The transcript from the November 11 motion hearing was released Tuesday. The whole thing lasted about an hour or so, and the most noteworthy parts were Judge Richard Kyle’s questions.
LeMond lawyer Jaime DiBoise led off, attempting to define ‘best efforts’, and whether Trek’s marketing efforts met that standard. Trek lawyer Ralph Weber followed. Weber contended that Trek and LeMond had a contract that stipulated that Trek would spend 3% of net sales on marketing and advertising, and Trek met that number, and therefore met its contractual obligations to LeMond.
The judge’s first hypothetical
Weber then cites specific examples of customers and dealers complaining about LeMond’s outspoken anti-doping stance, to which Kyle asks this hypothetical:
THE COURT: What would have happened if instead of Mr. LeMond using the language that he had used had been asked after some of the newspaper articles about Armstrong’s association with the doctor, LeMond’s history of anti-doping comments unrelated to Armstrong, if he had been asked after that Armstrong thing came out with the doctor he was asked by the press, Do you have any comments on that, and he said, "I have no comment." Wouldn’t you be saying exactly the same thing? Wouldn’t that be read as a knock on the brand in the same way? It seems to me his hands are absolutely tied once that subject comes up because if he says something, he is getting lambasted by you folks for doing it. If he says I either can’t say anything or I have no comment, it’s going to be construed by the press as, see, he must be basically saying that. Then what would you do with this lawsuit?
Kyle seemed to be saying that LeMond’s hands were tied once questions arose about Armstrong. If he said ‘no comment’, it would’ve been construed as a tacit accusation. The only way LeMond could’ve avoided this lawsuit is if he went against his convictions and proclaimed Armstrong clean. Weber resisted the hypothetical, repeatedly refusing to answer the question:
MR. WEBER: The proof, Judge, the answer to your lawsuit is you have to say how consumers react. Because Trek sells to independent bike dealers. Independent bike dealers turn around and sell to consumers. These independent bike dealers are small business people that are very nervous about making a go of it. They hock –
THE COURT: But the press comes out and says –the press comments on his no comment saying, Well, obviously this is a view that he’s got about Armstrong. He’s thinking he’s doping, etcetera, etcetera.
MR. WEBER: We would have to see what the consumers’ reaction is. My own belief is if he said "No comment", there would be no story about LeMond.
THE COURT: Let’s assume that you could show that the consumers were reacting exactly the same way as a result of his saying "no comment".
MR. WEBER: I think –
THE COURT: Because here is somebody that is commenting on doping generally, initially unrelated to Armstrong. He obviously is in the forefront, for lack of a better word, of the anti-doping view. And the press is going to go to him when someone of Armstrong’s notoriety is either accused of or suspected of doping.
MR. WEBER: Right.
THE COURT: And they are going to expect some comment from him.
MR. WEBER: Number one, I don’t think you would get that kind of reaction. Number two –
THE COURT: Let’s assume you did. Let’s assume you got the reaction. Then what would you do?
MR. WEBER: Can I also assume then that in 2004 he said, "Armstrong will do anything to keep his secret"?
THE COURT: No, no, he didn’t say anything other than, "I am not going to comment on it."
MR. WEBER: And there were no comments in ’04 or ’06 or ’07?
THE COURT: Right.
MR. WEBER: Well, then we have a different situation, and I don’t believe we have the level of consumer reaction and dealer reaction that we did.
THE COURT: But let’s assume you had that reaction from the consumer. Exactly the same reaction your survey showed that they were not going to follow the brand. Would you be making the claim here today that that violated the provisions here?
MR. WEBER: Well, let’s look at the clause that we’re talking about.
THE COURT: No, no, let’s just answer my question.
MR. WEBER: Do I think we would be making the same claim if LeMond’s conduct damaged Trek’s business? Yes, we would. I don’t believe it would have.
THE COURT: Wait. You believe –
MR. WEBER: If LeMond damaged Trek’s business.
THE COURT: By saying "no comment"?
MR. WEBER: If that were construed by the press and the consumers as an attack on Armstrong, which I don’t believe they would, but if you’re asking me to assume that they would, then yes, then I think he would be damaging Trek’s business.
THE COURT: And you would have the same lawsuit as right here?
MR. WEBER: I don’t think we would because the lawsuit we have here includes comments in ’04 that Armstrong will do anything to keep his secrets. We have the comments in ’06 that Armstrong threatened my life, my livelihood and my wife.
THE COURT: You’re fighting my hypothetical.
MR. WEBER: Yes, I am. I am, Judge.
Diboise follows up
Next Weber and Kyle discussed LeMond’s alleged undercutting of dealers by selling bikes to friends, and then DiBoise did some following up. The end of DiBoise’s argument is particularly interesting, regarding Trek’s claim that LeMond violated a ‘moral turpitude’ clause:
Now, your Honor, my last point. Picking up on your Honor’s comment, if Mr. LeMond had said "No comment" in response to any of the questioning of him about Mr. Armstrong’s alleged doping and/or use of performance-enhancing drugs, the press would have construed that in any way, shape or form it wanted to. It would have caused the same furor. But the point, I believe, of your hypothetical is to think about this clause and whether or not it really reaches the conduct that Trek is attempting to have it reach.
That clause is designed to allow a company to get out from an agreement where the athlete’s performance or statements or actions are so bad as to cast doubt on the company itself. They are reserved for situations such as Michael Vick’s where you have an athlete who is fighting dogs, conduct unbecoming to the NFL. Conduct that breached his agreement. That’s what these clauses are reserved for.
Here what we have is Mr. LeMond speaking out against something everybody in this country hates. The pervasive use of doping in our athletic endeavors. How he can be punished for making those statements under this clause is just ludicrous. Here that clause means something other than what Trek is trying to make out of it. In any event, they can’t prove any damages flowing from his statements.
Weber answers the hypothetical
Weber then returns to the judge’s first hypothetical question, which in turns draws out another:
MR. WEBER: Thank you, Judge. I’ve had a few moments to reflect on the Court’s hypothetical and I think a better answer on behalf of Trek is as follows. Had LeMond simply said "No comment", I don’t think Trek would have been critical of that in any way, even with assuming the consumer reaction that the Court raises for this reason. Trek repeatedly told LeMond they had no problem with him speaking out against doping. In fact, encouraged him to do so. Trek has a very aggressive anti-doping language clause in its contracts with athletes. The line that Trek drew and asked Mr. LeMond to observe is no attacks on individual athletes because that is what got people so upset. LeMond repeatedly agreed with that and then repeatedly breached it. So had he simply as to an individual athlete said "No comment", Trek would not be here today.
THE COURT: One more hypothetical while you’re on the topic.
MR. WEBER: Okay.
THE COURT: Let’s assume it turns out tomorrow that Armstrong had been doping. What happens to your claim here then?
MR. WEBER: It doesn’t change.
THE COURT: You know, some test comes back. They have some way of doing it, and sure enough he’s been doping.
MR. WEBER: It doesn’t undo the $9 million and more in lost profits from the bike sales Trek did not realize.
THE COURT: Even if what he said was absolutely true?
MR. WEBER: Right. Trek was damaged. The contract with LeMond is over. Trek was damaged to the tune of between 9 and 12 million dollars as the result of lost bike sales. That doesn’t go away.
The judge suggests a settlement and a witness
Kyle then compared the case to a divorce, and urged both parties to strongly consider a settlement. He then discusses scheduling if the case does go to trial, dropping this in:
But as you look at your schedules, and I don’t want you to look at them now, but if counsel who intend to try the case and perhaps Mr. LeMond or Mr. Armstrong have got major issues already in March or that period of time in terms of pre-planned vacations or whatever it is, you ought to let Ms. Siebrecht know, who is my calendar clerk, of those, and with a copy to the other side. We’ll make every effort to work around that.
Both sides let the possibility of Armstrong testifying in the case alone. Kyle then closed with his interpretation of the case:
…I sense that Mr. LeMond was a pain in the neck to some of the people at Trek and the people at Trek were ready to lower the boom on him at some point in time and maybe with good reason. And then the Armstrong issues comes up and basically the owner of Trek passes on and now all of a sudden we have different management in there and somebody said let’s blow the whistle on this thing. It’s time to — not doing anything wrong. It’s time we’re not going to put up with this stuff anymore. And here we are. One charge escalates into another.