State of Illinois ex rel Wilke v. Ameresco, Inc.

2020 IL App (4th) 180563-U

• Court: Appellate Court of Illinois
• Decided: February 13, 2020
• Docket: 4-18-0563
• Status: Unpublished

Opinion

NOTICE 2020 IL App (4th) 180563-U This order was filed under Supreme FILED NO. 4-18-0563 February 13, 2020 Court Rule 23 and may not be cited as precedent by any party except in Carla Bender the limited circumstances allowed IN THE APPELLATE COURT 4th District Appellate under Rule 23(e)(1). Court, IL OF ILLINOIS

FOURTH DISTRICT

THE STATE OF ILLINOIS ex rel. ) Appeal from the R. KURT WILKE and SAM XANDERS, ) Circuit Court of Plaintiffs-Appellants, ) Sangamon County v. ) No. 14MR1395 AMERESCO, INC. ) Defendant-Appellee. ) Honorable ) Ryan M. Cadagin, ) Judge Presiding.

JUSTICE DeARMOND delivered the judgment of the court. Justices Turner and Harris concurred in the judgment.

ORDER ¶1 Held: The appellate court affirmed, finding the trial court did not err in granting defendant’s motion for summary judgment. The court properly found relators’ qui tam claims under the False Claims Act were prohibited by the “public disclosure bar” within the Act, which precludes such claims based on information already placed in the public domain, and relators did not qualify under the “original source” exception recognized under the Act. The trial court also did not err in granting defendant’s motion to strike certain exhibits from relators’ summary judgment motion.

¶2 In December 2014, plaintiffs, the State of Illinois ex rel. Kurt Wilke and Sam

Xanders (relators), filed a qui tam action under sections 3 and 4 of the Illinois False Claims Act

(Act) (740 ILCS 175/1 et seq. (West 2014)) alleging defendant, Ameresco, Inc., fraudulently

misrepresented information to two school districts to induce them to enter into performance

contracts for the installation of energy conservation measures in their schools. In May 2016,

relators filed a motion for partial summary judgment, claiming the contracts were void as violative of section 19b and the competitive bidding requirements of the Illinois School Code

(105 ILCS 5/19b-1 et seq.(West 2014), 105 ILCS 5/10-20.21 (West 2014)). Relators contended

as a result of contractual provisions stipulating to savings, the “guaranteed energy savings”

provisions required by section 19b of the School Code were improperly circumvented and

competitive bidding otherwise required by the School Code was avoided. Defendant denied the

allegations and contended the trial court was not obligated to reach the issue of what was

required by section 19b since relators’ claims were barred by the “public disclosure bar” of the

Act (740 ILCS 175/4(e)(4)(A) (West 2014)).

¶3 In September 2016, defendant filed a motion for summary judgment contending

the “public disclosure bar” contained within the Act precluded relators from bringing their

claims under the qui tam provisions of the Act and asking the court to dismiss the case on

jurisdictional grounds.

¶4 In July 2018, the cross-motions were heard along with a motion filed by

defendants in August 2017 asking to strike two exhibits from relators’ reply in support of their

partial summary judgment motion and in opposition to defendant’s motion. At the conclusion of

the hearing, ruling from the bench, the trial court found the public disclosure bar within the Act

applied and dismissed the case. The parties asked to submit a written order, which was ultimately

approved and signed in April 2018.

¶5 On appeal, relators contend the trial court erred by concluding they did not fall

within the “original source” exception to the public disclosure bar found within the Act and

therefore should not have dismissed their claims. We affirm.

¶6 I. BACKGROUND

¶7 A. The Act

-2- ¶8 In order to better understand the procedural history of this case, it is necessary to

provide a not-so-brief discussion of the Act. The Act (740 ILCS 174/1 et seq. (West 2014)) is an

anti-fraud statute providing the State of Illinois with a cause of action to recoup losses resulting

from false or fraudulent claims primarily by, but not limited to, private vendors, through the

imposition of civil liability on anyone who defrauds the state with such claims. To establish

liability under the Act, a relator generally needs to prove (1) that the defendant made a statement

in order to receive money from the government, (2) that the statement was false, and (3) that the

defendant knew the statement was false. United States ex rel. Yannacopoulos v. General

Dynamics, 652 F.3d 818, 822 (7th Cir. 2011). The attorney general is authorized under the Act to

pursue recovery of civil penalties and treble damages for the state. There is also a “qui tam

provision” within the statute that allows for private citizens, known as relators, to bring a civil

action on behalf of themselves and the state. “A person may bring a civil action for a violation of

[the Act] for the person and for the State. The action shall be brought in the name of the State.”

740 ILCS 175/4(b)(1) (West 2014).

¶9 A relator must notify the state of its intention to proceed, and if the state declines

to pursue the matter, the relator can then proceed on his own behalf. If the relator is successful in

proving the false claim, he can receive up to 30% of the proceeds or settlement as the party

responsible for disclosing the fraud and recovering the funds. See 740 ILCS 175/4 (West 2014).

Under a qui tam action, the Illinois Attorney General’s Office has authority to intervene at any

point in the proceedings. See 740 ILCS 175/4 (c) (West 2014).

¶ 10 The Act is modeled directly after the federal False Claims Act (31 U.S.C.

§§ 3729, 3730 (2009)). See United States ex rel. Humphrey v. Franklin-Williamson Human

Services, 189 F. Supp. 2d 862, 867 (S.D. Ill. 2002) (the Illinois Act tracks the relevant provisions

-3- of the federal False Claims Act almost word for word, substituting the appropriate state

references for the federal ones, and because the two acts are “virtually identical in all relevant

aspects,” the court will look to federal False Claims Act case law for guidance); see also People

ex rel. Lindblom v. Sears Brands, LLC., 2019 IL App (1st) 180588, ¶ 29 (because the Illinois Act

closely mirrors the federal False Claims Act, we may look to federal law for guidance in

construing the Act).

¶ 11 The purpose of the Act is to penalize those who submit or cause to be submitted

false or fraudulent claims to the state for payment. It also penalizes those who make or use false

statements to get a false or fraudulent claim paid. 740 ILCS 175/3(a) (West 2014). The Act

intends, however, that the facts surrounding the false claim be based on information not already

known or otherwise available to the government, and that the inside information comes from a

true “whistleblower” and not merely a self-serving opportunist who does not possess their own

inside information. See Glaser v. Wound Care Consultants, Inc., 570 F.3d 907, 915 (7th Cir.

2009). He cannot be merely repeating information which is already publicly available unless he

is able to add materially to it with information independently obtained. State ex rel. Beeler,

Schad & Diamond, P.C. v. Target Corp., 367 Ill. App. 3d 860, 867, 856 N.E.2d 1096, 1103

(2006). “Where a public disclosure has occurred, [the government] is already in a position to

vindicate society’s interests, and a qui tam action would serve no purpose.” United States ex rel.

Feingold v. AdminaStar Federal, Inc., 324 F.3d 492, 495 (7th Cir. 2003). For that reason, the Act

contains a “public disclosure bar” to qui tam actions.

“The court shall dismiss an action or claim under [the Act], unless

opposed by the State, if substantially the same allegations or

-4- transactions as alleged in the action or claim were publicly

disclosed:

(i) in a criminal, civil, or administrative hearing in which

the State or its agent is a party;

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

State report, hearing, audit, or investigation; or

(iii) 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.” 740

ILCS 175/4(e)(4)(A) (West 2014).

¶ 12 As we noted above, since the Act closely mirrors its federal counterpart, our

courts have looked to federal case law for guidance, especially when analyzing the public

disclosure bar. Humphrey, 189 F. Supp. 2d at 867; see also Target Corp., 367 Ill. App. 3d at 865.

¶ 13 In order to determine whether the “public disclosure bar” applies to a particular

complaint, the court is to conduct a multi-step analysis. Lyons Township ex rel. Kielczynski v.

Village of Indian Head Park, 2017 IL App (1st) 161574, ¶ 11, 84 N.E.3d 1118, lays out a four-

part inquiry to avoid dismissal under a qui tam action:

“(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 [citation]; (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

-5- prior three inquiries, whether the relator qualifies as an ‘original

source’ under section 4(e)(4)(B) of the [False Claims] Act

[Citations.].”

¶ 14 If the court’s answer is “no” to any of the first three questions, then the inquiry

ends there and the qui tam plaintiffs can proceed. If the answer to each of the first three is “yes,”

then the only exception to the bar will apply if the relator qualifies as an “original source” of the

information. See Target Corp., 367 Ill. App. 3d at 868. At each stage of the analysis, the relator

bears the burden of proof. United States ex rel. Absher v. Momence Meadows Nursing Center,

Inc., 764 F.3d 699, 707 (7th Cir. 2014). The analysis in Lyons Township has its genesis in the

federal courts. As courts of limited jurisdiction, failure to meet the test results in a lack of subject

matter jurisdiction. Although our circuit courts are considered courts of general jurisdiction, the

four-step test in Lyons Township still serves to determine whether the “public disclosure bar”

may apply under the Illinois False Claims Act.

¶ 15 “To trigger the public-disclosure bar of [section (e)(4)(A) of the Act], it is not

enough that allegations of wrongdoing have been publicly disclosed; the relator’s allegations

must also be ‘based upon’ the public disclosure.” Glaser, 570 F.3d at 914. Prior to Glaser, the

Seventh Circuit held such suits were “based upon” publicly disclosed information when they

“ ‘depend[ed] essentially upon publicly disclosed information and [were] actually derived from

such information.’ ” Glaser 570 F.3d at 914 (quoting United States v. Bank of Farmington, 166

F.3d 853, 864 (7th Cir. 1999)). In Glaser, the court revisited that interpretation in light of the fact

its basic dictionary definition was in the significant minority among federal circuits. It concluded

such an interpretation defeated the purpose of the original-source exception and adopted the

majority view: “a relator’s FCA complaint is ‘based upon’ publicly disclosed allegations or

-6- transactions when the allegations in the relator’s complaint are substantially similar to publicly

disclosed allegations.” Glaser 570 F.3d at 920. “Substantially the same” does not mean the

allegations and the publicly disclosed information have to be identical. A lawsuit that is even

partially dependent upon the publicly disclosed information can prompt the public disclosure bar.

See United States ex rel. Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 645, 654-55 (D.C. Cir.

1994) (the focus is on the quantum of information already publicly disclosed rather than the

amount or quality of information brought forward by the qui tam plaintiff.); United States ex rel.

Precision Co. v. Koch Industries, Inc., 971 F.2d 548, 552 (10th Cir. 1992) (“an FCA qui tam

action even partly based upon publicly disclosed allegations or transactions is nonetheless ‘based

upon’ such allegations or transaction”, within the meaning of section 4(e)(4)(A)). “Thus, a

qui tam action cannot be sustained where all of the material elements of the fraudulent

transaction are already in the public domain and the qui tam relator comes forward with

additional evidence incriminating the defendant.” Quinn, 14 F.3d at 655. The relator has to

possess substantive information about the particular fraud it claims to have uncovered, as

opposed to merely providing background information which allows the relator to understand the

significance of the publicly disclosed transaction. See United States ex rel. Stinson, Lyons,

Gerlin & Bustamente, P.A. v. Prudential Insurance Co., 944 F.2d 1149, 1160 (3d Cir. 1991).

¶ 16 In order to qualify as an “original source” and avoid the bar, the relator must have

direct and independent knowledge of the information on which the allegations are based. 740

ILCS 175/4(e)(4)(B) (West 2014). This means the information which forms the basis for the

underlying allegations of the relator’s actions, not the information on which the publicly

disclosed transactions triggering the public disclosure bar were based. See Rockwell

International Corp. v. United States, 549 U.S. 457, 471-72, 127 S. Ct. 1397, 1408 (2007). Even

-7- if the information has been publicly disclosed, the relator must have either voluntarily provided

the same information to the government before filing or be in possession of information which

was independent of and “materially” adds to the publicly disclosed information which has also

been provided to the government before filing suit. 740 ILCS 175/4 (e)(4)(B) (West 2014).

¶ 17 Voluntarily providing the disclosure to the state means the disclosure must be

made sufficiently in advance of the filing in order to provide enough time for the state to engage

in proper investigation and verify the relator’s status as a genuine whistleblower. Bank of

Farmington, 166 F.3d at 865-866, abrogated on other grounds by Glaser, 570 F.3d at 915.

¶ 18 While a specific time period is not outlined within the statute, it is well settled that

only hours or even a couple of days to provide the disclosure to the state in advance of filing is

not a sufficient amount of time required by the statute. United States ex rel. Ackley v.

International Business Machines Corp., 76 F. Supp. 2d 654, 668 (D. Md. Nov. 17, 1999),

abrogated on other grounds by United States ex rel. Fadlalla v. DynCorp International LLC.,

402 F. Supp. 3d 162, (D. Md. 2019).

¶ 19 B. Procedural History

¶ 20 In December 2014, relators filed a qui tam action under the Act (740 ILCS 175/4

(West 2014)) alleging defendant, an independent energy service contractor, perpetrated a fraud

on the school districts of Ball-Chatham and Taylorville. Relators alleged defendant did this by

inducing the districts to enter into contracts which were alleged to falsely represent guaranteed

savings in compliance with section 19b of the Illinois School Code (105 ILCS 5/19b-1.2 (West

2014)), by stipulating to energy savings and thus eliminating the required guarantees under the

statute (105 ILCS 5/19b-1.2 (West 2014)). What are commonly referred to as “section 19b

contracts” are an exception to the usual requirement for competitive bidding in any Illinois

-8- school district involving proposed contracts in excess of $50,000. If the school district is entering

into a “guaranteed energy savings contract” with a “qualified provider” as defined in sections

19b-1.2 and 1.3, the district is permitted to proceed through negotiated procurement rather than

competitive bidding. 105 ILCS 5/19b-1.2, 19b-1.3, 19b-1.4 (West 2014). This process permits

the district to publish requests for proposals, which solicit interested vendors or providers to

submit proposals meeting the criteria set forth by the district and from which the district has the

discretion to select. Under the terms of a guaranteed energy savings contract, also known as a

performance contract, energy savings “are guaranteed to the extent necessary to pay the costs of

the energy conservation measures” by the energy contractor. 105 ILCS 5/19b-1.2 (West 2014).

Here, the relators contended defendant negotiated with the school boards with assurances of

guaranteed savings or promises to reimburse the districts for any shortfalls, when in fact, the

contract which the boards ultimately approved provided for “stipulated” savings. The proposed

contracts contained no written guarantee that the actual energy and/or operational cost savings

resulting from defendant’s proposed energy savings measures would meet or exceed the cost of

implementing the measures, contrary to the statutory requirements of a guaranteed energy

savings contract. Relators further alleged as a result of these misrepresentations, defendants

submitted invoices for payment totaling $2,207,091 to the Chatham School District and

$12,281,167.98 to the Taylorville School District, and all invoices were paid with public funds.

¶ 21 As a result of the alleged deficiencies in the contracts and the process by which

they were procured, relators alleged the contracts were void as violative of the Illinois School

Code and the Act and sought reimbursement to the school districts, treble damages as provided

under the Act, and a relator’s award. As required under the Act, relators provided the Illinois

attorney general with “[a] copy of the complaint and written disclosure of substantially all

-9- material evidence and information the person possesses” in order to determine whether the State

would elect to proceed with the case. 740 ILCS 175/4(b)(2) (West 2014). The Illinois attorney

general elected not to intervene in the qui tam action and has taken no position on the merits of

relators claim. He did, however, submit a statement of interest on the State’s behalf during the

circuit court proceedings in order to correct what he believed to be relators’ erroneous

interpretation of the Act’s public disclosure bar.

¶ 22 After several preliminary motions directed to the pleadings, in May 2016, relators

filed a motion for partial summary judgment, contending the contracts entered into between the

districts and defendant were void as a matter of law and therefore the proper subject for summary

judgment. In September 2016, defendant filed a motion for summary judgment claiming the

material elements of relators’ allegations were based on information they obtained from publicly

disclosed facts in which they had no independent knowledge and are thus precluded from

forming the basis of a cause of action by the “public disclosure bar.” Furthermore, defendant

argued relators were not an “original source” of the alleged fraudulent information, and the

undisputed facts revealed no fraudulent inducement. Relators sought to avoid application of the

public disclosure bar by contending the reference to “the State” found in section 4(e)(4)(A) of

the Act (740 ILCS 175/4(e)(4)(A)(West 2014)): “The court shall dismiss an action or claim

under this Section, unless opposed by the State, *** (emphasis added)” included the school

districts themselves. Relators then claimed both the Ball-Chatham and Taylorville school

districts passed resolutions objecting to dismissal, attaching copies of the resolutions to their

pleadings.

¶ 23 Defendant filed a motion to strike these affidavits, claiming the exhibits were not

properly before the court because: (1) the two school districts were not parties to the suit, (2) the

- 10 - exhibits contain inadmissible hearsay, and (3) the “State,” as used in the statute, is the Illinois

attorney general, who possesses the exclusive power to represent the State or intervene on its

behalf in a false claim action. In August 2017, the Illinois Attorney General filed a statement of

interest arguing the Illinois attorney general has the sole authority to oppose dismissal of a

qui tam action on the basis of the public disclosure bar under the Act. In April 2018, the trial

court granted defendant’s motion and struck relators’ uncertified copies of the school districts’

“resolutions.” The court noted the Illinois Supreme Court has held the qui tam provisions of the

Act constitutional for the precise reason that it allows the Illinois attorney general to retain

authority and control over the litigation at every stage of the proceeding. See Scachitti v. UBS

Financial Services, 215 Ill. 2d 484, 510-11, 831 N.E.2d 544, 560 (2005).

¶ 24 At the hearing on defendant’s motion for summary judgment in July 2018,

defendant argued the information relied upon by relators as the basis for their claim was obtained

through Freedom of Information Act (FOIA) requests from civil litigation in which they had

been involved or from public online sources. Neither relator was on the Ball-Chatham school

board during the times relevant to their claims, and neither worked for the Taylorville school

district at any time. Additionally, defendant asserted the affidavits provided by relators added

nothing new or material but simply confirmed information previously and publicly disclosed.

Defendant contended relators would not have learned of the allegations or transactions

independent of the public disclosures and are not insiders or whistleblowers. Furthermore,

defendant argued relators’ complaint is the same or substantially the same as the information

publicly disclosed, and they are therefore precluded from bringing their qui tam action by the

public disclosure bar.

- 11 - ¶ 25 Relators argued FOIA was intended to promote transparency and accountability

and it should not be an absolute bar under the Act. Additionally, relators claim they materially

added to the information received from their FOIA requests by supplementing it with

information from Open Meetings Act (5 ILCS 120/2 (West 2014)) litigation and affidavits from

a former school board member and former Ameresco employee. The trial court found the public

disclosure bar applicable in this case and entered an order granting defendant’s motion for

summary judgment.

¶ 26 This appeal followed.

¶ 27 II. ANALYSIS

¶ 28 Relators argue the trial court erred by: (1) finding the public disclosure bar

applied to them, (2) failing to recognize how they materially added to the already known

information to a degree sufficient to fall under the “original source” exception, (3) failing to

recognize the right of the school boards to object to dismissal under the Act, and (4) granting

defendant’s motion for summary judgment. Further, they argue the trial court erred by striking

the copies of the school board resolutions they attached to their summary judgment pleadings.

We disagree and affirm.

¶ 29 “Summary judgment is appropriate where ‘the pleadings, depositions, and

admissions on file, together with the affidavits, if any, show that there is no genuine issue as to

any material fact and that the moving party is entitled to a judgment as a matter of law.’ ”

Ioerger v. Halverson Construction Co., 232 Ill. 2d 196, 201, 902 N.E.2d 645, 648 (2008)

(quoting 735 ILCS 5/2-1005(c) (West 2000)). It is appropriate where the nonmoving party has

failed to establish a material element of the cause of action and where there is no genuine factual

dispute. “Summary judgment is to be encouraged in the interest of prompt disposition of

- 12 - lawsuits, but as a drastic measure it should be allowed only when a moving party’s right to it is

clear and free from doubt.” Pyne v. Witmer, 129 Ill. 2d 351, 358, 543 N.E.2d 1304, 1307 (1989).

The court must construe the pleadings, depositions, admissions, exhibits, and affidavits on file

strictly against the movant in determining whether a genuine issue of material fact exists.

Johnson v. American Family Mutual Insurance Co., 193 Ill. App. 3d 794, 799, 550 N.E.2d 668,

671 (1990).

¶ 30 On appeal from a trial court’s decision to grant a motion for summary judgment,

our review is de novo. Bowles v. Owens-Illinois, Inc., 2013 IL App (4th) 121072, ¶ 19, 996

N.E.2d 1267.

¶ 31 A. Public Disclosure

¶ 32 “The public-disclosure bar aims ‘to strike a balance between encouraging private

persons to root out fraud and stifling parasitic lawsuits’ in which a relator, instead of plowing

new ground, attempts to free-ride by merely reiterating previously disclosed fraudulent acts.”

United States ex rel. Beauchamp v. Academi Training Center, 816 F.3d 37, 43 (4th Cir. 2016)

(quoting Graham County Soil & Water Conservation District v. United States ex rel. Wilson, 559

U.S. 280, 295 (2010)). Under the Act, information is publicly disclosed when “the critical

elements exposing the transaction as fraudulent are placed in the public domain.” Feingold, 324

F.3d at 495. Written responses and information provided pursuant to FOIA requests constitute

public disclosures under the Act. Schindler Elevator Corp. v. United States ex rel. Kirk, 563 U.S.

401, 411, 131 S. Ct. 1885, 1893 (2011). Information gathered from public websites before filing

a claim also constitute “news media” under the Act’s disclosure prohibition. Beauchamp, 816

F.3d at 43. The term “in the course of a civil, criminal, or administrative hearing” under the

public disclosure bar “should be interpreted broadly to include allegations and information

- 13 - disclosed in connection with civil, criminal, or administrative litigation.” (Internal quotation

marks omitted.) Prudential Insurance, 944 F.2d at 1156.

¶ 33 Relators acknowledge in their brief “some, but not all of the documents relied on

by [them] to state a claim were obtained by [FOIA] requests to the school districts.” They also

agree they “obtained some documents from the Chatham district in [Open Meetings and FOIA]

litigation” which arose out of their requests for information relating to the allegations of their

complaint. In their pleadings before the trial court—and briefs before this court—they

acknowledge receiving information from public websites. In their depositions, both plaintiffs

admitted receiving their information, in large part, from FOIA requests and from Illinois State

Board of Education public websites. The requests for proposals, memoranda of understanding,

board resolutions to approve the contracts, the contracts and attachments, e-mails between the

relevant individuals for the school districts and defendant, change orders, invoices, and board

meeting minutes, both open and closed, were all public record and accessible to anyone willing

to search for them. As noted above, although both served on the Ball-Chatham school board at

one time, neither relator was on the Ball-Chatham school board during the times relevant to their

claims, and neither worked for the Taylorville school district at any time. As a result, they

admitted in their depositions they had no first-hand knowledge of any information forming the

bases of their claims. Relator Wilke was asked in his deposition:

“Q. So, is it fair to say that the, that the earliest that you ever learned about

what you believe to be fraudulent activity of Ameresco in relation to Taylorville

was when you received the FOIA response with respect to the Taylorville

documents?

A: That’s correct. Well, let me back up a minute. No. That’s correct.”

- 14 - Wilke acknowledged having never been present during any conversations,

involved in any negotiations, or present during any school board meetings where the particulars

of the contracts were discussed. He could point to no information contained in the complaint

which was based on his first-hand knowledge.

¶ 34 At Xanders’s deposition, he testified the information forming the basis of the

Taylorville allegations came from FOIA requests, an Open Meetings Act and FOIA lawsuit, and

public websites. In fact, Xanders explained in his deposition how the original complaint had

already been filed when he began searching for documents from other school districts on a public

website and found those relating to the Taylorville School District. As a result, the original

complaint, filed in December 2014, was amended to add the Taylorville School District contracts

in July 2015. He also acknowledged having never worked for the district or having been

involved with any negotiations with defendant. He admitted he had no first-hand knowledge of

any of the work performed for either school district by defendant pursuant to the contracts and

said he never heard about 19b contracts until he began “reading the minutes and agenda items of

Ball-Chatham school district” in 2013, long after he was off the school board. Xanders was

asked, similarly to relator Wilke:

“Q. Are all of the allegations of the amended complaint that relate

specifically to Taylorville arise [sic] out of the FOIA response that was given to

you by Taylorville?

A: Well, no, because the payments that were made came from or at least

the initial discovery that the payments were made came from the statement of

affairs [(which he previously indicated was filed with the State Board of

Education and published in the newspaper)].

- 15 - Q. Okay. Other than the FOIA response and the annual statement of

affairs, which did you find it on the local, [sic] from the local paper or from the

Illinois State Board of Education?

A. I would have gotten it from the State Board of Education [website].”

¶ 35 With regard to the Ball-Chatham claims, Xanders testified that while volunteering

at the schools in 2013, he started reviewing documents on the Ball-Chatham server. These

included board meeting agendas, videos, and minutes of meetings. He then began sending FOIA

requests to the district in August 2013, asking for defendant’s contracts and attachments.

Xanders acknowledged having never been present at any board meeting where defendant’s

contract was discussed in 2010 but said he “viewed” the contracts during his volunteer work

years later. He also agreed he had no direct conversations with any of the participants in the

contractual agreement between either school district and defendant at or around the time the

contracts were either negotiated or signed.

¶ 36 The public disclosure bar in the Act requires the court to dismiss any claim if

“substantially the same allegations or transactions” as those alleged in the complaint have

already been publicly disclosed in, among other things, a “State report” or “from the news

media.” 740 ILCS 175/4(e)(4)(A)(ii), (iii) (West 2014). The Act does not require public

disclosures themselves to allege fraud in order to be subject to the bar. See Absher, 764 F.3d at

708 (Public disclosure need not include allegation of fraud. The public disclosure bar may apply

so long as the facts disclosing fraud are in the government’s possession or the public domain.);

see also Cause of Action v. Chicago Transit Authority, 815 F.3d 267, 278 (7th Cir. 2016)(quoting

Absher, 764 F.3d at 708 (all that is required is that “ ‘[the] facts establishing the essential

- 16 - elements of fraud—and consequently, providing a basis for the inference that fraud has been

committed—are in the government’s possession or the public domain’ ”).

¶ 37 The public disclosures in this case do not involve allegations of fraud. Instead,

relators conclude there must have been fraud based on the information regarding the transactions

and interactions between school officials and representatives of Ameresco they compiled for

their complaint, coupled with their interpretation of section 19b contracts under the School Code.

Relators contend the information itself, when properly considered, reveals the fraud they allege

occurred. However, this information came from sources all covered under the public disclosure

bar of the Act. Relators acknowledged under oath how most of the factual assertions made in

their claims came from FOIA responses. The United States Supreme Court defined “report” for

purposes of the federal False Claims Act and found a broad interpretation was “consistent with

the generally broad scope of the FCA’s public disclosure bar.” They also found the bar’s

reference to “allegations or transactions” was meant to be interpreted broadly as well. Schindler

Elevator Corp., 563 U.S. at 408. As a result, they concluded a written agency response to a

FOIA request falls within the ordinary meaning of “report,” along with any records or

attachments provided in response. Schindler Elevator Corp., 563 U.S. at 411.

¶ 38 Relators further acknowledge having searched Illinois State Board of Education,

Taylorville, Ball-Chatham, and the State Capital Development Board websites, along with local

newspapers, for information which helped form the basis for their claims of fraud. All of these

qualify as “news media” under section 4(e)(4)(A)(iii) (740 ILCS 175/4(e)(4)(A)(iii) (West

2014)) and are also subject to the public disclosure bar. In fact, in Schindler, the United States

Supreme Court noted how the inclusion of “news media, suggest[s] that the public disclosure bar

provides a broa[d] sweep.” (Internal quotation marks omitted.) Schindler, 563 U.S. at 408. In

- 17 - Beauchamp, the court noted federal courts have uniformly defined “public disclosure” to include

websites and online articles. Beauchamp, 816 F.3d at 43, n.6. Obviously, newspapers fall within

the same definition. See United States ex rel. Osheroff v. Humana Inc., 776 F.3d 805, 813

(2015).

¶ 39 Relators contend some of their information came only as a result of forced

disclosure pursuant to filing Open Meetings Act and FOIA lawsuits against Ball-Chatham and

threats of suit against Taylorville. This does not change the public nature of the disclosures. Even

the statute provides for public disclosure for matters disclosed “in a criminal, civil, or

administrative hearing in which the State or its agent is a party.” 740 ILCS 175/4(e)(4)(A)(i)

(West 2014). Here, the school boards of Taylorville and Ball-Chatham are properly considered

“state agencies” for purposes of the public disclosure bar. See 740 ILCS 175/2(a) (West 2014)

(“(a) ‘State’ means *** any school district ***”); Lyons Township, 2017 IL App (1st) 161574,

¶ 11. Federal courts are uniform in finding documents discovered or obtained in litigation fall

within the meaning of “publicly disclosed.” See Prudential Insurance, 944 F.2d at 1156 (holding

information gleaned in litigation and on file in the clerk’s office included as information equally

available to strangers to the fraud transaction had they chosen to look for it);United States ex rel.

Siller v. Becton Dickinson & Co., 21 F.3d 1339, 1350 (4th Cir. 1994) (any information disclosed

through civil litigation and on file with the clerk’s office should be considered a public

disclosure for the purpose of the False Claims Act).

¶ 40 It is clear from the record the basis of relators’ claims stem from documents

procured through FOIA requests or which were otherwise publicly disclosed. The information

existed in publicly displayed budgets, documents filed with the state, readily accessible board

meeting minutes, documents from other litigation, and information actively sought by relators

- 18 - through Internet searches. This is contrary to the whole purpose of whistleblower statutes. It is

not enough that relators merely parrot what is publicly available or troll for public records as

they did here. Remember, Xanders testified he first began searching for public records regarding

the Ball-Chatham 19b performance contract with defendant, and after filing suit, he began

searching for records of other school districts who had contracts with defendant. This is the

classic example of opportunistic litigation described by the United States Supreme Court in

Schindler, which the public disclosure bar is designed to prevent, where anyone could have

served the same FOIA requests, read the same public documents, and filed the same qui tam

action under the Act.

¶ 41 B. Substantially the Same

¶ 42 Once the determination is made that relators’ claims are based on publicly

disclosed information, the inquiry turns to whether allegations or information in the claims are

“substantially the same” as those within the publicly disclosed documents. 740 ILCS 175/4

(e)(4)(A) (West 2014).

¶ 43 “Substantially the same” does not mean exactly the same. Even additional

information that has not been publicly disclosed does not prevent the application of the public

disclosure bar if material elements of the fraud have already been publicly disclosed. Quinn, 14

F.3d at 654. A simplistic formula was used in Quinn to illustrate how to determine whether the

allegations contained in relators’ complaint are “substantially the same” as the information

publicly available. Using X + Y = Z, with Z representing the allegation of fraud, and X and Y

representing its essential elements, the court said if the elements for an allegation of fraud are

already public (X + Y) , from which the reader or listener could then conclude fraud had been

committed (Z), the prohibition against a qui tam action applies. Equally so, if either the

- 19 - fraudulent transaction (X + Y) or the allegation of fraud (Z) are already known, the government

is in the position to act and there is no reason for a qui tam action. Even if it takes special

training or knowledge to put X + Y together to form Z, if all the facts forming X + Y are public,

the bar still applies. Quinn, 14 F.3d at 654-655.

¶ 44 The record before us reveals relators relied exclusively on publicly disclosed

documents which contained the “material elements of the fraud” to formulate the basis of their

complaint alleging defendant defrauded the Taylorville school district. Thus, a qui tam action

cannot be sustained where all of the material elements of the fraudulent transactions are already

in the public domain and the qui tam relator comes forward with additional evidence

incriminating the defendant. Quinn, 14 F.3d at 654. This is also true where “all of the critical

elements of fraud have been publicly disclosed, but in a form not accessible to most people.”

Quinn, 14 F.3d at 655. “The relator must possess substantive information about the particular

fraud, rather than merely background information which enables a putative relator to understand

the significance of a publicly disclosed transaction or allegation.” Prudential Insurance, 944

F.2d at 1160.

¶ 45 Relators argue their claims against defendant for allegedly defrauding the Ball-

Chatham school district are not substantially the same as publicly disclosed materials because

relators have provided affidavits from a former school board member of the district and a former

employee of defendant. The affidavit of the former school board member details a school board

meeting where members of the board questioned an Ameresco representative about the proposed

contract. The other affidavit is from a former Ameresco employee who was the lead project

developer for the Ball-Chatham school district project before he was terminated in 2010 and

before the completion of the project. He provided a presentation of the Ameresco contract to the

- 20 - school board during one of its meetings. The affidavit describes his duties under the project and a

summary of what he presented to the school board. However, both affidavits contain information

that was already publicly disclosed via FOIA request or disseminated on public websites and fail

to materially add anything not publicly disclosed—they merely repeat it.

¶ 46 During the hearing on the summary judgment motion, relators argued their

depositions materially added to their claims against defendant. However, their deposition

testimony consisted of their opinions and not material elements of any fraud. For example,

counsel at the motion said, “Mr. Xanders testified *** that he talked to a project manager from B

& B who did the Ameresco work at Chatham, and he was informed that they replaced T8

[lightbulbs] with more efficient T8 [lightbulbs]. There’s no way those savings could have

matched the contract costs”; and regarding Mr. Wilke describing one of the affidavits, “[t]he

Board voted on the contract, and [the board member] recalled statements that were made about

the guarantees and approved the contract based on those statements. You want fraud, there’s

fraud.” In other words, relators took the facts they uncovered through their search of public

records and documents and concluded there must have been fraud of some kind. Even they

acknowledge no one else has, at any time, claimed there was fraud in the negotiation and

servicing of the contracts.

¶ 47 In analyzing whether a relator has “materially added” anything to the public

disclosure, the Seventh Circuit has focused on whether the relator’s allegations are substantially

similar to the publicly disclosed documents. See Chicago Transit Authority, 815 F.3d at 283

(finding because relators’ claims were substantially similar to the information contained within

the publicly disclosed audit report, relators did not materially add anything to the public

disclosure.)

- 21 - ¶ 48 All of the material elements of the alleged fraud were obtained from the

documents procured through FOIA responses or found on public websites. Relators claim the

affidavits and other information obtained differs from information publicly disclosed. However,

being different does not make it material. All of the information regarding the requests for

proposals, how Ameresco ended up with the contracts, the terms of the contracts and process of

negotiation, board meeting minutes discussing the contracts and their approval, all documents

and records relating to the contracts, performance, and payment, were part of the public record.

The only thing missing were relators’ opinions about the securing of the contracts and

compliance with section 19b of the School Code. It was their opinion the process disclosed by

the public records was flawed, that the guarantees required by the statute were improperly or

illegally circumvented by the “stipulated savings” language in the contracts, and the state bidding

procedures were not properly followed by the change orders. Even when confronted with

information in the same records revealing both legal counsel and qualified engineers signed off

on the projects and the boards of each school district relied upon the opinions of their legal

counsel when they approved the contracts, relators maintained there must have been fraud

involved. However, relators failed to identify any additional information which materially added

to conclusions they reached based upon their review of information previously obtained via

public disclosures. The essential material elements of the alleged fraud were already publicly

disclosed. Quinn, 14 F.3d at 654. Therefore, relators claim is substantially the same as the

publicly disclosed “allegations or transactions,” and their claims must be dismissed unless they

demonstrate they were the original source.

¶ 49 C. Original Source

- 22 - ¶ 50 If the trial court determines the public disclosure bar applies to a qui tam action,

relators can still avoid dismissal if they can prove they were the original source of the publicly

disclosed information. United States ex rel. Ziebell v. Fox Valley Workforce Development Board,

Inc., 806 F.3d 946, 952 (7th Cir. 2015).

“ ‘[O]riginal 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)(B) (West 2014).

¶ 51 To qualify as an original source, a relator must demonstrate that he shared with

the government, before filing suit, information that is “independent of the public disclosures and

that materially adds to the information that had been publicly disclosed.” (Internal quotation

marks omitted.) Fadlalla, 402 F. Supp. 3d at 181.

¶ 52 The record reflects relators have no independent knowledge of the information on

which their claim is based. Relators were not privy to any direct knowledge concerning the

alleged fraud, and according to the record before us, learned all of the material elements of the

alleged fraud through public disclosures or second-hand information. Instead, Xanders started

searching through the public records of the Ball-Chatham School District until he found enough

to convince himself there was fraud. After filing suit in that case, he began trolling public records

of the state Central Management Services and filing FOIA requests until he found another school

- 23 - district, Taylorville, which had similar contracts. All of these undertakings could have been

performed by any member of the public. Prudential Insurance, 944 F.2d 1149.

¶ 53 Relators claimed they materially added information which qualified them as an

original source. When prompted at the motion for summary judgment hearing, counsel for

relators argued the materially added information consisted of light bulbs, second-hand statements

made by the superintendent, and an affidavit from the school board member who was at the

presentation by the Ameresco representative. However, this information was already included

within FOIA responses or located on public websites and does not constitute “materially added”

information sufficient to qualify them as an original source.

¶ 54 Although information obtained from litigation falls within the “publicly

available” definition, relators argue the holding in United States ex rel. Moore & Co., P.A. v.

Majestic Blue Fisheries, LLC, 812 F.3d 294, 300 (3rd Cir. 2016), supports their position that

information obtained from a lawsuit can materially add to a relator’s claim. In Moore, the Third

District found the relator was able to provide independent information that materially added to

the previously disclosed information after relator was able to uncover “essential factual

background of the fraud *** that were not publicly disclosed,” which relator obtained through a

wrongful death lawsuit. Moore & Co., 812 F.3d at 308.

¶ 55 In the case before us, the information relators claim materially added to the

publicly disclosed documents from civil litigation provided immaterial details. Details regarding

the replacement of light bulbs, an affidavit from a school board member about his recollection of

a school board meeting, and statements from the former superintendent were not details that

materially added any new information to the alleged fraud already publicly disclosed. The relator

in Moore obtained information from a wrongful death action (civil hearing) between a private

- 24 - party and a public company, thus avoiding the implication of this section of the public disclosure

bar. The state or its agent was not a party to the lawsuit. Conversely, relators claim the

information obtained which materially added to the previous publicly disclosed documents came

from Open Meetings Act litigation against the Ball-Chatham school, a state agency.

Accordingly, because we interpret this provision of the Public Disclosure Act “broadly to include

allegations and information disclosed in connection with civil, criminal, or administrative

litigation” (Prudential Insurance, 944 F.2d at 1156), even if this information materially added to

information publicly disclosed, relators cannot avoid this section of the public disclosure bar.

¶ 56 From a procedural standpoint even if relators were an “original source” they were

required to “voluntarily provide[ ] the information to the State before filing an action under this

Section.” 740 ILCS 175/4 (e)(4)(B) (West 2014).

¶ 57 “Besides giving the government more time than the post-filing period to act on

the fraud allegations, this requirement also gives the government the chance ‘to consider whether

there has already been public disclosure of the matters, whether the prospective relator in fact

possesses direct and independent knowledge of the matters he is disclosing, and whether he is

making disclosures on a voluntary basis.’ ” United States ex rel. King v. Hillcrest Health Center,

Inc., 264 F.3d 1271, 1281 (quoting Ackley, 76 F. Supp. 2d at 668.)

¶ 58 There is no specific time frame requirement when relators must voluntarily

disclose the information to the state; however, there must be enough time for the state to engage

in its own investigation of the alleged fraud. Thirty days before the filing of a suit is reasonable

in most cases; however, a few moments, hours, or days before the suit is filed is not sufficient for

voluntary disclosure. Ackley, 76 F. Supp. 2d at 668, abrogated on other grounds by Fadlalla,

402 F. Supp. 3d 162.

- 25 - ¶ 59 Here, counsel for relators notified a representative of the Attorney General’s

office, via phone, one day prior to the filing of the complaint. Counsel sent an e-mail with a copy

of the complaint to the Attorney General’s office approximately one hour before filing it. This

does not comport with the requirement of “voluntary disclosure” and failed to give the Attorney

General’s office sufficient time to investigate the claim or ascertain whether relators were

genuine whistleblowers with direct independent knowledge of their claims. It is clear from the

case law that advance notice is not merely a formality to be met in a perfunctory manner but has

a very real purpose—to allow the attorney general to fully investigate the claim, determine

whether perhaps it is something he should pursue, or decide whether relators are in a position to

do so. See Scachitti, 215 Ill. 2d at 511-12 (discussing the broad authority the attorney general has

in qui tam actions under the Act).

¶ 60 D. Unless Opposed by the State

¶ 61 The public disclosure bar requires the court to dismiss a claim, unless “the State”

opposes the dismissal. 740 ILCS 175/4(e)(4)(A) (West 2014). Relators claim their two affidavits

from the Ball-Chatham and Taylorville school districts should not have been stricken by the trial

court because the school districts constitute “the State,” and their opposition to the dismissal of

relators’ claim abrogates the mandatory dismissal provision of the public disclosure bar. As

noted by defendant, the passing of these resolutions appears to be a superficial effort to

circumvent the requirements of the statute, was undertaken during the litigation, and has no legal

support. In fact, it was this one aspect of relators’ litigation which precipitated the attorney

general’s involvement. The attorney general had already reviewed the claims and found his

office was not interested in intervening, but it did so when relators either misunderstood or

misinterpreted the meaning of “the State” in the context of the statute. The two resolutions filed

- 26 - by relators in May 2017, long after litigation began, as part of their “reply in support of their

motion for summary judgment and response in opposition to defendant’s motion for summary

judgment,” were uncertified resolutions from both school districts objecting to the dismissal of

the claims. Defendant contends the districts are not parties to the litigation, the “resolutions”

were not brought properly before the court and contain inadmissible hearsay, and only the

attorney general has the authority to oppose the dismissal of the case under the Act.

¶ 62 The attorney general, while taking no position on the merits of relators’ claims,

filed a statement of interest, maintaining the attorney general is “the State” under the public

disclosure bar and has the sole authority to oppose the dismissal of a claim, as he has exclusive

control of qui tam litigation.

¶ 63 In April 2018, the trial court properly granted defendant’s motion to strike

“resolutions” one and two. The court reasoned, in part, the school districts have no authority to

oppose the dismissal of a qui tam action under the Act, making their “resolutions” irrelevant.

¶ 64 Relators incorrectly relied upon the First District decision in Lyons Township,

2017 IL App (1st) 161574, to argue the allegedly defrauded entity may be “the State” within the

meaning of the statute and thereby has the authority to oppose dismissal of a claim under the

public disclosure bar. The First District in Lyons Township held the defrauded unit of

government is “the State” for purposes of deciding what constituted a “State report” under the

public disclosure bar. Lyons Township, 2017 IL App (1st) 161574, ¶ 14. Lyons Township did not

address the issue of who had authority to object to dismissal under an entirely different provision

within the Act. It was not an issue in the case, and the court said nothing about changing or

modifying the authority of the attorney general to object.

- 27 - ¶ 65 Under the Act, the Attorney General “retains authority to control the litigation at

every stage of the proceedings.” Scachitti, 215 Ill. 2d at 510-11. Our supreme court held in

Scachitti that the Act’s qui tam provision is constitutional only because it grants the attorney

general authority to intervene at any stage of the proceedings. Scachitti, 215 Ill. 2d 484 at 510-

11. Allowing another governmental entity to oppose the mandatory dismissal would, in effect,

usurp the power of the attorney general. This cannot be a feasible interpretation of the holding in

Lyons Township, nor its intent, as the First District’s analysis did not include such a discussion.

Furthermore, our supreme court has made it clear the attorney general, as the chief executive

officer of the state, can be the only authority to object to the court’s dismissal under the public

disclosure bar. “No one but the Attorney General may intervene in the action, and the Attorney

General retains the right to intervene in the lawsuit at any time.” (Emphasis added.) Scachitti,

215 Ill. 2d at 511.

¶ 66 Finally, relators argue that even if their claim falls under the public disclosure bar

and they do not qualify as original sources, their claim should not be dismissed because their suit

is not “parasitic” in nature. We decline to undertake such an analysis as the public disclosure bar

clearly provides that if a relator fails to overcome the bar, “[t]he court shall dismiss an action or

claim under [the Act], unless opposed by the State ***.” (Emphasis added.) 740 ILCS

175/4(e)(4)(A) (West 2014).

¶ 67 E. Knowingly False

¶ 68 Lastly, although not absolutely essential to our analysis, perhaps it goes without

saying, but an additional necessary element of a relator’s claim is that it must be based on a

“knowing” falsehood. Under the Act, liability attaches only if a defendant “knowingly presents,

or causes to be presented, a false or fraudulent claim for payment or approval” to the State. 740

- 28 - ILCS 175/3(a)(1)(A) (West 2014). “Knowingly” is defined as: (1) actual knowledge,

(2) deliberate ignorance of the truth or falsity of the information, or (3) reckless disregard for the

truth or falsity of the information. 740 ILCS 175/3(b)(1) (West 2014). Throughout the

proceedings before the trial court, relators had to acknowledge the issue with regard to

“guaranteed savings” versus “stipulated savings” was one for which there was no legal precedent

and for which there could be a difference of opinion. During their depositions, relators were

asked whether this issue was one for which they had legal authority, and they acknowledged

there was none. When asked for any evidence of knowledge or knowingly false representations,

the relators could only opine the representatives of defendant or the district representatives

advocating the contracts with defendant “had to know” the representations were not true or were

somehow violative of state law. Without actual evidence of a false or fraudulent representation,

relators’ claim was destined to fail anyway. See People ex rel. Beeler, Schad & Diamond, P.C. v.

Relax the Back Corp., 2016 IL App (1st) 151580, ¶ 19, 65 N.E.3d 503 (plaintiff must prove a

false claim was done so knowingly by defendant to a government entity for the purpose of

avoiding a financial obligation to the government).

¶ 69 Based upon this record and for the reasons stated, we find the trial court properly

granted defendant’s motion for summary judgment. The court’s order striking relators’ exhibits

was proper as well.

¶ 70 III. CONCLUSION

¶ 71 For the reasons stated, we affirm the trial court’s judgment.

¶ 72 Affirmed.

- 29 -