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A paradigm shift in power faces Armstrong in court

  • By Matthew Beaudin
  • Published Nov. 22, 2013
Lance Armstrong is facing increasing financial pressure to settle multiple lawsuits before he is forced to testify under oath. Photo: Mandel Ngan | AFP

For so long, Lance Armstrong was Goliath and his adversaries David. Resources were in his favor. An adoring public stayed on message. He won, at everything.

But now, and for the first time in a while, he finds himself in an unfamiliar position, that of the underdog.

The wayfaring court of public opinion may have already convicted Armstrong. But there’s still much left to decide in the other courts, as the fallen star faces a myriad of lawsuits, one that includes the federal government — very much a Goliath to Armstrong’s David.

Earlier this week, Judge Robert L. Wilkins indicated it was likely the whistleblower case filed by Floyd Landis, and subsequently joined by the Justice Department, would move forward against some of the plaintiffs, including Armstrong and several longtime associates.

What happens next is essentially what amounts to a miserable ’cross course: there are lines marked through which one is supposed to travel, but the path through is contorted and messy. Civil cases — what Armstrong faces since his criminal case was dropped by the federal government — differ greatly in process compared to their criminal counterparts.

In criminal cases, prosecutors bring charges, and a trial follows, and a verdict is reached. In civil cases, and what could prove painful for Armstrong, is the discovery period, in which both sides use various tools to learn of the other side. Each side can submit questions, for example, with the answers staying between parties. The court also allows depositions. Parties must cooperate, or risk being sanctioned by the courts. That’s not to say all agree all the time.

“I’m sure there will be disputes here,” said Mark Stichel, a Baltimore-based attorney who has litigated civil cases in state and federal courts throughout the U.S. “My guess is there will be disputes about discovery and that’s pretty typical.”

Armstrong could have a hefty amount of discovery period to deal with, given the fact that the federal judge struck down his legal team’s request to consolidate discovery processes, which would have spared Armstrong from having to answer multiple lawsuits at once. Judges do administer balance tests, meaning the discovery process is proportionate to the stakes in the case, which, with Armstrong and the amount of money on the line, are high. He will likely be called and made to testify under oath.

There is one thing, though, that can keep Armstrong from having to go under oath and give one — or several — depositions, and that’s settlement. In the past, the mere thought of it seemed an anathema to a born winner, though that’s changed recently. Earlier this week, he settled a case with Acceptance Insurance, which sought to recover $3 million on bonuses it paid him for winning the Tour de France. The last-minute move kept Armstrong from going under oath to testify on Thursday in Austin, Texas. He also settled with The Sunday Times, which sought to recoup its losses in a 2006 libel settlment, in August.

Armstrong sued the paper for libel after it printed an article nine years ago that suggested he used PEDs. The Times eventually settled for 300,000 pounds in Armstrong’s favor. The paper recovered a confidential amount earlier this year, but it was seeking around 1 million pounds in damages.

Armstrong has not testified under oath since 2006, when he denied doping in a dispute with SCA Promotions, another insurance company. SCA lost its initial case against Armstrong, but is now going after the cyclist for more some $12 million, presenting yet another opportunity for either settlement or sworn testimony.

“At some point, he will have to have his deposition taken under oath, unless he settles. And lots of times cases settle because people don’t want their depositions taken,” Stichel said. “I think what we’re really talking about here is money, and how much.”

It is likely that a scheduling order will be issued soon in the federal case that outlines a timetable for discovery, which Stichel said he expects to range from six months to a year. The system, he said, is equally taxing on everyone.

“I think the system is pretty evenly balanced. … Once you get into the discovery phase, it becomes very expensive for both sides. Even if you have a defendant who says, ‘well I’m not liable,’ they still have to spend a lot of money defending themselves.”

And here’s where the traditional power structure for Armstrong and his attorneys has flipped. “When you’re going up against the government, the government has lots of lawyers, and lots of money. As wealthy as Lance Armstrong may be, his resources are not without limits,” Stichel said. “Just looking at the docket, the number of lawyers … this is just very expensive litigation. He is spending a lot of money, and that’s an incentive to try to settle.”

Armstrong, in theory, will be in discovery for more than one case at the same time, making the process even more expensive. The incentives to settle and avoid testimony under oath are established, but Armstrong refused earlier this year to do so with the Justice Department for more than $13.5 million, according to a report by Selena Roberts at SportsonEarth.com.

So, does Armstrong actually settle the federal case, handing over millions to Floyd Landis willingly, after those negotiations fell apart in February of 2013?

“That’s a hard question to answer. If this were a normal business case, I would expect it to settle. But a huge element in any settlement scenario is the basic personality of the parties involved,” Stichel said. “And Lance Armstrong doesn’t strike me as the kind of guy who’s going to give up easily. But the flip side is that his resources are not going to last forever. I think that’s going to be the hard thing. I can’t answer that question.”

Time, and a judge, will have to.

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Matthew Beaudin

Matthew Beaudin

Matthew Beaudin graduated from the University of Colorado at Boulder's journalism school in 2005 and immediately moved to Telluride, Colorado, to write and ski, though the order is fuzzy. Beaudin was the editor of the Telluride Daily Planet for five years. He now lives in Boulder, where he joined VeloNews in the spring of 2012. Music. Coffee. Bikes. His dog, Anabelle. That about sums it up. Follow him on Twitter @matthewcbeaudin.

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