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Jul 12, 2001

AMA Chairman Rick Gray Admits Errors In Handling Of Edmondson Case

On June 8, the American Motorcyclist Association issued a press release announcing a $3 million settlement of a lawsuit, Roger Edmondson vs. AMA and Paradama (AMA Pro Racing). That press release was very similar yet different to what AMA Board of Trustees Chairman J. Richard Gray is now telling the AMA membership in the August 2001 issue of the official AMA magazine, American Motorcyclist, now being received by AMA members.<BR><BR>Gray's "Open Letter to AMA Members" includes virtually identical opening paragraphs as the press release. But in the body of the letter, Gray finally tells the AMA membership what Roadracing World readers already knew: The AMA made mistakes.<BR><BR>Having said that, it is notable that Gray doesn't admit to the AMA membership that the North Carolina law (Chapter 75) that provided for the actual damages found at trial to be tripled was the "Unfair And Deceptive Trade Practices Act." The "Association" was found by a jury, a Federal District Judge, and the Fourth Circuit Court of Appeals to have acted in an unfair and deceptive manner in dealings with Edmondson. Gray also fails to point out that the trial was held in North Carolina because that is where Edmondson was based--and where entries for AMA Pro races run by Edmondson were sent and processed--and fails to admit that the AMA was involved in a joint venture with Edmondson, another fact found at trial and confirmed by former AMA President Ed Youngblood in a famous memo to AMA Trustees, admitted at trial as Exhibit 102. Youngblood's subsequent resignation is referenced in Gray's letter, although Youngblood is not mentioned by name.<BR><BR>The following passages seen in Gray's letter to AMA members were not in the original press release on the settlement:<BR><BR>"And I want to make sure that you, our members, understand how it came about.<BR><BR>"The decision to bring this litigation to a close was very difficult, but as we looked ahead to the prospect of a third legal review of this matter, it seemed the proper course of action for the Association.<BR><BR>"In addition, recent rulings made it obvious that we were not going to be completely successful in contesting this matter. In other words, the new trial was not going to be about whether we owed Mr. Edmondson anything, but about how much we owed him. Finally, pursuant to North Carolina law – which we contended did not control our dealings with Mr. Edmondson since the AMA is based in Ohio – any actual damages due him would be tripled. Considering this, our new counsel advised us as to the probability of success. After considering that advice, it was our decision to make every effort to settle the matter without incurring additional counsel fees and the unknown quantity of yet another verdict.<BR><BR>"We do, by agreeing to pay this amount, recognize that this matter was not managed in an appropriate manner. Simply stated, there were mistakes along the way. But they were not mistakes of malice. They were a result of our failure to recognize the situation for what it was and appropriately respond. There were misunderstandings from the beginning concerning the nature of our relationship with Mr. Edmondson, and these lasted all the way through the trial on this matter. These resulted in erroneous opinions on the part of staff members, the Board of Trustees and our counsel, all of whom share some responsibility for this outcome.<BR><BR>"We have lost much more than money from these lengthy proceedings. We have lost countless hours of staff and Board time that could have been devoted to the primary missions of the AMA, but were instead spent on research, preparation and debate. We have lost an exceptional leader of our Association, who left in part because of this situation. And many of us have lost countless hours of sleep because of concern for an Association dedicated to the protection and promotion of our love, motorcycling.<BR><BR>"It was time to stop the bleeding, and the way to do that was through a realistic evaluation of our situation, leading to an appropriate response. It was not easy, but it had to be done, and we did it. We could have continued the case, but it has never been our goal to be litigious for publicity's sake. Indeed, during this time, the constraints imposed by the nature of the litigation meant we have not been able to fully discuss much of this matter publicly. We could not work to resolve this litigation while openly discussing our strategy and our positions in public.<BR><BR>"We want you to know that we did the best we could in a most difficult situation. To those members who are concerned about your Association, rest assured that sufficient funds have been held in reserve to pay this settlement. That money was budgeted and accounted for at the time of the original trial.<BR><BR>"The AMA's Board of Trustees has continued to review and revise policies concerning the way the Association enters into contracts with those providing services. In today's litigious climate, it's virtually impossible to avoid lawsuits. but the Association has taken steps to guard against a repeat of the same mistakes should we get involved. I commit to our members that now, with this matter behind us, we will work to cull what lessons we may learn from the episode, while committing to recognize future pitfalls before we are so deeply involved. It is now time to move on.<BR><BR>"I hope this helps you better understand this decision."<BR><BR>Roadracing World coverage of the case was published in the following print issues: 2/99, 3/99, 4/99, 1/00, 3/00, 4/00, 12/00, 4/01, 8/01. Posts concerning the trial went up on this website on the following dates: 2/2/01, 2/3/01, 2/6/01, 2/8/01, 2/26/01, 4/4/01, 5/11/01, 6/6/01, 6/8/01, 6/11/01.<BR><BR><BR><BR>The following is a related FIRST PERSON/OPINION piece:<BR><BR>What The AMA's Rick Gray Should Have Said<BR><BR>By John Ulrich<BR>Vice President, Editor<BR>ROADRACING WORLD PUBLISHING, Inc.<BR><BR>"The AMA completely screwed this up, time after time, repeatedly denying reality, and it worked against us. Furthermore, the ‘mean gene' seen in so many AMA dealings came to the surface, leading the Association to hinder resolution of Roger and Peggy Edmondson's personal bankruptcy case, an action that backfired when revealed to the original trial jury.<BR><BR>"Be that as it may, many of the people involved in the original dealings that led to the lawsuit are no longer with the AMA, and those who were involved and are still here won't be for long.<BR><BR>"This is a new day, the dawning of a new era, and the AMA is going forward, resolved to not f--k with people and to not disrupt successful racing programs and operations. And, above all, to treat AMA members involved in racing on all levels fairly and with the respect they deserve, every time and in every situation, instead of characterizing any difference of opinion as ‘us vs. them.'<BR><BR>"Stick with us, and we will tap into the vast pool of talent seen in the AMA paddock before looking outside motorcycle racing for expertise and advice, we will welcome and seriously consider different viewpoints expressed by our racing members, and we will embrace sincere efforts made by our members to improve AMA Pro Racing.<BR><BR>"Stick with us, and we will rewrite the rulebook to eliminate contradictory and hard-to-understand sections, we will always remember the intent of a given rule and enforce it with that original intent in mind, and we will ensure that all paddock groups are represented when decisions are made and policies set. Stick with us, and we will turn this thing around, quickly, with substantial results clearly visible well before the end of the current AMA Pro Racing season."<BR><BR>That's what he should have said, but didn't, couldn't, and, sadly, never will.<BR><BR>If, by some miracle of God, Rick Gray and the AMA prove me wrong, I will happily headline the error of my opinion.<BR><BR>Call me a dreamer…<BR><BR>