A response to a FOIA request is a public disclosure, First Circuit rules

by bvernia | December 4th, 2009

On November 18th, the First Circuit, affirming a dismissal of a Rhode Island qui tam, ruled that a response to a Freedom of Information Act (FOIA) request constitutes a public disclosure under the False Claims Act and addressed how to determine whether a relator’s allegations are “based upon” the public disclosures.

In the case, a local real estate developer filed a qui tam suit against the City of Woonsocket, Rhode Island and its mayor, claiming that they had violated the FCA by making false statements to the US Department of Housing and Urban Development when applying for federal grants for subsidized housing. The real estate developer, however, had allegedly obtained this information through a FOIA request and the media, and the district court dismissed the action due to the FCA’s public disclosure bar.

The First Circuit looked at three factors to determine whether the relator had met his burden of overcoming the public disclosure bar:

  • Whether there has been public disclosure of the allegations in the relator’s complaint;
  • If so, whether the public disclosure occurred in the manner specified in the False Claims Act; and
  • If so, whether the relator’s suit is “based upon” those publicly disclosed allegations.

First, the court found that a response to a request under the FOIA constitutes a public disclosure simply because the FOIA response disseminates information to members of the public. Second, the court found that the FOIA response fell within the FCA’s enumerated list of sources, agreeing with what it characterized as the majority view that FOIA reports constituted administrative reports under the False Claims Act.

Finally, the court agreed with the majority view that “as long as the relator’s allegations are substantially similar to information disclosed publicly, the relator’s claim is ‘based upon’ the public disclosure even if he actually obtained his information from a different source.” Although other courts, most notably the Fourth Circuit, require the relator’s allegations to be actually derived from the publicly disclosed information, the First Circuit chose not to follow this path for two primary reasons: (1) allowing the suit would not support the policy behind the False Claims Act, which is to encourage lawsuits by persons who have firsthand knowledge of fraud against the government; and (2) because this particular relator could not be considered an “original source” and therefore meet a statutory exemption for filing the qui tam action.

Under the False Claims Act, a relator can bring an action based upon public disclosure only if the relator is an “original source” of the information, meaning that the relator must have both direct and independent knowledge of the information. The First Circuit found that the developer could not be an original source because his information was only a compilation of publicly available information and he possessed no independent knowledge, apart from the publicly disclosed information, of the alleged fraud.

Leave a Reply

Recent Posts

Recent Comments