Oprah Interview Marks Beginning of Armstrong’s Next Legal Battle
Oprah Interview Marks Beginning of Armstrong’s Next Legal Battle
The Am Law Daily
UPDATE: 1/19/2013, 1:45 p.m. EST. The 33rd and 34th paragraphs of this story have been updated with information gleaned from a Form 990 filing by the Lance Armstrong Foundation.
Lance Armstrong’s decade-long fight to clear his name of performance-enhancing drug use officially ended this week with a much-publicized interview with Oprah Winfrey.
“I view this situation as one big lie I repeated a lot of times,” Armstrong told Winfrey in his prime-time televised mea culpa. “This story was so perfect for so long . . . [but] it wasn’t true.”
The web of lies built by Armstrong—who famously beat cancer and went on to win a record seven consecutive Tour de France titles—has kept lawyers from nearly a dozen Am Law 200 firms busy in litigation and arbitration proceedings that have generated enough affidavits, emails, and depositions to top the Pyrenees.
Now retired, Armstrong no longer scales the alpine peaks of Europe, but the disgraced cyclist’s terse admission about using banned substances could put him back on a steep legal path—one that could land him in federal court or even bankruptcy. First and foremost on Armstrong’s watch list is an investigation into charges of fraud, drug trafficking, and witness tampering, which was dropped by the U.S. Department of Justice in February 2012.
Armstrong could also still be on the hook for perjury charges. While the statute of limitations for perjury is five years in a criminal case and four years for civil actions, says Marty Steinberg, the former head of the commercial litigation practice at Hunton & Williams, those timeframes can be extended if prosecutors bring RICO or conspiracy claims. (Steinberg represented former St. Louis Cardinals slugger Mark McGwire during congressional hearings into the use of steroids in baseball.)
Steinberg, who left Hunton last year to cochair the litigation practice at Miami’s Bilzin, Sumberg, Baena, Price & Axelrod, believes that Armstrong’s public apology for wrongdoing might be part of a deal with the Justice Department.
“[Armstrong] strikes me as a deliberate, calculating guy, so there must be some other motivation here,” Steinberg adds. “His personality isn’t one to apologize, because he didn’t for a long time. His lawyers must have looked into this—forgiveness is not immunity.”
After suffering defeats in performance-enhancing drug-related cases brought against former baseball stars Barry Bonds and Roger Clemens, the Justice Department likely has little appetite for a protracted court battle with Armstrong’s high-priced legal team. (The Wall Street Journal reported this week that there was some internal disagreement among Armstrong’s lawyers over their clients’ plan to appear on Winfrey’s OWN network and own up to his past indiscretions.)
The cyclist’s longtime public relations adviser and attorney Mark Fabiani, who earned the nickname “Master of Disaster” during his time in the Clinton administration, was in Austin for the taping of Armstrong’s interview with Winfrey. Fabiani, who also serves as special counsel to the National Football League’s San Diego Chargers, did not respond Friday to a request for comment from The Am Law Daily.
Also not returning phone calls were other members of Armstrong’s star-studded legal defense team, one that includes Sheppard Mullin Richter & Hampton white-collar defense cochair Bryan Daly in Los Angeles, Keker & Van Nest partner Elliot Peters in San Francisco, litigation partners Robert Luskin and Mark Levinstein of Patton Boggs and Williams & Connolly, respectively, in Washington, D.C., and Timothy Herman of Austin’s Howry Breen & Herman. (Herman, Armstrong’s longtime personal attorney, told Bloomberg this week that he didn’t feel betrayed by his client.)
Armstrong told Winfrey that when the U.S. attorney’s office in Los Angeles dropped its criminal investigation of him last year, he genuinely believed he was “out of the woods.” But the U.S. Anti-Doping Agency was conducting a parallel probe, and in June it leveled its own charges against the tough-talking Texan, which, after a brief battle in federal court in Austin, he ultimately chose not to contest in August.
The Am Law Daily reported in October on the efforts by USADA and its outside lawyers from Bryan Cave to pierce the omertà surrounding Armstrong and former teammates of his U.S. Postal Service-sponsored cycling team, which backed all of Armstrong’s Tour de France wins, save for 2005, when the team was sponsored by the Discovery Channel. That month Armstrong’s reputation took another blow following the release of a 202-page reasoned decision by USADA, based in part on the testimony of 26 individuals.
That testimony also included the affidavits of Armstrong’s 11 former USPS teammates, which describe in detail how the taxpayer-supported USPS team developed a secret doping system that was designed to beat detection. The affidavits from close friends and colleagues were also what inevitably sent the high-profile cyclist’s image off-road.
“It’s amazing how everyone can now see what a different guy [Armstrong] is,” says Chris Manderson, a former Paul Hastings associate who cofounded Newport Beach, California–based Manderson, Schafer & McKinlay in 2009. “We’ve known all along that he was a doper, a liar, and a thug,” adds Manderson, who represents Armstrong’s former teammate Tyler Hamilton, “but a few years ago no one knew.”
Armstrong’s attorneys attacked Hamilton two years ago after the former national road race champion sought to speed Armstrong’s demise by accusing his ex-teammate of doping during a tell-all interview with CBS’s 60 Minutes. Armstrong also reportedly confronted Hamilton at a restaurant in Colorado, an altercation that drew the attention of the FBI. (Manderson spoke with The Am Law Daily in 2011 about Hamilton’s decision to come clean about his own doping issues, which he subsequently helped his client address in a well-received book last year called The Secret Race.)
Other former USPS teammates of Hamilton and Armstrong that gave affidavits to USADA have hired their own counsel. Kramer Levin Naftalis & Frankel litigation cochair Barry Berke advised Canadian cyclist Michael Barry, while a trio of other former riders—Tom Danielson, Christian Vande Velde, and David Zabriskie—turned to Herrick, Feinstein counsel David Rosenfield.
A client of Wachtell, Lipton, Rosen & Katz referred litigation partner David Anders to George Hincapie, the only member of the USPS team to ride with Armstrong during all seven of his Tour de France victories. Armstrong admitted to Winfrey that it was the testimony of Hincapie that sealed his fate.
During the first half of her interview with Armstrong—the second part airs on Friday night—Winfrey played excerpts of a deposition Armstrong gave back in 2005 in litigation with Dallas-based SCA Promotions. Armstrong and his lawyers from Austin’s Howry Breen had sued the company a year earlier over its refusal to pay him a $5 million bonus for winning his sixth Tour de France title on the grounds that he was able to do so only because of illicit drug use.
The case was moved from state court in Texas to arbitration, where a three-member panel eventually handled down a decision adverse to SCA, one of many defendants targeted over the years by Armstrong and his attorneys for daring to suggest he cheated on his way to the top of pro cycling.
Armstrong attributes a “win at all costs” mentality for his decision to lie about doping to one of SCA’s lawyers—Jeffrey Tillotson of Dallas’s Lynn Tillotson Pinker & Cox—in the video deposition played on Winfrey’s program. It’s a decision that could come back to haunt Armstrong, as Tillotson and SCA are expected to file a complaint next week seeking to reopen the case and recoup Armstrong’s $5 million bonus and $2.5 million in attorney fees paid to Howry Breen.
“I thought my big interview was a few years ago,” says Tillotson, recalling the deposition of Armstrong in the SCA arbitration. “But I guess Oprah got different answers.”
In late December, The Sunday Times, a British newspaper owned by Rupert Murdoch’s News Corporation, filed suit against Armstrong in London seeking to recoup $1.5 million from a libel settlement it agreed to several years ago for referring in an article to a controversial 2004 book written by its top sportswriter David Walsh about Armstrong’s alleged doping practices. (The now vindicated Walsh announced Friday that Armstrong’s public apology didn’t go far enough because he refused to implicate others.)
Armstrong also faces a qui tam or whistle-blower action filed by former teammate Floyd Landis in 2010. The suit, which remains under seal, accuses Armstrong and other defendants of defrauding the U.S. government, of which the USPS is an independent agency, by denying his use of performance-enhancing drugs.
Also named in Landis’s whistle-blower suit is Thomas Weisel, a Silicon Valley financier who helped fund a company called Tailwind Sports, which managed Armstrong’s yellow-shirted USPS team during its heyday, and who also once managed the money for the head of pro cycling’s world governing body, according to a report this week by The Wall Street Journal. (Tailwind also joined Armstrong in the suit against SCA, with W&C’s Levinstein and Baron & Budd’s Lisa Blue also advising the claimants, according to transcripts of the proceedings.)
Weisel spoke out for the first time Thursday in an interview with The New York Times, in which he provided a detailed statement claiming not to have known anything about doping by Armstrong or his USPS teammates. Sullivan & Cromwell litigation partner Robert Sacks, the managing partner of the firm’s Los Angeles office, is representing Weisel. Sacks declined to comment further behind Weisel’s public statement on the matter.
Wilson Sonsini Goodrich & Rosati litigation partner Leo Cunningham represented Landis in August when the former cyclist agreed to pay nearly $500,000 in restitution as a part of a deferred prosecution agreement with federal prosecutors in San Diego on charges that he defrauded donors to his legal defense fund. Cunningham says he’s not representing Landis in the qui tam action. (Wilson Sonsini previously advised another Armstrong nemesis—former Tour de France winner Greg LeMond—in an unrelated litigation battle with Armstrong, who was also criticized by LeMond’s wife this week.)
Another lawyer for Landis, San Francisco solo practitioner Paul Scott, declined to comment when contacted by The Am Law Daily on Friday.
Landis’s whistle-blower action reportedly seeks $30 million from Armstrong—or roughly the amount paid by the USPS to sponsor the team. Landis, who is seeking about a quarter of that amount, will get a significant boost should the Justice Department join his case. Any judgment could also be trebled, potentially putting Armstrong on the hook for a sum which, coupled with the loss of key sponsorships and a damaged brand, could put him in dire financial straits.
“It’s much harder these days to shed personal debts in bankruptcy,” says Manderson, the attorney for Armstrong’s ex-teammate Hamilton. “Any bankruptcy filing would result in an automatic stay, but there would still have to be a debt restructuring that he couldn’t just walk away from.”
Armstrong has already bankrupted himself when it comes to being a voice of authority in the sport of pro cycling, whose reputation has suffered greatly in recent years due to allegations of rampant doping by its participants. At least one lawyer with cycling ties was mum about what Armstrong’s admission might mean for the sport itself.
Steve Berman, a name partner at Seattle-based plaintiffs firm Hagens Berman Sobol Shapiro, did not return a request for comment about Armstrong. Hagens Berman sponsors its own road cycling team, as do other firms like Morrison & Foerster.
This week the International Olympic Committee stripped Armstrong of a bronze medal he won at the Sydney summer games in 2000, while cycling’s world governing body, the Union Cycliste Internationale, urged Armstrong to appear before its independent commission that is investigating doping. British firms Marcfarlanes and 20 Essex Street were hired last month by UCI to act as legal advisers to the commission, according to U.K. publication Legal Week.
Armstrong resigned in November from the Austin-based Lance Armstrong Foundation, which also saw its top in-house lawyer leave that same month. The most recent public financial records filed by the nonprofit for 2011 show that general counsel and executive vice president of people and organizational development Mona Patel earned $186,771 that year. Patel is no longer listed as an employee of the foundation on its website and has since joined the Los Angeles Philharmonic as its general counsel and vice president of human resources, according to her profile on LinkedIn, a social networking site for professionals.
Patel, a devoted cyclist of her own who spoke with sibling publication Texas Lawyer in late 2011, did not immediately respond to an emailed request for comment about her departure from Armstrong’s foundation, which was the subject of a feature story by Outside magazine last year on how it spends the proceeds from the sale of its Livestrong yellow wristbands.
In his interview with Winfrey, Armstrong said he hoped his foundation would survive, and noted that one of his lowest moments was when he was asked to step down from the charity’s board. The foundation itself has announced that it is “disappointed” in Armstrong’s actions but still “grateful” for its namesake’s contributions to fighting cancer.
As for whether Armstrong’s public plea has served its purpose—the cancer activist admitted being a “bully” to Winfrey and said he chose to speak out because his story had become “so bad and so toxic”—the reaction of others to his televised confession has been decidedly mixed.
“He kind of reminded me of John Edwards,” says one Am Law 100 partner who has squared off against Armstrong and watched pieces of the Winfrey interview. “Yeah, it was a good apology, but it was a little late.”
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