3:49pm

Tue October 25, 2011
The Commonwealth

Judge Rejects Kentucky's Request to Join Lawsuit

Kentucky cannot join a federal lawsuit against Education Management Corp., the second-largest for-profit college company in the country, a judge ruled Monday. In August, Attorney General Jack Conway announced the commonwealth had filed to intervene in the whistleblower case as part of a larger effort to crackdown on the business practices of for-profit colleges. The attorney general’s office has sued and investigated other institutions, including Owensboro-based Daymar College and Louisville-based Sullivan University.

Education Management Corp owns Brown Mackie College, which operates three campuses in the commonwealth.

Conway told the Lexington Herald-Leader their business practices put students and taxpayers at risk because of “overaggressive” recruiters who target people who are unable to pay their students loans, but U.S. District Judge Terrence McVerry denied his request to join the case.

From Business Week:

“This case is already over four years old and the addition of ‘consumer protection’ claims would cause further delay and prejudice to the existing parties,” McVerry said (Monday) in a written opinion.

(SNIP)Kentucky doesn’t have a state law equivalent to the federal false claims act and intervention by the state “is not warranted under the circumstances of this matter,” McVerry said in the ruling.

The attorney general’s office is currently reviewing the opinion and considering their options, says Conway spokeswoman Shelley Johnson, adding there is a possibility of an appeal.

But the campaign for Republican Todd P’Pool, who is challenging Conway in the general election this fall, quickly pounced on the ruling.

P’Pool campaign manager David Ray says the decision is another example of Conway wasting resources and ignoring more important issues, such as joining a lawsuit against President Obama’s health care law.

“Of course, this doesn’t stop him from trying to raise money off of these stunts and tout them in his TV ads, but perhaps voters should know he can’t ‘waste valuable resources’ to fight Obamacare but he can surely waste those same valuable resources to file silly lawsuits that get thrown out of court but help him get re-elected,” he says.

The Conway campaign declined to comment.