Lance Armstrong Loses Arbitration
Friday, February, 27, 2015
Disgraced pro cyclist Lance Armstrong and Tailwind Sports Corporation have been ordered by an arbitration panel to pay $10 million to SCA Promotions. The promotions company had charged them with fraud due to a cover-up of Armstrong’s use of performance-enhancing drugs.
The arbitration ruling was 2-1 in favor of SCA Promotions, which announced it had already asked a Dallas district court to confirm the ruling. Armstrong’s legal team, however, claims the arbitration was “contrary to Texas law” and announced a firm belief the courts will overturn the ruling in due time.
SCA Promotions paid $12 million in performance bonuses when Armstrong was active in his cycling career, during which he won seven Tour de France competitions. Armstrong was stripped of these titles, however, when investigations concluded he had used banned substances that boosted his performance and gave him an unfair advantage over other competitors. As a result, SCA sued to be repaid the bonus money, claiming Armstrong’s actions amounted to fraud. In 2006 SCA settled with Armstrong over allegations of cheating and paid him $7 million after Armstrong testified at 2005 arbitration that he had never used performance-enhancing substances.
When Armstrong’s use of banned substances was confirmed, however, SCA sued again to recover the settlement as well as its bonus money.
The arbitration decision stated that “perjury must never be profitable.” Armstrong’s team argued that whatever subsequent events occurred, under Texas law the original settlement could not be overturned. In other words, Armstrong’s lawyers argue that even if deciding for Armstrong is “wrong,” under the law it is the only conclusion allowed.