Compliance » Scary Math For Government Contractors Who Are Qui Tam Defendants

Scary Math For Government Contractors Who Are Qui Tam Defendants

July 14, 2014

iStock_000005972855 DOLLAR SIGNS 420

Covington & Burling attorneys make the case that a recent Fourth Circuit opinion is not only unfair to qui tam government contractor defendants, but that it also injects a perverse incentive into the qui tam dynamic by motivating potential relators to overlook serious fraud in favor of less serious ones that happen be billed by way of a large number of successive invoices. In United States ex rel. Bunk v. Gosselin World Wide Moving NV, the qui tam relator alleged that a shipping company conspired to fix shipping rates, including by submitting a false certificate of independent price determination with its bid. In carrying out the contract, which was for transporting goods to U.S. military personnel in Europe, the company submitted thousands of invoices over a period of time, and the qui tam relator sought the statutory civil penalty of $5,500 to $11,000 for each invoice submitted, on the grounds that each invoice was a false claim. The low end of that range, $5,500, times the number of invoices – which was 9,136 – is over $50 million, although the relator proposed to cut it to $24 million. Shipping company Gosselin has filed a petition for writ of certiorari to the Supreme Court, arguing that the penalty is an excessive fine in violation of the Eighth Amendment. Covington & Burling attorneys filed an amicus brief for the National Defense Industrial Association.

Read full article at:

Daily Updates

Sign up for our free daily newsletter for the latest news and business legal developments.

Scroll to Top