Trout case may have impact on future of Ali Act litigation

January 5, 2018

Maybe the most important case as it relates to the expansion of the Ali Act may involve boxer Austin Trout and his current lawsuit against the World Boxing Organization in Federal Court in Puerto Rico.

Last month, the WBO is moving to dismiss the case and invoke the arbitration clause which was a part of his promotional contract with the company.  Trout had filed the lawsuit which includes claims for violation of the Ali Act in boxing.  The WBO argues that Trout agreed to the contract and should be held to its arbitration clause and that he forfeited his right to a jury trial.  Trout states that the Ali Act is federal law and that it is not governed by the WBO Promotional contract.  His attorneys also claim that that the arbitration would be unreasonable or unjust.  The other overarching argument is that the WBO has waived its right to compel arbitration by litigating the case.

The case, originally filed in state court in New Mexico where Trout resides, has been around for 2 years but due to jurisdictional fights, nothing substantive has happened in the case.  Due to the hurricane that hit the island, there was an additional delay.

You can find the background of the lawsuit in our September 2017 post which includes copies of the Complaint and Amended Complaint.

Payout Perspective:

There’s no timeline as to when the Court might render a ruling on the WBO’s Motion to Dismiss.  But, the overarching issue for fans of the Ali Act Expansion is whether an organization can contract out of the lawsuit.  This means that even if there is a federal law which grants a plaintiff a right to sue, the fact that there is an arbitration clause in the contract may render the claim moot as to a trial and it may (or may not) go forward in arbitration.  There are several layers to consider here as to whether the Ali Act is something that was contemplated as part of a contractual dispute that would go to arbitration.  If it is a part of the contract and the arbitration clause is valid, it would make it easier for organizations to litigate claims.  On the other hand, I have been an advocate for arbitration and/or mediation to resolve Ali Act violations due to the fact that litigation is long and expensive.  You could also bifurcate the claims as to taking the Ali Act to trial while arbitrating any other claims.  The other issue is who would be the trier of fact (i.e., jury, judge or arbitrator).  Also, who would be the arbitrator (a panel or just one individual).  Thinking ahead, if an expansion to the Ali Act takes place, it would be interesting to see if the UFC amends its fighter contracts to institute clauses to limit them to binding arbitration similar to the UFC Anti-Doping Program.  MMA Payout will keep you apprised of this lawsuit.

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