Lance Armstrong loses bid to have lawsuit dismissed

Lance Armstrong loses bid to have lawsuit dismissed

Credit: Getty Images

AUSTIN, TX - JANUARY 14: In this handout photo provided by the Oprah Winfrey Network, Oprah Winfrey (not pictured) speaks with Lance Armstrong during an interview regarding the controversy surrounding his cycling career January 14, 2013 in Austin, Texas. Oprah Winfrey’s exclusive no-holds-barred interview with Lance Armstrong, "Oprah and Lance Armstrong: The Worldwide Exclusive," has expanded to air as a two-night event on OWN: Oprah Winfrey Network. The special episode of "Oprah’s Next Chapter" will air Thursday, January 17 from 9-10:30 p.m. ET/PT (as previously announced) and Friday, January 18 at 9 p.m. ET/PT. The interview will be simultaneously streamed LIVE worldwide both nights on Oprah.com. (Photo by George Burns/Oprah Winfrey Network via Getty Images)

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by Brent Schrotenboer, USA Today Sports

khou.com

Posted on June 20, 2014 at 4:07 PM

Updated Friday, Jun 20 at 4:08 PM

A federal judge has denied Lance Armstrong's request to dismiss a $100 million fraud lawsuit filed against him last year by the U.S. government.

In an 81-page ruling issued Thursday, Judge Robert Wilkins allowed the government's case to proceed, setting the stage for a long and expensive court fight against the disgraced cyclist, who stands to lose a fortune if the government prevails.

His attorneys had argued the case was too old to bring under the statute of limitations. They also argued that the government should have known about his doping but did nothing to stop it because the U.S. Postal Service cycling team greatly benefited from the positive publicity surrounding Armstrong's success in the Tour de France.

"There could possibly be documents in the government's possession suggesting that it had reason to know the cycling team was doping, despite the findings of the investigation by the French authorities," Wilkins wrote. "If so, there may be force to the defendants' argument that the government should have conducted its own investigation sooner, and that if it had undertaken such an investigation, it would have uncovered doping. But the Court cannot make that determination based on the present record and based solely on the allegations in the complaint, as required when ruling on a motion to dismiss. Accordingly, the Court denies without prejudice, the defendants' motion to dismiss the government's action as time-barred."

The federal government filed suit against Armstrong last year, seeking nearly $100 million in damages on behalf of the U.S. Postal Service, the former sponsor of Armstrong's cycling team.

Filed under the False Claims Act, the government's suit alleged that the USPS would not have paid $40 million to sponsor the team from 1998 to 2004 if it had known that Armstrong's cycling team was cheating to win races in violation of its sponsorship contract.

In response, Armstrong asked the court to dismiss the case. The government "got exactly what it bargained for" with its sponsorship, Armstrong argued. He also said the government's fraud case is too old to bring under the six-year statute of limitations.

After a hearing of the arguments in November, Wilkins issued his decision Thursday.

The fraud case against Armstrong originally was filed under seal in June 2010 by Floyd Landis, a confessed doper and former teammate of Armstrong's. After more than a decade of false denials, Armstrong finally admitted to doping during a televised interview with Oprah Winfrey in January 2013. About a month after that interview, the federal government announced it was joining Landis' suit.

Landis filed a separate, parallel complaint in the case in which he also sued Bay Area businessman Thomas Weisel, who bankrolled the USPS team. Armstrong said he believed "Mr. Weisel was aware of doping by the USPS Team and in professional cycling in general," according to a court filing in the case.

But Wilkins dismissed Landis' claims against Weisel, saying he didn't sufficiently plead his case against him.

"There are insufficient allegations that Weisel had knowledge of the doping, and without such knowledge, he could not have had knowledge of any obligation to repay the government or have a purpose to conceal, avoid or decrease any such obligation," Wilkins wrote.

Landis – as a government whistleblower -- stands to get up to 25% the damages if the government's case prevails.

In a recent court filing, the government claims an exact amount of damages dating 10 years prior to Landis' original complaint -- $32,321,821.94 for sponsorship payments. Under the False Claims Act, damages can be trebled, in this case up to nearly $100 million.

The government previously sought to have Armstrong and others testify in pretrial depositions this month, but those depositions were put on hold pending Wilkins' ruling. The parties shall submit a new schedule for the depositions within 20 days of the ruling, Wilkins wrote.

The federal suit is one of two pending fraud cases against Armstrong, the other being a case filed last year by SCA Promotions, a sports insurance company in Dallas. The company seeks more than $12 million in costs and returned prize money for bonuses it paid Armstrong for winning the Tour de France from 2002 to 2004.

In 2012, the U.S. Anti-Doping Agency stripped Armstrong of all seven of his victories in the Tour de France from 1999 to 2005.

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