Articles from June 2011

Schindler v. Kirk: Qui Tam Action Can’t Use Evidence from FOIA Request

The U.S. Supreme Court recently reversed the Second Circuit with a 5-3 vote (Justice Kagan did not participate), holding that corporate whistleblowers cannot bring lawsuits on the basis of information they get from a Freedom of Information Act (FOIA) request because such information is a “report.”  See Schindler v. Kirk, 179 L. Ed. 2d 825 (2011).

The qui tam relator had alleged that his former employer submitted false claims in its federal contracts on the basis of information that his wife obtained through FOIA requests.  Schindler v. Kirk at 833.  The federal Qui Tam Act bars suits to recover falsely or fraudulently obtained federal payments where those suits are “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 . . . .”  31 U.S.C. § 3730(e)(4)(A) (footnote omitted).  Justice Clarence Thomas’ majority opinion found that the incriminating information derived from FOIA requests constituted a “report,” thereby foreclosing the lawsuit, seemingly irrespective of the truth of the underlying allegations.  Id. at 835-836.

With legal reasoning at least as extensive and compelling, the Second Circuit had concluded the FOIA-derived information to not be a “report.”  Yet the Thomas majority opinion, referencing an amicus brief submitted by the U.S. Chamber of Commerce, offered this justification: “[A]nyone could identify a few regulatory filing and certification requirements, submit FOIA requests until he discovers a federal contractor who is out of compliance, and potentially reap a windfall in a qui tam action under the FCA.”  Id. at 838.

In other words, a citizen might identify a law, submit a FOIA request to confirm compliance with the law, find that there is in fact a violation of the law, and thereafter “reap” precisely the “windfall” that the Qui Tam Act provides for.


The full Schindler v. Kirk opinion is available here.