SUPREME COURT GRANTS CERT IN FALSE CLAIMS ACT CASE

Today, the U.S. Supreme Court announced that it was going to hear the sixth False Claims Act case in as many years. In examining this Second Circuit case, U.S. ex rel. Kirk v. Schindler Elevator Company, 601 F.3d 94 (2d Cir. 2009), the Supreme Court will be faced with the issue of whether a federal agency’s response to a Freedom of Information Act request is a “report . . . or investigation” within the meaning of the False Claims Act’s public disclosure bar, 31 U.S.C. § 3730(e)(4).

The Public Disclosure Bar was added to the FCA in 1986, with the twin purposes of encouraging the filing of qui tam actions while still preventing relators from receiving a reward when they merely copy fraud allegations that have already been broadly disseminated to the public. The bar was only intended to apply when the fraud allegations were detailed in the very specific, statutorily defined public disclosures, enumerated in 31 U.S.C. 3730(e)(4)(A).

Over the years, however, some courts have broadly interpreted this list to include disclosures that fall outside of this narrow list. For example, when it comes to the issue now before the Supreme Court, then-Judge Alito penned an opinion in U.S. ex rel. Mistick PBT v. Housing Authority of the City of Pittsburgh, 186 F.3d 376 (3d Cir. 1999), which held that a government employee’s response to a FOIA request qualifies as a governmental “report” under the FCA public disclosure bar.

Other courts have sensibly read the bar to only apply to actual governmental reports, which likely put the government on to the trail of fraud. For example, in U.S. ex rel. Haight v Catholic Healthcare West, 445 F.3d 1147 (9th Cir. 2006), the court took a different approach. Rather than relying on the dictionary definition of the words “report” and “investigation,” the Ninth Circuit looked at the words in the context of the Public Disclosure bar as whole. The Ninth Circuit concluded that construing the terms “report” and “investigation” to refer to work product that represents governmental analysis or leg-work, rather than the mechanistic production of documents that follows upon a FOIA request, is in keeping with the goals of the FCA’s Public Disclosure Bar:

a FOIA request is a mechanism for duplicating records that are in the possession of the federal government and that are not otherwise excludable from members of the public. In contrast, reports and investigations generally involve independent work product. “Report” denotes a document that includes an analysis of findings; “investigation” implies independent governmental leg-work. Moreover, the FCA’s jurisdictional bar groups “report” and “investigation” with a series of other enumerated sources that each involve extensive governmental work product and involvement. Because responding to a FOIA request requires little more than duplication, labeling any response to a FOIA request a “report” or “investigation” would ignore the way in which each of the enumerated sources [in the statute] involves governmental work product.

Id. at 1153 (internal quotation marks and citation omitted).

In Kirk, the Second Circuit agreed with the Ninth Circuit, further dividing the circuits on this issue. The U.S. Supreme Court will now have the ultimate say on this important issue.

For more information about qui tam law and health care fraud, contact Nolan & Auerbach, P.A.

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