Supreme Court Makes it Harder to Hold Contractors Accountable for Fraud
5-18-11 – The Supreme Court recently held, in Schindler Elevator Corp. vs. U.S., that private citizens cannot file qui tam lawsuits that rely upon information obtained through the Freedom of Information Act (FOIA). The majority opinion reasoned that the suit, which was based on information from the Department of Labor (through the FOIA request), was precluded under the public disclosure bar of the False Claims Act, which prohibits bring suits based on public information unless the person bringing the action is an original source of the information. The goal of such a bar is to prevent people from just submitting FOIA requests on many agencies to see who is out of compliance and then file a qui tam action under the FCA. Justice Ginsburg, dissenting, argued that the suit was based on relator’s observations and experience, and that the FOIA request should not be considered an administrative action prohibited under the FCA.