On December 19, 2013, the US Court of Appeals for the Fourth Circuit held in U.S. ex rel. Bunk v. Gosselin World Wide Moving that a relator has standing to bring an action on behalf of the government under the False Claims Act (FCA) for civil penalties, even if no actual damages are sought (No. 12-1369, (4th Cir. Dec. 19, 2013)).

Plaintiff Kurt Bunk brought an action against the defendants alleging that they participated in an unlawful conspiracy to defraud the Military Traffic Management Command (MTMC). He further alleged that the defendants falsely represented that they had not engaged in discussions or made agreements with each other regarding the pricing of services, the allocation of territories or the division of market share. His action was consolidated with an action brought by another private plaintiff, Ray Ammons, in which the government intervened. The consolidated action went to trial, and the jury found defendant Gosselin liable for several of the counts alleged in the plaintiffs' complaints, including Count II of Bunk's complaint. Count II alleged that Gosselin was culpable under the FCA for artificially inflating the packing and loading component of bids submitted for the transportation of household goods for the MTMC. Bunk chose to forgo proof of actual damages and requested only civil penalties.

In a cross-appeal, Gosselin argued that Bunk, as a private plaintiff, lacked standing to sue under the FCA because he decided to bypass proof of actual damages and instead sought only civil penalties. According to Gosselin, Bunk therefore suffered no injury in fact, an essential component of standing. In Vermont Agency of Natural Resources v. U.S. ex rel. Stevens, the Supreme Court held that an FCA action alleges both "an injury to [the government's] sovereignty arising from violation of its laws" and a "proprietary injury resulting from the alleged fraud." (529 U.S. 765, 771 (2000)). Gosselin argued that only the proprietary injury, compensated by damages measured dollar for dollar, is an injury in fact for standing purposes. Gosselin further asserted that civil penalties merely address the injury to sovereignty, which it contended was not an injury in fact.

The Fourth Circuit upheld the lower court's finding that the government sustained injury due to the defendant's conduct. It held that the injury was an injury in fact, which conferred standing on Bunk as an FCA relator. The court rejected the argument that Bunk's tactical decision to pursue only civil penalties altered his relationship to the action as plaintiff and assignee. Successful FCA relators can and do recover both damages and civil penalties. The court ruled that because the remedial provisions of the FCA are strongly integrated, "they should not be evaluated in isolation for standing purposes." In so holding, the Fourth Circuit joined the US Courts of Appeals for the Fifth and Tenth Circuits in finding that realtors seeking solely civil penalties enjoy standing to sue under the FCA (U.S. ex rel. Stone v. Rockwell Int'l Corp., 282 F.3d 787 (10th Cir. 2002); Riley v. St. Luke's Episcopal Hosp., 252 F.3d 749 (5th Cir. 2001)).