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Monday, July 31, 2017

FOIA Information Can Form the Basis for False Claims Act Lawsuit

A recent decision from an Illinois appellate court clarified when individuals can bring claims under the Illinois False Claims Act. In Lyons Township ex rel. John H. Kielczynskiv. Village of Indian Head Park, a citizen submitted a number of FOIA requests to a municipality regarding a contract for police services that the municipality had entered into with an adjacent township.  

After reviewing the information produced by the municipality in response to his FOIA request, the citizen filed a lawsuit under the Illinois False Claims Act. The False Claims Act allows private parties to bring lawsuits on behalf of public bodies that have allegedly been defrauded.  These private parties are then entitled to a percentage of the settlement or judgment if the lawsuit is successful.  The complaint alleged that the municipality had defrauded the township by submitting bills for services that were never performed and for retaining the revenue from tickets written within the unincorporated areas of the township.

The municipality filed a motion seeking to dismiss the lawsuit because the source of the information that formed the basis of the citizen’s claims was the municipality’s FOIA responses.  Under the False Claims Act, there are a number of exceptions that prohibit a lawsuit from moving forward based on how the citizen discovered the evidence of the alleged fraud.  For example, if the citizen learns of the alleged fraud from a news story or other public report, the citizen cannot proceed with a suit under the False Claims Act.  

Although the trial court had previously ruled in favor of the municipality, the appellate court reversed, finding that the citizen’s claims were not barred simply because the FOIA responses came from the municipality, and not the township.  The court held that only information provided by the public entity that was allegedly defrauded (in this case, the township) could be considered a public report that would bar an action under the False Claims Act. Since the information that formed the basis of the citizen’s claims came from the municipality’s FOIA responses, as opposed to the township, the municipality could not stop the citizen’s claims from moving forward. 

The court also found that the allegedly fraudulent actions of the municipality were not immunized under the Tort Immunity Act. The court noted that the citizen’s claims were based on the contract between the municipality and the township, and that causes of action under a contract theory are not protected by the Tort Immunity Act. The court also held that the Tort Immunity Act only bars claims based on the oral misrepresentations of a municipal employee, but does not bar claims where the alleged fraud is still based on a written contract.  

Post Authored by Kurt Asprooth, Ancel Glink


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