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SCA Promotions Response to Lance Armstrong

SCA Promotions Response to Lance Armstrong

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Published by Robert Wilonsky
Lance Armstrong and SCA continue their legal battle over millions awarded for his Tour de France wins.
Lance Armstrong and SCA continue their legal battle over millions awarded for his Tour de France wins.

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Published by: Robert Wilonsky on Feb 19, 2014
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02/20/2014

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SCA P
ROMOTIONS
,
 
I
NC
.’
S
A
MENDED
J
OINT
R
ESPONSE
I
N
O
PPOSITION TO
L
ANCE
A
RMSTRONG AND
T
AILWIND
S
M
OTIONS TO
S
TAY
A
RBITRATION AND
 / 
OR
V
ACATE
A
RBITRATION
A
WARD
 P
AGE
1
4851-9163-0616, v. 1
CAUSE NO. DC13-01564 SCA PROMOTIONS, INC., § IN THE DISTRICT COURT OF § Plaintiff, § § v. § DALLAS COUNTY, TEXAS § LANCE ARMSTRONG, TAILWIND § SPORTS, INC., and WILLIAM § STAPLETON, § § Defendants. § 116
TH
JUDICIAL DISTRICT
SCA
 
P
ROMOTIONS
,
 
I
NC
.’
S
A
MENDED
J
OINT
R
ESPONSE
I
N
O
PPOSITION TO
L
ANCE
A
RMSTRONG
 
AND
T
AILWIND
S
M
OTIONS TO
S
TAY
A
RBITRATION AND
 / 
OR
V
ACATE
A
RBITRATION
A
WARD
 
TO THE HONORABLE JUDGE OF SAID COURT: SCA Promotions, Inc. (“SCA”) hereby submits this Amended Joint Response In Opposition to Lance Armstrong’s Motion to Stay Arbitration and/or to Vacate Arbitration Award and Tailwind’s Motion to Stay Arbitration and/or to Vacate Arbitration Award. In support of this Response, SCA shows as follows:
INTRODUCTION AND SUMMARY
In 2006 — after the arbitration proceeding involving Mr. Armstrong, Tailwind and SCA had concluded — Mr. Armstrong and Tailwind sought the exact procedural and substantive relief that SCA now seeks. Mr. Armstrong and Tailwind asked the Panel to reconvene and sanction SCA for its alleged post-arbitration conduct. In their motion, Mr. Armstrong and Tailwind argued that
“[t]his Panel has continuing jurisdiction to entertain [its] Motion for Sanctions
.”
See
Claimants’ Motion to Set Aside Nonsuit and Reinstate the Motion for Sanctions. The filing
FILED
DALLAS COUNTY
2/19/2014 11:01:04 AM
GARY FITZSIMMONS
DISTRICT CLERK
 
SCA P
ROMOTIONS
,
 
I
NC
.’
S
A
MENDED
J
OINT
R
ESPONSE
I
N
O
PPOSITION TO
L
ANCE
A
RMSTRONG AND
T
AILWIND
S
M
OTIONS TO
S
TAY
A
RBITRATION AND
 / 
OR
V
ACATE
A
RBITRATION
A
WARD
 P
AGE
2
4851-9163-0616, v. 1
was just one more hard-nosed, scorched-earth tactic from Mr. Armstrong in his perpetual quest to crush the truth (and SCA). Among other relief, SCA now seeks to impose sanctions
against 
 Mr. Armstrong (also  based on the fact that the Panel has continuing jurisdiction). In response, Mr. Armstrong suddenly switched his position, contradicted his former pleadings and argued to the Panel that they had no authority or power to do exactly what he previously asked and told them they
could do
 but a few years ago. By now, however, Mr. Armstrong’s credibility as a litigant is, to put it mildly, severely impaired. The Panel denied his efforts to block SCA’s request for arbitration. Mr. Armstrong now goes a step further and asks this Court to overrule the Panel and halt the arbitration in its entirety. Mr. Armstrong and Tailwind’s arguments rest on a thin claim that there is no valid arbitration agreement. This claim lacks merit. This Court can deny Mr. Armstrong and Tailwind’s motions for the following reasons.
1.
 
Under the parties’ arbitration agreement, it is the arbitration panel that decides what is arbitrable and both Tailwind and Armstrong had waived any challenge to that determination.
The arbitration agreement contained in the Comprehensive Settlement Agreement (to which Tailwind and Armstrong are both signatories) gives the arbitration panel exclusive jurisdiction over the parties’ disputes and further provides that all parties (including Tailwind and Armstrong) waive any challenges to the jurisdiction of the Panel, including subject matter jurisdiction. In other words, the Panel has the authority and power to decide what the scope of its  jurisdiction and neither Armstrong or Tailwind (or SCA) can challenge that determination. Thus, because any such challenges to the Panel’s jurisdiction have  been contractually waived, this Court can summarily deny Armstrong and Tailwind’s request.
 
2.
 
The parties have two valid and binding arbitration agreements that clearly cover the disputes in arbitration.
To the extent the Court determines that it has the power to decide the issue of arbitrability, it can easily make that determination in favor of requiring arbitration. There are two binding arbitration agreements, both of which contain broad language encompassing the very claims at issue. Neither Armstrong or Tailwind can challenge the validity of these agreements because both  previously sought arbitration pursuant to them. Moreover, SCA’s claims (and Armstrong’s defenses) all revolve around issues connected to the Contingent Prize
 
SCA P
ROMOTIONS
,
 
I
NC
.’
S
A
MENDED
J
OINT
R
ESPONSE
I
N
O
PPOSITION TO
L
ANCE
A
RMSTRONG AND
T
AILWIND
S
M
OTIONS TO
S
TAY
A
RBITRATION AND
 / 
OR
V
ACATE
A
RBITRATION
A
WARD
 P
AGE
3
4851-9163-0616, v. 1
Contract and the parties’ Comprehensive Settlement Agreement, both of which require arbitration. 3.
 
The Panel has the authority to hear the disputes before it.
Armstrong’s challenge to the Panel’s “authority” to award sanctions and other relief are also without merit. Armstrong and Tailwind have agreed that the Panel has such authority and, in fact, have previously sought sanctions from the Panel. Likewise, SCA’s claim for forfeiture is properly before the Panel and it has authority to decide the issue. Consequently, the Panel has both the authority and jurisdiction to hear such matters. 4.
 
This Court cannot hear a motion to vacate a “Partial Final Award.”
The  jurisdictional award that Armstrong and Tailwind challenge is not a final award. As a result, this Court cannot, under the Texas Arbitration Act, hear a challenge to its validity. It must await a full final award before any challenges can be made.
K
EY
B
ACKGROUND
F
ACTS
 A.
 
The Contingent Prize Contract.
1.
 
SCA entered into a Contingent Prize Contract #31122 with Disson Furst & Partners (later known as Tailwind Sports, Inc.) to pay Lance Armstrong prize money if he was the Official Winner of a series of successive Tour de France races in 2002, 2003 and 2004.
1
 2.
 
The Contingent Prize Contract has an arbitration clause providing as follows: “Sponsor [Tailwind] agrees that any dispute arising under this contract shall be resolved by  binding arbitration pursuant to the Texas General Arbitration Act. The site of such arbitration shall be Dallas, Texas.” A copy of that agreement is attached as Exhibit A (all exhibits submitted as part of an Appendix). 3.
 
Mr. Armstrong was declared the Official Winner of the Tour de France races in 2002, 2003 and 2004. SCA paid the prize money in 2002 and 2003. However, a dispute arose in 2004 over whether SCA was still obligated to pay Mr. Armstrong based on him being the
1
 Tailwind (a sports management company) had separately contracted with Mr. Armstrong to pay him the prize money if he won the Tour de France races. SCA, through the Contingent Prize Contract, was assuming Tailwind’s risk in exchange for a fee.

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