On September 16, 2011, the D.C. Court of Appeals is expected to hear the appeal from D.C. District Judge Richard Leon’s ruling barring a qui tam suit based on an earlier, similar suit against SLM Corp. (Sallie Mae).  Sheldon Batiste, a former Sallie Mae employee, filed his suit in Washington D.C. in 2008 alleging a fraudulent scheme whereby Sallie Mae routinely granted forbearances to student loan borrowers without regard to whether they intended to pay back the loans.  A complaint had been previously filed in 2005 in California alleging a similar scheme, although supported with entirely different facts.  The 2005 suit was subsequently dismissed.

The Department of Justice has supported Mr. Batiste in his appeal to the Court of Appeals, although the DOJ elected not to intervene when he first filed his case.

Judge Leon ruled that it was sufficient that the second case shared the “same material elements” and the “same fraudulent scheme.” Batiste has argued, however, that the suit should be permitted to go forward as it is “factually, legally, temporally, and substantively different.” Batiste argues that a second action is barred only where the second suit is “based on the same essential facts.”

Read the entire article, “How Similar Is Too Similar?”