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Is The Class Action Lawsuit Against Lance Armstrong Legit?

Boulder Business LawyersThe Lance Armstrong saga continues this week saw a class action lawsuit filed against Lance Armstrong and various publishers on behalf of California consumers who claim they were misled by Defendants’ statements and purchased Defendant Armstrong’s books based upon the false belief that they were true and honest works of nonfiction.

When I first heard about the class action, I immediately thought “Are you kidding me?  Sure, we’d all like to sue Oliver Stone for subjecting us to JFK in 10th grade history class but this? … come on.” So, is this class action against Lance Armstrong legit? Actually, it might be.

Stutzman, et al v Lance Armstrong, et al., filed January 22, 2013 in the US District Court for the Eastern District of California, alleges Lance Armstrong et al, made multiple misrepresentations contained in Lance Armstrong’s books, IT’S NOT ABOUT THE BIKE: My JOURNEY BACK TO LIFE and EVERY SECOND COUNTS, and advertisements and marketing for the books (including the front and back cover and flyleafs media press kits, during television and newspaper interviews, on Internet websites and at personal appearances made by Armstrong) as true and honest works of nonfiction when, in fact, Defendants knew or should have known that these books were works of fiction. Further, the lawsuit claims Lance Armstrong et al advertised marketed and sold these books as a works of nonfiction.

The Plaintiffs allege they were misled by Lance Armstrong’s and the other Defendants’ statements and purchased Lance Armstrong’s books based upon the false belief that they were true and honest works of nonfiction. In their 59-page Complaint, Plaintiffs cite to the exhaustive and growing body of evidence and recent admissions by Lance Armstrong himself to support the allegations of misrepresentation and fraud regarding Lance Armstrong’s use of banned substances (EPO, blood doping, testosterone) during his professional cycling career.

Knowing that the mere claim that his success was due to superior physical training, proper diet and an extraordinary spirit and drive to succeed was not enough to quell suspicions and rumors that he doped, Defendant Armstrong wrote lengthy passages in IT’S NOT ABOUT THE BIKE: My JOURNEY BACK TO LIFE that were intended to convince readers and consumers – including Plaintiffs and the members of the Class – that the rumors of Armstrong’s doping were unfair and untrue because of the extensive drug-testing regime employed by the DCI and the organizers of the Tour de France… Complaint ¶ 20

In order to survive a motion to dismiss, the Plaintiffs will have to overcome the pleading requirements of Federal Rule of Civil Procedure 9(b) which requires state-law claims grounded in fraud to be plead with particularity and requires a plaintiff to plead with particularity the circumstances constituting the fraud while malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally. “Averments of fraud must be accompanied by the ‘who, what, when, where, and how’ of the misconduct charged.” Yess v. Ciba–Geigy Corp. USA; Villegas v. Wells Fargo Bank, N.A. (N.D. Cal. Sept. 17, 2012).

The Complaint almost certainly meets Rule 9(b)’s requirements as to Lance Armstrong. As to the other named Defendants however, the Plaintiffs may not get so far. This lawsuit was brought in a Federal Court in the Eastern District of California – a court within the jurisdiction of the 9th Circuit. The United States Court of Appeals for the 9th Circuit has held that a book publisher owed no duty to a car dealership owner for allegedly publishing errors concerning emission systems in automobiles. Sinai v. Mitchell Books (9th Cir.1993). In 2000, a New York court followed the 9th Circuit’s lead and supported the proposition that publishers have no duty to investigate the accuracy of its books.

The Sinai court stated that absent an express warranty, publishers have no duty to investigate the accuracy of the contents of the books it publishes and concluded that such a duty could not be created because a publisher’s right to publish free of fear of liability is guaranteed by the First Amendment and the overriding societal interest in the untrammeled dissemination of knowledge. While the Sinai case is 20 years old and may be revisited or distinguished at this point, it may be that the “deep pockets” of the publishers in the case might not be reachable by the Plaintiffs. Which would leave Lance Armstrong alone to pay any judgment.

This case will be interesting to watch in light of Lance Armstrong’s recent admissions, alleged recent lies, and anticipated flood of lawsuits resulting therefrom.  If the case is permitted to move forward it will no doubt be because of Lance Armstrong’s years of agressive lies and denials about his drug use during his cycling career.  The crux of the case is the contention that the Plaintiffs would not have purchased the books had the truth not been withheld by Lance Armstrong.

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