Lance Armstrong, FRS Accused in Suit of False Advertising

Photographer: Gail Oskin/Getty Images

Lance Armstrong attends the 2011 Pan-Massachusetts Challenge in Bourne, Massachusetts on Aug. 6, 2011. According to FRS’s website, its product were originally developed to provide energy for chemotherapy patients. Close

Lance Armstrong attends the 2011 Pan-Massachusetts Challenge in Bourne, Massachusetts... Read More

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Photographer: Gail Oskin/Getty Images

Lance Armstrong attends the 2011 Pan-Massachusetts Challenge in Bourne, Massachusetts on Aug. 6, 2011. According to FRS’s website, its product were originally developed to provide energy for chemotherapy patients.

Lance Armstrong, the seven-time Tour de France cycling race champion later stripped of those titles for cheating, was sued for false advertising and fraud in separate lawsuits.

Armstrong and his management company, Tailwind Sports Corp., owe Acceptance Insurance Co. $3 million for bonuses paid to him after he won Tour de France races in 1999, 2000, 2001 according to a complaint filed yesterday at a Texas state court in Austin.

“Armstrong was never entitled to receive any of the payments because he cheated in each race and violated the rules and regulations of the events,” Acceptance alleged. A Tailwind predecessor had purchased the insurance to cover the cyclist’s contract bonuses.

The cyclist set a record by winning the French cross- country race each year from 1999 to 2005. He was stripped of the titles in August. Armstrong admitted in a January television interview with Oprah Winfrey that he’d used a “cocktail” of testosterone, erythropoietin and blood transfusions throughout his career.

‘False’ Advertising

The Nebraska-based insurer accused Armstrong and Tailwind of fraud and breach of contract. It also claimed the defendants had been unjustly enriched.

The cyclist was also sued yesterday with FRS Co., a nutritional products maker for which he served as spokesman, in Los Angeles federal court by consumers claiming Armstrong and the company engaged in false advertising by linking his Tour de France victories to FRS products.

“Lance’s lawyers have not reviewed the lawsuits yet and so we don’t have anything to say,” Mark Fabiani, a spokesman for the cyclist, said today in a telephone interview.

In television advertisements, Armstrong had claimed FRS’s energy and health supplements were his “secret weapon,” according to the consumers’ case, which seeks class status on behalf of all people who bought FRS products “based in whole or in part” on the Armstrong marketing campaign from 2007 to 2012.

Consumers wouldn’t have bought FRS products, or would have paid less for them, if not for the misleading ads, according to the complaint.

Powerful Antioxidant

According to FRS’s website, its products were originally developed to provide energy for chemotherapy patients. The company’s products contain quercetin, “a powerful all-natural antioxidant,” according to the website.

Carli LaForgia, a spokeswoman for the California-based company, didn’t immediately respond to an e-mail yesterday after regular business hours seeking comment on the lawsuit.

Tailwind and Armstrong last month were sued by SCA Promotions Inc., which seeks to recoup $12 million in prize money paid the rider after he won the 2002, 2003 and 2004 Tour races.

Fabiani said then that a 2006 settlement agreement barred SCA from raising the issue. That case was filed at the U.S. court in Dallas.

The class action case is Martin v. FRS, 13-01456, U.S. District Court, Central District of California (Los Angeles). The insurance case is Acceptance Insurance Co. v. Armstrong, D- 1-GN-13-000761, Travis County, Texas, District Court (Austin).

The other bonus case is SCA Promotions Inc. v. Armstrong, DC13-01564, District Court of Dallas County, Texas, 116th Judicial District.

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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