United States Ex Rel. Landis v. Tailwind Sports Corp.
2014 U.S. Dist. LEXIS 83313
| D.D.C. | 2014Background
- USPS sponsored a professional cycling team (1995–2004); sponsorships paid ~ $42M under 1995 and 2000 agreements that required compliance with UCI/IOC and other governing bodies and included morals/drug clauses and defaults for doping-related misconduct.
- Relator Floyd Landis (former team rider) and the United States sued Lance Armstrong, Johan Bruyneel, Tailwind entities, and several investors/owners under the False Claims Act (FCA) and related common-law claims, alleging systematic doping, concealment, and false statements that induced USPS payments.
- The government intervened against Armstrong, Bruyneel, TS Corp., and TS LLC; Landis pursued qui tam claims against those and additional non‑intervened defendants (Weisel, CSE, Stapleton, Knaggs, Ross Investments, Montgomery Sports).
- Complaints allege repeated use of EPO, blood transfusions, HGH, testosterone, and managerial facilitation; Armstrong later admitted doping (2013 Oprah interview).
- Defendants moved to dismiss on jurisdictional, timeliness, standing, Rule 9(b), and merits grounds. The court granted some dismissals (narrowly) and denied others, dismissing certain relator claims as time‑barred and some claims against specific defendants for failure to plead with particularity, but allowing major FCA and common-law claims to proceed against key defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether relator retains standing after government intervention | Landis remained a party with statutory right to continue | Defendants argued intervention strips relator of Article III standing | Held: Relator retains party status; statute and precedent allow continued participation |
| Whether Delaware winding-up statute barred suits vs. dissolved Tailwind entities | Plaintiffs filed within federal Rule 3 (action commenced at filing); gov’t complaint relates back | Tailwind argued dissolution/late service and §278 barred actions after wind-up period | Held: Federal Rule 3 governs; TS LLC dismissed as merged into TS Corp; gov’t complaint relates back under FERA §3731(c) where applicable; service adequate |
| Applicability of FCA tolling §3731(b)(2) to relator actions | Landis argued tolling should apply (some courts apply to relators) | Defendants argued tolling applies only to government actions and relator limited to 6‑year SOL | Held: §3731(b)(2) construed to apply to government actions; relator limited to 6‑year SOL (claims before June 10, 2004 dismissed) |
| Pleading specificity under Rule 9(b) for FCA counts against individual/owner defendants (e.g., Weisel) | Plaintiffs allege implied certifications, fraudulent inducement, and that high‑level defendants caused/knowing of false claims | Defendants argued plaintiffs failed to plead time/place/content, causation, and scienter with particularity | Held: Many 9(b) challenges sustained as to Weisel (dismissed without prejudice); Tailwind/Retail defendants largely failed to develop Rule 9(b) arguments and waived some challenges; reverse‑false‑claims and false‑statement claims survive as to Armstrong and others where knowledge and concealment sufficiently alleged |
Key Cases Cited
- United States v. Science Applications Int’l Corp., 626 F.3d 1257 (D.C. Cir. 2010) (explains implied‑certification theory and FCA scienter standards)
- Sanders v. North Am. Bus. Indus., Inc., 546 F.3d 288 (4th Cir. 2008) (construed §3731 tolling as applying to government only)
- Graham County Soil & Water Conservation Dist. v. United States ex rel. Wilson, 545 U.S. 409 (2005) (statutory interpretation limits scope of §3731 references to subsets of §3730 actions)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: factual matter must state plausible claim)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must be plausible, not merely conceivable)
- Bridges v. United States, 346 U.S. 209 (1953) (interprets Wartime Suspension of Limitations Act scope re: fraud of pecuniary nature)
- Covad Communications Co. v. Bell Atlantic Corp., 407 F.3d 1220 (D.C. Cir. 2005) (courts may judicially notice facts on the public record)
- United States ex rel. Long v. SCS Business & Technical Institute, Inc., 173 F.3d 870 (D.C. Cir. 1999) (dictum recognizing relator remains a party after government intervention)