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Valparaiso Univ. Law School

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Tuesday, May 4, 2010

When Does the False Claims Act's Jurisdictional Bar Preclude Qui Tam Actions?

2nd Cir.  It's complicated.

Daniel Kirk, a Vietnam War veteran, worked at Millar Elevator Industries beginning in the late 70s.  In 2002, Millar's operations were integrated into those of the Schindler Elevator Company.  In 2003, Millar was demoted and resigned.  Eight months later, Kirk sued, alleging that he had been fired in violation of VEVRAA, the VIetnam Era Veterans Readjustment Assistance Act.  That claim was dismissed and the dismissal was affirmed last year.  

Meanwhile, Kirk brought suit under the False Claim Act in the name of the U.S. government.   In 2007, the government elected not to intervene and Kirk pursued his claim as a relator.  His suit alleged that Schindler had entered into hundreds of contracts subject to VEVRAA requirements but that Schindler had failed to comply with those requirements.  Among other claims, Kirk alleged that Schindler failed to submit required VETS-100 reports in some years and had filed false VETS-100 forms in others.   The district court dismissed the action finding, among other things, that the claim was bared under the FCA, 31 U.S.C. s. 3730(e)(4), which provides that information that has been publicly disclosed cannot be a basis for a FCA claim.  The information at issue here related to the allegedly missing and/or falsified VETS-100 forms that Mr. Kirk had discovered through FOIA requests.  

The relevant section of the FCA provides:

No court shall have jurisdiction over an action under this section 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, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information. 

The Second Circuit vacated and remanded. There was no question that Mr. Kirk was not the original source of the information, so the only question whether a FOIA request counts as "public disclosure" for the purposes of the statute.  The Third Circuit answered that question in the affirmative.  The Ninth Circuit concluded that only a FOIA request that results in the production of an "enumerated source;" that is, one of the types of sources expressly named in the statute, creates a jurisdictional bar to an FCA claim.  The Second CIrcuit followed the Ninth.  It was supported in its position by the U.S. government as amicus curiae.

The full opinion in the case, United States of America ex rel. Daniel Kirk v. Schindler Elevator Corp. can be found here.

[Jeremy Telman]


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Comments

Its not complicated. Very simply, all FOIA requests do not trip the jurisdictional bar if they are not from a government report, news item, investigation etc. My FOIA request was just information only. All the circuits including the third circuit agree with this. Many blogs have gotten this wrong. FOIA request for information only is OK.

Daniel Kirk

Posted by: Daniel Kirk | May 22, 2010 3:28:02 PM

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