In a 25-page response, Armstrong argued the sponsor, the U.S. Postal Service, should have known he was using performance-enhancing drugs to win his seven Tour de France titles, the Wall Street Journal reported Tuesday.
The Postal Service had "basked in the favorable publicity of its sponsorship," Armstrong said, and had renewed its sponsorship even as allegations about his use of performance-enhancing drugs were made public.
The lawsuit was filed in 2010 by former teammate Floyd Landis under the federal False Claims Act, which allows citizens to sue for alleged fraud against the government. If the suit is successful, Landis could receive a reward of up to a third of the money recovered by the government.
The U.S. Justice Department joined the suit in February.
Armstrong's lawyer also argued the suit had been filed after the six-year statute of limitations.
USPS began its sponsorship of Armstrong's team in 1995 and renewed it through 2004.
Armstrong was stripped of his Tour de France titles last year and in January admitted to doping. Major sponsors have canceled their deals with him and he has been banned from cycling for life.