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Crime, Law and Justice
Dispatches from public radio's correspondent at the Oregon Legislature. This is a venue for political and policy coverage of the state government in Salem and its impact on the people of Oregon.

Federal Court Turns Down Oregon's Attempt To Sue For-Profit College

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The 9th Circuit Court of Appeals ruled against the State of Oregon in a lawsuit against the company that operates the University of Phoenix.

Oregon has failed in its attempt to recover millions from a bad investment in a for-profit university.

A federal appeals court this week ruled against the state and in favor of the company that operates the University of Phoenix.

Four years ago, three retirement funds -- including the primary Oregon public workers pension fund -- filed a shareholder lawsuit against the Apollo Group, which is the parent company of the University of Phoenix. They claimed that the university made false and misleading statements about how many students would enroll there and how much they'd pay in tuition.

The state said at the time that its pension fund had lost $10 million as a result.

But a panel of federal judges on the 9th U.S. Circuit Court of Appeals this week upheld a lower court's ruling that said the University of Phoenix didn't cross the line with its optimistic projections of future profits. The judges said the company was engaging in so-called "business puffery". That's essentially a legal form of exaggeration.

A spokesman for the Oregon Department of Justice said the agency is reviewing the opinion and had no additional comment.