United States ex rel Kurt Bunk v. Gosselin World Wide Moving

741 F.3d 390
CourtCourt of Appeals for the Fourth Circuit
DecidedDecember 19, 2013
Docket19-1059
StatusPublished
Cited by35 cases

This text of 741 F.3d 390 (United States ex rel Kurt Bunk v. Gosselin World Wide Moving) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States ex rel Kurt Bunk v. Gosselin World Wide Moving, 741 F.3d 390 (4th Cir. 2013).

Opinions

No. 12-1417 affirmed; No. 12-1369 affirmed in part, reversed in part, and remanded with instructions; and No. 12-1494 vacated and remanded by published opinion. Judge KING wrote the opinion, in which Judge THACKER joined. Judge SHEDD wrote a separate opinion concurring in part and dissenting in part.

KING, Circuit Judge:

These appeals and cross-appeal are taken from final judgments, entered in accordance with Federal Rule of Civil Proce[395]*395dure 54(b), in a pair of qui tam actions consolidated for litigation in the Eastern District of Virginia. By its Order of February 14, 2012, the district court: (1) assessed a single civil penalty in the sum of $5,500 in favor of the United States, intervening in substitution of relator Ray Am-mons, as to a single portion of its claim pursuant to the False Claims Act (the “FCA”), which it alleged against defendants Gosselin Worldwide Moving, N.V., Gosselin Group N.V., and the latter’s CEO, Marc Smet (collectively, “Gosselin” or the “company”); (2) decreed judgment for Gosselin on the remainder of the FCA claim, as well as common law claims asserted by the government in the same action; (3) granted judgment as to liability with respect to a single FCA claim alleged by relator Kurt Bunk and against Gosselin in the second action; but (4) denied Bunk recovery of civil penalties on that claim.

The primary issue before us is whether the district court erred in determining that, concerning 9,136 false invoices at the heart of Bunk’s claim, any award under the FCA must necessarily exceed more than $50 million. The court ruled that such an assessment would contravene the Excessive Fines Clause of the Eighth Amendment, and it thus awarded nothing. We must also decide whether, as to the larger portion of the government’s FCA claim on which Gosselin prevailed, the court properly declared the company immune under the Shipping Act. Gosselin, for its part, urges on cross-appeal that Bunk’s election to seek civil penalties to the exclusion of actual damages deprives him of standing to maintain any recovery — even one consistent with the Eighth Amendment.

We conclude that Bunk possessed standing to sue for civil penalties while bypassing the prospect of a damages award, and we thus affirm the district court’s judgment in his favor. To the extent, however, that the court denied Bunk recovery of any penalties, we reverse and remand for entry of his requested award of $24 million, an amount that we deem to be consistent with the Constitution. Finally, we are of the opinion that the Shipping Act confers no immunity upon Gosselin for any part of the government’s FCA claim; we therefore vacate the contrary ruling in favor of Gosse-lin and remand the misadjudicated portion of the claim for further proceedings.

I.

A.

1.

An army may march on its stomach, but when a fighting force is deployed to a foreign front, familiar furnishings also serve to fuel the foray. The Department of Defense (the “DOD”) seeks to provide its armed military forces and civilian personnel with the orderly and efficient transport of their goods and effects across the Atlantic, point to point within Europe, and back home again. The DOD thus instituted the International Through Government Bill of Lading program (the “ITGBL program”) to govern transoceanic moves, while relying on the Direct Procurement Method (the “DPM”) to contract for transport strictly on the European continent. Both methodologies were administered by the DOD’s Military Traffic Management Command (the “MTMC”).1

In the ITGBL program, the MTMC solicited domestic vendors — often referred to as “freight forwarders” — to bid on one or [396]*396more “through rates,” i.e., unitary prices for moving household goods along shipping channels established between the several states and the particular European countries in which American personnel were encamped. Channels were further distinguished based on which of the respective termini was the origin of the goods. For example, the Virginia-to-Germany channel was bid apart from the Germany-to-Virginia channel.

The successful bidders contracted with the MTMC to supply door-to-door service, typically consisting of discrete segments: packing the goods at the origin; land carriage to the ocean port; origin port services; ocean transport; destination port services; and carriage overland to the destination, where the goods were unpacked. Subcontractors, including Gosselin, provided services in connection with the European segments, and the prices quoted by those subcontractors were taken into account by the freight forwarders. The MTMC dealt on an individual basis with some of these same subcontractors when it availed itself of the DPM to obtain packing, loading, and transportation services exclusively within Europe.

On November 14, 2000, Gosselin met in Sonthofen, Germany, with a number of its industry peers, some that provided services in multiple European segments and others that were more locally focused. Together, these entities controlled the lion’s share of packing and transportation services within Germany. The meeting participants agreed to charge a non-negotiable minimum price for these local services, which would also be incorporated into the fixed “landed rate” quoted to the freight forwarders for servicing multiple segments. Apart from its intended effect upon the ITGBL program, the Sonthofen meeting and resultant agreement arguably served as a catalyst with respect to an ongoing DPM scheme. Pursuant to that scheme, Gosselin was awarded a contract, effective May 1, 2001, after colluding with its fellow bidders to artificially inflate the packing and loading component of the submitted bids. Thereafter, Gosselin subcontracted much of the work, in predetermined allocations, to its supposed competitors.

Despite the efforts of Gosselin and its Sonthofen cohorts, freight forwarder Co-van International, Inc., was able to submit, at initial filing for the ITGBL International Summer 2001 (“IS01”) rate cycle, the low bid on fourteen channels between Germany and the United States (the “Covan Channels”). In order to increase the likelihood of obtaining business in those channels, other freight forwarders such as the Pasha Group, with which Gosselin had a continuing relationship, would have been compelled to match Covan’s prime through rate. Instead, Gosselin threatened to withdraw financing from Covan for the latter’s purchase of thousands of lift vans required to fulfill its contractual obligations with the MTMC. Consequently, Covan cancelled its bid, and Gosselin spread the word among the freight forwarders that each should, during the second (“me-too”) phase of the bidding, match only the second-lowest bid on the Covan Channels.

2.

The foregoing scenario was virtually duplicated one year later, during bidding for the IS02 cycle. On that occasion, Cartwright International Van Lines, Inc., successfully bypassed the established landed rates to submit the low bid on twelve Germany-U.S. channels (the “Cartwright Channels”). Gosselin and Pasha, however, convinced Cartwright to withdraw its bid, and, after ensuring that local agents would refuse services to anyone who failed to [397]*397cooperate, they secured agreements from Pasha’s fellow freight forwarders to echo the second-lowest bid. For their actions in connection with the Cartwright Channels, the Gosselin and Pasha corporate entities were each convicted of federal criminal offenses in the Eastern District of Virginia. See United States v. Gosselin World Wide Moving, N.V.,

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Bluebook (online)
741 F.3d 390, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-ex-rel-kurt-bunk-v-gosselin-world-wide-moving-ca4-2013.