Appeal from a judgment of the United States District Court for the Southern District of New York (Sidney Stein, Judge), entered March 30, 2009, dismissing the Plaintiff-Appellant's complaint for failure to state a claim upon which relief can be granted and for lack of subject matter jurisdiction. We hold that a document obtained in response to a request made under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, qualifies as an enumerated source triggering the jurisdictional bar of the False Claims Act ("FCA"), 31 U.S.C. § 3730(e)(4)(A), only when the document itself is a "congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation," and that the documents obtained by the plaintiff through FOIA do not fall within any of these categories. We further hold that the plaintiff's complaint stated valid claims under the FCA when it alleged that Defendant-Appellee had entered into contracts with the federal government while not in compliance with the Vietnam Era Vet erans Readjustment Assistance Act ("VEVRAA"), 38 U.S.C. § 4212, insofar as it (1) had in some years, failed to file certain reports required by VEVRAA, and (2) had in other years, filed false reports. We therefore vacate the judgment of the district court and remand for further proceedings consistent with this opinion.
The opinion of the court was delivered by: Katzmann, Circuit Judge
Argued: December 10, 2009
Before MCLAUGHLIN, KATZMANN, and LYNCH, Circuit Judges.
The Vietnam Era Veterans Readjustment Assistance Act ("VEVRAA"), 38 U.S.C. § 4212, requires contractors doing business with federal government entities to submit annual reports to the Secretary of Labor providing information about the number of veterans employed by the contractor (the "VETS-100 reports"). Plaintiff-Appellant Daniel Kirk brought this qui tam action on behalf of the United States government under the False Claims Act ("FCA"), 31 U.S.C. § 3729 et seq., alleging that his former employer, Defendant-Appellee Schindler Elevator Corp. ("Schindler"), obtained government contracts while representing that it had filed the required VETS-100 reports, when in fact it either had failed to file a report or had filed a false report for the relevant years. Kirk based his allegations in large part on information he obtained after submitting requests under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552.
This case calls on us to decide a question of first impression in this Circuit: whether the FCA's jurisdictional bar, 31 U.S.C. § 3730(e)(4)(A), which provides that "[n]o court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in . . . a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation," applies when the plaintiff's allegations are based on materials produced in response to a FOIA request. Our sister Circuits are divided on this issue. If the jurisdictional bar does not apply, this case also presents the question whether Schindler may be held liable under the FCA for (1) failing to file VETS-100 reports, and (2) filing false VETS-100 reports.
We hold that the answer to the question whether a document obtained in response to a FOIA request qualifies as an enumerated source under 31 U.S.C. § 3730(e)(4)(A) depends on the nature of the document itself; the FCA's jurisdictional bar applies only when the document is a "congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation." We further hold that Kirk stated valid claims under the FCA when he alleged that (1) Schindler had failed to file VETS-100 reports for certain years, and (2) Schindler had filed false VETS-100 reports for certain years. We vacate the judgment of the district court and remand for further proceedings consistent with this opinion.
The FCA is designed to help combat fraud against the federal government by persons who provide goods and services to it. See United States ex rel. Doe v. John Doe Corp., 960 F.2d 318, 319 (2d Cir. 1992). It establishes liability for persons who submit false claims for payment to the government, 31 U.S.C. § 3729(a)(1), and it contains a variety of measures designed to enhance deterrence and enforcement. These include, for example, a treble damages provision, id., and - central to this case - qui tam provisions that allow private citizens who learn of fraud to bring suit in the name of the government and to share in any recovery, id. § 3730(b)-(d). Plaintiff-relator Daniel Kirk brought such an action based on his belief that his employer, Schindler, had obtained contracts and payments from the federal government while failing to comply with the requirements of VEVRAA.
Kirk served in the United States Army from 1969 to 1971, performing part of his service in Vietnam. In 1978, he took a job at Millar Elevator Industries, Inc. ("Millar"). Millar was bought by Schindler in 1989, but the two companies operated separately until 2002. In the years preceding 2002, Kirk was promoted several times, eventually (in 2001) becoming Vice President responsible for the Modernization, Repair, and Maintenance Support Departments of Millar. After Schindler integrated Millar's operations into its own in 2002, Kirk was initially named Schindler's Regional Modernization Manager for New York City and Long Island, in which capacity he managed over 100 employees. In July 2003, however, Kirk discovered, apparently without being informed directly, that he was being demoted to the non-managerial position of Field Superintendent. He resigned from Schindler in August 2003.
In April 2004, Kirk filed a complaint with the Office of Federal Contract Compliance Programs ("OFCCP") at the Department of Labor ("DOL"), claiming that he had been improperly demoted and constructively terminated by Schindler despite the fact that he was a Vietnam veteran in violation of VEVRAA. The OFCCP provided Schindler with a copy of Kirk's complaint and began an investigation of Schindler's compliance with VEVRAA. In February 2005, OFCCP found that there was insufficient evidence to support Kirk's claim. Kirk appealed this finding, and in November 2009, the DOL affirmed the OFCCP's finding that Schindler had not violated VEVRAA when it took an adverse employment action against him.
In March 2005, meanwhile, Kirk filed the instant case under the FCA in the name of the U.S. government. As provided for by the FCA, see 31 U.S.C. § 3730(b), the case was initially filed under seal; in June 2007, after the government had decided not to intervene, the action was unsealed and Kirk was permitted to pursue it as relator. He then filed the Amended Complaint.
Before turning to the factual allegations in the Amended Complaint, it is useful to review the relevant requirements of VEVRAA. VEVRAA and its accompanying regulations impose several specific requirements on contracts "entered into by any department or agency of the United States for the procurement of personal property and nonpersonal services (including construction)," when the value of the contract exceeds a certain monetary threshold.*fn1 38 U.S.C. § 4212(a)(1). Contracts subject to VEVRAA must contain provisions obligating the contractor (1) to "take affirmative action to employ and advance in employment qualified covered veterans,"*fn2 38 U.S.C. § 4212(a)(1); (2) to invite eligible veterans to identify themselves voluntarily to their employer, 48 C.F.R. §§ 22.1310(b), 52.222-37(e); and (3) to submit annual reports to the Secretary of Labor (the "VETS-100 reports") providing data about the qualified covered veterans in the contractor's workforce, including the number of qualified covered veterans in each job category and hiring location and the number of new employees who are qualified covered veterans, 38 U.S.C. § 4212(d); 48 C.F.R. §§ 22.1310(b), 52.222-37(c).
In 1998, Congress passed the Veterans Employment Opportunities Act, 31 U.S.C. § 1354, which provides that "no agency may obligate or expend funds . . . to enter into a contract [covered by VEVRAA] with a contractor from which a [VETS-100] report was required . . . if such contractor did not submit such report," id. § 1354(a)(1). In turn, 48 C.F.R. § 52.222-38 provides that "[b]y submission of its offer, the offeror represents that, if it is subject to the reporting requirements [of VEVRAA] . . . it has submitted the most recent VETS-100 Report required by [the Act]." This regulation issued in October 2001 and became effective December 21, 2001. See 66 Fed. Reg. 53,487-01, 53,487 (Oct. 22, 2001).
Kirk's Amended Complaint alleges that Schindler, while entering into numerous contracts with the federal government that were subject to the requirements of VEVRAA, failed to comply with it in several salient ways. Because the district court dismissed the complaint under Fed. R. Civ. P. 12(b)(6) and 12(b)(1), we accept as true the material facts alleged in the complaint and draw all reasonable inferences in Kirk's favor. Sharkey v. Quarantillo, 541 F.3d 75, 83 (2d Cir. 2008); Freedom Holdings, Inc. v. Spitzer, 363 F.3d 149, 151 (2d Cir. 2004).
Kirk alleges that from 1998 to the present, he was never asked to identify himself as a veteran and that when Schindler integrated its operations with Millar's, the approximately 400 former Millar employees were not given an opportunity to self-identify as veterans. He further alleges that as a manager of 100 employees at Schindler with responsibility for hirings, firings, and promotions, he was never informed of any affirmative action program aiding veterans. A copy of Schindler's employee manual makes no reference to an affirmative action program for veterans.
In addition, Kirk alleges that Schindler failed to submit VETS-100 reports from 1998 until late 2004 and that the reports it did file in 2004, 2005, and 2006 are false. These latter allegations are based in significant part on the results of several FOIA requests submitted to the DOL by his wife, Linda Kirk. In November 2004, Mrs. Kirk submitted a FOIA request seeking copies of any VETS-100 reports filed by Schindler for the years 2002, 2003, or 2004. In a letter dated February 11, 2005, the Office of the Assistant Secretary for Veterans Employment and Training informed Mrs. Kirk that the DOL had located no VETS-100 reports from 2002 or 2003 and enclosing copies of three VETS-100 reports filed by Schindler in 2004. In January 2005, Mrs. Kirk submitted a second FOIA request seeking copies of any VETS-100 reports filed by Schindler for the years 1998, 1999, 2000, and 2001. By letter dated September 29, 2005, the Office of the Assistant Secretary for Veterans Employment and Training informed her that the DOL had located no VETS-100 reports for 1998, 1999, or 2000, but enclosed copies of 28 VETS-100 reports filed by Schindler for the 12-month period ending September 30, 2002.*fn3 Finally, in April 2007, Mrs. Kirk submitted a third FOIA request to the DOL, this time seeking copies of any VETS-100 reports filed by Schindler for the years 2005 and 2006. Under cover of a letter dated May 14, 2007, the Office of the Assistant Secretary for Veterans Employment and Training provided copies of 19 VETS-100 reports filed in 2005 and 49 filed in 2006.
On the basis of these facts, Kirk alleged that Schindler was not in compliance with VEVRAA in that it (1) did not offer its employees the opportunity to identify themselves as Vietnam-era veterans, (2) failed to implement an affirmative action program aiding covered veterans, and (3) failed to file VETS-100 reports for the years 1998 through 2003, and filed false VETS-100 reports for 2002, 2004, 2005, and 2006. Kirk based his allegation that Schindler did not file VETS-100 reports in 1998-2003 on the responses Mrs. Kirk received to her FOIA requests; with regard to the 2002 reports, Kirk alleged that the fact that these reports were not produced in response to Mrs. Kirk's November 2004 request but were eventually produced in response to her January 2005 request indicates that the 2002 reports were belatedly filed. Kirk also alleged that the 2002 reports were, in any event, false. Kirk's allegation that Schindler's 2002, 2004, 2005, and 2006 VETS-100 reports were false was based on his comparison of the information contained in the reports produced pursuant to Mrs. Kirk's FOIA request with his personal knowledge of Schindler's operations. For example, he alleged that while the 2004 reports cover only eighteen unspecified locations, Schindler has more than eighteen locations in the United States. He also alleged that while the 2004, 2005, and 2006 reports listed no covered veterans who are technicians or craft workers in New York, he personally knows (and named in the complaint) a number of covered veterans working for Schindler in those job categories. Moreover, he alleged, the filed reports must be false because, as his personal experience demonstrated, Schindler never asked Vietnam-era veterans to self-identify.
During the years in which Schindler was not in compliance with VEVRAA, Kirk alleged, it entered into hundreds of contracts with the federal government that were subject to VEVRAA's requirements. Appended to the Amended Complaint are lists of specific contracts between Schindler and various agencies of the U.S. government dating from 1999 to the time the Amended Complaint was filed in 2007, all of which exceed VEVRAA's minimum value. Kirk charged that each claim for payment submitted by Schindler under one of these contracts was a false claim within the terms of the FCA.
In September 2007, Schindler filed a motion to dismiss the Amended Complaint. The three stated grounds for Schindler's motion were (1) that under the jurisdictional provision of the FCA, 31 U.S.C. 3730(e)(4), the district court lacked jurisdiction over Kirk's suit because the information on which his allegations were based - specifically, the information garnered through Mrs. Kirk's FOIA requests - had been publicly disclosed, (2) that Kirk had failed to plead his fraud claims with adequate specificity under Fed. R. Civ. P. 9(b), and (3) that in light of Kirk's pending complaint before the OFCCP, the district court should defer to the agency and dismiss the action under the doctrine of "primary jurisdiction." The district court granted Schindler's motion to dismiss. First, the district court found that there could be no liability for those of Kirk's allegations that were based on Schindler's filing of false or inaccurate VETS-100 reports because Schindler never certified the accuracy of the reports. Second, the district court assessed the applicability of the FCA's jurisdictional bar to Kirk's remaining claims. Recognizing that it faced a question that had not been decided in this Circuit, the district court found that the FOIA reports constituted a "public disclosure" via one of the ...