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Media Alerts - Bunk v. Gosselin World Wide Moving, N.V. - Fourth Circuit
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April 3, 2014
  Bunk v. Gosselin World Wide Moving, N.V. - Fourth Circuit
Headline: Expensive? Yes. Excessive? No: $24 Million Fine Levied Against Foreign Subcontractor for Over 4,000 Counts of Fraud Against the Government

Area of Law: Civil Law

Issue Presented: Whether a fine under the Federal Claims Act for conspiring to defraud the government of over $1.5 million was excessive and thus in contravention of the Eighth Amendment.

Brief Summary: The Appellee, Gosselin Worldwide Moving, N.V. ("Gosselin"), was a German subcontractor that worked with foreign vendors to transport goods in Germany. After being contracted by the United States Department of Defense to provide transportation services, Gosselin and other companies in the same industry collectively agreed to charge a non-negotiable minimum price for their services. Over the next two years, Gosselin threatened to withdraw materials necessary for transport if companies undercut the agreed upon fixed prices with lower bids. Gosselin's threats resulted in two vendors cancelling their bids. Gosselin was subsequently convicted of federal criminal offenses for its involvement in the scheme.
After a criminal trial, the relator, Bunk, brought a civil action against Gosselin, under the False Claims Act ("FCA"), for participating in price-fixing and a monopoly of access to defraud the government. Finding that Bunk (on behalf of the government) had proven 4,341 instances of false claims, the district court entered judgment for Bunk in the amount of $5,500, in total. Even though Bunk was entitled to as much as $50 million, the district court reasoned that any penalty in excess of $1.5 million would violate the Excessive Fines Clause of the Eighth Amendment.

On appeal, the United States Court of Appeals for the Fourth Circuit first found that relators seeking solely civil penalties enjoy standing to sue. Turning to the amount of the judgment, the court affirmed the entry of judgment in favor of Bunk but reversed the trial court's award of only $5,500, and remanded the case with instructions for the district court to amend the judgment to award $24 million. The Fourth Circuit noted that $24 million did not constitute an excessive fine as it appropriately reflected the gravity of Gosselin's offenses and provided the necessary and appropriate deterrent effect.

To read the full opinion, please visit:
http://www.ca4.uscourts.gov/Op...ublished/121259.P.pdf

Significance: The Fourth Circuit interpreted the FCA's penalty provision.

Panel: Judges King, Shedd, and Thacker

Argument Date: 05/14/2013

Date of Issued Opinion: 12/19/2013

Docket Number: 12-1369

Decided: Affirmed in part, reversed in part, and remanded with instructions

Case Alert Author: Emmanuel Fishelman

Counsel: ARGUED: Louis Martin Bograd, CENTER FOR CONSTITUTIONAL LITIGATION, PC, Washington, D.C., for Appellant. Michael David Shumsky, KIRKLAND & ELLIS LLP, Washington, D.C., for Appellee. ON BRIEF: Terrence J. Donahue, Jr., MCGLYNN GLISSON & MOUTON, Baton Rouge, Louisiana, for Appellant. Joseph P. Thomas, Linda E. Maichl, Jeffrey Peck, ULMER & BERNE, LLP, Cincinnati, Ohio; Jay P. Lefkowitz, John K. Crisham, KIRKLAND & ELLIS LLP, Washington, D.C., for Appellee.

Author of Opinion: Judge King

Case Alert Circuit Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 04/03/2014 01:16 PM     4th Circuit  

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