160 F. Supp. 3d 253
D.D.C.2016Background
- Floyd Landis (relator) filed a qui tam False Claims Act (FCA) suit alleging the USPS cycling team, including Lance Armstrong and associated business agents (Stapleton, Knaggs, and Capital Sports & Entertainment (CSE)), concealed doping to obtain USPS sponsorship payments.
- The 2000 Sponsorship Agreement between USPS and Tailwind (team manager) provided lump-sum sponsorship payments and contemplated hospitality/promotional reimbursements; it included anti-doping/morals clauses and allowed USPS to terminate or pursue remedies on default but did not expressly require automatic repayment upon breach.
- CSE (managed by Stapleton and Knaggs) handled Tailwind’s business affairs and submitted invoices to USPS; four claims for reimbursement were submitted in June–Sept 2004 (and Relator alleges two more later claims were submitted).
- The Government intervened against Armstrong but declined to intervene against the CSE Defendants; prior district rulings allowed direct-false-claim claims only for claims within the six-year limitations period and left open a reverse-false-claim theory under pre-FERA § 3729(a)(7).
- On summary judgment the Court found genuine factual disputes that precluded dismissal of Counts 1, 2, 3, and 6 (direct false-claim counts) because a reasonable jury could find the contested post-2004 reimbursements (and additional invoices) were made under the Sponsorship Agreement and thus non-time-barred and potentially false.
- The Court granted summary judgment for defendants on Count 4 (pre-FERA reverse-false-claim) because, applying D.C. Circuit precedent, the Sponsorship Agreement did not create a present, self-executing legal obligation to repay USPS such that § 3729(a)(7) liability could attach.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of six-year statute of limitations to direct FCA claims | Landis: invoices submitted post-June 10, 2004 (including four hospitality reimbursements and two other invoices) were made under the Sponsorship Agreement and thus within limitations | CSE: the four post-2004 reimbursements were not sponsorship payments under the Agreement and/or the Agreement had ended before they were submitted | Denied for summary judgment—genuine dispute whether the four (and two additional) claims arose under the Agreement; jury could find non-time-barred false claims |
| Whether the June–Sept 2004 reimbursement invoices were contemplated by the Sponsorship Agreement | Landis: Agreement and modifications expressly or implicitly authorized hospitality/promotional reimbursements; invoices bore the contract number and were addressed to USPS sponsorship director | CSE: those invoices were hospitality reimbursements unrelated to the Sponsorship Agreement and not "sponsorship fees" | Denied for summary judgment—documentary evidence and contract language create a triable issue that the invoices were contract-related |
| Whether a contract breach creates an "obligation" under pre-FERA § 3729(a)(7) (reverse false claims) | Landis: a ‘‘total breach’’ of core anti-doping provisions would create an obligation to repay that money (restitution) and § 3729(a)(7) covers such obligations without need for a demand/judgment | CSE/Armstrong: breach-only indebtedness is contingent—government must exercise discretion to sue; contingent obligations do not satisfy § 3729(a)(7) | Granted for summary judgment—Court revisited prior ruling and held under D.C. Circuit law (Hoyte) that the Agreement created no present, self-executing obligation to repay; contingent right to sue is insufficient |
| Liability of non-contracting agents (CSE/Stapleton/Knaggs) for reverse false claims | Landis: defendants who cause false records/ statements to conceal obligation can be liable even if they are not the original obligor | Defendants: only the contract party (Tailwind) could owe the obligation; non-obligor agents cannot be liable for an obligation they do not owe | Court did not reach this alternative argument on the merits after finding no statutory "obligation"; summary judgment for defendants on Count 4 rendered further analysis unnecessary |
Key Cases Cited
- United States v. Science Applications Int’l Corp., 626 F.3d 1257 (D.C. Cir. 2010) (implied-certification theory supports some FCA claims)
- Hoyte v. American Nat’l Red Cross, 518 F.3d 61 (D.C. Cir. 2008) (a consent decree that does not itself require payment does not create a present obligation under § 3729(a)(7))
- Am. Textile Mfrs. Inst. v. The Limited, Inc., 190 F.3d 729 (6th Cir. 1999) (distinguishes present obligations from contingent liabilities; contingent obligations not covered by reverse-false-claim provision)
- Q Int’l Courier, Inc. v. United States Postal Service, 131 F.3d 770 (8th Cir. 1997) (obligation must be a present duty to pay created by statute, contract, judgment, or acknowledgment of indebtedness)