United States Ex Rel. Landis v. Tailwind Sports Corp.
234 F. Supp. 3d 180
| D.D.C. | 2017Background
- USPS sponsored a professional cycling team (1995–2004), paying Tailwind roughly $42 million overall and $32,267,279.85 within the FCA limitations period for 41 invoices.
- The 2000 Sponsorship Agreement included anti-doping and morals clauses and permitted USPS to terminate for drug-related misconduct or negative publicity.
- Lance Armstrong, the team’s star rider, repeatedly denied PED use during the sponsorship; later investigations (USADA, law enforcement) established systemic doping and Armstrong publicly confessed in 2013.
- Floyd Landis filed a qui tam False Claims Act (FCA) suit in 2010; the government later intervened. Remaining defendants include Armstrong and CSE (agents); Tailwind and Bruyneel are largely defaulted/out of the case.
- The government moved for partial summary judgment to establish Tailwind submitted 41 claims totaling $32,267,279.85; the Court granted that narrow relief. Discovery complete; cross-motions for summary judgment resolved liability and damages issues.
- The Court denied summary judgment to Armstrong on most liability theories (fraud-in-the-inducement and implied certification) and common-law claims, granted defendants summary judgment on express-certification theory, and left actual damages for the jury.
Issues
| Issue | Plaintiff's Argument (Gov’t / Relator) | Defendant's Argument (Armstrong / CSE) | Held |
|---|---|---|---|
| Existence and amount of claims presented to USPS | Tailwind submitted 41 invoices and USPS paid $32,267,279.85; those are FCA “claims” | Numbers are undisputed but defendants object to evidence timing and admissibility | Granted for gov’t: 41 claims totaling $32,267,279.85 established as a matter of law |
| Fraud-in-the-inducement (FCA & common-law fraud) | Armstrong’s denials and alleged concealment induced USPS to enter/renew the 2000 agreement; USPS relied on those representations | Armstrong argues timing and lack of reliance (statements post-date negotiations), and disputes causation | Denied for defendants: genuine factual disputes on material misrepresentation and USPS reliance preclude summary judgment |
| Express-certification FCA theory | Gov’t contends statements and conduct rendered claims false | Defendants point out invoices contain no express certification of compliance | Granted for defendants: no express false certification in the invoices; summary judgment for defendants on this theory |
| Implied-certification FCA theory | Submission of invoices coupled with concealment of doping amounted to implied false certifications of contractual compliance | Defendants argue invoices made no specific representations and Universal Health limits implied liability | Denied for defendants: applying D.C. Circuit precedent (SAIC), the gov’t raised triable issues that defendants withheld material noncompliance; implied-certification survives |
| Actual damages (FCA treble/benefit-of-the-bargain) | Gov’t seeks treble of payments, arguing sponsorship would have been worthless if USPS had known of doping | Armstrong asserts USPS received substantial measurable benefits (sales, earned-media valuations) exceeding payments; thus actual damages are zero as matter of law | Denied for defendants: market value of benefits is not sufficiently quantifiable as a matter of law; under SAIC the jury must decide net value (amount paid minus value of services received/used) |
| Unjust enrichment (related equitable relief) | Gov’t: Armstrong was enriched by salary/payments funded by USPS while concealing breaches | Armstrong: no direct contract, he performed services, and any restitution requires accounting for benefits USPS received | Denied for defendants: factual disputes over benefit value and unjust retention remain for jury |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard and burden on movant)
- Anderson v. Liberty Lobby, 477 U.S. 242 (genuine issue for trial standard at summary judgment)
- United States v. Bornstein, 423 U.S. 303 (invoices as "claims" under the FCA; benefit-of-the-bargain measure)
- United States v. Sci. Applications Int'l Corp., 626 F.3d 1257 (D.C. Cir.) (FCA implied-certification and damages framework when market value indeterminate)
- Universal Health Servs., Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (Supreme Court) (limits and framework for implied-certification theory)
- United States ex rel. Bettis v. Odebrecht Contractors of Cal., Inc., 393 F.3d 1321 (fraud-in-the-inducement theory under FCA)