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[A] Black [Suit] Is the New Yellow [Jersey]: Tracking Armstrong's Newfound Career as a...Professional Defendant?




by:
Proskauer Rose LLP - New York Office

 
November 29, 2013

Previously published on November 2013

In his neverending Trek through the courts, Lance Armstrong is facing a slew of suits following his dramatic admissions of doping to Oprah Winfrey. While past Tour de France champions like Eddy Merckx or Greg LeMond have left the sport in great esteem and started their own bicycle lines, Lance Armstrong, stripped of his seven titles, has lately been wearing wingtips more than toe clips.

For example, in Martin v. FRS Co., No. 13-01456 (C.D. Cal. filed Feb. 28, 2013), a suit seeking class certification, a putative class of consumers alleges that Armstrong and The FRS Co., a maker of sports beverages and endurance products, deceptively peddled FRS products during Armstrong's record-setting cycling career. According to the complaint, Armstrong is a partial owner of FRS and former team member of the Board of Directors who participated in "significant decisions" regarding FRS's marketing and advertising strategies. With an ad pitch steeper than the climb of the famed Alpe d'Huez, Armstrong told the world that FRS supplements were his "secret weapon," a claim that his attorneys argue was nonactionable puffery and a subjective, nonquantifiable opinion. Of course, Armstrong confessed to Oprah that he could not have possibly won his Tour titles without doping. The plaintiffs' unfair competition and false advertising causes of action allege that consumers would not have bought FRS products or would have paid a lesser price had they known that Armstrong's success was due to the use of PEDs. It remains to be seen whether Armstrong's dismissal motion can knock the plaintiffs out of the saddle by convincing the court that FRS's statements were non-actionable or that the plaintiffs failed to claim a real injury in fact.

The FRS dispute isn't Armstrong's first time in the class action velodrome—a prior suit fell off the back when a court dismissed the majority of claims against Armstrong and his publishers relating to his memoirs, "It's Not About the Bike" and "Every Second Counts." The plaintiffs in that action asserted that marketing the books as works of nonfiction was misleading and that they would not have purchased the books if they had been aware that Armstrong was doping. The court, however, dismissed most counts on the basis that the books and related marketing were protected by the First Amendment.

Indeed, as if on a lone breakaway, Armstrong is being pursued by a peloton of claimants. In addition to the deceptive advertising suits, former teammate Floyd Landis has brought suit against Armstrong under the whistle-blower provisions of the False Claims Act, which typically allows claimants to recover 15 to 25 percent of the recovery for claims relating to a defendant's false claims for payment to the U.S. Government. (See U.S. ex rel. Landis v. Tailwind Sports Corp., No. 10-00976 (D.D.C. filed Apr. 23, 2013). Ever the wheelsucker, the federal government, which paid Armstrong's Tailwind team through a sponsorship agreement with the U.S. Postal Service valued at approximately $40 million, joined Landis's suit in April 2013. The government alleges that Armstrong and the team's violation of the sponsorship agreement and failure to adhere to the rules of cycling undermined the value of the USPS sponsorship and unjustly enriched Armstrong and the team. The Department of Justice is seeking treble damages, an increase that is permitted under the False Claims Act, which could lift the defendants' liability to $120 million.

With these litigations in full tuck, it could prove to be a very long and expensive descent for the embattled Armstrong.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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