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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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FCA Civil Penalties May Double, Exploding Possible Damages Awards

On May 2, 2016, the Railroad Retirement Board (RRB) issued an interim final rule increasing civil penalties allowable under the False Claims Act (FCA).  The rule will be effective on August 1, 2016.  Public comments may be sent to the RRB by July 1, 2016.  The Bipartisan Budget Act of 2015 requires other agencies, including the U.S. Department of Justice, to issue similar regulations in the coming months. The 1986 version of the FCA provided that on a finding of liability, the government can recover civil penalties of not less than $5,000 and not more than $10,000 per false claim in addition to treble damages.  The statute was subsequently amended to permit the civil penalties provision to be adjusted through the regulatory process by the Federal Civil Penalties Inflation Adjustment Act of 1990 and the Bipartisan Budget Act of 2015.  Civil penalties currently range from $5,500 to $11,000 per claim. Under the RRB’s proposed regulation, penalties will increase...

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