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UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND

CHAMBERS OF

J. FREDERICK MOTZ
UNITED STATES DISTRICT JUDGE

101 WEST LOMBARD STREET BALTIMORE, MARYLAND 21201 (410) 962-0782 (410) 962-2698 FAX

January 3, 2007

Memo To Counsel Re: United States of America, ex rel. Thornton G. Sanders v. North American Bus Industries, Inc. Civil No. JFM-02-3084 Dear Counsel: As I indicated at the conclusion of the hearing held on December 8, 2006, my schedule unfortunately does not permit me to write an extensive opinion. Instead, I am issuing this memorandum opinion, stating my rulings and the reasons for them. I hope you understand that the form of my opinion does not reflect that I have not taken your arguments seriously.1 Defendant's motion for summary judgment will be granted in part and denied in part. Plaintiff's motion for summary judgment will be denied. I. Count I Plaintiff's "Buy America" claims asserted in count I are based upon the contention that NABI's payments to NABI Hungary for Engineering and Technology ("E&T") services were provided "in sham contracts designed to disguise the true purpose of these payments, i.e., to enable NABI to qualify for the federal subsidy and to shift taxable income to the parent company in Hungary." (Relator Sanders' Mem. of Law in Supp. of Cross Mot. for Partial Summ. J. as to Liability on Counts I, II, III, & IV of his Second Am. Compl. and Sanders' Opp'n to Def.'s Mot.

On December 20, 2006, counsel for the United States wrote a letter requesting that I delay my decision until February 1, 2007, in order to give the United States an opportunity to reconsider its decision not to intervene in this action. The United States' request is denied. This action has been pending since 2002, and the United States has twice been invited to intervene and has twice declined to do so. The United States received copies of all the electronic filings in this case, including the memoranda submitted in connection with parties' cross-motions for summary judgment. While the motions were pending, the United States made no effort to intervene, and it chose not to attend the hearing held on December 8, 2006. Under these circumstances, the time has come for this court to rule without hearing from the United States. 1

1

for Summ. J. at 28 [hereinafter Pl.'s Mot. for Summ. J.]).2 I am satisfied that genuine issues of fact exist as to whether the services for which the payments were made were fictitious. Accordingly, both parties' summary judgment motions as to count I are denied. However, as defendant argues, there is no evidence in the record that any other company would have sold the buses for any less than defendant charged or that the purchasers did not receive the buses for which they contracted. Therefore, under Harrison v. Westinghouse Savannah River Co., 352 F.3d 908, 923 (4th Cir. 2003), plaintiff has no claim for actual damages. On the other hand, Harrison also makes clear that the incurring of actual damages is not a requirement for a claim under the False Claims Act. Id. at 75 n.7. If a false statement caused the United States to pay out money, a False Claims Act claim will lie even if the United States did not suffer actual damages. Under those circumstances, the defendant would be liable only for the civil penalties imposed by the Act, see 31 U.S.C.

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