Yesterday, U.S. District Judge Christopher Cooper in Washington refused to throw out the $100 million lawsuit brought by the United States against former cycling icon Lance Armstrong, clearing the way for trial. The lawsuit was originally brought under the whistleblower provisions of the False Claims Act by Armstrong’s former teammate Floyd Landis. Landis and the government claim Armstrong defrauded the United States Postal Service out of millions of dollars in sponsorship funding because Armstrong cheated to win the Tour de France by taking illegal performance enhancing drugs. Armstrong was ultimately stripped of his seven titles and banned from further competition. Ironically, Landis too was stripped of his one Tour de France title for engaging in the same illicit drug use.
While yesterday’s ruling was a major victory for the government in its long battle with Armstrong, the judge did recognize the “substantial” benefits the Postal Service received at the time of Armstrong’s victories before his cheating was exposed. As reported in the Washington Post, Armstrong’s legal team pounced on this finding with Armstrong’s lead lawyer, Elliot Peters, claiming the opinion reveals “there is no actual evidence of any quantifiable financial harm to the USPS. So the government may now proceed to a trial that, as a practical matter, it cannot win.” However, this may be pure posturing on the side of Armstrong as the judge clearly recognized in his 37-page opinion that a jury could still find the Postal Service suffered a net harm from being so closely associated with all the negative publicity surrounding Armstrong in the fallout of this highly publicized scandal:
Ultimately, however, the court concludes that the monetary amount of the benefits USPS received is not sufficiently quantifiable to keep any reasonable juror from finding that the agency suffered a net loss on the sponsorship, especially if one considers the adverse effect on the Postal Service’s revenues and brand value that may have resulted from the negative publicity surrounding the subsequent investigations of Armstrong’s doping and his widely publicized confession.
The case will likely proceed to trial towards the end of the year. The government is seeking triple the damages it claims it suffered from sponsoring Armstrong’s US Postal Service Pro Cycling Team. The Postal Service paid roughly $32 million under the sponsorship contract of which Armstrong received more than $13 million. As the whistleblower who originated the lawsuit, Landis could be entitled to up to 30 percent of any government recovery.
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