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Motions in Limine Filed in Lance Armstrong/US Postal Service Litigation Raise FCA Damages, Government Knowledge and Relator Character Issues on Which Court’s Rulings May Have Widespread Impact

We reported back in March on the US District Court for the District of Columbia’s summary judgment decision in the Lance Armstrong/Floyd Landis/US Postal Service (USPS) False Claims Act (FCA) litigation, centered on Lance Armstrong’s use of performance enhancing drugs (PEDs) while he was leading a professional cycling team sponsored by the USPS. A pack of motions in limine (MILs) filed by the parties over the past few weeks suggest that the case may well be headed to trial this fall, and raise some notable legal issues to watch as it continues to unfold, including: As we previously reported, the key takeaway from the February summary judgment decision was the Court’s rejection of the government’s “tainted claims” theory of damages and associated ruling that, if liability is ultimately proven, the proper measure of (single) damages would be the $32 million the USPS paid in sponsorship, minus the actual value (if any) of the net benefits the USPS received from...

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In Calculating FCA Damages, Another Court Rejects Government Windfalls Based on Purportedly “Tainted Claims”

Last month, the US District Court for the District of Columbia delivered another blow to the “tainted claims” theory of False Claims Act (FCA) damages frequently espoused by the government and qui tam relators. From the 1990s through 2004, the US Postal Service sponsored a professional cycling team led by Lance Armstrong, who won the Tour de France seven consecutive times during that span shortly after surviving metastatic cancer. It was later revealed that Armstrong and his teammates had used performance enhancing drugs (PEDs) during the relevant time period. Armstrong ultimately was stripped of his titles and banned from the sport permanently. After years of denials, Armstrong publicly admitted his PED use in a 2013 interview with Oprah Winfrey. In 2010, former Armstrong teammate Floyd Landis filed a qui tam FCA suit under seal against Armstrong, the team’s owner (Tailwind Sports Corporation) and others. United States ex rel. Landis v. Tailwind Sports...

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Determining FCA Damages: Sixth Circuit Urges Comparable Sales Analysis to Assess Fair Market Value, Even Where Number of Market Participants is Small

On April 6, 2015, the Sixth Circuit reversed a $657 million judgment previously labeled by the Justice Department as “the largest judgment in the history of the False Claims Act,” because the government failed to prove damages.  For the second time in U.S. v. United Technologies Corp., the Sixth Circuit remanded to the district court to determine if the government can prove that false statements made in a 1983 supply bid by Pratt & Whitney, now owned by United Technologies Corp., in resulted in actual damages to the government.  Significantly, the Sixth Circuit opined that comparable sales analysis is the preferred method of determining the fair market value of goods to determine if the government suffered damage, even in a market that appears to be an oligopoly. The government filed the case in 1999, claiming that Pratt had made false statements to the Air Force while competing with GE Aircraft to supply engines for fighter jets.  Pratt had served for...

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