A federal judge has dismissed the US government’s argument that Lance Armstrong’s cycling team had an obligation to pay back sponsorship money received from the US Postal Service (USPS). While the case could still cost Armstrong $100m, USA Today reports that it will now prove harder for the government to prove it was defrauded and suffered damages resulting from doping practices on the team.
The government had tried to argue that Armstrong’s team was obliged to return money on the grounds that it breached its sponsorship contract. However, US District Judge Christopher Cooper concluded that the notion of ‘reverse false claims’ did not fit this case. Reverse false claims relate to a failure to disclose and return money owed to the government.
However, the more significant aspect of the case is the government’s position that the cycling team made direct false claims for payment to the USPS. This part of the case has not yet been ruled on and under the False Claims Act, damages could be tripled. With more than $30 million having been paid to Armstrong’s cycling team from 1998-2004, this could yet mean a payout approaching $100 million.
Armstrong’s defence is that USPS was not damaged by the doping and in fact received more in value from the sponsorship than it paid. His lawyers have previously cited USPS-commissioned studies valuing the global exposure received between 2001 and 2004 at $138-147m.
Last month, his lawyer also told a federal court that the USPS should have been aware that professional cycling was a “cesspool” of doping when it first sponsored his team and accused the government agency of choosing to ignore the issue.