United States Ex Rel. Oberg v. Pennsylvania Higher Education Assistance Agency
2014 U.S. App. LEXIS 4725
| 4th Cir. | 2014Background
- Dr. Jon Oberg, relator for the United States, sues PHEAA, VSAC, and ASLA under the False Claims Act for allegedly submitting false SAP claims.
- The district court dismissed the FCA claims; on remand, applying the arm-of-the-state framework, the district court again dismissed those against PHEAA, VSAC, and ASLA.
- The Fourth Circuit held that the arm-of-the-state analysis governs FCA personhood for state-created corporations and remanded for limited discovery where appropriate.
- The court analyzes four nonexclusive factors: potential state payment of judgments, autonomy, statewide vs non-state concerns, and treatment under state law.
- ASLA is held to be an arm of Arkansas and thus not a “person” under the FCA; PHEAA and VSAC are vacated for limited discovery to determine their status.
- The decision preserves FCA liability against ASLA while allowing further proceedings to resolve PHEAA and VSAC status.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are PHEAA and VSAC arms of the state? | Oberg argues neither is an arm of the state; they are distinct corporate entities with autonomy. | Defendants contend both are arms of the state under the four-factor test. | PHEAA and VSAC not conclusively arms; remanded for limited discovery |
| Is ASLA an arm of the state and therefore not a “person” under the FCA? | Oberg contends ASLA is not an arm; it is a corporate entity with independence. | ASLA is an arm of Arkansas under the four-factor test. | ASLA is held to be an arm of the state; FCA claims against ASLA dismissed |
Key Cases Cited
- Vt. Agency of Natural Resources v. United States ex rel. Stevens, 529 F.3d 765 (U.S. 2000) (limits state sovereign liability under the FCA where state agencies are involved)
- Cook Cnty. v. United States ex rel. Chandler, 538 U.S. 119 (U.S. 2003) (establishes that municipalities can be “persons” under the FCA)
- Hess v. Port Authority Trans-Hudson Corp., 513 U.S. 30 (U.S. 1994) (state-control considerations for Compact Clause entities; relevance to arm-of-state analysis)
- Regents of the Univ. of Cal. v. Doe, 519 U.S. 425 (U.S. 1997) (concepts of state liability vs. private liability in arm-of-state context)
- Md. Stadium Auth. v. Ellerbe Becket, Inc., 407 F.3d 255 (4th Cir. 2005) (factors for state autonomy and arm-of-state analysis)