I think it was so that Lubitz only got a Third Class medical from the FAA so that he could fly solo during his training in the States.
Correct chucks - he already possessed a JAA Class 1 Medical issued in Germany - the FAA 3rd Class was for student pilot purposes to complete the solo element of the JAA Integrated CPL course in AZ. This has nothing to do with the FAA; it is the fact that a problem had been identified and the school allowed him to continue training following evaluation - the fact that a proportion of the training was conducted in the US and that if successful, a law suit would likely yield a greater award (as stated by the lawyers), this really should come as no surprise.
Oxford at the time, and now CTC operate from the same facility as ATCA - I wonder if other schools are concerned about potential liability issues in light of the possible outcome?