Lance Armstrong Ek’s out Small Victory in Federal Whistleblower Lawsuit
Whistleblower Floyd Landis and the United States cannot pursue a “reverse” false claims count against disgraced cyclist Lance Armstrong under a U.S. Postal Service sponsorship contract, a federal judge ruled this week.
U.S. District Judge Christopher R. Cooper entered summary judgment Tuesday dismissing the claim. He concluded the sponsorship agreement in place “created no legal obligation” for Armstrong “to repay USPS any sponsorship fees obtained as a result of materially false statements.”
Direct false claims cause the federal government to pay money directly to the claimants, while reverse false claims cause the improper withholding of money the federal government is owed.
Landis sued former teammate Armstrong, former U.S. Postal Service team manager Johan Bruyneel and Armstrong’s management company Tailwind Sports in Federal Court in 2010. The United States joined the lawsuit three years later, after Armstrong admitted to Oprah Winfrey that he used steroids and blood doping to win his record seven consecutive Tour de France victories.
Armstrong gave the interview after he was banned from the sport for life and stripped of his victories. Describing the interview as an “ass whooping,” Armstrong said last month he was forced to do it because he wanted to tell his story on his terms with a person of his choosing.
In the same interview , Armstrong said he could not settle with the government because he “is not in a position to cut any more checks” after enduring numerous other lawsuits.
As many know, Landis was also was stripped of his Tour de France victory for doping, after an epic breakaway in the 2006 race. He claims Bruyneel knew the team was using banned drugs and that Armstrong and Tailwind Sports, among others, knowingly flouted USPS sponsorship agreements signed in 1995 and 2000. Landis could receive up to 30 percent of any recovery as whistleblower.
Cooper’s 31-page opinion agreed with the defendants that Tailwind’s “purported obligation to pay does not arise under the contract, but rather from an alleged right to recoup previous contractual payments.” Cooper said he could not find any other decision ruling that a breach of contract with the United States allows it to sue for reimbursement qualifying as an “obligation” under the False Claims Act.
He cited a 2014 ruling against the defendants that concluded a reverse false claims “obligation” is only triggered by a “total breach” of a “core, vital material term that defeats the purpose of the contract” and allows the injured party to ask for restitution.
“Upon considerable further review, the court is persuaded that Tailwind’s alleged breach of the sponsorship agreement did not create a statutory ‘obligation,'” he wrote.
Cooper also refused to dismiss four direct false claims counts against Armstrong’s business representatives – William Stapleton, Barton Knaggs and their company Capital Sports and Entertainment Holdings – finding a genuine issue of material fact exists as to whether false claims under the USPS sponsorship agreement were filed within act’s six-year statute of limitations.
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