Landis v. Tailwind Sports Corporation
Civil Action No. 2010-0976
| D.D.C. | Nov 28, 2017Background
- This is a District of Columbia opinion resolving Daubert/Fed. R. Evid. 702 challenges to expert witnesses in a False Claims Act suit arising from USPS’s sponsorship of Lance Armstrong’s cycling team.
- The Government proffered three experts on damages: Larry Gerbrandt (media impressions/valuation), Dr. Brian Till (brand-association/marketing effects), and Dr. Jonathan Walker (economic loss estimates using event-study analogues).
- Armstrong proffered two experts: Douglas Kidder (estimating economic benefits USPS received from the sponsorship) and Dr. John Gleaves (history and prevalence of PED use in cycling; plus opinions about USPS officials’ knowledge and investigation failures).
- The Court reaffirmed its summary-judgment limitation: the Government may not argue the fair-market value of the tainted promotional services was zero, but may prove that negative publicity after revelations reduced or eliminated prior benefits.
- Rulings: Government experts largely admissible but barred from endorsing the zero-value damages theory; Gerbrandt cannot testify that negative impressions necessarily outweighed positive ones. Kidder is admissible except as to revenue from a cycling-themed Visa promotion. Gleaves may testify about the widespread use of PEDs in cycling but not about what USPS officials knew or failed to investigate.
Issues
| Issue | Plaintiff's Argument (United States) | Defendant's Argument (Armstrong) | Held |
|---|---|---|---|
| Admissibility of govt experts on damages (relevance/speculation) | Experts provide a combined, non-speculative framework (impressions → brand harm → loss) to let jury estimate damages | Testimony irrelevant or too speculative; experts do not provide concrete damage quantification | Admitted: testimony is relevant and not unduly speculative when limited to permissible damages theory; cannot support zero-market-value theory |
| Gerbrandt's qualifications and methodology | Experienced media analyst whose impression counts and reach methodology are reliable | Lacks academic credentials; fails to show negative impressions outweighed positives; media-impression math unreliable | Qualified; impression-count methodology admissible; may not opine that negative impressions necessarily outweighed positives |
| Dr. Till (brand effect) — methodology/reliability | Academic literature and peer-reviewed work support general theory that negative endorser publicity harms sponsor brands | No case-specific study; unreliable to apply general theory here | Admissible to testify to general causal theory and its likely application, but must avoid the prohibited zero-value damages theory |
| Dr. Walker (economic loss estimates) — methodology | Event-study results from comparable public-company scandals reasonably applied to estimate USPS loss range | Method speculative because USPS is not publicly traded and no direct event study exists | Admissible: using event-study analogues and applying loss rates to comparable firms is sufficiently reliable if limited to permissible damages framework |
| Kidder (Armstrong’s expert) — qualifications and methods | Experienced business valuator; relied reasonably on USPS data and interpolation/extrapolation | Lacks formal econ/finance training; methodologies speculative; improperly attributes Visa promotion revenue to sponsorship | Qualified; testimony admissible except testimony attributing Visa-promotion revenue to the sponsorship is excluded |
| Gleaves (Armstrong’s expert) — scope of opinions | History and contemporaneous prevalence of PEDs in cycling relevant to materiality and statute of limitations; also would opine on what USPS knew | Govt: prevalence of non-USPS doping irrelevant; opinions about USPS knowledge/usurping jury/credibility determinations | Admitted: may testify about widespread PED use (limited to probative timeframes). Excluded: opinions on USPS officials’ knowledge or investigative failures (impermissible witness-credibility/usurpation) |
Key Cases Cited
- Daubert v. Merrell Dow Pharm., 509 U.S. 579 (trial-court gatekeeping: expert reliability and relevance)
- United States v. Science Applications Int’l Corp., 626 F.3d 1257 (D.C. Cir.) (valuelessness of services rendered by an entity with undisclosed conflicts is often "impossible to determine")
- Story Parchment Co. v. Paterson Parchment Co., 282 U.S. 555 (proof of amount of damages may be approximate when exact computation is precluded)
- Bigelow v. RKO Radio Pictures, 327 U.S. 251 (where defendant’s wrong prevents precise computation, jury may make a just and reasonable estimate)
- United States ex rel. Miller v. Bill Harbert Int’l Constr., Inc., 608 F.3d 871 (D.C. Cir.) (expert-derived methods to estimate damages upheld where exact computation impossible)
- Tri County Indus., Inc. v. District of Columbia, 200 F.3d 836 (D.C. Cir.) (lost-profits award not speculative where market and expert evidence supported estimates)
- Ambrosini v. Labarraque, 101 F.3d 129 (D.C. Cir.) (challenges to an expert’s methodology often go to weight, not admissibility)