FOIA Requests May Preclude False Claims Act Suits

In a 5-3 decision, the Supreme Court reversed and remanded a decision of the Court of Appeals for the Second Circuit asserting jurisdiction over a False Claims Act qui tam action, because a written agency response to a Freedom of Information Act request is a “report” within the meaning of the FCA’s bar against qui tam actions based on public disclosures. The relator, a former contractor employee, alleged the contractor violated the FCA by obtaining government contracts and payments while falsely certifying compliance with the Vietnam Era Veterans’ Readjustment Assistance Act (38 USC 4212), which requires government contractors to submit annual reports on the number of “qualified covered veterans” they employ. The relator supported his allegations with the government’s responses to FOIA requests, which indicated the number, and provided copies of the VETS-100 reports the contractor filed in a nine-year period. The Second Circuit reversed a federal district court (54 CCF ¶79,304) and held a response to a FOIA request is neither a “report” nor an “investigation” within the meaning of 31 USC 3730(e)(4)(A), which barred qui tam actions “based upon the public disclosure of allegations or transactions … in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation….”

Ordinary Meaning

Resolving a split among the courts of appeals, the Supreme Court considered the ordinary, dictionary meaning of a report as “something that gives information,” a “notification,” or “an official or formal statement of facts.” The Court found the broad ordinary meaning to be consistent with the “generally broad scope” of the public disclosure bar. In reasoning the immediately surrounding words required a narrower definition of report to “connote the synthesis of information in an investigatory context,” the Second Circuit repeated the Fourth Circuit’s error of applying noscitur a sociis to interpret the public disclosure bar, despite the Court’s reversal in Graham County Soil and Water Conservation Dist. v. U.S. ex rel. Wilson (54 CCF ¶79,296). The Court concluded a written agency response to a FOIA request falls within the ordinary meaning of “report,” and any records produced with the response are part of the report. Thus, any allegation or transaction disclosed in a record attached to a FOIA response is disclosed “in” a report for purposes of the public disclosure bar. The Court directed the Second Circuit to resolve on remand whether the relator’s suit was based on allegations or transactions disclosed in the FOIA responses and accompanying records.

Open Questions

The Court rejected the prospect of potential defendants insulating themselves from FCA liability by making FOIA requests for incriminating documents, leaving open whether a relator who comes by information from another source may bring a suit that is not “based upon” the initial public disclosure, or whether such a relator qualifies for the “original source” exception. In her dissenting opinion, Justice Ginsburg charged the majority with ranking a “ministerial” FOIA response “akin” to a Government Accounting Office report, thereby weakening the “force of the FCA as a weapon against fraud on the part of [g]overnment contractors.” (Schindler Elevator Corp. v. U.S. ex rel. Kirk, US SCt, 55 CCF ¶79,579)