No. 1-16-1574

FIFTH DIVISION March 24, 2017

IN THE APPELLATE COURT OF ILLINOIS

FIRST JUDICIAL DISTRICT

LYONS TOWNSHIP ex rel. JOHN H. KIELCZYNSKI, ) Appeal from the ) Circuit Court of Plaintiff-Appellant, ) Cook County. ) v. ) No. 15 L 1442 ) VILLAGE OF INDIAN HEAD PARK, ) The Honorable ) Brigid Mary McGrath, Defendant-Appellee. ) Judge Presiding.

JUSTICE LAMPKIN delivered the judgment of the court, with opinion. Justice Hall concurred in the judgment and opinion. Presiding Justice Gordon specially concurred, with opinion.

OPINION

&1 Relator, John Kielczynski, appeals the dismissal of his two-count complaint against

defendant, Village of Indian Head Park (Village), under the Illinois False Claims Act (Act) (740

ILCS 175/1 et seq. (West 2014)) pursuant to section 2-619 of the Code of Civil Procedure (735

ILCS 5/2-619 (West 2014)). Relator alleged the Village overbilled for policing services (count 1)

and failed to remit collections from traffic fines (count 2) in violation of its contract with

plaintiff, Lyons Township. On appeal, relator contends the circuit court erred in finding that his

claims were barred by the Act’s public disclosure provision and that the Village was immune

from liability based on section 2-106 of the Illinois Local Governmental and Governmental 1-16-1574

Employees Tort Immunity Act (Tort Immunity Act) (745 ILCS 10/2-106 (West 2014)). Based on

the following, we reverse and remand for further proceedings.

&2 FACTS

&3 During the relevant time period, relator was a retired Lyons Township police officer.

From June 2014 to October 2014, relator submitted a number of Freedom of Information Act

(FOIA) requests. In response, relator received a 2014-2016 contract for police services between

the Village and Lyons Township, as well as copies of traffic tickets written by the Village while

in Lyons Township. The contract expressly stated that its purpose was “to provide mobile, well-

equipped and trained police officers from [the Village] police department to patrol and provide

[p]olice [p]rotection in unincorporated areas within [Lyons Township] on a contract basis.”

Pursuant to the terms of the contract, the Village was to provide a minimum of 3,120 “man hours

per year” in police services for which Lyons Township would compensate a specified dollar

amount. Then, on February 11, 2015, relator filed a lawsuit, asserting that the Village had billed

Lyons Township for police services not actually provided and that the Village retained revenue

from tickets written within Lyons Township in violation of the contract.

&4 The Village responded by filing a section 2-619 motion to dismiss the suit. The circuit

court granted the motion with prejudice, finding relator’s claims were barred by the public

disclosure provision of the Act because relator’s investigation was based on records obtained

under FOIA. In addition, the circuit court found the Village was immune from any liability

pursuant to section 2-106 of the Tort Immunity Act.

&5 This appeal followed.

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&6 ANALYSIS

&7 Relator contends the circuit court erred in dismissing his claims where the public

disclosure provision of the Act and section 2-106 of the Tort Immunity Act do not apply to his

suit.

&8 A motion to dismiss pursuant to section 2-619 admits the legal sufficiency of the

complaint, but asserts an affirmative matter to otherwise defeat the claim. Patrick Engineering,

Inc. v. City of Naperville,

. In considering a section 2-619 motion to

dismiss, a court reviews all pleadings and supporting documents in a light most favorable to the

nonmoving party. Van Meter v. Darien Park District,

(2003). In so

doing, the court must determine whether the existence of a genuine issue of material fact

precludes dismissal or, absent such an issue of fact, whether the asserted affirmative

matter makes dismissal proper as a matter of law. Kedzie & 103rd Currency Exchange, Inc. v.

Hodge,

(1993). We review the dismissal of a complaint pursuant

to section 2-619 de novo.

.

&9 I. False Claims Act

&10 The Illinois False Claims Act is an anti-fraud statute modeled after the federal False

Claims Act (

(2006)). State ex rel. Schad, Diamond & Shedden, P.C. v.

National Business Furniture, LLC,

, ¶ 28. Pursuant to the Act, a party

that perpetrates fraud against the State is liable for civil penalties and triple damages. 740 ILCS

175/3(a)(1) (West 2014). A claim under the Act may be raised on the State’s behalf by the

Attorney General or by a private person, known as a “relator,” in a qui tam action. 740 ILCS

175/4(a)-(c) (West 2014). With regard to a qui tam action, the State may choose to intervene or,

as in this case, may allow the relator to proceed with the litigation. 740 ILCS 175/(b)(4) (West

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2014). In the latter, the relator is considered a party to the action and is entitled to a percentage of

the proceeds or settlement if the lawsuit is successful. 740 ILCS 175/4(c)(1), (d) (West 2014).

&11 The following provisions of the Act are relevant to our analysis and are considered the

public disclosure bar to qui tam actions:

“(4)(A) The court shall dismiss an action or claim under this Section, unless

opposed by the State, if substantially the same allegations or transactions as alleged in the

action or claim were publicly disclosed:

***

(ii) in a State legislative, State Auditor General, or other State report,

hearing, audit, or investigation; or ***

***

unless the action is brought by the Attorney General or the person bringing the action is

an original source of the information.

(B) For purposes of this paragraph (4), ‘original source’ means an individual who

either (i) prior to a public disclosure under subparagraph (A) of this paragraph (4), has

voluntarily disclosed to the State the information on which allegations or transactions in a

claim are based, or (ii) has knowledge that is independent of and materially adds to the

publicly disclosed allegations or transactions, and who has voluntarily provided the

information to the State before filing an action under this Section.” 740 ILCS 175/4(e)(4)

(West 2014).

The Act defines “State” as:

“(a) ‘State’ means the State of Illinois; any agency of State government; the

system of State colleges and universities, any school district, community college district,

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county, municipality, municipal corporation, unit of local government, and any

combination of the above under an intergovernmental agreement that includes provisions

for a governing body of the agency created by the agreement.” 740 ILCS 175/2 (West

2014).

Accordingly, there are four inquiries that must be conducted by a court to determine whether it

has jurisdiction to hear a qui tam suit. State ex rel. Beeler, Schad & Diamond, P.C. v. Target

Corp.,

(2006); see also Glaser v. Wound Care Consultants, Inc.,

(7th Cir. 2009). The questions are: (1) whether the alleged “public disclosure”

contains allegations or transactions from one of the listed sources of section 4(e)(4)(A) of the

False Claims Act (740 ILCS 175/4(e)(4)(A) (West 2014)); (2) whether the alleged disclosure

was made “public” within the meaning of the False Claims Act; (3) whether the relator’s

complaint is “based upon” the “public disclosure”; and (4) if the answer is positive for the prior

three inquiries, whether the relator qualifies as an “original source” under section 4(e)(4)(B) of

the False Claims Act. Id.; 720 ILCS 175/4(e)(4)(B) (West 2014)

&12 Turning to the case before us, the first question we must address is whether substantially

the same allegations or transactions as alleged in relator’s claims were publicly disclosed in “a

State legislative, State Auditor General, or other State report, hearing, audit, or investigation.”

Relator contends the circuit court erroneously concluded, in reliance on the United States

Supreme Court case Schindler Elevator Corp. v. United States ex rel. Kirk,

(2011),

that the FOIA information supporting his claims qualified as “State reports.” More specifically,

relator argues that, pursuant to the language of the Act, the “State” in this matter is Lyons

Township, the government unit on whose behalf the lawsuit was raised, and not Indian Head

Park. Therefore, relator maintains that the records supporting his claims that were produced by

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Indian Head Park pursuant to his FOIA requests do not qualify as “State reports” and, thus, do

not bar his claims. Indian Head Park counters that the FOIA documents do qualify as “State

reports” under Schindler Elevator Corp. and the Act, where “State” is defined broadly as any

State or local government actor. Indian Head Park continues that, because relator’s complaint

was entirely based upon information provided in the FOIA documents, the complaint was

properly dismissed pursuant to the public disclosure provision.

&13 Our research has not revealed any Illinois case law on the question presented. That said,

our analysis requires application of the well-known principles of statutory interpretation. The

primary rule of statutory construction is to ascertain and give effect to the intent of the legislature

by applying the plain and ordinary meaning of the language of the statute. Hamilton v. Industrial

Comm’n,

(2003). When the statutory language is clear, courts must apply the

statute as written.

. However, if a statute is capable of being understood by reasonably

well-informed persons in two or more different ways, the statute is considered ambiguous. Solon

v. Midwest Medical Records Ass’n,

(2010). The supreme court has advised:

“If the statute is ambiguous, the court may consider extrinsic aids of construction in order

to discern the legislative intent. [Citation.] We construe the statute to avoid rendering any

part of it meaningless or superfluous. [Citation.] We do not depart from the plain

statutory language by reading into it exceptions, limitations, or conditions that conflict

with the expressed intent. [Citation.]”

.

&14 We recognize that, as defined by the Act, “State” can mean a unit of local government.

We, however, conclude that, in this context, “State” means the unit of government allegedly

being defrauded, namely, Lyons Township. We find support for our interpretation in other

subsections of the Act. For example, the “State” has the primary responsibility for conducting a

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qui tam action and maintains the authority to dismiss a case despite a relator’s objections. 740

ILCS 175/4(c) (West 2014); see People ex rel. Schad, Diamond & Shedden, P.C. v. QVC, Inc.,

, ¶ 21. Accordingly, in this context, logic dictates that the defrauded government

unit retains the decision-making power regarding the fate of a case. In contrast, it would be

illogical to give an unaffected unit of government the authority to make determinations regarding

the survival of a case for which that government unit has no connection. In fact, the Act provides

that a qui tam action “shall be brought in the name of the State.” 740 ILCS 175/4(b) (West

2014). Clearly, a qui tam action would not be brought on behalf of a government entity engaging

in fraud, or any other random government unit with no ties to the claim. The purpose of the Act,

in relevant part, is to provide qui tam actions for citizens to reveal fraud against the government,

not to protect a government entity engaging in fraud. See National Business Furniture, LLC,

(the Illinois False Claims Act is an anti-fraud statute).

&15 We find further support for our interpretation of “State report” in the most recent

amendments to section 4(e) of the Act. Prior to August 17, 2012, section 4(e) of the Act

provided:

“(4)(A) 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 legislative, administrative, or Auditor General’s 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.” Pub. Act 96-1304 (eff. July 27, 2010).

As of August 17, 2012, however, the legislature amended section 175/4(e) of the Act to separate

the means of public disclosure and by removing administrative reports as a qualifying method of

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public disclosure—instead, expressly requiring that a non-Auditor General’s report be a “State”

report. See Pub. Act 97-978 (eff. Aug. 17, 2012).

&16 The 2012 amendment brought the Act in compliance with the federal False Claims Act,

which similarly had been amended to narrow the public disclosure methods to no longer include

state and local reports, only federal reports. See

(e)(4)(A)(ii) (Supp. I 2012).

The federal amendment was made in response to Graham County Soil & Water Conservation

District v. United States ex rel. Wilson,

(2010), wherein the Supreme Court

interpreted pre-amended language, nearly identical to that in the pre-amended version of the

Illinois Act, of “administrative reports, audits, and investigations” as encompassing disclosures

made in state and local sources as well as federal sources. As with the federal False Claims Act,

the Illinois Act narrowed the acceptable methods for the public disclosure bar by limiting the

prohibition, in relevant part, to a “State report.” Logic dictates that, in narrowing the acceptable

methods for application of the public disclosure bar, the legislature intended “State report” to be

a report known to the unit of government being defrauded and not merely a report provided by

any unit of government. See Bailey & Associates, Inc. v. Department of Employment Security,

(1997) (“[g]enerally, if the legislature passes an amendment

contradicting a recent interpretation of a statute, it is ‘an indication that such interpretation was

incorrect and that the amendment was enacted to clarify the legislature’s original intent’ ”

(quoting Collins v. Board of Firemen’s Annuity & Benefit Fund,

(1993)).

&17 We recognize that, in Schindler Elevator Corp., the Supreme Court found that a written

agency response to a FOIA request constituted a “report” under the federal False Claims Act’s

public disclosure bar.

. In so doing, the Supreme Court defined “report” based

on the word’s ordinary meaning, namely, something that gives information or a notification, and

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based on the “generally broad scope of the FCA’s public disclosure bar.”

. Relying

on the “entire text” “integrated [as a] whole,” the Supreme Court noted the wide reach of the

public disclosure bar by considering sources of public disclosure, such as the “news media” and

“administrative hearings,” along with the legislature’s use of the broad terms “allegations or

transactions.”

&18 We find, however, that Schindler Elevator Corp. has no application to the case at bar and,

therefore, we need not determine whether a FOIA request constitutes a “report.” Putting aside the

parties’ dispute regarding the precedential value of a federal case to the interpretation of our state

statute, our statute was amended after the Schindler Elevator Corp. case. Importantly, Schindler

Elevator Corp. expressly limited its analysis to the pre-amended version of the public disclosure

bar.

583 U.S. at 404, n.1. Moreover, as previously discussed, section 4(e) of the Act, in

relevant part, now limits the public disclosure bar to a “State report.” Reading the statute as a

whole, as we must, a “State report” under the circumstances of this case means a report provided

by the government entity being defrauded, i.e., Lyons Township. Our interpretation is consistent

with the plain reading of the text and complies with the purpose of the public disclosure bar to

strike a balance between encouraging private persons to root out fraud while stifling parasitic

lawsuits. See Graham County Soil & Water Conservation District,

.

Accordingly, where the vast majority of FOIA documents upon which relator based his claims

were provided by the Village, relator’s allegations were not substantially the same allegations or

transactions as alleged in a publicly disclosed “State report.” 1 Relator’s claims, therefore, were

not barred by the public disclosure provision.

1 We acknowledge that in U.S. ex rel. Moore & Co., P.A. v. Majestic Blue Fisheries, LLC,

(2016), the Third Circuit Court of Appeals found that a response to a FOIA request still qualified as a report for purposes of the federal public disclosure bar even after the statute was amended. 9

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&19 Furthermore, we find the Village’s additional argument—that our interpretation of the

Act cannot stand where information in the news media can act as a public disclosure bar, thus

demonstrating that “State” need not mean the unit of government being defrauded—is

misplaced. The 2012 amendments to the Act made clear that there are various methods for the

public disclosure of information, one being a “State report” and another being “the news media.”

See Pub. Act 97-978 (eff. Aug. 17, 2012). There is no question that information within the news

media can be considered publicly disclosed; however, there is no question that the information

here was not publicly disclosed in the news media. The fact that there are numerous public

disclosure methods that would bar a qui tam claim has no bearing on the meaning of a “State

report” as used in the Act and as applied here.

&20 In sum, we conclude that the circuit court erred in finding that the public disclosure bar

prohibited relator’s lawsuit, where the allegations supporting the fraud claims as obtained by

relator from the FOIA responses were not from one of the listed sources in section 4(e)(4)(A) of

the False Claims Act, namely, the alleged “public disclosure” did not contain allegations

substantially similar to allegations publicly disclosed in “State reports.” To the extent the Village

argued that the information relator obtained from Lyons Township qualified as a “State report”

under our interpretation, we note there was no assertion by the Village that the Lyons Township

information otherwise met the obligations for the public disclosure bar, i.e., that substantially the

same allegations from the Lyons Township response detailing the amounts billed for each officer

working in Lyons Township established the allegations of fraud. Instead, the Village

acknowledged relator’s claims were based only “in part” on the Lyons Township’s FOIA

response. The vast majority of documents supporting relator’s claims were provided by the

That case, however, is distinguishable from the case at bar where the alleged fraud was perpetuated on the same entity that responded to the FOIA request.

10 1-16-1574

Village. Without satisfying the first of the four inquiries required to bring the relator’s complaint

within the False Claim Act’s threshold public disclosure jurisdictional bar, we conclude the

circuit court erred in dismissing the claims. As a result, we need not determine whether the

relator’s allegations were “publicly disclosed,” whether the lawsuit was “based upon” the

publicly disclosed allegations, or, if so, whether the relator is an “original source” of the

information upon which his lawsuit was based.

&21 II. Tort Immunity Act

&22 Lyons Township next contends the circuit court erred in finding that relator’s claims were

barred by section 2-106 of the Tort Immunity Act. Initially, Lyons Township argues that the Tort

Immunity Act does not apply to this case at all because relator’s fraud claims were based on a

contract between Lyons Township and the Village. In the alternative, Lyons Township argues

that the Village’s written misrepresentations are not immune from liability.

&23 Section 2-101(a) of the Tort Immunity Act provides, in relevant part, that “[n]othing in

this Act affects the liability, if any, of a local public entity or public employee, based on: (a)

Contract.” 745 ILCS 10/2-101(a) (West 2014). Although it is undisputed that Lyons Township

and the Village were parties to a contract for police services and remitter of payment for parking

fees, relator initiated a false claims action, not a contract action. We, therefore, find that the Tort

Immunity Act does apply. See DiMarco v. City of Chicago,

(1996)

(“[i]t is evident from the manner in which the word ‘contract’ is employed in section 2-101 that

the legislature meant to exclude causes of action under contract theory” and not merely causes of

action based on a contract).

&24 Because we find that the Tort Immunity Act does apply to relator’s claims, we turn to the

question of whether section 2-106 immunized the Village for the alleged fraud. In order to do so,

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we must rely on the previously discussed tenets of statutory construction. Most importantly, we

must ascertain and give effect to the intent of the legislature.

To do so, we rely on the

language of the statute, applying the plain or ordinary and popularly understood meaning to the

words that appear.

&25 Section 2-106 of the Tort Immunity Act provides that “[a] local public entity is not liable

for an injury caused by an oral promise or misrepresentation of its employee, whether or not such

promise or misrepresentation is negligent or intentional.” 745 ILCS 10/2-106 (West 2014). The

circuit court agreed with the Village in interpreting section 2-106 to immunize municipalities

against negligent and intentional misrepresentations, both oral and written. In contrast, Lyons

Township argues that the immunity applies only to oral promises or oral misrepresentations

wherein the term “oral” modifies both “promise” and “misrepresentation.”

&26 Based on our analysis, we find the circuit court erred in applying section 2-106 to this

case. Given the commonly understood principles of grammar and usage, we find the legislature

intended for the adjective “oral” to modify both “promise” and “misrepresentation.” The fact that

the disjunctive term “or” was used does not negate the legislature’s ability to use one adjective to

modify multiple nouns. Moreover, reading the statute as a whole, we find additional support for

our interpretation where the legislature did not repeat the word “oral” in the second half of

section 2-106. If the legislature intended to immunize only oral promises and all

misrepresentations by a municipal employee, it would have been incumbent on the legislature to

expressly state that only oral promises, whether negligent or intentional, are immunized. Instead,

as written, the statute limits its use of “oral” to a single mention because it modifies the entirety

of the section. Moreover, in order to interpret the statute like the circuit court and the Village, we

must assume the legislature employed improper grammar. Specifically, if “oral” only modifies

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“promise” then “misrepresentation” does not have a proper article where the statute would read

“[a] local public entity is not liable for an injury caused by an *** misrepresentation of its

employee, whether or not such promise or misrepresentation is negligent or intentional.” We will

not make such an assumption. We, therefore, conclude that the immunity applies only to oral

misrepresentations by a municipal employee. Accordingly, section 2-106 does not apply to the

case at bar wherein the alleged fraudulent activity was based on the written contract between the

municipalities.

&27 Finally, the Village argues that, in the alternative, section 2-107 applies to immunize it

from liability. We disagree. Section 2-107 of the Tort Immunity Act provides that “[a] local

public entity is not liable for injury caused by any action of its employees that is libelous or

slanderous or for the provision of information either orally, in writing, by computer or any other

electronic transmission, or in a book or other form of library material.” 745 ILCS 10/2-107

(West 2014). Based on the circumstances in this case, immunity for the “provision of

information” is not applicable.

&28 In sum, we conclude that the Village’s alleged actions were not immunized pursuant to

the Tort Immunity Act.

&29 CONCLUSION

&30 We reverse this cause and remand it for further proceedings where relator’s false claims

action was not barred by the public disclosure provision of the Act and where the Village’s

alleged conduct was not immunized by the Tort Immunity Act.

&31 Reversed and remanded.

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&32 PRESIDING JUSTICE GORDON, specially concurring.

&33 While I concur in the result, I must write separately to clarify both the facts and the law.

The facts in the majority's opinion are too short to make clear that there are two very separate

State entities involved in this suit. Also, I believe that our analysis section needs a fuller

discussion of the United States Supreme Court's decision in Schindler Elevator Corp. v. United

States ex rel. Kirk,

(2011), and subsequent federal appellate opinions. In this

special concurrence, I add those necessary facts and provide an increased discussion to

accomplish a fuller discussion of Schindler.

&34 I. Facts

&35 John Kielczynski is both a retired police officer and a resident of unincorporated Lyons

Township (Lyons). On behalf of Lyons, he filed a civil suit against the Village of Indian Head

Park (Indian Head), alleging that Indian Head police officers, whom Lyons was paying to patrol

Lyons, were instead performing work for Indian Head.

&36 Lyons and Indian Head had signed a contract, the purpose of which was "to provide

mobile, well-equipped and trained police officers from the Indian Head Park Police Department

to patrol and provide Police Protection in unincorporated areas within [Lyons] Township on a

contract basis."

&37 The contract, which is attached to the complaint, states that Indian Head will provide a

police officer to patrol from 3 to 11 p.m. daily, as well as an additional officer on either Friday or

Saturday from 7 to 11 p.m., for a total of 60 hours per week at a rate of $32.71 per hour. The

contract states that the Indian Head officers will be "certified, trained officers (not auxillary),"

and that they will work a total of 3120 hours per year patrolling specified "portions" of the

"unincorporated [Lyons] Township."

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&38 The complaint alleges that, instead of adhering to the terms of this contract, the Indian

Head police officers were performing work in Indian Head at times when they were supposed to

be patrolling Lyons. The complaint alleges at least 53 specific instances of fraudulent billing by

Indian Head.

&39 In addition, the complaint alleges at least 11 instances where fines from tickets written by

Indian Head officers patrolling in Lyons were paid, not to Lyons as required by the contract, but

to Indian Head. The complaint alleges that Indian Head has "no records showing payment of any

ticket revenue paid to LYONS."

&40 Instead of seeking a specific amount, the complaint asks: (1) that Indian Head be ordered

to account for (a) all the time billed to Lyons for policing services and (b) all the revenue paid to

Indian Head for tickets written in Lyons; (2) that Indian Head be ordered to pay to Lyons three

times the value of (a) the police time fraudulently billed to Lyons and (b) the ticket revenue

owed; (3) that the court assess penalties against Indian Head for $1000 for each violation; and (4)

for attorney fees and costs.

&41 In his brief to this court, Kielczynski argues that his suit is based on his observations as a

resident, his experience as a police officer, and records he obtained from Indian Head pursuant to

FOIA. Kielczynski argues that, after receiving Indian Head's responses to his FOIA requests, he

performed his own independent analysis of them by utilizing his experience as a police officer.

&42 II. The Law

&43 The trial court granted Indian Head's motion to dismiss pursuant to Section 2-619 of the

Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2014)). "A section 2-619 motion to

dismiss admits the sufficiency of the complaint, but asserts a defense outside the complaint that

defeats it." Patrick Engineering, Inc. v. City of Naperville,

. " Specifically,

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section 2-619(a)(9) permits involuntary dismissal where the claim is barred by 'other affirmative

matter.' " Patrick,

. "When ruling on such motions, a court must accept as

true all well-pleaded facts, as well as any reasonable inferences that may arise from them."

Patrick,

. Our review of a dismissal under section 2-619 is de novo.

Patrick,

.

&44 The trial court granted Indian Head's motion to dismiss based upon the public disclosure

bar in the Illinois False Claims Act (740 ILCS 175/4(e)(4) (West 2014)) and section 2-106 of

the Illinois Tort Immunity Act (745 ILCS 10/2-106 (West 2014)). I find the majority's

discussion of the Illinois Tort Immunity Act persuasive (supra ¶¶ 21-28), but I must write

separately concerning the Illinois False Claims Act.

&45 Kielczynski brought this suit pursuant to the Illinois False Claims Act, which permits a

member of the public to file suit on behalf of a State entity that has been defrauded. See

generally 740 ILCS 175/2(a) (West 2014) (listing covered State entities), and 740 ILCS 175/3(a)

(West 2014) (describing the types of fraud). However, the suit may be barred if the information

upon which it is based was publicly disclosed. 740 ILCS 175/4(e)(4) (West 2014).

&46 The purpose of a public disclosure bar is to eliminate " 'parasitic' " lawsuits that are based

on information of which the government is well aware and which then result in a windfall to

"enterprising individuals." United States ex rel Moore & Co. v. Majestic Blue Fisheries, LLC,

(3d Cir. 2016) (discussing the public disclosure bar in the federal False

Claims Act). See also 740 ILCS 175/4(d)(2) (West 2014) (if the State does not proceed with the

action, the person bringing the action may receive between 25 and 30% of the proceeds of the

action); Schindler Elevator Corp. v. United States ex rel. Kirk,

, 405 (2011) (when

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the government chooses not to intervene, the private party "stands to receive between 25% and

30% of the proceeds of the action" under the federal False Claims Act).

&47 The trial court concluded that Kielczynski's suit on behalf of Lyons was based on

information that was publicly disclosed, because it was based on information which he had

obtained through FOIA requests to Indian Head.

&48 Thus, the first question in this suit is whether a response to a FOIA request qualifies as a

"State report" under the Illinois False Claims Act, thereby triggering the public disclosure bar.

740 ILCS 175/4(e)(4) (West 2014). Supra ¶ 11.

&49 Back in 2011, the United States Supreme Court held that a written response to a FOIA

response did constitute a "report" under the federal False Claims Act's public disclosure bar.

Schindler, 583 U.S. at 411. Specifically, the Schindler plaintiff had discovered, through FOIA

requests to the Department of Labor, that a federal contractor had failed to make required reports

to the Department of Labor. Schindler, 583 U.S. at 404-06. The Court held that the Department

of Labor's FOIA responses were "report[s]" within the meaning of the federal public disclosure

bar. Schindler, 583 U.S. at 411 ("The DOL's three written FOIA responses to Mrs. Kirk, along

with their attached records, are thus reports within the meaning of the public disclosure bar.").

Schindler is relevant because, as the majority observes, the Illinois False Claims Act is modeled

on the federal act. Supra ¶ 10.

&50 However, the Schindler opinion effectively distinguishes itself from the case at hand. In

its first footnote, the Schindler court observed: "During the pendency of this case, the Patent

Protection and Affordable Care Act,

, amended the public disclosure bar. Because

the amendments are not applicable to pending cases, Graham County Soil and Water

Conservation Dist. v. United States ex rel. Wilson,

, --, n. 1 (2010), this opinion

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refers to the statute as it existed when the suit was filed." Schindler, 583 U.S. at 404 n.1. See

also United States ex rel. Oliver v. Philip Morris USA Inc.,

(D.C. 2014) ("The

False Claims Act was amended on March 23, 2010, by the Patent Protection and Affordable Care

Act.

(j)(2),

, 901-901 (2010). Those amendments do

not apply to pending suits filed before their enactment. [Citation.] Accordingly throughout this

opinion we refer to the version of the FCA that was in effect at the time [plaintiff] filed his

complaint.").

&51 As a result of the Schindler footnote, the federal cases most relevant to our discussion are

cases: (1) that were decided after March 23, 2010, or after; and (2) that applied the 2010

amendment. Similarly, the only precedential Illinois cases are cases (1) that were decided after

August 17, 2012, and (2) that applied our state's August 17, 2012, amendment, which was

enacted to bring our act in line with the amended federal False Claims Act. See supra ¶ 16.

&52 As a result, our search for the most relevant cases is within a limited time frame. Within

this time frame, we have not found any precedential Illinois cases and only two relevant federal

appellate court cases.

&53 First, the Third Circuit Court of Appeals issued an opinion last year which contains a

good discussion of the history of the federal False Claims Act in general and the 2010

amendments in particular. Moore,

. The court concluded that, even after the

2010 amendments, Schindler's holding still applied, and that a response to a FOIA request still

qualified as a report for purposes of the federal public disclosure bar. Moore, 812 F.3d at 302­

03.

&54 Specifically, the Moore plaintiff had discovered, through FOIA requests to the United

States Coast Guard, that a vessel owner had provided false information to the United States

18

1-16-1574

Coast Guard. Moore,

. Factually, the Moore case is similar to Schindler,

where the plaintiff had discovered, through FOIA requests to the Department of Labor, that a

federal contractor had failed to make required reports to the Department of Labor. Schindler,

583 U.S. at 404-06. In both cases, the alleged fraud was perpetuated on the same entity which

responded to the FOIA requests.

&55 Similarly, the Eighth Circuit applied the 2010 amendments in United States ex rel.

Kraxberger v. Kansas City Power & Light Co.,

, 1078 n.2 (8th Cir. 2014), and

held that, under Schindler, 2 a FOIA response was a report for purposes of the federal public

disclosure bar, where the plaintiff had discovered, through FOIA requests to the General

Services Administration (GSA), that a federal contractor had defrauded the GSA. In all three

cases–Schindler, Moore and Kraxberger–the alleged fraud was perpetuated on the same entity

which had also supplied the FOIA information.

&56 In contrast to these cases, the alleged fraud in the case at bar was perpetuated by a

different entity. That Indian Head and Lyons must be considered separate entities is shown by

the fact that they entered into an arms-length contract, which spelled out, in detail, what one was

required to pay the other and what services were required in return. Thus, the relevant federal

appellate opinions are readily distinguishable from the case at bar.

&57 For these reasons, I concur with the majority's conclusion that, in this rare case, where

one State entity is accused of defrauding another State entity, the fact that the alleged malfeasor

made a FOIA response does not trigger the public disclosure bar for its alleged victim.

2 The Eighth Circuit applied Schindler without first discussing whether Schindler still applied after the 2010 amendments. Kraxberger,

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