Government’s case against Armstrong doomed by 2016 ruling

The Federal Government's $100 million fraud case against Lance Armstrong was likely doomed by a judge's decision in 2016.

The Federal Government’s $100 million fraud case against Lance Armstrong was likely doomed by a judge’s decision in 2016 to dismiss a key part of the lawsuit, legal experts told USA Today

In March 2016, U.S. District Judge Christopher Cooper tossed out the government’s charge that Armstrong was subjected to “reverse” false claims for the $30 million in sponsorship money that his team received from the U.S. Postal Service. The government argued that Armstrong had breached his sponsorship contract by using banned performance-enhancing drugs and methods during his time on the U.S. Postal team.

Judge Cooper disagreed with the charge and tossed it out.

“The government … contends — again — that long-established principles of contract and restitution law obligated (the cycling team owner) to repay any funds attributable to a breach of the Sponsorship Agreement,” Cooper wrote in his ruling. “The Court rejected this view after considerable briefing.”

On Thursday, Armstrong settled his case with the government for $5 million, with an additional $1.65 million payment going to cover the legal fees of Floyd Landis. Of the $5 million, Landis collects $1.1 million, meaning the government will receive just $3.9 million, which Armstrong will pay in installments. The news was seen as a major victory for Armstrong, who paid approximately 7 percent of the sum he originally faced.

“One might surmise that the government may have had doubts about the strength of its damages case,” attorney Tony Anikeeff told USA Today. Anikeef was not involved with the case.

Judge Cooper’s decision in 2016 likely made it more challenging for the government to prove damages against Armstrong. Rather than collect the cash due to a supposed breach of contract, the government had to prove that the U.S. Postal Service received damage from Armstrong’s doping controversy. In 2017, Federal attorneys had an expert state that Armstrong’s doping scandal produced 1.5 billion negative media impressions during 2010 and 2014.

But Armstrong’s attorneys had assembled statistics to show that the U.S. Postal Service actually benefitted from the sponsorship, which began in 1996 and ran through 2004. Court records showed that the U.S. Postal Service commissioned its own report that showed that it received $103 million in earned media value between 2001 and 2004.

Armstrong’s legal team appears to have known that they had the upper hand. Elliot Peters, Armstrong’s attorney, told USA Today that Armstrong rejected a prior offer to settle for more money and believed he had an advantage, should the case go to court.

Peters said that Armstrong decided to settle for $5 million due to “several significant court rulings rejecting and limiting the plaintiffs’ damages theories.”