LeMond Cycling, Inc. v. Trek Bicycle Corporation

Filing 139

Attachment 4
DECLARATION of Emily S. Zastrow in Opposition to 117 Memorandum in Support of Motion, 114 MOTION for Summary Judgment filed by Trek Bicycle Corporation. (Attachments: # 1 Placeholder for Exhibits 45,55-57,61,66,70,74, # 2 Placeholder for Exhibits 46-47, # 3 Exhibit 46, # 4 Exhibit 47, # 5 Exhibit 48, # 6 Exhibit 49, # 7 Exhibit 51, # 8 Exhibit 51, # 9 Exhibit 52, # 10 Exhibit 53, # 11 Exhibit 54, # 12 Exhibit 58, # 13 Exhibit 59, # 14 Exhibit 60, # 15 Exhibit 62, # 16 Exhibit 63, # 17 Exhibit 64, # 18 Exhibit 65, # 19 Exhibit 67, # 20 Exhibit 68, # 21 Exhibit 69, # 22 Exhibit 71, # 23 Exhibit 72, # 24 Exhibit 73, # 25 Exhibit 75, # 26 Exhibit 76)(Rolf, Benjamin) SEALED DOCUMENTS RECEIVED IN CLERKS OFFICE on 8/5/2009 (lph). Modified attachment text on 8/6/2009 (RLR).

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LeMond Cycling, Inc. v. Trek Bicycle Corporation Doc. 139 Att. 4 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 1 of 38 ZASTROW EXHIBIT 48 Dockets.Justia.com Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 2 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 1 1 2 UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA LeMOND CYCLING, 3 4 INC., 5 Plaintiff, vs. TREK BICYCLE CORPORATION, 6 Case No. 08-1010 7 8 9 Defendant/Third-Party Plaintiff, vs. GREG LeMOND, 10 11 12 13 Third-Party Defendant. -----------------------------------------------------video Deposition of JOHN BURKE 14 15 16 17 18 Tuesday, April 7, 2009 9:31 a.m. 19 20 at GASS WEBER MULLINS, LLC 309 North Water Milwaukee, 21 22 Wisconsin Street, Suite 700 53202 23 24 Reported by Julie K. Lyle, RPR/RMR/CRR 25 Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 3 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 10 1 2 3 4 5 your last name. MR. I'm sorry. WEBER: That's all right. That's all right. BY MR. Q WEBER: But just -- so I just caution you, none of my 6 7 questions are aimed at discovering any of your communications that you had with your counsel, your head I 8 9 okay? So a just kind of put that in roadblock. I for kind of don't want -- don't 10 want to ask you about those. A 11 12 13 Okay. Q What specific provision did contract yesterday? you look at in the LeMond A I 14 15 16 looked at Section 13. Q A What is Section 13 13? LeMond Section states that Greg damage cannot do Company. 17 18 19 Q anything to And you the Trek Bicycle LeMond believe that Mr. has, in fact, done that? A 20 Yes. Okay. How has he done a 21 Q A that? I 22 23 There are quite give you a few different ways. will well sales few examples. 24 In with the LeMond 2001 we were doing very I 25 line. think we had grown Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 4 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 11 1 2 to somewhere around $16 million. After Lance was Armstrong won the Tour de France, Greg LeMond 3 4 stated publicly that this achievement a either great accomplishment or the greatest fraud in That caused absolute caused a 5 6 7 the history of sports. -- a lot of problems with our retailers, of problems with our consumers. The bicycle business caused lot 8 9 is very a 10 dependent on bicycle retailers. They make lot 11 12 13 14 15 of decisions door, about what products come in the and those are the products that go out the a door. They spend lot of time recommending what products they want to sell. When Greg made those comments in 16 17 2001, the confidence of those small business and because people went down substantially, of 18 that, sales. it hurt our relationships and with those 19 20 21 22 retailers, it also hurt our potential LeMond Again, in 2004, when -- right in the summer, before or after the tour, sometime 23 24 25 Greg said that Lance Armstrong threatened my wife, were my life, a and my livelihood. we were Once again, a we in situation where getting lot Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 5 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 12 1 2 of negative feedback from retailers and we were getting that was a lot of negative feedback from consumers 3 4 undermining Trek's efforts in the marketplace. Our 5 6 7 retailers, our salespeople are all out there working hard for Greg LeMond. They're selling LeMond product which Greg's making a 8 9 royalty on, and they're being undercut. a Those are couple of examples 10 11 12 there. If damaged we take a look at how Greg Trek through employee purchases, somewhere in his 13 contract he gets and he around 15 free bikes 14 gets the ability to buy bicycles for 15 16 17 18 19 friends, for This is excuse a met for family. All right? -- something that Trek employees can do. Over the relationship he ended up purchasing with Greg, $1.5 million worth of 20 21 22 23 24 25 bicycles. same Just to give you an example, in that period of timet Gary Fisher purchased around Lance Armstrong purchased around $24/000. $24/000. It Greg LeMond had a even got to the point where price list that he used. In Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 6 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 13 1 2 3 4 5 fact, of he was actually -- in certain cases, in Minneapolis where Greg was he was competing with our dealers. a There's an example sale up competing with our dealers. Those are a couple of examples 6 7 where Greg has damaged Trek. Q I -- I understand that those are I a couple of 8 9 examples. want you to give me me the exhaustive Greg LeMond list. A Tell I -- tell you a me how else 10 11 12 13 has damaged Trek. Well, just gave couple of the big ones that -- I can be a little more specific and tell you that in 2001, the LeMond business was about 15 or $16 14 15 16 17 million. Everything up until that and point had been going pretty well. All other athletes. We the sudden we get to 2001, comments Greg starts making disparaging about 18 19 20 21 22 23 24 25 were in a perfect position at of cycling in a that point in time. growing The sport was significantly. as a LeMond was great position grown brand. my That business could have to, in estimation, at least $30 million and over the next five years, it stayed flat at best. Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 7 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 14 1 2 There's an example. Another example is what happened 3 4 5 in the PTI lawsuit. was not doing Back in the late 1990s, Trek We so well financially. were 6 7 look at making -- we were reviewing our business to see where we could make some changes. taking a We took a look at the LeMond contract and a we 8 9 said, you know what, we're not doing of selling LeMond good job accessories. 10 11 12 13 And we Greg and said, Greg, so talked to -- I talked to is there a way that we could restructure this company. that we're not going to sell LeMond accessories and you can do it with another 14 15 And we talked about that for we came a 16 17 18 19 while. things. we And sure enough, a to an agreement where we gave Greg We couple extra things, large expanded the length of the contract, on agreed to pay more royalties international 20 sales, and we got out of the accessory contract. I 21 22 23 brought up to Greg at that Greg, we point, you know, really don't independent want to see LeMond accessories go to the mass merchant. 24 That's a big competitor for Greg bicycle 25 retailers. said that's not going to happen. Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 8 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 15 1 2 If anything takes place here, I'll let you know. If you go back and you take a look 3 4 at it, unfortunately, once again, there had been a negotiations with PTI, there had been intent signed even before he conversation. and I letter of 5 6 7 had that It's just would make commitments. time and time again Greg He would say 8 I'm going 9 to do one thing, and then he would do something 10 11 12 else. You can go back in the history when we and take when a look, in 2001, in 2004, in 2006 -- 13 14 Greg would comment on specific athletes do and we'd get to the end of this and Greg would say, you know what, 15 16 17 Ilm not going to that anymore. I'm done with that. I'm not going to do that. Ilm going to support I'm going to support Trek. your 18 19 retailers. And, That's the way And we'd say, it's going to be. and weld go great, 20 21 22 23 24 out there. know, as we always have done, you we kept going on and on. we Despite And all the problems, kept moving on. it was disappointing. But those are just more examples. Q 25 Do you have any other examples? Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 9 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 16 1 2 A I'm that sure there's I plenty of more. Those are ones can recollect at this time, and those are for the 3 4 5 quite substantial. Q Well, you've had three weeks to prepare deposition, right? You've been 6 7 A Yes, And I have. Q you've met three times over the past three 8 9 A weeks, right? Uhm-uhm. 10 Q A Is that Yes. a yes? 11 12 Q A And you've never been deposed I before, right? 13 have not. 14 15 Q So this is probably what? a little bit of a nervous event for you, A right? 16 A A 17 18 19 Q A nervous event for you in your life. with this? No. Q A Okay. You're totally comfortable 20 21 22 23 No. Okay. Q A Somewhere-somewhere They're in between there. Q A Somewhere -- somewhere in between? 24 Yep. 25 Q But you've obviously had time to think about how Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 10 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 17 1 2 A Greg LeMond has I injured Trek, right? have. 3 4 Q And as you're sitting here today, you've given me the exhaustive list of every way that Greg LeMond 5 6 7 8 9 A has damaged Trek; No. MR. is that right? Just WEBER: a second. Yeah. Objection. THE WITNESS: BY MR. No, it's not right. what 10 11 12 13 14 WEBER: Q A Okay. All right. I Well, then tell me else. There are -ways just gave you three very large that Greg LeMond has damaged Trek. There are plenty of others. I 15 do -- do you look at me when I 16 17 18 Q A answer the questions? Not always. Okay. I run a sizable bicycle on, and so company. I I have a 19 lot of things going everything. Q A don't remember 20 21 Those are three very large issues. Okay. Are you done answering? 22 23 Yes. Q All right. me As you sit here today, have you told 24 25 everything that you remember regarding the ways that Greg LeMond has injured Trek? Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 11 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 18 1 2 3 4 5 A A Yes. Okay. Q The -- how many consumer complaints have you produced in this lawsuit from 2001? to ask the lawyers. You would have Okay. Q A Do you know that you've produced none? 6 7 You would have How many to ask the lawyers on that. has Greg LeMond made Q athletes I 8 9 A disparaging comments regarding since 2001? One that know of. 10 11 12 13 Q A And who's that person? That would be Lance Armstrong. The PC LeMond Q -- the PTI lawsuit involved a deal that Cycling entered into with respect to 14 15 16 17 18 A accessories; A is that right? That is correct. contracts have you entered into as a Q How many CEO on No behalf of Trek? idea. 19 Q A Dozens? 20 21 22 23 24 25 Probably. Would Q it have been difficult for you to request a contract between Trek and LeMond Cycling that would have prohibited Mr. LeMond from entering into an accessories contract that enabled LeMond Cycling to provide accessories to the mass Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 12 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 28 1 2 things out. successful. We wanted things to be really time those And we'd have problems time and 3 4 again. And, you know, we'd discuss problems, and we'd try to rectify those problems. and those 5 6 7 And Greg would make commitments, commitments would be broken. But we always -- I'm we an optimistic 8 9 person. I always hope that We're not a can find a solution. 10 11 12 Q instead of trying to to solve problems. litigious company, and so file lawsuits, we're trying a Well, you say that Trek is not company. litigious 13 14 15 16 17 A Is that right? LeMond A That's correct. And Q yet, after time? served you with a lawsuit, what was your reaction Which to that? 18 Q A In 2008. In 2008, was 19 after he served us with a lawsuit, it 20 21 22 23 Q A my judgment that there had been so many times that Greg had not lived up to his commitments. Uhm-uhm. And there had been too many times when he had we 24 25 threatened us, that when received another my lawsuit less than ten days after father had Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 13 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 29 1 2 died, a I figured that you was enough. And so we made decision at that time to end the relationship. 3 4 5 Q A You We -did. filed a lawsuit against Mr. LeMond? Q And that lawsuit was filed here in Wisconsin, 6 7 right? A Yes. And 8 9 Q it was later MR. dismissed after we won a transfer motion in Minnesota, WEBER: right? as to foundation 10 Object as 11 12 13 14 15 to the procedural events that occurred. MR. MADEL: You can go ahead and answer. MR. WEBER: If I you know about the procedural events, you can tell don't him. know. 16 17 18 THE WITNESS: MR. WEBER: You can tell him if you don't. THE WITNESS: BY MR. Q 19 Yeah. 20 MADEL: 21 22 23 that that lawsuit -- our lawsuit ultimately filed in Minnesota, right? You know I was A know that. that your lawsuit -you 24 25 Q And you know filed your lawsuit in Wisconsin? Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 14 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 44 1 2 get you that information. Q You say that Mr. LeMond did a lot for the same? LeMond 3 4 5 6 brand. Was -- was the efforts that Mr. Armstrong did for the LeMond brand the MR. WEBER: You just said -- let I me just stop you. MR. 7 MADEL: Did just do the same 8 9 thing? THE WITNESS: MR. Yep. I 10 11 12 13 MADEL: used it again. I'm sorry. THE WITNESS: MR. MR. Sorry about that. No, Push MADEL: WEBER: that's all right. the reset button. I 14 15 16 17 MR. MADEL: Here we go. will. Thank you. BY MR. Q MADEL: 18 With respect to your statement that Mr. Armstrong 19 20 21 22 23 24 A did Mr. I a lot for the do? LeMond brand, what did Armstrong think the basic thing is is he -- he brought up the tide and all the boats rose with it, really including Trek's, including Greg LeMond's, including Specialized. His tour victories boom 25 ignited the road bike in the United States. Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 15 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 68 1 2 3 4 A that presentation referring to Mr. idiot? That was a LeMond as an quote from one of our managers, a manager who had worked very hard to promote LeMond the 5 6 7 8 9 line. And, once again, as he's out there working hard to promote Greg LeMond's line that Greg's making royalties on, Greg LeMond goes out Lance Armstrong. And, and disparages once again, who has that manager, who 10 11 12 13 14 was Malcolm Davies, the highest integrity, spend a once again that manager is having to customers who lot of his time talking to when he does are asking him, Why do you do business with Greg LeMond Q this time and time again? 15 16 Move to strike as nonresponsive. Do you consider Greg LeMond an 17 18 19 A idiot? No, I I don't consider some Greg LeMond to be an idiot. consider of his actions to be idiotic. A 20 They don't make sense. 21 22 23 lot of Greg LeMond's actions we have been out there building his brand, and he working hard for his brand, consistently part of 24 shoots himself in the foot. There's a 25 very interesting Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 16 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 72 1 2 3 4 Q A Is the -You must -- you must -- it -we you must understand, in the context, were served with around ten days We a lawsuit ten days -- somewhere 5 6 7 after same my father's death. we All right? were given were type of lawsuit in 2004. All to right? 8 9 It be threatening, we Q was a lawsuit that we found and we wanted to make sure that 10 11 12 13 A were organized in how we put our message out. What did Trek do to Mr. LeMond within seven days of his mother's death? I don't know. I -- to be honest with you, I 14 didn't Q even know that his mother had died. send you a 15 16 And did Mr. LeMond note of condolence after your father A I passed away? 17 18 believe that he did. (Exhibit 135 was marked for ) 19 identification. BY MR. Q 20 21 22 23 MADEL: Exhibit 2004, 135 is a letter from Loren Brown, LeMond on behalf of Trek, to Mr. right? dated August 10, 24 A It is. 25 Q And the first two paragraphs say, "My firm Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 17 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 76 1 2 3 4 5 just Q A one way. so The media was going to write about the story, they might as well hear the story. Were you angry No, I at this time at Greg I LeMond? I don't think was angry. I would say was disappointed. I'd We put 14 years into that 6 7 relationship. started that relationship out. 8 It $4 was interesting going through the notes that 9 our minimum sales target was something like far a 10 11 12 13 14 million. The success of LeMond with Trek exceeded those original expectations. There were some We put lot into it. rocky times along Every time we the way based on Greg's behavior. went out of our way to 15 16 17 try and put things back who together, we lost we customers along the way And wondered why we continued with Greg. and time again, move Q time 18 19 tried to patch that up and -- move it along. as a 20 21 22 Did you lose any customers result of your April 8, 2008, presentation? A We -- not to Was my knowledge. a 23 24 25 Q Okay. there reason -- now, within your April 8, 2008, presentation, you included some e-mails from customers. Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 18 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 77 1 2 3 4 A Okay. Why Q A did you do I that? a Because magnitude, think -- in I think it decision of that good was for everybody to 5 understand the kind of e-mails and the kind of 6 7 8 9 feedback that we had been getting. After Greg's 2004 or 2006, we comments in 2001 or would get an amazing amount of e-mails from upset retailers, from upset customers. And I 10 think it was important that 11 12 13 Q A that's something that Define "amazing." went into our decision-making process. 14 15 16 17 18 don't have to -- I don't but it was in the hundreds. And I have the exact number, Q all of those, presumably, should have been produced A in this case, right? a That would be You I legal question. 19 20 Q A don't not. know if they've been produced or not? do 21 22 Q A Do you know I if any of them have been discarded? do not know. 23 24 Q Was there any effort at Trek, after 2004 to today, to have Trek employees document problems 25 that they were having with LeMond in the field? Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 19 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 83 1 2 3 4 A The 2004 complaint that you had summarized, ridiculous I did you -- did you consider that at the time? can't remember. 5 6 7 Q But yet you -- even after that was served on you in 2004, you made the specific decision to continue doing business with Mr. LeMond? MR. WEBER: 8 9 Object. Just a second. Object to the form of the question. mailed to him. MR. It was 10 11 12 MADEL: Okay. Fair. 2004 complaint BY MR. Q A MADEL: 13 14 15 After Yeah. after you received the -and Q you decided not to proceed with litigation LeMond; 16 17 to continue doing business with Mr. is that right? A 18 19 In the end, that was the decision that was made after numerous conversations with Greg and 20 assurances, once again, that Greg was going to 21 22 23 24 25 Q support Trek, comment support Trek retailers, and not on specific athletes. was The sequence was a Exhibit a 135, you noticing breach; LeMond serves to continue lawsuit on you; Trek decides to do business with LeMond, Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 20 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 84 1 2 right? MR. WEBER: Object. No. 3 4 5 THE WITNESS: MR. WEBER: Wait. Object to the form of the question. MR. It I 6 7 MADEL: WEBER: said serve again? no, no. MR. No, In addition to 8 that -MR. MR. 9 MADEL: WEBER: All right. 10 11 12 -we we have a standing what that's objection. about. I think understand 13 But beyond that, there's -- you're 14 15 16 17 18 taking an event in August and an event in December and an event in the spring of '05 and assuming that those are the only three events. BY MR. Q A MADEL: Go I ahead and answer. 19 think the -- to my recollection, sequence the part that 20 21 22 23 24 25 you have not put in your of events are conversations with Greg about going forward and really having him make some adjustments in terms of not commenting on specific athletes. In 2004, part of that is we said, okay? listen, we just want to end the agreement, Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 21 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 85 1 2 We're honorable peoplel we're good peoplel Why we obviously have you go out and a disagreement here. don't And 3 4 find another company. do any harm Okay? you Why we'll know I do we a nice transition here becausel 5 6 7 8 don't want to here. don't you just go out and find another company. I And he went out and he looked around and he couldn't find another company. And we 9 that's when he came backl and 10 were taking a look at it. And we just saidl and put 11 12 13 14 Q okaYI let's -- once againl let's try this thing back together. we And we did thatl and we -- carried on again. The -- weIll first -I of alII how do you know he 15 couldn't find another A company? 16 17 18 Conversations would say that's conversations that I've had with counsel. Q Has anybody -- weIll strike that. Has 19 20 Greg LeMond or anybody on behalf of Greg find another A LeMond told you that he couldn't 21 22 company? No. MR. WEBER: 23 24 And by "you/" you mean Mr. Burke personally as opposed to Trek? MR. 25 MADEL: I don't think this is a Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 22 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 94 1 2 A That's true. And you wouldn't Q ever turn a blind eye to that, 3 4 A would you? No, I I wouldn't. 5 6 7 Q mean, if you had facts in front of you that a convinced you that this person was actually doper, you're going to drop them from the Trek 8 family, A right? provided me 9 If somebody with evidence in this 10 11 12 country, you're innocent until proven guilty, right? So if somebody was convicted of doping, then they would be dropped from the Trek family. Q 13 I've on got a trial on May 5, a and I hope that you're a 14 it. That was joke. It's just I joke. 15 16 17 18 A It's like, I'm like May 5? where am going to be on MR. WEBER: He's a criminal defense lawyer. THE WITNESS: 19 Okay. I 20 21 22 23 MR. MADEL: couldn't -- I couldn't agree with you more. BY MR. Q MADEL: With respect to the evidence against Mr. 24 Armstrong with respect to doping 25 A Yep. Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 23 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 95 1 2 3 4 5 A Q -- do you have -- do you know of any evidence drugs that he has used performance-enhancing at any time during his cycling career? I do not. I Q A Have you read any? No. 6 7 You know, time to time have been really don't -- I'm sure from I've read an article where there where he's made you know, I 8 allegations or I've had conversations LeMond 9 with Mr. plenty of 10 11 12 13 Q A allegations. most But, -- this guy is the tested athlete in the history of sports. Uhm-uhm. I'm aware that the doping allegations were 14 litigated in the won Q seA lawsuit, and Mr. Armstrong 15 that lawsuit. 16 17 18 19 Was it -a was there a factual finding that he didn't A dope in that lawsuit? I'm not Has lawyer. a Q there been problem with doping in the Tour 20 21 22 A de France in the last few years? teams have had problems with doping, Yes. Numerous Q 23 including the winner of last year's tour, right? A I 24 couldn't specifically tell you that. do you 25 Q Do you know of any players -- players -Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 24 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 97 1 2 to investigate somebody A when there are allegations of doing just that? There's 3 4 5 We're not investigators. -- there's a DCI. They have a -- I'm sure they have And rules and they have doping protocol. worked. I it's obviously 6 7 8 they've found -- as you mentioned earlier, they found a number of people mean, here in the last few years. Q 9 Well, have there been tests where Lance Armstrong EPO 10 11 12 13 14 A proved positive for use I -- taking in 1999? do not know. Q Okay. The -- when you said that Trek won't do business with somebody that dopes, do you at what point believe it has been established that 15 16 17 18 Q A somebody has doped? Well, I really don't -body came to So I would say once the governing that conclusion. for All right. example, if we take Mr. Landis, 19 you would have done business with 20 21 22 23 A Mr. Landis up to the time that the arbitration panel came out and said he's a -- he's guilty? me Isn't that -WEBER: MR. Just let object to the 24 form of the question as hypothetical. THE WITNESS: 25 Right, hypothetical. Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 25 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 103 1 2 3 4 5 6 7 A "how many." I mean, how many could be 20 to -- if of Q you really wanted to count custom builders, to the best et cetera, my it could go as high as 40, knowledge. What was Trek's fastest-growing 2000 to 2007? road bike brand in the period of I don't have those figures in front of me, but I 8 9 would assume that Q A it was the Trek brand. Why would you assume that? a 10 11 12 13 Because the -- we've had lot of growth with Trek. As I mentioned earlier, the road bike business, after Lance Armstrong won his first tour, the road bike business, not just for Trek went up, and 14 15 but for everyone in the industry, it just continued to And go up and up and up. I 16 17 18 know that we have a large share of that business, and so as the business continued to grow, Q so did our sales. 19 20 21 22 23 With respect you mentioned to Mr. LeMond's bicycle sales which at the very beginning of the did you deposition, when first learn about the extent of his bicycle purchases from Trek? A Way When I too late. 24 Q A did you -- when was that? I 25 would say -- don't have the exact date on Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 26 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 108 1 2 A 1995 to 1999 entirely No. to Trek's efforts? It was a team effort between Trek and Greg. a 3 4 5 Greg brought great name, famous cyclist, won the tour three times. We took that name and that image 6 7 and we put it together with good product we designers. And most important, a put it a 8 9 together with great group of -- with great distribution channel. 10 11 12 13 Trek's sales team is known as the most competent in the bicycle industry, is second to none. a and the You Trek retail network put those things together and you've got combination. Q good 14 15 16 17 And from 2000 through 2008, do you attribute the level of those sales to be entirely due to Trek's efforts? A 18 19 20 "Entirely" no, is a very strong word. I would say not entirely. But after 2001, when Greg called 21 22 Lance either the greatest hero or the greatest we fraud and again in 2004 and again in 2006, were 23 fighting an uphill battle to sell Greg's 24 25 Q bikes. Yet the sales continued to increase? Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 27 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 109 1 2 A I think the sales continued to increase. there a The market share continued to decrease. Q 3 4 Was reason you chose not to put those market share A statistics in your presentation? 5 6 7 You know, the -- you know, the problem with the I market share statistics is, as said before, the bicycle industry doesn't have great numbers. 8 9 It's last Q not like the auto industry where you can see how many Toyota priuses were sold in Dane County 10 11 12 month. It so just doesn't have that kind of I information, So did not put it in here. bikes then when you said that the market share LeMond 13 14 statistics with respect to the decreased through what were you basing A the period 2000 through 2008, 15 16 that testimony on? I'd for say I base it on being a in the bike business 17 18 19 24 years and having pretty good handle on our business. numbers There are come -- there's industry They're not really good, that out. 20 21 22 23 24 A but generally you can kind of see what's going on. Q Okay. What are those industry numbers that you're relying upon? It's called BPSA, which is bicycle products, a and 25 we can kind of get -- get Gramann Reporting, Ltd. handle on what's 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 28 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 114 1 PTI. And he never said anything about that, and 2 3 4 5 he said if we're ever looking to do anything in the mass, he already I'll let you know. And all that time, knew. And that's just another example of 6 7 business dealings with Greg, where he does some really good things, but stuff like that, in the it -- it 8 9 certainly undercuts the confidence relationship. Q 10 11 12 13 14 15 16 17 18 That damage that you have as phrase A that you used is a I think the -gut feel to you. The damage is a gut feel because that's very hard to quantify. Because what's happening is retailers brand who have strongly supported the LeMond -- all right. There's a three blocks away there's retailer and Target. Well, all a Trek the sudden now Target's selling $9.99 LeMond What's helmets. going on? now And I that retailer is going, 19 got to compete with somebody else same name; I 20 21 22 selling the don't like that. that. So all Q the sudden he starts buying less LeMond bikes. And It's hard to quantify 23 I'm somewhat sure that you're exaggerating 24 25 with the $9.99 LeMond helmet. more than It was probably that. Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 29 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 115 1 2 A You're-But I Q think what you're trying to point out is 3 4 that they were selling it for a cheaper value than what would exist in an independent bike 5 6 7 A dealer shop. Uhm-uhm. Yes. Q I'm going to direct your attention back to your 8 presentation where you have And some e-mails here. 9 it says "Fallout" at the top. What did you mean by 10 11 "fallout" there? A 12 13 Fallout would MR. MR. be what the consequences of Greg's actions were to Trek. WEBER: 14 15 Go to the prior page. MADEL: Yeah. 16 17 18 19 20 BY MR. Q MADEL: The -- so -a and then on that first fallout a page, you put in two e-mails from -- Trek customer e-mail and A LeMond customer e-mail, right? We're on fallout, which says -- starts out 21 22 23 Q A "Thanks to Greg's comments"? Yes. Yes. And then you put 24 25 Q in two additional customer e-mails on the next page that says "Fallout" at Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 30 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 118 1 2 3 4 5 A Do you see that? First sentence of the second paragraph. I do. "No Q That last sentence of that paragraph, whether you believe Mr. Armstrong why not matter doped or not, a 6 7 position the Trek and LeMond brand on higher ground." Do you see A I 8 9 that? do. 10 11 12 Q "There's no doubting Mr. LeMond's commitment clean cycling, and based on to his very public anti-doping stance, that?" why doesn't Trek support 13 14 Do you see A that? 15 16 I do. Q A How would you answer I that question? 17 would answer that question that Trek did 18 19 20 support, on numerous occasions, Greg's anti-doping stance. I On many different In fact, I occasions told Greg, I don't have an issue of Greg's encourage 21 22 stance against anti-doping. it; Greg Trek encouraged it. his comments 23 It -- regarding was regarding 24 Lance Armstrong and specific 25 athletes that Trek objected to. Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 31 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 128 1 are going to come up and say, you know, John 2 3 4 5 A Burke, I thought that that was the most shameful, my stupid presentation I've ever seen in No, I life? dealers don't think they are because I think they looked at that presentation had been -- and those 6 7 living this I program. They've had coming a customers over the last eight years into 8 9 the stores saying LeMond. And wouldn't even look at 10 11 12 there they had these small business people who have invested in the inventory, it's sitting a there, and all the sudden Greg 13 14 15 16 they're taking LeMond, look and there's ESPN, "Lance Armstrong threatened my wife, a my life, and my livelihood." And there's We bicycle dealer and he's going, "Not again. through in this in 2001. Now went 17 we're going through 18 19 Q this in 2004. And these It just keeps going on and on." bike dealers, they do independent 20 21 22 23 A business with you, They do. And right? Q they send you money for bikes, you provide them with bikes, A right? 24 They do. So 25 Q they have a business relationship with you, Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 32 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 151 1 2 Q A Yeah. Yeah. I The food's I much better here. much 3 4 5 Q A don't travel so -- All right. Q -- -- so, you know, it's probably my problem. 6 7 8 9 But the does granted, if you take -- it surprise you that the person that's the to his general manager of Trek's European minus division, the UK, is criticizing LeMond due 10 11 12 13 14 A low sales of LeMond bikes in places such as France, No, Holland, and Spain? because that person has gone -- it's a been a tough And sell, not that person came an easy sell. It's tough sell. has gone out of his way. And 15 that e-mail in after another one of Greg's Lance Armstrong. a 16 17 18 comments going after And there Malcolm is introducing new line, getting all and then he opens the show samples out, putting together the catalogs, up 19 doing all this stuff, 20 21 22 23 the newspaper and here we go again. Greg would Every time we did this, make -- Greg would make a commitment. He'd say, you know what? I'm not going to talk about Lance And 24 25 Armstrong about anymore. I'd say, great, and a talk clean doping all you want, Greg, Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 33 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 152 1 2 sport; that's awesome. And he'd say, I'm not going to 3 4 5 talk about Lance Armstrong again. And then it would come around Tour I de France time, and then there it is. remember 6 7 8 going to the Tour de France 2000 was -- I think it right? 2004. I'm in the Minneapolis airport, We're taking 100 of our best customers to France 9 to watch the tour. There Lance Armstrong 10 11 12 13 it is, ESPN, breaking news, -- or Greg LeMond says Lance Armstrong threatened his wife, his That's all we life, and his a livelihood. week a talked about for We 14 with your 100 top dealers. talked about 15 16 17 18 19 few other things, But too. it's it just kept going You know, on I and on. And people are frustrated. sat there in 2006, right? 2004 thing, we came Once again, after the back and we repaired the I 20 whole thing, right? we worked We put okay. my hand out to Greg, 21 22 it a through, We're back on line. new poured lot of We money into product 23 development. carbon came out with the most killer okay? 24 25 fiber bike. Beautiful, And what we said is, 414.272.7878 you know Gramann Reporting, Ltd. Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 34 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 153 1 2 what? We're really going to get this thing And so we rolling again. customers. We invited all these And 3 4 5 flew them into Milwaukee. We I'll And never forget this. I were out at the resort on Lake -- think it's Lake Nagawicka. we 6 7 8 9 there we are out there and got Greg out there. And he and I are I up on a stage and we're outdoors and we've got like 200 of our or 100 of our best customers. 3 -- 10 11 12 mean, our top percent of our dealers make up 30 percent of and these are important guys. We our sales, 13 brought them all in for the Trek 100 to introduce the new LeMonds so they could ride the new stuff. And 14 15 16 17 18 19 they're all fired up about is rolling. Everything's two weeks this. great. Everything And then all the after have sudden, later, All there it is right back in the papers, we've got Lance Armstrong. Greg LeMond going 20 that energy, we all the money, a 21 22 23 put in to really all that stuff that killer line and like Malcolm, people who selling Greg's stuff. And so a guy he's who a 24 25 representative of a lot of at Trek put in wanted this thing to succeed, lot of Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 35 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 154 1 2 time and effort. man, And it was just kind of like, that's what here we go again. He sent me And that 3 4 5 e-mail is. that e-mail. And it was just -Q But you recognize, though, too, when we're on 6 7 looking at, you know, just so far here Exhibits 138 through 143, 8 there's -- there's a pretty big segment of cyclist enthusiasts out there that really like anti-doping stances and 9 10 11 12 13 A really like right? Wrong. what Greg was saying about Armstrong, You got to separate who those two. There's a lot of people out there stances, Q A like anti-doping 14 all right? People want a 15 16 Yep. And I'm one of them. When you clean sport. a 17 18 All right? then say that there's lot of people against Lance Armstrong, those are different Q those are 19 topics. 20 21 22 Well, but -- and I understand that you -- you say done much on behalf that you're against doping, but, you know, have you, you know, really of the 23 24 entity for Trek to demonstrate stance? A your anti-doping 25 Well, I mean, we've done -- you know, if you take Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 36 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 155 1 2 3 4 5 a look, game it's is the rules of the you game. We The rule of we the can't dope. don't -- don't take care of the rules of the game. That's the UCI. Q A That's their responsibility. Greg I understand. 6 7 Okay. -- you know, different people take on different causes. Q A 8 Uhm-uhm. 9 And Greg's one of Greg's One causes is 10 11 12 13 anti-doping. of his causes is is this Every was, absolute consumption of Lance Armstrong. time Greg, we talked about doping with Greg, it talk about anti-doping as much as you want, go out there and do, 14 promote Q it, that's great. 15 16 17 18 Did -- did you ever talk to Greg about what Lance Armstrong had said to him in terms of threatening him by getting ten people together that said that Greg used EPO? A 19 20 21 22 23 No. Q All right. Greg LeMond Did you -- you obviously knew that considered Lance Armstrong to have cheated when he won the Tour de France? A Yes. He 24 25 Q A told you that on numerous occasions? Yes. Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 37 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 156 1 2 3 4 A Q Did you ever ask Greg LeMond to sign a statement saying that he believed that Lance Armstrong had never taken any performance-enhancing drugs? I do not -- I think you might be referring to the a 5 6 7 8 9 2001 retraction, and I'd have to take look at it. MR. WEBER: Before we -- before we so get into that, we've been going another hour, let's take examples. a break. MADEL: Oh, 10 11 12 13 14 MR. that's one of those Yes. VIDEO TECHNICIAN: This is the end of Videotape No.3. 2:04 p.m. (A We're going off the record at 15 recess was taken.) TECHNICIAN: 4 16 VIDEO This is the 17 18 beginning of Videotape No. in the continuing are back on the deposition of John Burke. record at 2:20 p.m. We 19 20 21 22 23 24 (Exhibit 145 was marked for identification. BY MR. Q A ) MADEL: Mr. Burke, what's Exhibit 145? Exhibit 145 is an e-mail to TrekBikes.com from 25 Steve Hansen. Gramann Reporting, Ltd. 414.272.7878 Case 0:08-cv-01010-RHK-JSM Document 139-5 Filed 08/05/09 Page 38 of 38 Videotape Deposition of John Burke, 4/7/2009 Page 185 1 2 statements the communications from Armstrong and Stapleton? A that you'd received 3 4 5 No. I think it was was a a combination of a lot of a things. Trek It combination of my own disappointment. It was a combination of and lot of 6 7 retailers calling Trek, calling. you it was Armstrong and Stapleton Q 8 9 Do you recall telling Mr. LeMond when you you were called him on this that the reason that 10 calling him A was because of pressure you were 11 12 13 receiving from Armstrong and Stapleton? You know, 11m sure I that a was one of -- one of the I reasons. was was a in very difficult situation. 14 15 in between a three-time winner of the tour in the middle to be the was a and most famous cyclist in the world at that And I 16 time. was put 17 18 19 Q peacemaker, and that tough position to be in. I think you described yourself at the time that 20 21 22 23 24 A you were trying to be Henry Kissinger there. I You know, tried and as hard as was I could to be Henry I Kissinger, it not and think, as I remarked on that phone taped call, which Greg LeMond later told me that the reason it was 25 taped was because his answering machine was Gramann Reporting, Ltd. 414.272.7878

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