From TDF champion to serial defendant - two more lawsuits launched against Lance Armstrong

A second insurer wants TDF bonus money back, while class action launched relating to endorsement of nutrition brand FRS

by Simon_MacMichael   March 1, 2013  

Lance Armstrong FRS ad

Proof that every cloud has a silver lining, Lance Armstrong’s fall from grace is resulting in a bumper workload for his lawyers, with news today of two more lawsuits launched against the disgraced cyclist turned serial defendant – one, a class action relating to a range of energy products that Armstrong once endorsed, the other from an insurer seeking repayment of bonuses paid to him for winning some of the Tour de France titles he was stripped of last year.

If that latter action sounds familiar, it’s because Armstrong is already being sued by SCA Promotions, which he successfully took to court in 2006 to get it to pay millions of dollars in bonuses for winning the Tour in 2002, 2003 and 2004.

SCA is now asking him to return $12 million in bonuses and fees following his admission that he doped his way to victory.

The action from an insurance company revealed today, however, is an entirely separate one and relates to his first three victories in the race, between 1999 and 2001.

Acceptance Insurance Company, which underwrote bonuses for those years, wants its money back, saying that "by cheating and deception, Armstrong committed fraud."

According to USA Today, the lawsuit, filed in his home state of Texas, adds: "This suit seeks repayment of $3 million in undeserved and unearned pay Armstrong obtained by fraud."

The second lawsuit that emerged today relates to a proposed class action against Armstrong and nutrion brand FRS, whose products Armstrong endorsed in print, web and TV ads, including billing them as his “secret weapon.”

FRS was one of several sponsors that dropped Armstrong as spokesman after the United States Anti Doping Agency published its Reasoned Decision in October, explaining that it "seemed like a good time to part ways."

The action has been filed in a federal court in Los Angeles, and alleges that purchasers were misled into buying the products as a result of Armstrong’s endorsement and the suggestion they lay behind his performances.

“Instead, defendant Armstrong's successes were the result of his systemic and illegal use of banned performance-enhancing drugs and human growth hormones," reads the lawsuit.

According to the company’s website, “FRS was originally developed by health scientists to provide sustained energy for chemotherapy patients. Today it is used by elite athletes, wellness experts and anyone who wants to lead a healthy, active lifestyle."

Other lawsuits that Armstrong faces include one from the Sunday Times, seeking the return of a seven-figure out of court settlement it made in 2006 after he alleged it had libeled him, plus Floyd Landis’s whistleblower action under the False Claims Act, which the US government joined last week.

Financially, that case, which alleges that Armstrong and others involved with the US Postal Service team defrauded the government, in the shape of the sponsor, could be the most damaging of all; US Postal paid a total of $31 million during the years it sponsored the team, and the False Claims Act provides for a penalty of up to three times that amount.

USA Today puts Armstrong’s potential liabilities at $110 million against an estimated net worth last year of $125 million, and there's a possibility that with the US government now after a slice, others are piling in with their lawsuits while there is still money to be had.

We suspect others will follow, perhaps looking to file in jurisdictions where they can be confident the case will be heard quickly... and all the time, with his legal bill presumably ticking over like a taxi meter on steroids, the final cost could be even higher.

4 user comments

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Coming to think about it, if FRS win, can I then sue them for selling a product with misleading ads? After all they already got our money. Saying: They paid for something and got a result out of it in the past.

posted by Dr. Ko [108 posts]
2nd March 2013 - 8:20

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Dr. Ko wrote:
Coming to think about it, if FRS win, can I then sue them for selling a product with misleading ads? After all they already got our money. Saying: They paid for something and got a result out of it in the past.

I think you have misread the article. Armstrong and FRS are being sued jointly in the class action suit. FRS are not suing Armstrong. If you bought FRS products because of Amrstrong you should join the class action suit.

posted by Colin Peyresourde [978 posts]
2nd March 2013 - 12:30

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"Lance's secret weapon." Love it.

posted by The Rumpo Kid [590 posts]
2nd March 2013 - 14:26

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You are right, thanks for pointing me in the right direction.

posted by Dr. Ko [108 posts]
2nd March 2013 - 18:56

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