United States ex rel Kurt Bunk v. Gosselin World Wide Moving
741 F.3d 390
| 4th Cir. | 2013Background
- DOD contracted freight forwarders under ITGBL and DPM programs; Gosselin and others allegedly colluded to fix "landed rates" and rig bids for Germany–U.S. channels.
- Criminal convictions arose for Gosselin/Pasha on bid-rigging affecting some channels; related qui tam suits followed (relators Bunk and Ammons; Government intervened in Ammons).
- At trial the jury found liability for 9,136 false invoices tied to Bunk’s DPM claim; the district court credited only a single $5,500 penalty for a different portion and found no recoverable penalties for the 9,136 claims, citing the Eighth Amendment as applied to the statutory per-claim minimums.
- The district court also held Gosselin immune under the Shipping Act for its price‑fixing conduct affecting all German channels (excluding the Cartwright Channels where liability was affirmed earlier).
- Relators and the United States appealed; the Fourth Circuit reviewed standing, Excessive Fines Clause proportionality, the scope of Shipping Act immunity, and whether a reduced award (remittitur) could cure constitutional problems.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Relator standing when suing only for civil penalties under the FCA | Bunk: FCA assigns government’s claims so relator has Article III standing to pursue penalties alone | Gosselin: Penalties remedy sovereign injury (not assignable); relator lacks injury‑in‑fact if he waives damages | Court: Relator has standing; FCA assignment and qui tam tradition permit relators to seek penalties alone |
| Eighth Amendment — whether per‑claim minimums make a penalty excessive as applied | Bunk: Court may accept remittitur to reduce award to constitutional level ($24M proposed) | Gosselin: Statutory minimums require ~$50M; any large award is grossly disproportional | Court: $50M+ would be excessive; remittitur to $24M is constitutional and must be entered; vacated district court’s zero award |
| Shipping Act immunity for price‑fixing conduct affecting German channels | U.S.: Shipping Act does not bar FCA liability where scheme affected entire through‑transportation market | Gosselin: §1706(a)(4) immunizes foreign inland segment conduct from antitrust and thus from FCA liability here | Court: Shipping Act did not entitle Gosselin to blanket immunity for the government’s FCA claim; vacated district court’s grant of judgment on that ground and remanded |
| Judicial power to reduce number of assessed claims or fines to avoid Eighth Amendment problem | Bunk/Govt: Court should allow reduced number of assessed claims or accept remittitur rather than award nothing | Gosselin: Statute mandates per‑claim minimums; relator’s election cannot force lower penalty | Court: Plaintiff (and relator as assignee) may accept reduced judgment; court must ensure constitutional proportionality — $24M remittitur is appropriate |
Key Cases Cited
- United States v. Gosselin World Wide Moving, N.V., 411 F.3d 502 (4th Cir. 2005) (criminal appeal addressing similar price‑fixing and immunity arguments)
- United States v. Bajakajian, 524 U.S. 321 (1998) (Excessive Fines Clause proportionality test; fine ‘‘grossly disproportional’’ standard)
- Vermont Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765 (2000) (qui tam relator standing under FCA via assignment of government’s claim)
- United States ex rel. Harrison v. Westinghouse Savannah River Co., 352 F.3d 908 (4th Cir. 2003) (each invoice can be a separate FCA claim; context for per‑claim penalties)
- United States ex rel. Marcus v. Hess, 317 U.S. 537 (1943) (FCA’s dual remedies intended to make government whole and deter fraud)