On Monday, the Supreme Court ruled 5-3 that qui tam lawsuits may not proceed on the basis of information obtained through under a Freedom of Information Act (FOIA) request.
The Freedom of Information Act requires the full or partial disclosure of certain unreleased information and documents controlled the federal government. The federal False Claims Act, through which citizens are allowed to file qui tam lawsuits, says such suits cannot be filed using information obtain under a FOIA request.
The suit that gave rise to the ruling involved Schindler Elevator Corporation, who was sued by a former employee on behalf of the government for failing to comply with reporting requirements concerning the employment of Vietnam veterans. Schindler allegedly submitted hundreds of false claims for payments under government contracts since 1999.
That suit was originally thrown out by the judge, who said the former employee's information had come from a request under the FOIA. Because the reports were public information, he said, a qui tam suit cannot be filed based upon them. That decision was overturned by the 2nd U.S. Circuit Court of Appeals in New York City, and appealed up to the Supreme Court.
The Court's opinion, authored by Justice Clarence Thomas, affirmed the originally decision, and said that private plaintiffs may not bring claims under the federal False Claims Act based upon information obtained from federal agencies pursuant to a request under the Freedom of Information Act.
The Court's decision was, according to sources, an attempt to balance the need of encouraging private parties to expose fraud and the need to prevent "parasitic" lawsuits.
The decision was criticized by the opposing Justices for weakening the effectiveness of the False Claims Act as a tool to battle fraud by government contractors.
Source: Washington Post, "Supreme Court says FOIA request cannot be used to trigger False Claims Act lawsuit," Associated Press, 16 May 2011.