Whistleblower cases are not typically high-profile, media-fueled cases. But, when the defendant is one of America’s formerly-beloved sports superstars, the False Claims Act becomes front-and-center news around the world. And according to an order from a federal judge last Thursday, the most highly-publicized False Claims Act case in recent memory will move forward towards what is sure to be an equally high-profile trial.
Lance Armstrong is a household name – an indisputably gifted athlete who battled stage IV cancer and returned to dominate the grueling sport of cycling. As with most incredible success stories, Armstrong always had critics – those who believed his comeback was too good to be true and that he must be taking performance-enhancing drugs. But, Armstrong steadily and passionately denied the allegations (and even sued those making the allegations) for more than a decade, all while racking up an unprecedented seven wins on cycling’s biggest stage, the Tour de France.
In 2010, Floyd Landis – a former cycling partner of Armstrong, confessed doper and convicted hacker – filed a False Claims Act case under seal against Armstrong alleging that Armstrong and some of his colleagues defrauded the U.S. Postal Service by accepting sponsorship payments while using or encouraging the use of performance-enhancing drugs in violation of the sponsorship deal’s terms. The case was unsealed in January 2013, a short while after Armstrong publicly admitted to doping for all seven of his Tour de France wins during an interview with Oprah Winfrey – an admission that lead to his losing all of his titles and being banned from cycling for life. A month later, the Department of Justice joined Landis’s suit against Armstrong, seeking nearly $100 million in damages.
On Thursday, June 19, 2014, Judge Robert Wilkins of the U.S. District Court for the District of Columbia issued an 81-page opinion which rejected Armstrong’s efforts to have the case dismissed. Among other issues, Armstrong asserted that the United States had waited too long to bring its case, and that the government should have known about Armstrong’s doping when it was happening, but chose not to stop it because the U.S. Postal Service was benefiting from Armstrong’s popularity.
Judge Wilkins rejected both arguments based on the government’s allegations – though acknowledged the possibility that documents may be identified during discovery which reveal if and when the government knew about Armstrong’s doping. Based on Judge Wilkins’s order, the case against Armstrong, his former team manager Johan Bruyneel, and an associated company called Tailwind Sports, will now proceed to a phase called “discovery” wherein both sides seek extensive documentation and information from one another to support or refute the allegations. (Of note, Judge Wilkins did dismiss allegations against a team investor named Thomas Weisel because there were insufficient allegations to show his knowledge of the team’s doping.)
The legal and factual issues underlying this case are complicated and will likely force a jury to determine whether the U.S. Postal Service buried its head in the sand to reap the benefits of Armstrong’s enormous stardom, or whether Armstrong and his training cohorts pulled off a complicated long-con at the taxpayer’s expense.
Of course, there is no joy in watching a beloved athlete’s downfall be highlighted in the media. But, this case’s public attention is tremendously important for two reasons. First, it has brought the often-unrecognized False Claims Act to the forefront of countless news stories, thereby making potential whistleblowers aware of the law and its potential application. And perhaps more important, it is a strong signal from the Department of Justice that there isn’t a hall-pass on fraud just because the fraudster is popular, wealthy, or even a sympathetic figure.
This case will likely continue for years to come, and we will continue to include major developments on this blog. If you have any questions about this blog or about the False Claims Act in general, please contact us through the website or give us a call at 1-800-651-2502.