ORDER

J.P. STADTMUELLER, District Judge.

1. BACKGROUND

1.1 Parties

Brent M. Nelson ("Nelson"), the relator in this lawsuit filed under the qui tam provision of the False Claims Act ("FCA"), 31 U.S.C. § 3730(b), brings claims on behalf of the United States against defendant Sanford-Brown, Limited (formerly known as Ultrasound Technical Services, Inc.), a for-profit higher education enterprise, alleging fraudulent conduct in connection with claims for federal subsidies under the Higher Education Act. (Docket #12).1

From June 2008 to January 2009, Nelson served as the Director of Education at Sanford-Brown's campus in West Allis, Wisconsin ("SB-Milwaukee"). (Docket #79 at ¶ 6); (Docket #95 at ¶ 7).2 Based upon this short stint of employment with SB-Milwaukee, Nelson brings this case.3

Before summarizing Nelson's principal allegations, the Court will briefly address the particular statutory subsection on which this case turns: 20 U.S.C. § 1094(a).

1.2 Program Participation Agreements

In order to receive federal subsidies under Title IV of the Higher Education Act, a school must enter into a "program participation agreement" ("PPA") with the United States Secretary of Education. 20 U.S.C. § 1094(a). The statute provides that each PPA "shall condition the initial and continuing eligibility of an institution to participate in a program [for Title IV subsidies] upon compliance with [certain] requirements...." 20 U.S.C. § 1094(a)(1)-(29). The Court will refer to these requirements as "Title IV Restrictions."

1.3 Nelson's Principal Allegations

Nelson alleges that SB-Milwaukee recklessly disregarded (and violated) four Title IV Restrictions — (i) 20 U.S.C. § 1094(a)(20) (banning incentive compensation to its employees based on success in securing enrollments or financial aid); (ii) § 1094(a)(21) (requiring the school to, inter alia, meet requirements established by its accreditor); (iii) § 1094(a)(22) (requiring the school to refund unearned subsidies); and (iv) § 1094(a)(3) (requiring the school to, inter alia, maintain records necessary to ensure proper administration of subsidies) (collectively, the "Disputed Title IV Restrictions") — and nevertheless: (a) promised, in a PPA, to comply with such restrictions; (b) periodically certified compliance with such restrictions; and (c) submitted, or caused to be submitted, claims for Title IV subsidies "during the 2008-2009 school year" (Docket #12 at ¶¶ 8, 24, 25, 32 and 48-79); (Docket #107 at § 4.1.2.2); (Docket #81).4

Based on these allegations, Nelson brings claims under two statutory subsections of the FCA:

Before the Court is Sanford-Brown's motion for summary judgment on all of Nelson's claims. (Docket #60).

2. SUMMARY JUDGMENT STANDARD

"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "Material facts" are those under the applicable substantive law that "might affect the outcome of the suit." See Anderson, 477 U.S. at 248, 106 S.Ct. 2505. A dispute over "material fact" is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. In determining whether a genuine dispute of material fact exists, the court must construe all reasonable inferences in favor of the non-movant. Lac Courte Oreilles Band of Lake Superior Chippewa Indians v. Voigt, 700 F.2d 341, 349 (7th Cir.1983).

3. SB-MILWAUKEE'S PPA

3.1 2005 PPA

In September of 2005, Sanford-Brown's campus in Fenton, Missouri, entered into a PPA with the U.S. Department of Education ("2005 PPA"). (Docket #64-1); (Docket #79 at ¶ 20). The 2005 PPA provides, in relevant part, that "[t]he Institution understands and agrees that it is subject to and will comply with the program statutes and implementing regulations for institutional eligibility..." including the Disputed Title IV Restrictions. (Docket #64-1 at 3-6). As of June 16, 2006, SB-Milwaukee was an additional campus covered under the 2005 PPA. (Docket #79 at ¶ 21); (Docket #64-1 at 2); (Docket #64-2).

At the time the 2005 PPA was signed, the signatory: (i) intended that the campuses covered by the 2005 PPA would operate in compliance with the conditions specified in the 2005 PPA, including institutional eligibility requirements; and (ii) believed that all certifications and statements of fact contained in the 2005 PPA were true and accurate. (Docket #79 at ¶¶ 23-24).

3.2 2007 PPA

In December of 2007, Sanford-Brown's campus in Jacksonville, Florida, entered into a PPA with the U.S. Department of Education ("2007 PPA"). (Docket #65-1); (Docket #79 at ¶ 25). The 2007 PPA provides, in relevant part, that "[t]he Institution understands and agrees that it is subject to and will comply with the program statutes and implementing regulations for institutional eligibility..." including the Disputed Title IV Restrictions. (Docket #65-1 at 2-3 and 6). On May 15, 2008, with the U.S. Department of Education's approval, SB-Milwaukee was removed from the 2005 PPA and added as an additional campus covered under the 2007 PPA. (Docket #79 at ¶ 26).

At the time the 2007 PPA was signed, the signatory: (i) intended that the campuses covered by the 2007 PPA would operate in compliance with the conditions specified in the 2007 PPA, including institutional eligibility requirements; and (ii) believed that all certifications and statements of fact contained in the 2007 PPA were true and accurate. (Docket #79 at ¶¶ 28-29).9

4. ANALYSIS

4.1 Section 3729(a)(1)(B): Fraudulent Certification

For his claim under § 3729(a)(1)(B) — which imposes civil liability on any person who "knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim" — Relator offers two theories: one grounded in the statute's plain language (express false certification), and the other not (implied false certification).

A claim under § 3729(a)(1)(B) has three essential elements: (1) the defendant made a statement in order to receive money from the government; (2) the statement was false; and (3) the defendant knew it was false. See Yannacopoulos, 652 F.3d at 822; see also United States ex rel. Gross v. AIDS Research Alliance-Chicago, 415 F.3d 601, 604 (7th Cir.2005).

4.1.1 Express False Certification(s)

Seizing upon the teachings of Yannacopoulos, Sanford-Brown's motion for summary judgment challenged Nelson to identify evidence of an express misrepresentation (made with a sufficiently culpable mental state) regarding SB-Milwaukee's compliance with the Disputed Title IV Restrictions. (Docket #62 at 28-29) (Warning that Nelson may ask the Court to endorse a theory of fraud by implied misrepresentation "[given the absence of an actual misrepresentation....").

4.1.1.1 2005 PPA and 2007 PPA

By ratifying the PPA, SB-Milwaukee agreed that it "will comply" with the Disputed Title IV Restrictions. (Docket #64-1 at 3-6); (Docket #65-1 at 2-3 and 6); see generally Section Three supra. However, Nelson offers no evidence whatsoever regarding SB-Milwaukee's mental state when it was added as an additional campus covered under the PPA. See (Docket #81); (Docket #97 at 20); (Docket #229 at 14); see (Docket #236).10 Therefore, the record in this case does not sustain a theory of fraudulent inducement. See generally, U.S. ex rel. Main v. Oakland City University, 426 F.3d 914, 917 (7th Cir.2005).11

4.1.1.2 Other Certifications?

Without citation to the evidentiary record, Nelson alleges (by reference to statutory provisions) that SB-Milwaukee must have filed (or caused to be filed) express compliance certifications in connection with its alleged participation in certain Title IV funding programs (e.g., Pel Grants, Federal Supplemental Educational Opportunity Grants, and Stafford loans). (Docket #81 at 28-29); (Docket #229 at 13); see (Docket #236). Nelson's bald accusations plainly fail to satisfy his burden of production.

Accordingly, the Court will turn to Nelson's theory of implied certification.

4.1.2 Implied False Certification(s)

Nelson (joined by the government) asks this Court to adopt an "implied false certification" theory of liability under Section 3729(a)(1)(B) whereby "every claim for payment submitted under Title IV constitutes an `implied certification' of compliance with the PPA,...." (Docket #81 at 32-33); see (Docket #233 at 5-8) and (Docket #240 at 4-6). Without citation to pertinent legal authority (and, by its own disclaimer, untethered from the evidentiary record in this case), the government argues as follows: "[a] defendant's non-disclosure, at the time payment is sought, of the fact that it failed to fulfill a previous promise upon which entitlement to payment is conditioned, is functionally equivalent to an explicit false representation or certification that it is entitled to payment." (Docket #233 at 3) (emphasis added).

However, Nelson and the government fail to cite any controlling authority endorsing their "implied false certification" theory of FCA liability. (Docket #81); (Docket #233); (Docket #236); (Docket #240). Moreover, this Court finds none.

Rather, in this Court's view, the Seventh Circuit's application of Section 3729(a)(1)(B) to the facts in Yannacopoulos is instructive:

652 F.3d at 824.

Likewise, in Gross, the Seventh Circuit required "actual and particularly-identified false representations" to state a claim under this statutory subsection. 415 F.3d at 605.

With the benefit of the teachings of Yannacopoulos and Gross, this Court declines to expand FCA liability under Section 3729(a)(1)(B) as Nelson and the government propose.

4.2 Section 3729(a)(1): Fraudulent Presentment

U.S. ex rel. Fowler v. Caremark RX, L.L.C., 496 F.3d 730, 740-741 (7th Cir. 2007) (citation omitted) (overruled in part on other grounds by Glaser v. Wound Care Consultants, Inc., 570 F.3d 907, 920 (7th Cir.2009)); (Docket #81 at 8); (Docket #193-15 at 3).

Against the plain language of these three elements, Sanford-Brown contends that: "[W]ithout a misrepresentation, there is no false claim. See U.S. ex rel. Gross v. AIDS Res. Alliance-Chicago, 415 F.3d 601, 605 (7th Cir.2005)." (Docket #62 at 26). But Sanford-Brown's citation does not support its sweeping proposition: the analysis in Gross is limited to the "false record or statement" subsection of the FCA: Section 3729(a)(1)(B) (codified at 31 U.S.C. § 3729(a)(2) at the time Gross was decided).

In the alternative, Sanford-Brown argues that none of SB-Milwaukee's claims for federal subsidies was false because: (i) none of the PPAs was fraudulently induced, see Section 4.1.1.1 supra; and (ii) compliance with the Disputed Title IV Restrictions is not a condition of government payment. (Docket #62 at 29-34); see generally, Gross, 415 F.3d at 604 ("An FCA claim premised upon an alleged false certification of compliance with statutory or regulatory requirements also requires that the certification of compliance be a condition of or prerequisite to government payment.") (emphasis added) (citations omitted).

In response, Nelson highlights the statutory text preceding the Disputed Title IV Restrictions:

20 U.S.C. § 1094(a); (Docket #81 at 31). Furthermore, Nelson directs the Court's attention to the implementing regulation's pertinent text:

34 C.F.R. § 668.14(a)(1).12

Neither party in this case musters up any controlling authority divining whether or not the above-quoted passages render the Disputed Title IV Restrictions conditions of payment. See (Docket #62 at 29-34); see also (Docket #81 at 30-32) and (Docket #97 at 10-12). This Court is aware of none.

In this Court's view, the implementing regulation's more exacting language is revealing: "A program participation agreement conditions the initial and continued participation of an eligible institution ... upon compliance with...." 34 C.F.R. § 668.14(a)(1) (emphasis added).

The U.S. Court of Appeals for the Tenth Circuit recognizes a "significant distinction" between "conditions of payment" and "conditions of participation" in FCA cases:

U.S. ex rel. Conner v. Salina Regional Health Center, Inc., 543 F.3d 1211, 1220 (10th Cir.2008) (emphasis added).

This Court declines to endorse Conner's nebulous definition of conditions of payment, as Nelson requests. (Docket #81 at 30-31). Rather, this Court grounds its analysis in the text of 20 U.S.C. § 1094(a) and 34 C.F.R. § 668.14(a)(1), as quoted above, and finds no clear manifestation of congressional or regulatory intent to condition payment of Title IV federal subsidies on compliance with the Disputed Title IV Restrictions.

With the benefit of the foregoing analysis, the Court concludes that Sanford-Brown is entitled to summary judgment on Nelson's fraudulent presentment claim under Section 3729(a)(1).

5. CONCLUSION

In the end, Nelson and the government cast the FCA as a blunt instrument to police compliance with federal contracts, regulations and statutes. To be sure, it is not. See generally, U.S. ex rel. Steury v. Cardinal Health Inc., 625 F.3d 262, 268 (5th Cir.2010).

Accordingly,

IT IS ORDERED that the defendants' Motion for Summary Judgment (Docket #60) be and the same is hereby GRANTED; and

IT IS FURTHER ORDERED that this action be and the same is hereby DISMISSED on its merits, with prejudice, together with costs as taxed by the Clerk of the Court.

The Clerk is directed to enter judgment accordingly.