January 7, 2019

Do I Have a Case? Supreme Court Holds that Qui Tam Whistleblowers Cannot Base Claims on Information Received in Response to FOIA Requests

The public disclosure bar generally precludes qui tam relators from bringing actions based upon publicly disclosed information unless the relator is an original source of the information. Before the passage in 2010 of the Patient Protection and Affordable Care Act (“Affordable Care Act”), the False Claims Act (“FCA”) specifically prohibited private suits “based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media.” In Schindler Elevator Corporation v. United States ex rel. Kirk, the Supreme Court held that a federal agency’s written response to a Freedom of Information Act (“FOIA”) request constitutes a “report” within the meaning of the FCA’s public disclosure bar.

Relator Daniel Kirk, a Vietnam veteran, was employed by Schindler Elevator Corporation (“Schindler”) from 1978 until 2003. He filed an action against Schindler in 2005, alleging that Schindler had submitted false claims for payment under its Government contracts because the company had falsely certified compliance with the Vietnam Era Veterans’ Readjustment Assistance Act of 1972. Kirk supported his allegations with information his wife had received from the Department of Labor (“DOL”) in response to three FOIA requests.

The Supreme Court held that the DOL’s written responses to the FOIA requests were “reports” within the meaning of the FCA’s public disclosure bar. (Note: The Supreme Court considered the version of the public disclosure bar in existence at the time Kirk’s suit was filed, prior to amendment by the Affordable Care Act.) It remanded the case to the United States Court of Appeals for the Second Circuit to determine whether Kirk’s suit was “based upon . . . allegations or transactions” disclosed in those reports.

Learn more about qui tam actions here. Read success stories regarding qui tam litigation as well. Finally, please contact Berg & Androphy here confidentially to discuss your potential case.