United States of America v. Stevens-Henager College, Inc, 1:13-cv-00009

Background

Relators Katie Brooks and Nannette Wride filed a qui tam False Claims Act (FCA) suit against multiple for‑profit colleges and related defendants alleging systemic false certifications to obtain Title IV funds, including violations of the incentive‑compensation ban and the 90‑10 rule. The United States intervened limitedly as to two defendants and a narrower time period.
Relators allege admissions consultants (including the relators) were paid bonuses tied to enrollments in violation of 20 U.S.C. § 1094(a)(20), and that schools and auditors made false certifications and audit representations inducing DOE payments.
Defendants move under 28 U.S.C. § 1404(a) to transfer venue from the District of Idaho to the District of Utah; several defendants also joined alternative motions to dismiss which the court did not reach.
Key contested facts: defendants operate campuses across multiple states, but the bulk of operations, students, admissions consultants, Title IV receipts, and many likely witnesses and auditors are located in Utah rather than Idaho.
The District of Idaho applied the multi‑factor Jones/Stewart transfer analysis, finding Utah to be the “center of gravity” for the alleged fraud and that transfer would better serve convenience and the interests of justice.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Proper venue — whether case should remain in District of Idaho	Relators chose Idaho; some operative events and witnesses (Idaho campuses/employees) are in Idaho and plaintiffs favor minimal disruption	Majority of material events, witnesses, records, students, and auditors are in Utah; transfer to Utah is more convenient	Transfer to District of Utah granted under 28 U.S.C. § 1404(a)
Weight of plaintiff’s forum choice in qui tam	Relators argued their choice deserves deference	Defendants argued relators lack substantial Idaho contacts and government (real party in interest) did not insist on Idaho	Court gave minimal weight to relators’ choice; accorded deference to government but found other factors outweighed it
Availability/compulsory process for non‑party witnesses	Relators contended Idaho is necessary to secure live testimony from certain witnesses	Defendants argued more witnesses are in Utah and § 3731 likely permits nationwide subpoenas; Utah is more convenient	Court found compulsory‑process factor favored transfer (more likely witnesses in Utah and persuasive authority supports § 3731)
Judicial economy / public interest (local interest, congestion, jury burden)	Relators argued Idaho court’s familiarity favors retention and earlier resolution	Defendants argued Utah has greater local interest because most operative facts occurred there; transfer will not unduly delay case	Court found public‑interest factors (local interest, likely delay negligible) favored transfer or were neutral

Key Cases Cited

United States ex rel. Hendow v. Univ. of Phoenix, 461 F.3d 1166 (9th Cir.) (endorsing false‑certification theory in education context)
United States ex rel. Main v. Oakland City Univ., 426 F.3d 914 (7th Cir.) (false‑certification theory: false statements integral to payment chain)
Ebeid ex rel. United States v. Lungwitz, 616 F.3d 993 (9th Cir.) (discussing FCA false‑certification principles)
Jones v. GNC Franchising, Inc., 211 F.3d 495 (9th Cir.) (factors for § 1404(a) transfer analysis)
Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22 (U.S.) (transfer standard under § 1404(a))
Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834 (9th Cir.) (weight to be given plaintiff’s forum choice in transfer analysis)