- United States ex rel. Lamers v. City of Green Bay, 168 F.3d 1013 (7th Cir. 1999) (relator need not have access to internal documents to have direct, independent knowledge)
- United States ex rel. Lusby v. Rolls-Royce Corp., 570 F.3d 849 (7th Cir. 2009) (showing false claims can be inferred from knowledge of shipments and payments without invoices)