By MANDY SMITHBERGER and MICHAEL SMALLBERG
Yesterday, the Supreme Court weakened the government's ability to recoup money from contractors defrauding the government. In a 5-3 decision, the Court found in Schindler Elevator Corp. vs. U.S. that private citizens cannot file lawsuits under a qui tam provision of the False Claims Act that rely upon information obtained through the Freedom of Information Act (FOIA). The Justice Department secured $3 billion in civil settlements in 2010 under the False Claims Act (FCA), and has recovered more than $27 billion since 1986.
The case revolves around Vietnam War veteran Daniel A. Kirk, who was an employee of Schindler Elevator Corporation and suspected that the company was not in compliance with disclosure requirements under the Vietnam Era Readjustment Assistance Act of 1972. His wife received confirmation of these observations from information obtained from the Department of Labor under FOIA, and Kirk filed his own suit.