Stacy & Witbeck, Inc. v. City & County of San Francisco

This appeal involves the second prong of the question posed in Stacy & Witbeck, Inc. v. City and County of San Francisco (1995) 36 Cal.App.4th 1074 [ 42 Cal.Rptr.2d 805 ] (Stacy I): whether a publication filed for a litigation and a nonlitigation purpose is privileged in both the judicial and administrative arenas. The publication in question is a contract claim for overages purportedly incurred on a public works project. In Stacy I we held that the litigation privilege did not bar use of the publication in an administrative action to declare a contractor an irresponsible bidder due to its filing a false claim with the contracting municipality.

Today we hold that the municipality can prosecute a judicial action under the False Claims Act based on that same contract claim. Accordingly, we reverse the judgment in favor of the contractor.

I. Background

In May 1991, pursuant to its competitive bidding process, the City awarded Stacy a contract to construct a project known as Muni Metro System Castro No. 10 Double Crossover (the Muni Project). Clause 89 of the contract specified that as a prerequisite to entitlement to additional compensation “for the happening of any…