A judge in Portland, Oregon ruled today, that Nike must turn over its correspondences with Lance Armstrong.
After hearing more than an hour of arguments, U.S. District Judge Marco Hernandez, ordered Nike to turn over communications they had with Armstrong, as requested by the government in its ongoing whistleblower case against the disgraced cyclist.
The decision marks the latest turn in the government’s $100 million civil fraud suit against Armstrong, albeit with another heavyweight in the legal battle now – Nike.
Both Armstrong and the U.S. government had issued subpoenas for information from Nike as a star witness in the case. But Nike fought back today, telling the judge that they “don’t have a dog in that fight” and are not relevant to the issues being argued.
However, following today’s testimony, Nike failed to prevail in the matter.
The government is suing Armstrong on behalf of the U.S. Postal Service, which paid more than $30 million to sponsor his cycling team from 1998 to 2004. The government argues that Armstrong breached the team’s sponsorship contract by doping and then concealed it with false statements in order to keep the payments coming and avoid having to pay the money back.
Today, Armstrong’s attorneys argued the government was not damaged by his doping, and instead profited greatly from his success on the US Postal team. Moreover, they argued that the US Postal Service should have known about his doping long ago, but didn’t file this case until it was too late under the statute of limitations.
“(Armstrong) is saying the U.S. Postal Service should have known that he was doping because of allegations, because of publicly available information that is available to all of Armstrong’s sponsors,” U.S. Justice Department attorney Greg Mason told the judge. “The United States is entitled to develop facts surrounding what other sponsors knew. If sponsors X, Y and Z were all in the dark, that undermines Armstrong’s argument that the Postal Service should have known.”
Nike sponsored Armstrong before firing him in 2012, citing evidence that he had engaged in doping and misled the company for more than a decade.
As result Judge Hernandez granted the government’s request, relative to what information Nike may have known about Armstrong’s “doping”, and whether the company decided to concealed it, based its financial stake and fear of bad publicity.
In response, Armstrong wants to show how Nike benefitted financially by sponsoring his team, thus supporting his argument that both the sportswear giant and the US Postal Service got their money’s worth from their respective sponsorships, regardless if had “doped” or not.
But, Nike’s attorney, Bob Weaver, disagreed, saying Nike shouldn’t have to disclose such confidential business information.
“I don’t know that a viewer watching Lance Armstrong cycle through the Alps would decide that they wanted now to go start using express mail from the Postal Service,” Weaver told the judge. “But if they decided they would want a jersey he was wearing, that could be because they like Lance Armstrong, because they don’t like Lance Armstrong but like the Swoosh (Nike’s logo), because they see Nike as sponsoring outstanding athletes across the board, and they want to be connected to that.”
Hernandez delayed ruling on whether Nike should have to turn over the financial information requested by Armstrong, who stands to lose a fortune of the government’s case succeeds. Under the False Claims Act, he could be on the hook for triple damages near $100 million, with a major portion of it going to former teammate Floyd Landis, who originally filing the case as a government whistleblower back in 2010.
Prior to sacking Armstrong, the government believes that Nike profited heavily from Armstrong’s mystic tale of overcoming cancer, and going on to win seven consecutive Tour de France victories.
Indeed, Armstrong appeared in such memorable Nike ads, as the one in which he mocked those who questioned whether he was riding “clean”. To wit:
“Everybody wants to know what I’m on,” he asked in one Nike ad. “What am I on? I’m on my bike, bustin’ my ass six hours a day. What are you on?”
Weaver said Nike had “no knowledge Mr. Armstrong was doing this (doping) until, frankly, he admitted it” in 2013. He said the company ended its relationship with Armstrong in 2012 “because he violated his contract in the most outrageous way.”
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