• Supreme Court Decides Schindler Elevator Corp. v. United States ex rel. Kirk
  • May 19, 2011 | Authors: Aaron D. Van Oort; Marie E. Williams
  • Law Firms: Faegre Baker Daniels - Minneapolis Office ; Faegre Baker Daniels - Denver Office
  • On May 16, the Supreme Court issued an opinion in Schindler Elevator Corp. v. United States ex rel. Kirk, No. 10-188, holding that a federal agency's written response to a request for records under the Freedom of Information Act (FOIA) constitutes a "report" under the public-disclosure bar of the False Claims Act (FCA).  As a result, a qui tam action under the FCA cannot be based on a response to a FOIA request.

    Since 1999, Schindler Elevator Corporation and the United States government have entered into hundreds of contracts that are subject to the Vietnam Era Veterans' Readjustment Assistance Act of 1972.  That Act requires companies to report certain information to the Secretary of Labor, including how many of its employees are "qualified covered veterans" under the Act.  Daniel Kirk was a Vietnam-era veteran who was employed by Schindler from 1978 until 2003.  In August 2003, Kirk resigned from Schindler in response to what he viewed as Schindler's efforts to force him out.  At some point, Kirk's wife made three different FOIA requests to the Department of Labor for records of all reports that Schindler filed under the Act from 1998 through 2006.

    In 2005, Kirk filed a qui tam action against Schindler under the FCA.  Kirk alleged that Schindler had submitted hundreds of false reports for payment under its government contracts.  In support of his claims, Kirk alleged that Schindler falsely certified its compliance with the Act.  As evidence, Kirk pointed to the information that his wife had received in response to her FOIA requests to the Department of Labor.

    Schindler moved to dismiss the complaint and argued, among other things, that the FCA's public-disclosure bar deprived the District Court of jurisdiction.  The District Court granted the motion.  The Court of Appeals for the Second Circuit vacated the District Court's order and remanded the case for further proceedings, effectively holding that an agency's response to a FOIA request is neither a "report" nor an "investigation" under the public-disclosure bar.

    The Supreme Court reversed and remanded the case.  The Court first examined the statutory text of the public-disclosure bar.  Because the statute does not define the word "report," the Court looked at the word's ordinary meaning, and found it to be very broad in the context of the public-disclosure bar.  The Court found no textual basis for adopting a narrower definition of "report," and extensively referred to its recent decision in Graham County Soil & Water Conservation District v. United States ex rel. Wilson, which addressed the same issue.  Thus, the Court concluded that a written agency response to a FOIA request falls within the ordinary meaning of "report."  The Court was not persuaded by arguments based on the drafting history of FCA, nor did it believe that extending the public-disclosure bar to written FOIA responses would lead to unusual consequences.  Finally, the Court noted that neither Kirk nor his amici had provided any principled way to define "report" to exclude FOIA requests without also excluding other documents that are indisputably reports.

    Justice Thomas delivered the opinion of the Court, in which Chief Justice Roberts and Justices Scalia, Kennedy, and Alito joined.  Justice Ginsburg filed a dissenting opinion, in which Justices Breyer and Sotomayor joined.  Justice Kagan took no part in the consideration or decision of the case.