Lance's Biggest Legal Battle Looms

The lawsuits against Armstrong are beginning to drop, and making amends may end up costing him millions.
Mon February 11, 2013 4:00 pm

On November 30, 2005—before the Feds, before USADA, before Oprah—Lance Armstrong sat down in front of one of Dallas’ top trial lawyers, Jeff Tillotson. Armstrong raised his right arm, swore a judicial oath, and began saying things he has since admitted are not true .

“At times during the deposition, I thought, maybe I’m the crazy one here,” Tillotson recalled of that day. “He was passionate, he was determined, he was angry when he was supposed to be angry over someone challenging him. If all I had seen was that deposition, I would’ve sworn he was telling the truth.”

“But after talking to people who were to afraid to say anything because they knew Lance Armstrong would come after them, I knew he had to be lying,” Tillotson told me.

Last Thursday Tillotson filed suit on behalf of the client, SCA, a Dallas-based sports insurance company that deposed Armstrong during an arbitration hearing back in 2005. The suit claims Armstrong is legally obligated to repay SCA the $9.5 million dollars it gave him for winning the Tour de France from 2002 to 2004, plus another $2.5 million Armstrong was awarded in damages.

The SCA suit is just one of many mounting legal challenges Armstrong faces after being stripped of his seven Tour titles, and then publicly confessing to doping. The Sunday Times of London wants back $1.5 million it lost to Armstrong in a libel settlement . The government is poised to join Armstrong’s former teammate, and fellow doper, Floyd Landis, in a whistle-blower suit . Federal investigators are looking into Armstrong for witness tampering and obstruction of justice. And some folks in California recently sued Armstrong over the falsities in his best-selling book .

However, the SCA suit represents Armstrong’s most pressing legal and financial hurdle. “We felt the sooner we got in line, the better off we’d be,” Tillotson said.

Additionally, the suit will test Armstrong’s claimed commitment to restoring his public reputation. While repaying an insurance company likely doesn’t rank high on the list of humanitarian deeds, SCA’s owner, Bob Hamman, sincerely feels like Armstrong robbed him, and then rubbed it in his face. (During the initial legal battle, Armstrong and company took out an ad in a trade publication, the Sports Business Journal, accusing SCA of "a shameful and baseless breach of contract.")

While SCA claims it simply wants back the money it gave Armstrong (and any damages that might be awarded on top of that, too), from a legal standpoint, Armstrong has some case for argument. A clause in the initial settlement agreement—which Armstrong’s representatives provided Texas Monthly in lieu of an official comment—stated that the initial deal was, “fully and forever binding.”

But SCA appears confident that the jury it’s asked to hear the case will throw out the old settlement agreement in light of a clearer moral argument: Armstrong cheated the company out of millions, and repaying it is the right thing to do. The company was forced to pay Armstrong because he was the official winner of the Tour de France, and now he is no longer the official winner of those bike races.

Even Armstrong’s legal team seemed to concur on this point back in January 2006. In its suit, SCA included statements from Armstrong’s lawyer, Tim Herman, stating that, “If titles are stripped as a result of official action, then Tailwind [the company Armstrong co-owned] agrees to refund any payments made.”

So Armstrong now finds himself in a situation where fighting SCA will make him appear unrepentant for his many misdeeds, while repaying the company in full could make him more vulnerable to further civil and criminal law suits.

Even Tillotson can manage some empathy for Armstrong’s current legal predicament. “Our case may make it more difficult for him, because he may have to say or do things in our case, that won’t help him in his federal case,” he said.

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