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47 Procurement Law. 1 (2011-2012)

handle is hein.journals/procurlw47 and id is 1 raw text is: RoCutkemenit SECTION O 80C CONTRACT .AM * AMERICAN (AR ASSOCIAION VOMI 4 NIMBeii 4-4 FL 1 The Public Disclosure Bar: New Answers and Open Questions By DAVID M. NADLER AND JUSTIN A. CHIARODO Justin A. Chiarodo Continuing a trend of judicial and legislative activity re- garding the False Claims Act's (FCA) public disclosure bar, the Supreme Court recently held that a federal agency's Freedom of Information Act (FOIA) responses constitute reports that are subject to the bar.' Schindler Elevator Corp. v. United States ex rel. Kirk2 reinforces the court's broad interpretation of the public disclosure bar, also seen recently in Rockwell International Corp. v. United States ex rel. Stone3 and Graham County Soil & Water Conservation District v. United States ex rel. Wilson.4 This article discusses the evolution of the public disclo- sure bar, from its enactment in 1986 to its current form as amended by last year's Patient Protection and Affordable Care Act. It then discusses Schindler and other recent circuit court and district court cases interpreting the public disclo- sure bar, identifying several key unresolved issues that will continue to make the public disclosure bar one of the more contentious and frequently litigated areas of the FCA. David M. Nadler is a partner and Justin A. Chiarodo is an associate with Dickstein Shapiro LLP, where they represent companies in False Claims Act (FCA) cases. Contact Nadler and Chiarodo at NadlerD@dickstein- shapiro.com, and Chiarodoj@dicksteinshapiro.com, respectively. Background As originally enacted, the FCA did not limit the sources from which a relator could acquire information support- ing a qui tam action. In United States ex rel. Marcus v. Hess,6 the Supreme Court upheld the relator's recovery of a bounty, even though he learned of the allegations sup- porting his suit in a federal criminal indictment. As the criminal indictment meant the government was already keenly aware of the underlying fraud allegations, having to pay Hess a bounty where he added nothing to the case was seen as improperly diverting money that should have been returned to the government. More than 60 years later, the Supreme Court characterized Hess as the quintessential parasitic qui tam suit.7 Congress, at the request of the attorney general, took swift action following Hess to limit the ability for parasitic relators to recover FCA bounties. One congressman intro- duced a bill to eliminate all private suits under the FCA.9 The Senate Judiciary Committee proposed a less draconian (continued on page 15) News from the Chair Supplementing a Bid Protest Record in A Post-Axiom World 2 3 TOP SHEET: SBA Size Protests -Powerful Tool to Challenge Competitors; How to Minimize the Risk 6 News from the Commiltees Pensive Poser: How Can I Defend Myself? Remembering Paul Dembling 13 21 23

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