The Fourth Circuit reversed a judgment that awarded nothing -- zilch -- on a winning $50 million False Claims Act claim for civil penalties.
The panel first ruled that FSA relator Kurt Bunk had "standing" to sue under the statute despite his lack of personal injury. The harm to the federal government (from a scheme to fix prices and rig bids on charges for moving goods of U.S. military personnel) satisfied the injury-in-fact requirement for constitutional standing to sue, the panel held. The court thus joined "the two other circuits that have decided the issue." United States ex rel. Bunk v. Gosselin World Wide Moving, N.V., No. 12-1369, slip op. 30 (4th Cir. Dec. 19, 2013) (citing United States ex rel. Stone v. Rockwell Int'l Corp., 282 F.3d 787, 804 (10th Cir. 2002), rev'd on other grounds, 549 U.S. 479 (2007), and Riley v. St. Luke's Episcopal Hosp., 252 F.3d 749, 752 n.3 (5th Cir. 2001) (en banc)).
The court also concluded that the award of zero in civil penalties could not stand. Sure, the panel noted, the statutory requirement of at least a $5,500 penalty for each of 9,136 false invoices -- totalling north of $50 million -- seemed harsh in light of a paltry $2 million or so in possible losses to the government. But Bunk agreed to take far less -- a mere $24 million -- as he had a right to do. "Under the circumstances before us, we are satisfied that the entry of judgment on behalf of Bunk for $24 million on the DPM claim would not constitute an excessive fine under the Eighth Amendment. That amount, we think, appropriately reflects the gravity of [price-fixer/bid-rigger] Gosselin's offenses and provides the necessary and appropriate deterrent effect going forward." Id. at 44.