  09-1678-cv
  Kirk v. Schindler Elevator Corp.

                                 UNITED STATES COURT OF APPEALS
                                     FOR THE SECOND CIRCUIT

                                        SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE
32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A
PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE
(WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

         At a stated term of the United States Court of Appeals for the Second Circuit, held at the
  Daniel Patrick Moynihan Courthouse, 500 Pearl Street, in the City of New York, on the 6th day
  of July, two thousand eleven.

  Present:
           JOSEPH M. McLAUGHLIN,
           ROBERT A. KATZMANN,
           GERARD E. LYNCH,
                       Circuit Judges.
  ________________________________________________

  UNITED STATES OF AMERICA ex rel. DANIEL KIRK,

               Plaintiff-Appellant,

                        v.                                        No. 09-1678-cv

  SCHINDLER ELEVATOR CORPORATION,

           Defendant-Appellee.
  ________________________________________________

  For Plaintiff-Appellant:                 Jonathan A. Willens, New York, N.Y.

  For Defendant-Appellee:                  Steven Alan Reiss, Weil, Gotshal & Manges LLP, New
                                           York, N.Y.
        On remand from the Supreme Court of the United States.

        ON CONSIDERATION WHEREOF, it is hereby ORDERED, ADJUDGED, and

DECREED that the judgment of the district court is AFFIRMED in part and VACATED in

part, and the case is REMANDED for further proceedings.

        This case comes to us on remand from the Supreme Court. We presume the parties’

familiarity with the facts and procedural history, which we recount only to the extent necessary

to explain our decision.

        In March 2005, Plaintiff-Appellant Daniel Kirk filed this action under the False Claims

Act (“FCA”), 31 U.S.C. § 3729 et seq., alleging that his former employer, Defendant-Appellee

Schindler Elevator Corporation (“Schindler”), obtained government contracts while falsely

representing that it had filed with the Secretary of Labor certain reports providing accurate

information about the number of veterans employed by the contractor (the “VETS-100 reports”),

as required by the Vietnam Era Veterans’ Readjustment Assistance Act of 1972 (“VEVRAA”),

38 U.S.C. § 4212, and regulations promulgated thereunder. Prior to initiating this lawsuit, Kirk

had gathered information about Schindler’s filing of VETS-100 reports by way of requests that

his wife submitted to the Department of Labor (“DOL”) pursuant to the Freedom of Information

Act (“FOIA”), 5 U.S.C. § 552. In his complaint, Kirk alleged that Schindler had obtained

government contracts that were conditional on the proper filing of VETS-100 reports when it in

fact had either failed to file a report or filed a false report for the relevant years.

        Schindler moved to dismiss Kirk’s complaint on multiple grounds. The district court

granted the motion, concluding, inter alia, that (1) Kirk failed to state valid claims under the

FCA arising from Schindler’s filing of certain VETS-100 reports that allegedly contained false


                                                    2
information (the “false reports claims”), and (2) Kirk’s claims arising from Schindler’s alleged

failure to file VETS-100 reports for certain other years (the “failure-to-file claims”) were

precluded by the jurisdictional limitations set forth in 31 U.S.C. § 3730(e)(4)(A), which we refer

to as the FCA’s “public disclosure bar.” See United States ex rel. Kirk v. Schindler Elevator

Corp. (Kirk I), 606 F. Supp. 2d 448 (S.D.N.Y. 2009). On appeal, we vacated those rulings. We

held that materials produced in response to FOIA requests were not

“administrative . . . report[s] . . . or investigation[s]” subject to the public disclosure bar and that

the false reports claims were validly pleaded under the FCA. United States ex rel. Kirk v.

Schindler Elevator Corp. (Kirk II), 601 F.3d 94, 117 (2d Cir. 2010).

        Schindler then petitioned the Supreme Court for a writ of certiorari. That petition was

granted. In May 2011, the Supreme Court issued an opinion holding that the DOL’s responses to

FOIA requests indeed represented “report[s]” within the meaning of the public disclosure bar,

and remanded for further proceedings. Schindler Elevator Corp. v. United States ex rel. Kirk

(Kirk III), 131 S. Ct. 1885, 1889-90, 1896 (2011). At our invitation, the parties submitted letter

briefs addressing the proper disposition of this case in light of the Supreme Court’s decision.

        We review de novo the dismissal of Kirk’s claims for lack of subject matter jurisdiction

under the FCA. See, e.g., United States ex rel. Dhawan v. N.Y. Med. Coll., 252 F.3d 118, 120

(2d Cir. 2001) (per curiam).

        At times relevant to this action, the FCA’s public disclosure bar provided:

        No court shall have jurisdiction over an action under this section based upon the
        public disclosure of allegations or transactions in a criminal, civil, or
        administrative hearing, in a congressional, administrative, or Government
        Accounting Office report, hearing, audit, or investigation, or from the news
        media, unless the action is brought by the Attorney General or the person bringing
        the action is an original source of the information.


                                               3
31 U.S.C. § 3730(e)(4)(A) (2006) (footnote omitted). We previously concluded that the

information produced in response to FOIA requests is “publicly disclosed,” Kirk II, 601 F.3d at

104, and the Supreme Court has since held that the DOL’s written responses to the FOIA

requests are “report[s]” for purposes of the public disclosure bar, Kirk III, 131 S. Ct. at 1889.

However, our prior decision did not reach the issues of (1) whether the DOL’s FOIA responses

indicating that reports were not found for certain years disclosed “allegations or transactions,”

(2) whether Kirk’s failure-to-file claims were “based upon” any such disclosed “allegations or

transactions,” or (3) whether Kirk qualifies as an “original source” of the relevant information

underlying the failure-to-file claims. See Kirk II, 601 F.3d at 111 n.10. For the following

reasons, we conclude that Kirk’s failure-to-file claims were “based upon” the “allegations or

transactions” disclosed in the FOIA responses and that Kirk does not qualify as an “original

source.”

       First, we agree with Schindler that the relevant FOIA responses, which indicated that

VETS-100 reports for certain years were not found, disclosed “allegations or transactions”

within the meaning of the public disclosure bar. The Supreme Court has noted the

expansiveness of this statutory phrase, in that “Congress covered not only the disclosure of

‘allegations’ but also ‘transactions,’ a term that courts have recognized as having a broad

meaning.” Kirk III, 131 S. Ct. at 1891. While this court has not previously had occasion to

expound on the meaning of the word “transaction[]” in this context, decisions from our sister

circuits have construed the term to refer to the public exposure of all critical or material elements

of the allegedly fraudulent transaction. See Kirk II, 601 F.3d at 103 (citing cases).

       Here, the FOIA responses, together with other information in the public domain,

disclosed all the essential elements of the alleged fraud relating to Schindler’s failure to file

                                                  4
certain VETS-100 reports. As the district court put it, the “critical elements” of Kirk’s claim in

this regard are that: “(1) Schindler obtained contracts (2) requiring an express certification

pursuant to 48 C.F.R. § 52.222-38 that Schindler had filed VETS-100 reports, and (3) Schindler

had not actually filed those reports.” Kirk I, 606 F. Supp. 2d at 462-63. The first two elements

clearly were in the public domain, as demonstrated by (1) Kirk’s ability to obtain a list of

Schindler’s contracts from the Department of Veterans Affairs website and (2) the existence of a

DOL regulation providing that an offeror’s submission of a bid certifies compliance with the

required filing of the offeror’s most recent VETS-100 report, see 48 C.F.R. § 52.222-38. Kirk’s

allegations relating to the third element — that Schindler fraudulently failed to file VETS-100

reports for the years in question — indisputably derive from the DOL’s FOIA responses

indicating that reports were not found. While Kirk is correct that the FOIA responses do not

definitively state that the reports were not in fact filed and do not address Schindler’s state of

mind in respect of any such non-filing, it is sufficient for the public disclosure bar that the

disclosed transaction “creates an inference of impropriety.” United States ex rel. Burns v. A.D.

Roe Co., 186 F.3d 717, 724 (6th Cir. 1999) (internal quotation marks omitted). The disclosure

that certain VETS-100 reports were not found by the DOL certainly gives rise to an inference

that Schindler knowingly failed to file the required reports. Indeed, as Kirk lacked independent

knowledge of Schindler’s practices with respect to the filing of such reports, this disclosure was

essential to Kirk’s failure-to-file claims. In these circumstances, we hold that there was public

disclosure of the alleged fraudulent “transactions.”

       Second, we conclude that Kirk’s failure-to-file claims were “based upon” the relevant

publicly disclosed information. We have previously interpreted this phrase to mean that the

public disclosure bar applies to claims “based in any part upon publicly disclosed allegations or

                                                  5
transactions.” United States ex rel. Kreindler & Kreindler v. United Techs. Corp., 985 F.2d

1148, 1158 (2d Cir. 1993) (emphasis added) (internal quotation marks omitted). Here, the FOIA

responses provided the only evidence available to Kirk to substantiate his suspicion that

Schindler failed to file VETS-100 reports for some of the years in question. Because the failure-

to-file claims were founded at least in substantial part on those FOIA responses, these claims

were “based upon” publicly disclosed allegations or transactions.

       Third, we hold that Kirk has failed to establish that he qualifies for the “original source”

exception to the public disclosure bar. At times relevant to this lawsuit, the FCA defined

“original source” to mean “an individual who has direct and independent knowledge of the

information on which the allegations are based and has voluntarily provided the information to

the Government before filing an action under this section which is based on the information.” 31

U.S.C. § 3730(e)(4)(B) (2006). The Supreme Court has clarified that the “information” referred

to in the original source exception “is the information upon which the relator[’s] allegations are

based.” Rockwell Int’l Corp. v. United States, 549 U.S. 457, 470-71 (2007) (emphasis added);

see also Dhawan, 252 F.3d at 121 (noting that a qui tam plaintiff cannot qualify as an “original

source” “if a third party is ‘the source of the core information’ upon which the qui tam complaint

is based” (quoting Kreindler, 985 F.2d at 1159)). In our view, the “core information” underlying

the failure-to-file allegations came from the FOIA responses indicating that reports were not

found for certain years. Regardless of Kirk’s prior knowledge of and suspicions about other

aspects of Schindler’s contracting practices and its compliance with the VEVRAA and

applicable regulations, he lacked direct and independent knowledge of Schindler’s failure to file

certain reports. Accordingly, he cannot qualify as an “original source” with respect to those

allegations. See Rockwell, 549 U.S. at 476.

                                                 6
       Finally, we adhere to our prior decision insofar as it vacated the district court’s dismissal

of the false reports claims. See Kirk II, 601 F.3d at 117. Schindler does not contend that the

public disclosure bar applies to these claims. This concession does not relieve us of our

independent obligation to inquire into the existence of subject matter jurisdiction, see Rockwell,

549 U.S. at 467-70, and we conclude that the false reports claims do not run afoul of the

jurisdictional limitations of § 3730(e)(4)(A). The false reports claims, unlike the failure-to-file

claims, are premised on alleged facts that were not publicly disclosed, such as Kirk’s personal

knowledge of covered veteran employees who should have been counted and of Schindler’s lack

of procedures for counting such employees. Because these critical elements of the false reports

claims were not in the public domain, there was no public disclosure of the “allegations or

transactions” underlying these aspects of Schindler’s alleged fraud.

       Accordingly, for the foregoing reasons, the judgment of the district court is AFFIRMED

in part and VACATED in part, and the case is REMANDED for further proceedings consistent

with this order.

                                          FOR THE COURT:
                                          CATHERINE O’HAGAN WOLFE, CLERK




                                                  7
