Plaintiffs, students and their parents, sued defendants, charter schools, corporate operators, and school districts, for breach of contract, misrepresentation, and violations of the California False Claims Act (CFCA), Gov. Code, § 12650 et seq., and unfair competition law (UCL), Bus. & Prof. Code, § 17200 et seq. The trial court dismissed the claims, and the Court of Appeal of California reversed. Defendants sought further review.
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Overview
Plaintiffs alleged that the schools—designed to provide and facilitate home instruction through use of the Internet—failed to deliver instructional services, equipment, and supplies as promised, and as required by law. The court held that: (1) public school districts were not “persons” who could be sued under the CFCA; (2) charter schools and the individuals or entities that operated them, were “persons” subject to suit under both the CFCA and the UCL, and were not exempt from either law merely because such schools were deemed part of the public school system; (3) the CFCA claim was not barred for “educational malfeasance” insofar as it asserted that the charter schools submitted false claims for school funds while failing to furnish any significant educational services, materials, and supplies; (4) the CFCA claim was not barred insofar as it alleged that, before 2000, the charter schools violated “independent study” rules set forth in a 1993 statute, Ed. Code, § 51747.3; and (5) a qui tam action under the CFCA against a charter school operator was not subject to the requirement under the Tort Claims Act, Gov. Code, § 815 et seq., of prior presentment of a claim for payment.
Outcome
The judgment of the court of appeal was reversed as to its findings regarding the “independent study” restrictions, that the public school defendants were “persons” subject to suit under the CFCA, and that the charter school defendants were not “persons” subject to suit under the UCL. In all other respects, the judgment of the court of appeal was affirmed. The cause was remanded to the court of appeal for further proceedings.
