March 4, 2015 Rule 9(b)
UPDATE: Federal Court Dismisses Six Affirmative Defenses in Lance Armstrong False Claims Act Lawsuit
The federal False Claims Act can apply to just about any act of fraud involving taxpayer dollars, including the systematic abuse of government funds at the hands of a wayward cycling team – headed by none other than the disgraced former Tour de France champion Lance Armstrong. In 2013, a former teammate of Armstrong’s initiated a whistleblower lawsuit under the False Claims Act, alleging the cyclists intentionally submitted false claims for reimbursement to the government for purposes of funding his U.S. Postal Service racing team despite consistently utilizing banned performance enhancing drugs. This was a clear violation of not only the rules of cycling, but also of the agreement between Armstrong and the federal government for the provision of the funds.
The federal government joined in the lawsuit a few months later, and the litigation has ensued over the past several years. In today’s update, we discuss the federal district court’s decision to dismiss several of Armstrong’s affirmative defenses – all for various reasons – leaving the defendant with few options left, other than to settle the matter.
District of Columbia District Court Rejects Armstrong’s Affirmative Defenses
Through counsel, Armstrong submitted a number of affirmative defenses to the relator’s claims. The first such defense centered on the fact that the teammate responsible for commencing the lawsuit was also targeted for his criminal involvement in the matter and should therefore be precluded from seeking a qui tam reward for behavior in which he had participated. However, the court pointed out that the teammate is currently under a deferred prosecution agreement and has not technically been convicted of any wrongdoing in connection with the doping scandal.
Second, Armstrong raised the Rule 9(b) defense, claiming that the relator’s claims were not pled with enough specificity as required in cases involving allegations of fraud. As we have discussed several times on this blog, federal courts are split as to the applicability of Rule 9(b), particularly with regard to whether it requires a specific and itemized delineation of each instance of fraud, or a less stringent but concise listing of the alleged fraudulent conduct. Without actually addressing the standard, the court held that any Rule 9(b) objections were effectively waived, since neither party had addressed the issue at the outset of the lawsuit.
Several other defenses were also dismissed, including the assertion that the relator filed the claim in bad faith. Other defenses, however, were not dismissed, including a defense contending that the government ran afoul of confidentiality laws by disclosing information about the False Claims Act lawsuit publicly before it had been unsealed.
Contact Berger Montague Today
If you are aware of possible misuse of government funds, perhaps under a government contract for services or within the healthcare field, we encourage you to contact Berger Montague right away for assistance. Our experienced whistleblower attorneys can offer a confidential review of your claim and help you better understand the complexities of the False Claims Act.