A jury will decide whether Armstrong engaged in "fraudulent inducement." He could be forced to pay out $96 million in damages.
Lance Armstrong is headed to trial.
On Monday, a district court in Washington D.C. denied Armstrong’s attempt to have the federal government’s $100 million lawsuit against him tossed out of court with a summary judgement ruling. The decision marks a major defeat for Armstrong, whose attorneys had filed to have the case thrown out back in August.
The government’s suit alleges that Armstrong, the team’s owner Tailwind Sports, and Johan Bruyneel violated the False Claims Act (FCA) by collecting sponsorship funds from the U.S. Postal Service “while actively concealing the team’s violations of the agreements’ anti-doping provisions.” The suit was originally brought by former Armstrong teammate Floyd Landis in 2010, and was joined by the Feds four months later.
The suit alleges nearly $100 million in actual damages ($96,801,837 to be precise), calculated as three times the total amount of USPS’s sponsorship payments. Landis is potentially entitled to up to 25 percent of that sum.
The discovery phase of the case ended last fall with both sides requesting summary judgement. The government’s sought to establish the precise number of invoices (41) and total amount of the payments made by USPS ($32 million). The Court granted those motions.
Armstrong moved for summary judgment as well, claiming that the actual damages incurred by USPS were zero. His legal team claimed that the benefits of the sponsorship exceeded the $32 million price tag. However, the court found 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 now moves to a full jury trial, which will include witness testimony for both sides.
Previously, Armstrong’s legal team has sought to paint the entire era as dirty and dope-fueled, the implication being that any sponsor in that era must have been clued in to the methods required for victory. The argument thus calls into question the government’s contention that it was defrauded by Armstrong and his team’s cheating.
Making this argument is likely to require Armstrong to bring to court individuals involved in doping both on his team and other teams. Publicly available emails between the government and Armstrong’s attorneys indicate that the discovery phase included testimony from over thirty witnesses.
That witness list includes names familiar to cycling fans. In addition to Landis, Chris Carmichael, former USA Cycling CEO Steve Johnson, Armstrong’s longtime girlfriend Anna Hansen, his ex-wife Kristin Armstrong all provided testimony. They could do so again during a jury trial.
A jury will decide whether Armstrong and company engaged in “fraudulent inducement” when it re-signed USPS as a sponsor in 2000. A guilty verdict could see Armstrong forced to pay out the $96 million.