Suit vs. Armstrong at key juncture
Judge must decide whether feds’ case should go forward
The long legal war between Lance Armstrong and the federal government is about to reach its most critical stage.
U.S. District Judge Christopher Cooper must decide whether to allow the government’s $100 million lawsuit against the disgraced cyclist to proceed to trial or to throw it out at Armstrong ’s request.
The sides traded blows again Monday as Cooper considers summary judgment motions in the three-year-old civil fraud case.
Armstrong ’s attorney, Elliot Peters, ripped the government for saying the U.S. Postal Service suffered damages as a result of his client’s doping on the USPS cycling team from 2000 to 2004.
The government is suing Armstrong on behalf of the USPS, which paid $32.3 million to sponsor Armstrong ’s cycling team from 2000 to 2004. The govern- ment wants that money back, arguing that Armstrong ’s cycling team violated its sponsorship contract by doping and then concealed those violations to continue receiving payment.
The suit accuses Armstrong of unjust enrichment and is seeking treble damages under the False Claims Act — nearly $100 million, with Armstrong possibly on the hook for all of it.
To boost its case, the government has asked Cooper to certify in summary judgment that Tailwind Sports, the cycling team’s owner, submitted 41 claims for payment to the USPS from 2000 to 2004 totaling $32.3 million. The government argued Monday that granting this narrow request would “streamline the remaining litigation and shorten trial.”
Armstrong ’s attorneys said the government cannot prove the existence of a false assertion made by Armstrong. They noted that Armstrong himself did not submit claims for payment to the USPS. Instead, the sponsorship contracts were between the USPS and Tailwind Sports, which dissolved in 2007. Tailwind in turn paid Armstrong his salary.
“There is nothing unjust about Armstrong retaining the salary he earned under his contract with Tailwind and which was paid to him by Tailwind (not the USPS),” Peters wrote in arguments in support of Armstrong ’s motion to toss the case.
The government sees it differently.
“Armstrong ’s liability for causing the presentment of Tailwind’s claims is an issue for trial,” government attorneys wrote.
A ruling might not come for weeks. If Cooper denies Armstrong ’s request for summary judgment, he likely will set a trial date. He could throw the whole case out, throw out some of it or green-light the whole case for trial. Much depends on the issue of damages: Did the USPS get what it paid for when sponsoring Armstrong’s team?
The government considers the sponsorship worthless because it didn’t get the clean cycling team it says it was promised. But Peters said the USPS received far more in value from the sponsorship than its $32.3 million cost and therefore suffered no damages. He cited reports commissioned by the USPS to quantify the value of the sponsorship each year from 2001 to 2004.
“Those reports established that the USPS received at least $165 million in domestic and international media exposure as a result of the cycling team sponsorship between 2001 and 2004,” Peters wrote. “The reports are admissible both as adoptive admissions and as business records. And when admitted, the reports alone eviscerate the government’s damages claim.”
The government’s case originated in 2010, when Armstrong ’s former teammate, Floyd Landis, filed a complaint against him under seal. As a government whistle-blower, Landis — who also doped and lied about it — stands to get a cut of the damages if the government’s case succeeds.