United States District Court, District of Columbia
UNITED STATES OF AMERICA ex rel. FLOYD LANDIS Plaintiff,
TAILWIND SPORTS CORPORATION et al., Defendants.
CHRISTOPHER R. COOPER UNITED STATES DISTRICT JUDGE.
ruling marks the finish line of a lawsuit brought by Floyd
Landis and the federal government to recover money paid by
the U.S. Postal Service to sponsor a professional cycling
team featuring Lance Armstrong. In 2010, Landis filed suit
under the False Claims Act alleging that Armstrong and a host
of associates had defrauded the Postal Service by
misrepresenting and concealing the team's use of
performance enhancing drugs. The United States intervened in
the case in early 2013. After more than five years of active
litigation, the original peloton of defendants has dwindled
to two: the team's owner, Tailwind Sports Corporation,
and its erstwhile manager, Johann Bruyneel. Neither has
participated in the case since 2014.
government has moved for a default judgment on its False
Claims Act claims against both defendants, which Landis
joins, and on a separate common-law claim of unjust
enrichment against Bruyneel. Landis has independently moved
for an award of False Claims Act damages against both
defendants. As explained below, the Court will grant both of
the government's motions, impose $369, 000 in civil
penalties against Tailwind and Bruyneel, and award $1, 228,
700 in restitution against Mr. Bruyneel on the
government's unjust enrichment claim. The Court will deny
Landis' motion for an award of damages.
Court has fully recounted the factual and legal background of
the case in prior rulings. See, e.g., United
States ex rel. Landis v. Tailwind Sports Corp.
(“Landis II”), 234 F.Supp.3d 180, 186-90
(D.D.C. 2017). It will keep the details brief here.
1996 through 2004, the United States Postal Service
(“USPS”) sponsored a professional cycling team,
which was owned by a series of corporate entities culminating
with defendant Tailwind Sports Corporation
(“Tailwind”). U.S. Compl. ¶ 2. Johan
Bruyneel was the manager (or “directeur sportif”)
of the team; Lance Armstrong and Floyd Landis were two of the
team's riders. Id. ¶¶ 2, 7, 10. Under
agreements entered into in 1995 and 2000 for the USPS
sponsorship, Tailwind (or its predecessors) represented that
the riders on the team would adhere to all relevant rules
governing professional cycling, including prohibitions on the
use of performance enhancing drugs. Id. ¶¶
16-18. In addition, the 2000 agreement specifically included
the use of performance enhancing drugs, or any negative
publicity associated with such use, as events of default.
Id. ¶ 20. Over the period of the sponsorship,
USPS paid approximately $32 million to Tailwind. Landis
II, 234 F.Supp.3d at 186. As is now well known, the
riders on the USPS-sponsored team did not in fact adhere to
the international rules prohibiting the use of performance
enhancing drugs in cycling. In a 2013 interview with Oprah
Winfrey, Armstrong admitted that he had used banned
substances, including during the time period that USPS
sponsored the team. U.S. Compl. ¶ 61.
2010, Landis filed suit against multiple defendants,
including Armstrong, Bruyneel, and Tailwind, on behalf of the
United States under the False Claims Act. Landis II,
234 F.Supp.3d at 189. In 2013, the government intervened in
the suit against Armstrong, Tailwind, and Bruyneel.
Id. The defendants against whom the government did
not intervene reached a settlement agreement with Landis, to
which the government consented, and were dismissed in June
2017. See Order (July 5, 2017) [ECF No. 576].
Armstrong himself reached a settlement agreement with the
government and Landis on the eve of the scheduled May 2018
trial. See Order (April 30, 2018) [ECF No. 594]. The
only defendants that remain are Bruyneel and Tailwind, both
of whom ceased participating in the case after their motions
to dismiss were denied in 2014. The government and Landis now
seek default judgments against both.
a default judgment is a two-step procedure. See,
e.g., Bricklayers & Trowel Trades Int'l
Pension Fund v. KAFKA Construction, Inc., 273 F.Supp.3d
177, 179 (D.D.C. 2017). First, the plaintiff requests an
entry of default from the Clerk of the Court against a party
who has “failed to plead or otherwise defend” the
suit. Fed.R.Civ.P. 55(a). After obtaining an entry of
default, the plaintiff seeks a default judgment from the
Court. Fed.R.Civ.P. 55(b). Granting a default judgment is
appropriate “when the adversary process has been halted
because of an essentially unresponsive party.”
Bricklayers, 273 F.Supp.3d at 179 (internal
quotation omitted). “Default establishes a defaulting
party's liability for the well-pleaded allegations of the
complaint.” Boland v. Elite Terrazzo Flooring,
Inc., 763 F.Supp.2d 64, 67 (D.D.C. 2011). Once liability
is established, the Court “must make an independent
evaluation of the damages to be awarded and has considerable
latitude in determining the amount of damages.”
Bricklayers, 273 F.Supp. at 179 (internal quotation
Court will first address the Clerk's entry of default
against Bruyneel and Tailwind, before moving to whether the
government and Landis have established liability and damages
on the three claims raised against these defendants.
Entry of default
Bruyneel received a copy of the complaints and waived formal
service of process by the government and Landis. See
ECF No. 45, 62. Defendant Tailwind was properly served with
process in 2013. See United States ex rel. Landis v.
Tailwind Sports Corp. (“Landis I”),
51 F.Supp.3d 9, 34 (D.D.C. 2014) (holding Tailwind was
properly served). Moreover, both defendants were clearly
aware of the suit against them: they filed motions to dismiss
in 2013. See id. at 20. After the Court denied those
motions in June 2014, it directed both defendants to file an
answer by late July 2014. See Minute Order (July 2,
2014) (directing Bruyneel to file an answer by July 18,
2014); Minute Order (July 2, 2014) (directing Tailwind to
file an answer by July 27, 2014). Neither did so, and the
Clerk of the Court entered default against both defendants in
April 2016. See ECF No. 503. The defendants have not
otherwise appeared in this suit since their motions to
dismiss were denied in June 2014. Given the defendants'
failure to respond or otherwise litigate this suit for over
four years, default was appropriately entered.
False Claims Act claims against Bruyneel and ...