United States ex rel. Bunk v. Birkart Globistics GMBH & Co.
| Decision Date | 19 October 2011 |
| Docket Number | No. 1:02cv1168(AJT/TRJ),No. 1:07cv1198(AJT/TRJ),1:02cv1168(AJT/TRJ),1:07cv1198(AJT/TRJ) |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | UNITED STATES OF AMERICA ex rel. Kurt Bunk and Daniel Heuser, Plaintiffs/Relators, v. BIRKART GLOBISTICS GmbH & CO., et al., Defendants. UNITED STATES OF AMERICA ex rel. Ray Ammons, Plaintiff/Relator, v. THE PASHA GROUP, et al., Defendants. |
This False Claims Act case was tried before a jury, which on August 4, 2011, returned a verdict (1) in favor of the Gosselin defendants1 and against the United States as to what has been referred to in this litigation as the "Covan Channels"; (2) against the Gosselin defendants and in favor of the United States with respect to the number of false claims that the Gosselin defendants caused to be presented to the United States withrespect to what has been referred to in this litigation as the "Cartwright Channels"; and (3) against the Gosselin defendants and in favor of the United States with respect to what has been referred to in this litigation as the "DPM claim," filed and pursued by the Relator Bunk, without the intervention of the United States.
Presently before the Court are post-trial motions consisting of: (1) Defendants' Renewed Motion for Judgment as a Matter of Law and Alternative Motion for Partial New Trial (Doc. No. 1075), which challenges the jury verdict against the Gosselin defendants as to the Cartwright Channels and the DPM claim, and also seeks a set-off against damages otherwise assessable based on the restitution and settlement payments already collected by the government; (2) United States/Relators' Motion for Judgment Against Gosselin Defendants for Damages and Civil Penalties (Doc. No. 1076), which seeks without further proceedings judgment against the Gosselin defendants for treble damages and civil penalties with respect to the Cartwright Channels based on the Court's previous determination of liability and damages and the number of false claims that the jury determined were caused to be presented by the Gosselin defendants, and also as to the DPM claim, based on the jury's finding of liability as to the DPM claim and the parties' stipulation as to the number of invoices that the Gosselin defendants submitted with respect to the DPM claim; and (3) Relators' Motion Regarding Further Proceedings (Doc. No. 1073), which also seeks a determination of civil penalties as to the DPM claim based on the jury's finding of liability as to the DPM claim and the parties' stipulation.2
As discussed in this Memorandum Opinion, the Court concludes that the UnitedStates failed to present evidence sufficient to allow the jury to determine without speculation the number of false claims that the Gosselin defendants caused to be submitted to the government and for that reason, the Court will grant defendants' motion for judgment as a matter of law with respect to the Cartwright Channels. In addition, the Court conditionally rules pursuant to Federal Rule of Civil Procedure 50(c)(1) that a new trial should be granted as to the number of false claims that the Gosselin defendants caused to be submitted with respect to the Cartwright Channels if this judgment is reversed or vacated on appeal.
Second, the Court concludes that the government is entitled to treble damages in the amount of $2,595,000, or three times the amount of $865,000, which the Court had determined as a matter of law constituted the government's actual, total loss with respect to the Cartwright Channels, subject to any set-offs as a result of the criminal restitution payment of $865,000 made by defendant Gosselin Worldwide Moving N.V. and the approximately $14 million the United States obtained in settlements from those alleged to be jointly and severally liable with the Gosselin defendants. In that regard, the Court concludes that after such restitution and settlement payments are appropriately credited and set-off against the trebled damage amount of $2,595,000, the United States has recovered fully with respect to the Gosselin defendants and no amount remains due and owing from them based on their liability for the claims set forth in the United States' Complaint in Intervention.
Third, the Court concludes that the evidence was sufficient for a reasonable jury to find in favor of the United States on the DPM claim and that as a matter of law, 9,136false claims were submitted with respect to those claims.3 The Court also concludes that the Gosselin defendants are not entitled to a new trial with respect to the DPM claims. The Court will therefore enter judgment against the Gosselin defendants for civil penalties in an amount to be determined following the evidentiary hearing scheduled for October 26, 2011 and also award attorney's fees and a share of the government's recovery to Relator Bunk following a determination of civil penalties.
For the reasons previously stated in open Court and in this Memorandum Opinion, the Court therefore: (1) grants defendants' motion for judgment as a matter of law, and conditionally grants a new trial, as to the number of false claims submitted by the defendants as to the Cartwright Channels; (2) denies defendants' motion for judgment as a matter of law as to the DPM claim and also their request for a new trial as to the DPM claims; (3) grants the United States and Relators' motion for judgment as to damages in the amount of $2,595,000 as to the Cartwright Channels but reduces the amount owed by the Gosselin defendants for those damages to zero after crediting restitution and settlement payments already collected by the government; (4) grants the United States and Relators' motion for judgment for civil penalties against the Gosselin defendants as to the Cartwright Channels to the extent of one civil penalty on one false claim, in an amount to be determined; (5) grants the United States and Relators' motion for judgment of liability against the Gosselin defendants as to the DPM claim for civil penalties on 9,136 false claims, in an amount to be determined; and (6) otherwise denies the United States and Relators' motion for judgment against the Gosselin defendants as to the DPM claim, without prejudice to the assessment of civil penalties, attorney's fees anda share of the government's recovery to Relator Bunk.
The nature and procedural history of this case are set forth in the Court's previous orders and memorandum opinions, including, in particular this Court's Memorandum Opinion dated August 26, 2011 pertaining to aspects of the Court's ruling at trial on Defendants' motion for judgment as a matter of law pursuant to Fed. R. Civ. P. 50, made following the close of the government's case in chief. See Doc. No. 1072. Briefly stated for the purposes of the current motions, this consolidated action was originally filed by Relator Kurt Bunk and Relator Ray Ammons (collectively "Relators"). On July 18, 2008, the United States intervened as to all claims relating to the International Through Government Bill of Lading ("ITGBL") program. Those ITGBL claims allege that the Gosselin defendants, among others, formed a single, overarching bid-rigging and price-fixing conspiracy on November 14, 2000 that successfully raised the rates charged for packing and unpacking U.S. military household goods within Germany by German moving companies, known as German local agents. Based on these allegations, the United States and Relators assert causes of actions for violations of the False Claims Act ("FCA"), 31 U.S.C. § 3729(a)(l)-(3) (2000), common law fraud, common law conspiracy to defraud the United States, and unjust enrichment.
Although the United States intervened as to the ITGBL claims, the United States did not intervene as to the claim referred to as the Direct Procurement Method contract claim, or DPM claim, brought by Relator Bunk. Unlike the ITGBL program, the DPM claim against the Gosselin defendants arises out of the government's contracting directly with the Gosselin defendants for packing and moving services within Europe. RelatorBunk alleges that the Gosselin defendants violated the FCA by filing a false Certificate of Independent Price Determination ("CIPD") in connection with their bid for the DPM contract, under which defendants certified that the prices in their offer had been arrived at independently, when in fact, they and other potential bidders had entered into a price fixing agreement and territory allocations.
Related to the current motions are the Court's pre-trial rulings with respect to the government's motions for summary judgment as to liability, damages and civil penalties based on the criminal convictions against Gosselin arising out of its conduct with respect to the Cartwright Channels.4 Based on those criminal proceedings, by Order dated January 25, 2010 (Doc. No. 557), the Court entered summary judgment against the defendants as to liability on the government's claims for conspiracy to defraud under the False Claims Act () and for common law conspiracy (Count II of the Complaint in Intervention). By Memorandum Decision and Order dated November 10, 2010 (Doc. Nos. 737 and 738), the Court entered summary judgment as to damages, finding that as a matter of law based on the restitution order entered in the criminal case in the amount of $865,000, the government had been damaged in the amount of $865,000. In that regard, the Court held that the restitution order entered against Gosselin in the criminal proceedings constituted a determination of the total actual loss that the government incurred as a result of the alleged conspiracies based on the Cartwright Channels and, under the doctrine of judicial estoppel, constituted the amount of the government's loss as a result of the conspiracies alleged in the UnitedStates' Complaint in Intervention, as to which liability had been entered based on Gosselin's criminal convictions. See Memorandum...
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