Wednesday, October 4, 2023
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Court Revives Veteran’s False Claims Allegations

(CN) - The 2nd Circuit allowed a Vietnam veteran to sue his former employer under the False Claims Act for allegedly filing false veterans reports with the government.

In a lawsuit filed on behalf of the government, Daniel Kirk claimed Schindler Elevator Corp. shirked its legal duty to report how many veterans worked for the company.

Federal law requires government contractors to submit annual veterans reports, or VETS-100 reports, to the Secretary of Labor.

Kirk said Schindler failed to submit those reports from 1998 to late 2004, and the reports it filed from 2004 to 2006 were false.

His allegations were based on information gleaned from Freedom of Information Act requests submitted by his wife. He began investigating the company's VETS-100 reports after he was demoted in 2003. He resigned that same year, claiming he was effectively fired in violation of federal law.

But the False Claims Act states that courts can't review allegations "based upon the public disclosure of allegations or transactions ... in a congressional, administrative, or Government Accounting Office report."

This meant the 2nd Circuit had to decide, for the first time, if this jurisdictional bar applies when the allegations are based on information produced in response to a FOIA request.

The court said the answer "depends on the document itself." If the document falls under one of the categories outlined in the Act, the court lacks jurisdiction.

In Kirk's case, the Manhattan-based appeals court reinstated his False Claims Act allegations as "valid," overturning the lower court's dismissal of the case.

"Because the statute expressly states that the contractor must have submitted the report in order to be paid, a contractor that requests payment under such a contract 'implicitly certifies compliance' with the VETS-100 reporting requirement," Judge Robert Katzmann wrote. "Kirk therefore states a valid claim ... when he alleges that Schindler submitted bids and won contracts without having filed the requisite report."

Kirk's claim that Schindler submitted false reports is likewise valid, the court ruled.

"Kirk does not merely allege that Schindler filed inaccurate reports, he alleges that Schindler failed to take any steps whatsoever to monitor the number of covered veterans in its workforce and instead fabricated the numbers it supplied in its VETS-100 reports, essentially plucking them out of thin air," Katzmann wrote.

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