Strong Case Against Armstrong?

O n October 22nd, 2012, the Union Cycliste Internationale (UCI), the governing body for professional cycling and overseer of international competitive cycling events, banned Lance Armstrong from cycling, stripped him of his seven Tour de France titles and called on him to return the prize money he won for those victories. The UCI’s decision to sanction one of cycling’s biggest stars ever came shortly after the release of U.S. Anti-Doping Agency’s 1,000 page report detailing how Armstrong was the center of a massive team doping scandal. Since the report’s dissemination, the Armstrong doping scheme has been deemed by many as one of the most sophisticated, professionalized, and successful doping programs that cycling (or professional sports at large) has ever seen. The USADA’s report, which included testimony from 11 of Armstrong’s former teammates, was the culmination of a long and contentious investigation into doping in professional cycling. The UCI based its decision to sanction Armstrong on the USADA’s report and its decision reflected the approval of the USADA’s recommended sanctions against Armstrong.

The fallout of these agency reports and bureaucratic proclamations has been significant for Armstrong. Between the highly public release of the USADA report and the UCI decision, many on Armstrong’s long list of corporate endorsers have opted to drop Armstrong or to not renew his contract. Moreover, in light of the UCI’s call for Armstrong to return his prize earnings, SCA Promotions, a Dallas-based corporation that paid Armstrong millions of dollars in bonuses for his seven Tour de France victories, is seeking to recover on the grounds that since Armstrong is no longer the champion he is no longer entitled to the bonus. Given these public calls for recovery, there has been widespread speculation regarding Armstrong’s former endorsers and their own attempts to recollect money paid to Armstrong as well.

The legal question that emerges from this is: Can the UCI and all of these corporations legally recover from Armstrong? In terms of the UCI and SCA Promotions, I believe that the answer appears to be a logical yes. Given that the UCI and SCA Promotions paid Armstrong for his seven victories, it initially seems logical that they would be allowed to recover for prize money paid for those victories since they are now null and void. However, there are a number of factors that must be considered in determining the plausibility of such a recovery. For instance, how victory is defined by either party in any future legal proceeding or in any contract that exists between the Armstrong and SCA Promotions plays a crucial role in determining the nature of the recovery. SCA Promotions paid Armstrong for winning his Tour de France titles and if victory is defined as the official recognition of being champion, then Armstrong is no longer the victor and SCA’s recovery of prize money seems appropriate. On the other hand, if victory is defined solely by Armstrong’s first place finishes, which video records still corroborate, Armstrong is still, although through cheating and violating UCI rules, the victor and thus may not be required to return his prize money to SCA Promotions. There is also a purposive question, in that with a short lifespan of added publicity to the prize paying companies, they received value through association with Lance Armstrong that has already diminished over time and has been minimally or not affected by his disgrace.

In terms of endorsers who may seek to collect, I believe the answer is a little more nuanced. Most standard athlete endorsement deals have “moral clauses,” which allow for corporate endorsers to terminate the deal and initiate “clawback” claims against past earnings. The extent to which endorsers are able to opt out of contracts on the grounds of a morality clause vary, ranging from contracts that allow termination over issues that bring about moral disrepute to contracts that only call for termination in light of a serious conviction. Therefore, the language of the morality clause is essential in determining if these companies even have a legal cause of action. It is also important to note that although some of the corporations may have a legal cause of action, rooted in morality clauses, they still may not bring legal action against him as they must weigh the cost of litigation and potential public condemnation, as their relationship with a doper is emphasized, against the value of endorsement money already paid. Overall, despite the outcomes of these potential legal claims resulting from the USADA report and the UCI decision, the fact remains that cycling has unfortunately lost a great champion in an utterly shameful fashion.

Michael McGregor is a 1L at Harvard Law School.