Second Circuit Says FCA Suit Based On FOIA Documents May Proceed

The Vietnam Era Veterans Readjustment Assistance Act requires contractors doing business with federal government entities to submit annual reports to the Secretary of Labor providing information about the number of veterans employed by the contractor (the “VETS-100 reports”). Daniel Kirk brought suit under the False Claims Act alleging that his former employer, Schindler Elevator Corp., obtained government contracts while representing that it had filed the required VETS-100 reports, when in fact it either had failed to file a report or had filed a false report for the relevant years. Kirk based his allegations in large part on information he obtained after submitting requests under the Freedom of Information Act. 

The U.S. Court of Appeals for the Second Circuit has just issued a decision on a question of first impression in the circuit: does the FCA’s jurisdictional bar, which provides that “[n]o court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in . . . a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation,” apply when the plaintiff’s allegations are based on materials produced in response to a FOIA request. Other circuit courts are divided on this issue, but the Second Circuit has ruled that the FCA’s jurisdictional bar applies only when the document is a “congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation.”
 
The case is U.S. ex rel. Kirk v. Schindler Elevator Corp., No. 09-1678-cv (2d Cir. April 6, 2010). Attorneys involved include Jonathan A. Willens; Steven Alan Reiss, Gregory Silbert, and David Yolkut, Weil, Gotshal & Manges; Katherine Y.K. Cheung and Rae T. Vann, Norris, Tysse, Lampley & Lakis; and, for the government, Charles W. Scarborough, Michael S. Raab, and Jeannette Vargas.