Lance Armstrong must pay $10M to SCA Promotions

The following article was written by Brent Schrotenboer, USA TODAY Sports.

Lance Armstrong has been ordered to pay $10 million to SCA Promotions, the sports insurance company that paid his bonuses for winning the Tour de France and then helped cause his epic fall from grace in 2012.

In a 2-1 decision, an arbitration panel in Texas ruled against Armstrong after the company sued him for fraud in 2013.

“We are very pleased with this result,” SCA’s president and founder Bob Hamman said in a statement. “It is hard to describe how much harm Lance Armstrong’s web of lies caused SCA, but this is a good first start towards repairing that damage.”

The company said the $10 million award is believed to be the largest award of sanctions assessed against an individual in American judicial history. It differs from a civil judgment in part because it’s defined as a sanction against Armstrong for lying under oath during a previous dispute between the parties in front of the same panel.

“Perjury must never be profitable,” the panel said in its ruling. “Justice in courts of law and arbitration tribunals is impossible when parties feel free to deliberately deceive judges or arbitrators… Deception demands real, meaningful sanctions.”

In a court filing Monday, the company said Armstrong already has indicated he would refuse to pay the $10 million. In order to collect payment, it asked a Texas court on Monday to turn the arbitration panel’s $10 million award into a final judgment.

The panel’s ruling marks the latest setback for the disgraced cyclist, who has employed attorneys in three U.S. time zones and England to help fend off several lawsuits since his doping confession to Oprah Winfrey in January 2013.

Among his biggest problems lately:

— He’s still defending himself against the federal government in another fraud lawsuit that could cost him nearly $100 million.

— In January, he was given two traffic tickets after allegedly hitting two parked cars with his vehicle and then letting his girlfriend take the blame for it to avoid making news.

In 2013, he reached an undisclosed settlement with Acceptance Insurance, which sued him for fraud and sought to recover $3 million in bonuses it paid him for winning the Tour de France from 1999 to 2001.

In the SCA case, he was fighting a company that helped unmask the Armstrong legend along with the harsh lengths he would go to protect it.

The dispute started in 2004, when Armstrong sued the company for breach of contract after the company withheld his bonus for winning the Tour de France.

To make his point, Armstrong’s backers took out a full-page advertisement in Sports Business Journal, trashing SCA Promotions, which had paid his Tour de France bonuses in 2002 and 2003.

“SCA’s failure to pay the final installment of its policy is a shameful and baseless breach of contract,” the ad said.

The company put its reputation at risk for its stance but wouldn’t back down. It suspected Armstrong had cheated to win the race and didn’t want to pay him if he did. When the case went to arbitration in 2005, SCA Promotions attorney Jeffrey Tillotson famously asked Armstrong about banned drug use.

Armstrong replied by lying about it under oath, saying he never did.

“I race the bike straight up fair and square,” he testified during the same proceedings.

Because of this denial and without convincing evidence at the time, SCA Promotions was forced to settle the case and pay $7.5 million in 2006. But its efforts weren’t in vain. During the arbitration proceedings, the company compiled evidence and testimony that was used against him six years later, in 2012, when the United States Anti-Doping Agency banned Armstrong for life and stripped him of all seven of his titles in the Tour de France from 1999 to 2005.

To build its case against him, USADA compiled statements from other riders as witnesses, along with evidence from the SCA case of 2005-06. The SCA Promotions dossier included the testimony of former Armstrong teammate Frankie Andreu and his wife Betsy, who testified that during a hospital stay in Indiana in 1996, they had heard Armstrong admit to using banned drugs. In 2005, Tillotson asked him about this alleged incident – also under oath.

“How could that have taken place if I’ve never taken performance-enhancing drugs?” Armstrong replied.

It was one of the first big cracks to threaten his All-American myth – the story line that he was a cancer survivor who played by the rules to dominate cycling through sheer hard work and willpower.

And it all came tumbling down in 2012, sparking a chain of events that led to the latest ruling.

Backed into a corner by the evidence, Armstrong finally confessed to doping during a televised interview with Oprah Winfrey in January 2013.

SCA Promotions filed suit about a month later, accusing Armstrong of fraud in an attempt to get its money back – about $12 million, including attorneys’ fees.

The case then went back to arbitration, where the company also wanted Armstrong to be sanctioned for his false testimony in the previous arbitration proceeding.

To fend off the attack, Armstrong unsuccessfully appealed to the Texas Supreme Court to have the case blocked. He argued that the 2006 settlement was “forever binding” and could not be reopened.

He still could try to appeal the case based on the same argument.

“This award is unprecedented,” Armstrong’s attorney, Tim Herman, said in a statement given to USA TODAY Sports. “No court or arbitrator has ever reopened a matter which was fully and finally settled voluntarily. In this matter, SCA repeatedly affirmed that it never relied upon anything Armstrong said or did in deciding to settle (in 2006).”

Herman noted the dissenting opinion of arbitrator Ted Lyon, who said the previous settlement included “plain language” that the case could not be reopened.

“It is in fact unprecedented,” Lyon wrote in his dissenting opinion. “No arbitration panel in Texas or our nation has ever stretched back so far in time to issue such a sanction.”

Herman said he believes the courts will agree with Lyon’s point of view when reviewing the arbitration panel’s decision.

“Despite the absence of any legal basis for the sanction, Armstrong offered to pay SCA the entire $10mm in order to resolve the matter, but SCA refused,” Herman wrote in an e-mail.

In a statement, Tillotson noted that “the panel of arbitrators determined that Armstrong ‘continued to lie to the panel throughout the final hearing even while admitting to prior falsehoods and other wrongful conduct.'”

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