Dallas-based SCA Promotions Inc. filed suit on Feb. 7 against Lance Armstrong, seeking return of millions of dollars in prize money it paid him, based on the disgraced athlete’s admissions that he used “performance-enhancing drugs.” SCA also names as defendants Tailwind Sports Inc., which “served as Mr. Armstrong’s management firm,” and William Stapleton, Armstrong’s business agent and a lawyer.
In its 35-page petition in SCA Promotions Inc. v. Lance Armstrong, et al., filed in the 116th District Court in Dallas, SCA included screenshots of Armstrong’s Jan. 14 TV interview with Oprah Winfrey, during which he admitted using performance-enhancing drugs. SCA alleges that it paid more than $12 million in prize money to Armstrong and Tailwind due to “a deliberate lie perpetuated by Mr. Armstrong.”
On its second page, the petition juxtaposes a photo of Winfrey and Armstrong during the TV interview with a photo of Armstrong testifying under oath in 2005 during previous litigation with SCA. Beside the images, the petition includes quotations from the televised interview, where Armstrong admitted using banned substances, and his sworn testimony in 2006, where he denied using performance-enhancing drugs or banned substances.
SCA had sold Armstrong insurance policies that paid the cyclist and Tailwind if he won Tour de France titles. SCA first battled with the cyclist in 2004, after the company refused to pay him $5 million for his win of his sixth Tour de France title. SCA cited allegations, which the cyclist denied vehemently at the time, that he had used performance-enhancing drugs. On Sept. 14, 2004, Armstrong and Tailwind filed Armstrong, et al. v. SCA Productions, et al. in Dallas' 298th District Court seeking the payment. On Feb. 8, 2006, after an arbitration panel held a three-week hearing, SCA agreed to pay Armstrong and Tailwind $7.5 million. [See “Team Lance: Despite USADA’s Actions, Austin Lawyer Still Fights for Cyclist Armstrong,” Texas Lawyer, Sept. 24, 2012, page 1.]
In the Feb.7 petition, SCA seeks to vacate what it calls “the arbitration award and settlement agreement” and alleges the defendants procured that deal by fraud. SCA seeks a disgorgement and return of prizes, alleging Armstrong should have forfeited that money since he has been stripped of the Tour de France titles. SCA seeks repayment of $1.5 million for a 2002 Tour de France title, $3 million for the 2003 title and $7.5 million for the 2004 title. SCA also seeks attorney fees.
The SCA petition brings a number of causes of action, including one for “civil sanctions and contempt,” alleging that Armstrong and Stapleton “purposely and intentionally gave false testimony in connection with SCA’s legal proceeding.” Two other causes of action in the petition are unjust enrichment and breach of contract; the petition alleges Armstrong is keeping “prize money” even though he is no longer the official Tour de France winner.
Tim Herman, a partner in Howry Breen & Herman in Austin, represented Armstrong and Tailwind in the previous arbitration. The Feb. 7 SCA petition quotes what it alleges is Herman’s opening statement during the 2006 arbitration: “If titles are stripped as a result of official action, then Tailwind agrees to refund any payments made. . . .”
Armstrong spokesman Mark Fabiani, who says he is returning the call on Herman’s behalf, says Herman represents Armstrong and Tailwind but he does not know if Herman still represents Stapleton.
Fabiani writes in an email that the 2006 settlement agreement between SCA and Armstrong and Tailwind “prohibits SCA from ever revisiting” it.
Stapleton, who Herman also represented during the previous arbitration, did not immediately return a call seeking comment.
Jeffrey Tillotson, a partner Tillotson in Dallas’ Lynn Tillotson Pinker & Cox, who represents SCA, says, “Unfortunately, the parties have not been able to resolve their difference. My client could not wait any longer to begin the legal process.”
-- Miriam Rozen