Tour de Courts: SCA and Armstrong Battle It Out on Question of Fraud and Settlement

Lance Armstrong is riding a new tour these days, but instead of fresh air and the beautiful landscapes of France, this tour will be inside offices (lawyers’ offices) and courtrooms. Yes, it is the Tour de Courts.  Since his confession to doping in an interview with Oprah Winfrey, his legal problems have compiled dramatically.

One of the more public legal disputes is with SCA Promotions (SCA). SCA helps companies run promotions that involve large payouts – payouts that these companies would otherwise not be able to offer. For example, suppose a company sponsors a “half-court shot” during a local college game. A contestant is selected to make the shot. If that contestant makes the basket, he or she wins $250,000. The sponsoring company will pay a percentage of the total prize offering to SCA. If the basket is made, SCA pays the $250,000.  It’s an insurance of sorts with the fees acting as a kind of premium.

SCA entered into one of these contracts Lance Armstrong.  SCA would pay millions including bonuses if Armstrong won multiple Tours de France. SCA is no stranger to the issue of doping and Lance Armstrong – which is what this current litigation is all about. SCA paid the winnings but withheld his bonuses originally amidst early allegations of doping. However, in the end, a $7.5 million settlement ultimately resolved that dispute.  Now that Armstrong has confessed to doping, SCA wants their money back and took Armstrong to court to get it.

Armstrong counters that the original settlement agreement contained a “Will Not Challenge Under Any Circumstances” clause and has filed papers with the court seeking dismissal of SCA’s lawsuit.  SCA counters that Armstrong lied during the original dispute and that Armstrong perpetuated fraud in negotiating the original settlement.

This is but one stop on the Tour de Courts for Armstrong and, though one of the most public, not the most serious. Amongst the agencies suing Armstrong is the Department of Justice who accuses him of defrauding the U.S. government (the U.S. Postal Service was a big sponsor).

This upcoming tour will make the mountains classification of the Tour de France seem easy. However, in this tour, there are no additional points for getting to the top first.

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