Prograis files lawsuit against World Boxing Super Series

August 12, 2019

Regis Prograis has filed a lawsuit against the World Boxing Super Series seeking out of his contractual obligations due to alleged lack of funding for the event.  The lawsuit was filed on Friday in U.S. District Court in New Jersey.

Prograis, a native of New Orleans, won the WBA version of the 140-pound championship and advanced to the WBSS final against Josh Taylor to unify the super lightweight title this fall.

Prograis and his promoter Lou DiBella have requested a Declaratory Judgment which would allow him to fight elsewhere without repercussion from WBSS. According to the lawsuit, they claim inducement by WBSS “with the promise of career high paydays, including in excess of a million dollars, and the chance to fight some of the top competitors in Prograis’ weight class.  In reliance, they signed  a Tournament Agreement.  They note that they were not paid bonuses promised to them “within 5 days of the bout and receipt of an invoice.”  Despite submitting invoices, they did not pay on time.   They also saw delays of the fight amid rumors of financial problems and issues with late pay of purses and winners’ bonuses.

Even with confronting WBSS of their concern and setting up an Escrow Agreement to ensure payment, WBSS missed deadlines to deposit money in escrow.  The lawsuit identified the alleged payouts for each round of the WBSS.

Prograis was paid $500K for his quarterfinal fight but did not receive his winners’ bonus.  Another Lou Dibella promoted fighter, Ivan Baranchyk did not receive his winners’ bonus either.

The Escrow arrangement between DBE/Prograis and WBSS was as follows:

The lawsuit effectively stalls any fight that the WBSS may have scheduled with Prograis.

Arguably, Prograis is one of the up and coming fighters to watch in the division.  Looking to capitalize on his success, he’s looking for a guaranteed payday – something the lawsuit contends that the WBSS cannot do for him.  According to the lawsuit the WBSS missed several deadlines of an escrow agreement in which it was to

The scheduled fight for Prograis-Taylor was supposed to occur in early October.  Yet, Comasa, the Swiss-based owner of the WBSS never set the date with DAZN, the official streaming platform for the event.

According to The Athletic’s Mike Coppinger, the WBSS is trying to avoid litigation by attempting to schedule the fight.

Payout Perspective:

The lawsuit forces the hand of WBSS as there should be pressure from DAZN in making the fight. But, the issue of missed escrow payments should concern Prograis and DAZN. For Prograis, the cost of litigation outweighs the potential of not being paid for his next fight. While litigation is something that should be avoided at all costs, this seems to have worked in making WBSS make a move on ensuring compensation for Prograis. The fact that a resolution is being talked about so quickly may give rise to the fact that WBSS is hoping to avoid losing this fight and the fighter.

More unredacted document notes shows fighter discontent with…finding fights

August 9, 2019

In our third installment of looking into the newly unredacted expert report of Hal Singer, we take a look at issues with getting fights in the UFC.

Fighter pay has been the topic of much discussion when it comes to the UFC.  While it is one of the topics driving interest in this lawsuit, it is not the linchpin to the plaintiffs’ case.  But an impactful part of it.

Yet, the fight to actually fight in the UFC is an ongoing problem.  Anecdotally, UFC Middleweight Julian Marquez recently tweeted out that he is awaiting his next fight.  Marquez has only fought twice in the UFC with his last fight happening on July 6, 2008.  The middleweight stated that he doesn’t know when he’ll fight next.

Marquez’s plight is not the only one.

One of the documents cited by Dr. Singer in his expert report includes Angela Hill’s text to Sean Shelby asking if she would be ‘shelved again for 6 months?’  She told Shelby that she is ‘strapped for cash.’

Despite fighter frustration on not knowing when their next UFC appearance and pay will come from, Dr. Singer’s report reflects a roster filled with athletes ready for action.

Kyle Kingsbury, one of the plaintiffs in this lawsuit, noted at his deposition that Dana White controlled their careers and could either give you a tough opponent or put you on the undercard so you could make far less.

Former UFC Heavyweight Josh Barnett’s agent expressed frustration with the situation. Leland Labarre, Barnett’s rep, wrote to Sean Shelby and Michael Mersch, “As you know, a fight every 4 months or so would be typical for MMA fighters, whose career primes are generally short. Conversely, a 4-fight deal with a 5-year exclusive term is unheard of. The interpretation you have provide is simply unreasonable.”

Even if a fighter retired, Zuffa would not release them from their contract if there were fights remaining. A footnote reveals texts concerning Mark Bocek wishing to be released from his contract after he announced his retirement. Zuffa refused due to the potential of Bocek going to another organization. Bocek was told that he would not be released with a reply by Lorenzo Fertitta stating, “Every fighter from Chuck Liddell, Mark Coleman, etc that retired in the middle of their contract are still under contract. You can do anything to make money you just can’t fight anywhere else.”

 The footnote also discusses how it suspended Rampage Jackson’s contract when he informed the UFC that he was going to retire. Even if Zuffa did not receive a request from the fighter, it would threaten the promoter. That is what happened in the case of Melvin Guillard when he attempted to fight on a Combat Fighting Championship event. Even if the combat sport was not MMA, Zuffa would step in. This is what happened when Zuffa denied one of its athletes whether they could participate in a judo match.

Dr. Singer cites documents which supports the position that athletes were not able to obtain fights and this was due in part to a full roster. In August, 2011, Joe Silva stated that there were “too many guys.” Dana White stated in February 2013, “We have 470-something guys under contract…We have over 100 guys too many.”

Dr. Singer identifies Zuffa’s exclusivity provisions in its contract as conduct which prevented athletes to go to other promoters. “Zuffa was consistently able to keep Fighters bound by the exclusionary provisions in its contracts—and thus unavailable to other MMA promoters—while simultaneously promoting an insufficient number of bouts given the unumber of Fighters on its roster.” He went on to argue in his report that this ‘Challenged Conduct’ of limiting the options for fighters prevented them from earning pay as fighters. “In the absence of the Challenged Conduct, Zuffa’s ability to restrict Fighter career paths would have been curtailed, because these Fighters would have had more viable paths for pursuing their careers with other MMA promoters.”

The fighter discontent on the amount of activity coupled with Zuffa’s exclusive contracts and policy of not allowing athletes to fight elsewhere is an issue that Dr. Singer has highlighted as ‘Challenged Conduct’ which attributes to the anti-competitive scheme which is a part of the lawsuit.  How much will this information persuade the Court will be interesting to see in a couple weeks.

Show Money 29 talks unredacted expert report, Endeavor IPO, Zuffa Boxing and more

August 7, 2019

It’s another edition of Show Money with Paul Gift and John Nash.  As the expert report hearings are looming later this month, we talk about the newly revealed information in Hal Singer’s expert report, Endeavor’s IPO the inevitable Zuffa Boxing and more.

You can listen here.

Wilder-Povetkin/World of Boxing legal drama continues

August 5, 2019

The Deontay Wilder-Alexander Povetkin case may not be over despite an 2nd Circuit Appellate Court ruling which affirmed the trial court’s decision that Wilder’s claims for breach of contract should be dismissed.

However, the deposit World of Boxing put in escrow for the fight remains up in the air.  A letter filed with the Court last month indicates that Wilder is not giving up the fight as it contemplates an appeal to the full panel of Appellate Court judges on the 2nd Circuit (known as “en banc”) or even filing a request for the U.S. Supreme Court to hear the appeal.

In a letter to the Escrow Agent on June 18th, they informed escrow, “…to make clear that the referenced decision [the Appellate Court opinion] is not a ‘final non-appealable order’ what would entitle a party to distribution of the funds held in escrow…” As a result, on June 19th the Escrow Agent informed World of Boxing that it would not release the funds due to Wilder’s objection.

Letter From WOB to Court Ad… by Jason Cruz on Scribd

World of Boxing now argues that this delay has triggered a ‘liquidated damages provision’ in the escrow agreement which states that any objection by a party ‘not made in good faith’ is subject to a $2.5 million disbursement to the other party.  World of Boxing and Povetkin’s lawyers argued that Wilder’s request that it may seek another review would be ‘frivolous.’

Payout Perspective:

So here we are again with Wilder, Povetkin and World of Boxing still in a heated legal battle despite a jury trial, a summary judgment motion, a motion for reconsideration of the summary judgment and an appeal to the Second Circuit Court of Appeals.  As stated by Wilder’s attorneys, the last two efforts on this issue lie with having the 2nd Circuit judges hear the appeal (only one of the judges participated previously) or a request for the U.S. Supreme Court to hear the case.  Both of these options are very remote.  In most cases, those requests only occur where there are issues of unsettled federal law.  Arguably, that is not the case here.  But, what this could spawn is another lawsuit for the breach of the Escrow Agreement and its $2.5 million damage clause.  This would be almost 1/3 of the amount that is still being held in escrow.  MMA Payout will continue to monitor.

Unredacted passages and footnotes reveal more about Zuffa’s business in plaintiffs’ expert report

July 31, 2019

MMA Payout had the opportunity to review the proposed amended redactions from Zuffa to Plaintiffs’ expert, Hal Singer in the UFC Antitrust lawsuit. The newly revealed sections that were previously blocked from public view, gain some insight into the factual underpinnings of the promotion.  This is the first of a couple posts related to Dr. Singer’s expert report.

Late last month Zuffa, filed a revised version of redactions it sought for Dr. Singer’s expert report. The newly unveiled versions of the report provide some innocuous passages as well as some interesting tidbits which the promotion originally wanted redacted from public view.

The Last Hope – Strikeforce

One of the more interesting unredacted sections include deposition testimony from Bellator head Scott Coker.  While with Strikeforce, Coker indicated that the promotion was the last possible chance of competition with the UFC.  The line might remind you of this.

The acquisition of Strikeforce occurred after Affliction’s demise.  Singer’s expert report reflects the notion that Zuffa tried to exert its market force over the competition.  Coker stated at his deposition:  “If you can’t battle these guys [UFC] it’s over for the MMA industry.  UFC will be the only one left.  We’re the last chance.  Otherwise, fighters’ purses will go down if UFC is the only one – is the only one period.  We’re Luke Skywalker and UFC is Darth Vader and the Death Star.”

Interesting enough, as many know, after Strikeforce was engulfed by the UFC, Coker was  a part of the company until he was able to go to Bellator.  Coker sent this tweet after Cris Cyborg, who is heading into free agency, won her fight this past Saturday at UFC 240.

Why purchase Pride?

The newly unredacted information in the report includes emails from Zuffa’s outside counsel addressing the company’s acquisition of Pride.  In a rather ominous email that may be one to cover the attorney, it states, “the strategic/preemptive nature of this acquisition (i.e., to stop others from buying it) and you having seriously contemplated acquiring them only to shut down their business and utilize their Fighters in the UFC.”  Another unredacted footnote from a corporate representative from Deutsche Bank stated that ‘based on conversations with Zuffa and materials provided by Zuffa, Deutsche Bank’s interpretation was that “Each acquisition [Pride, WEC and WFA] had unique offensive and defensive purposes at the time.  However both the WFA and Pride transactions resulted in Zuffa’s roster of elite fighters expanding significantly.”

It’s worth noting that while the Deutsche Bank comment may buttress the argument of a predatory Zuffa looking to buy up the rest of the MMA promotions in the space, it is speculation and essentially hearsay – a statement made without foundation to assert the truth of the matter.  Deutsche made the conclusions based on conversations and documents not known in the passage so its hard to say whether the documents would be reliable.  Yet, you may infer that the position that Deutsche Bank was in as a lender to Zuffa would command truth and honesty on the part of the organization.

UFC pays DeathClutch

Brock Lesnar’s pay was revealed in a footnote that was unredacted.  When he fought as champion, Lesnar’s company, Deathclutch, was paid $812,500 within 30 days of a fight.  He was then paid another $812,500 within 60 days following the completion of the bout for a total of $1.625 million minus deductions and withholdings. Lesnar was paid a sum of $750,000 for fights where he was not UFC Champion. Similarly, he was paid $375,000 within the first 30 days and another $375,000 within 60 days.

On the issue of fighter pay within the UFC, Singer’s report is a Letter of Agreement from Lyoto Machida that gave him a $100,000 bonus for a fight stoppage.  Presumably this would be in addition to any Performance or Fight of the Night bonus.

The Letter of Agreements according to the report were given to a “small number of top-tier Fighters.”  As explained by Dr. Singer, they were “generally lump-sum payments to Fighters following a Live MMA Event, with the amount often contingent on the outcome of the fight.   Thus, they would not appear in commission reports on purses.  Some were based on a specific outcome and may “also incorporate sponsorship or endorsement agreements or both.”  Dr. Singer explained that the use of these agreements would keep the salaries of Fighters unknown to the public.

Evidence of Counterprogramming to hurt rivals

Another swath of footnotes revealed UFC plans to counterprogram rivals.  The UFC began to air its programming opposite other promotion’s big events starting in 2006.  The UFC first aired a taped compilation of fights opposite a WFA PPV.  In 2008, it countered Affliction’s PPV with a ‘re-run of a prior pay-per-view event on free television.  White openly admitted to throwing together a fighter card  in five weeks in an attempt to choke out another promotion.

 

Jon Jones in trouble again after revelation of incident at strip club in April

July 22, 2019

An Albuquerque, New Mexico television station, KRQE, reported that Jon Jones is being charged with battery for an incident that happened at a local strip club this pat April.  A bench warrant was issued for Jones as he failed to show for failing to show at a mandatory hearing.

Jones’ spokesperson stated that the light heavyweight champion did not know of the charges.  They also deny any wrongdoing and claim that this was a false allegation.

According to the report based on a police investigation Jones slapped a waitress inappropriately and “pulled her down to his lap and kissed her neck.”  She also told police that he placed her in a chokehold and picked her up off the ground.

While there seems to be more to investigate before drawing a conclusion, prosecutors believe that there was enough to charge Jones with battery.

Payout Perspective:

Jones seemingly was in a good place with his life and career and his victory in July highlighted the fact he is the top star in the promotion and at the peak of his career.  But Jon Jones’ worst enemy may be himself.  While its not known the veracity of the claims made by the waitress, the fact that he was in another situation where things could go wrong is an ongoing flaw with the otherwise unflappable fighter in the Octagon.  Moreover, the fact that this incident seemed to be swept under the rug of anyone covering the sport highlights the issues with reporting that is a question mark to all that are fans.

Zuffa files Reply Brief supporting motion to exclude Plaintiffs docs including report from Golden Boy lawsuit

July 16, 2019

Zuffa has filed its Reply Brief in support of Objections to Plaintiffs’ Exhibit List.  In the pleading, they support their initial argument that reports in the Golden Boy Antitrust lawsuit are inadmissible.

Zuffa contends that the exhibits that Plaintiffs are attempting to use should not be admitted into evidence.  Specifically, the Deetz Expert Report from the Golden Boy lawsuit against Al Haymon it contends is unreliable.  Zuffa argues that the Plaintiffs failed to secure to include the data from Deetz because they did not subpoena the underlying data or depose him about it.

“Without the ability to test or verify the data in the Deetz Report, neither the parties nor the Court have any way to know whether that inconsistency is due to error, a deliberate decision (legitimate or otherwise) by Mr. Deetz to manipulate his data or some other reason entirely,” writes Zuffa in Reply to Plaintiffs’ opposition to exclusion.

Zuffa states that Plaintiffs attempt to verify the data was stymied when its own expert, Prof. Andrew Zimbalist indicated at his deposition that he made no independent verification of the data in Deetz’ report.

Exhibit 1 by Jason Cruz on Scribd


The Deetz Report assessed damages on part of the boxing promotion after Al Haymon’s PBC entered the industry.  His report concluded that based on his analysis, that Golden Boy had suffered “significant damage” as a result of anticompetitive conduct of Al Haymon.  The monetary damages was redacted from the public report.  Deetz’s report is premised upon another report in the Golden Boy litigation, GB’s expert Robert Kneuper, Ph.D.  However, Deetz states that he did a “separate analysis of Golden Boy’s contracts with broadcast networks.”  The analysis concluded that Golden Boy’s financial conditions declined when Haymon entered into “exclusive broadcast network contracts.”  Essentially, Haymon’s alleged business strategy of blocking Golden Boy from access to broadcast networks due to exclusive contracts and thereby precluding them from the market caused monetary damages.

Zuffa Reply Brief by Jason Cruz on Scribd

Payout Perspective:

Zuffa’s reply stresses that certain exhibits that Plaintiff would like to include in its use at the evidentiary hearing should be excluded on the basis that they fail to provide sufficient reliability.  Although used in another lawsuit, Zuffa makes the argument that there has not been an independent verification of them.  Importantly, the expert report of Gene Deetz from the Golden Boy lawsuit is one of the documents Zuffa hopes to exclude.  Deetz’ report, which was in favor of Golden Boy as it claimed that Al Haymon violated antitrust laws, would similarly support Plaintiffs’ contention in this lawsuit.  Zuffa argues that the report should not be used to buttress Plaintiffs claims here.  The Court will have a chance to evaluate these arguments and make a decision before August’s hearing.

 

MMA Payout will continue to follow.

Zuffa responds to Plaintiffs’ Objections to its summary of exhibits in Antitrust lawsuit

July 12, 2019

Zuffa has responded to Plaintiffs’ Objections to its Exhibit List in the ongoing Antitrust Lawsuit. They argue in support of utilizing summary exhibits and call plaintiffs’ objections ‘baseless.’

Per order of the Court, the sides exchanged exhibit lists which will be used at the Expert hearings in late August and mid-September.

Defendant’s Oppo to Pla… by on Scribd


“Plaintiffs’ objection, regardless of scope, is wrong,” writes Zuffa with respect to the objections plaintiffs lodged. “Dr. Singer’s data is sprawling and the disputed summary exhibits simplify and highlight key parts of the data that will be relevant and helpful to the Court in conducting the “rigorous analysis” required in deciding whether to certify a class.”

Plaintiffs objected to 22 documents in Zuffa’s exhibit list.  This included, according to plaintiffs, 8 entirely new “Summary Exhibits”  and 14 exhibits Zuffa previously submitted in support of its briefs.  “Nearly all identify [Plaintiffs’ economic expert] Dr. [Hal] Singer’s “backup materials” as their sole purported source.”  According to Plaintiffs, this is outside the scope of the record created by Zuffa’s economists during expert discovery.  Plaintiffs claims that the information submitted by Zuffa is new and therefore past the cutoff to submit expert information.  Moreover, this does not give Plaintiffs time to examine, analyze and rebut this information in a proper time.

Zuffa notes that the materials from Dr. Singer’s expert report(s) are voluminous and its summary are accurate and “cannot be conveniently examined in Court.”  They give an example of the Regression Data containing “9,477 observations with 544 variables for which data may be listed for over a total of over 5.1 million fields of information.”  Secondly, they note that the underlying information that is summarized is admissible in evidence and no one has objected to the underlying information.  Finally, Zuffa notes that Plaintiffs will have the opportunity to examine each disputed summary exhibit.

In addition to citing case law which supports its position that the summary of the exhibits are admissible into evidence, they stress that the exhibits are not new expert testimony.  Rather, they are a summary of what has already been provided.

Finally, Plaintiffs had taken issue with a supplemental report by Zuffa’s economic expert, Professor Topel which was submitted after the expert report deadline last year.  Zuffa argues that the supplemental report was “factual updates relevant” to Prof. Topel’s reports regarding events that occurred after his filed reports.

Payout Perspective:

Zuffa indicates that even if the Court believes there is merit to Plaintiffs’ objections, they would like to have the opportunity to “lay the proper foundation” at the time in Court.  This would be a legal method of establishing the merits of the document, its accuracy and reliability prior to using it in Court.  This fight is more legal than substantive and in most cases even if information submitted by experts is “new,” they will allow the evidence in allowing Plaintiffs time to examine in order to rebut information.  At this point, there is a balancing test of allowing all the expert information into evidence within reason so that a proper decision may be made.  Parties take advantage of this by submitting information considered “new” or not previously submitted skirting prior deadlines.  There is merit to some of these arguments as sides like to “surprise” the other.  It’s the Court’s duty to mitigate the strategy of surprise.  Of course, there are no-nonsense courts that can exclude any information that has a sniff of being new and done as gamesmanship.  Here, it appears that Zuffa’s summaries do not include anything substantially new.  Even if so, its hard to fathom the Court preclude it and would allow deference for Plaintiffs time to rebut if necessary.

Plaintiffs in UFC Antitrust Lawsuit file brief opposing Top Rank, Bellator and Golden Boy’s objections to use of documents

July 3, 2019

Plaintiffs in the UFC Antitrust Lawsuit filed an Opposition this past Friday to the objections of Bellator, Golden Boy and Top Rank from producing the use of “potential” confidential information at August’s evidentiary hearing.

The Plaintiffs hope to utilize deposition testimony from Scott Coker related to Coker’s prior employment at Strikeforce, a copy of a standard Golden Boy promotional agreement template with boxers and a single paragraph from the Expert Rebuttal Report of Plaintiffs’’ expert Dr. Andrew Zimbalist which displays Top Rank’s wage share for the years 2013 to 2016.  There is also additional financial information from each of the three parties which Plaintiffs contend is “granular information.”

Plaintiffs’ Oppo to Non… by on Scribd

A set of evidentiary hearings will take place the last week of August and mid-September to determine the evidence provided by experts in the Antitrust lawsuit.  Pursuant to a scheduling order, the parties have produced exhibit lists they intend to use for the hearing.  Objections and responses have now been filed with reply briefs coming soon.

In addition, Bellator and Top Rank have filed objections to the use of information that includes information.  As third-parties to this lawsuit (they are not a plaintiff or defendant in the Antitrust lawsuit), they have filed objections to preserve the confidentiality of the documents.

Plaintiffs point out the standard that Bellator and Top Rank must convince the Court is that there must be “compelling reason” to exclude the documents from use.  Described as a high burden by Plaintiffs they cite to the overarching public policy that there is an “assumption that the press and public have a presumed right of access to court proceeding and documents.”  The only instance in which a party could overcome the policy is if “closure is essential to preserve higher values and is narrowly tailored to serve that interest.”

In arguing that Top Rank’s financial information which include the total annual revenues from 2010-2016 and average wage share are not commercially sensitive, they state that neither of the figures sought to use convey “granular, athlete-or event-specific information that could convey competitive advantage.”  Similarly, they suggest that the gross revenues from Bellator and Golden Boy would not provide a competitor advantage.

“Bellator and Golden Boy’s annualized gross revenues do not contain granular information that a competitor could potentially use to harm the Objectors because the figures convey no information that would enable a competitor to, for example, sign one of Objectors’ athletes, counterprogram Objectors’ events, or lure away Objectors’ sponsors.  If Objectors assert another type of harm, they have not articulated it and it is therefore waived.  Similarly, Objectors’ wage shares do not include information that could provide their competitors with an unfair advantage or put Objectors in a disadvantaged position in athlete negotiations or otherwise.”

Plaintiffs argue that Bellator’s annualized top-line revenues provide important context for assessing Zuffa’s dominant position in the market and wage share provides comparison regarding the class wide effects of Zuffa’s anticompetive Scheme.

With respect to the request to seal references to annual revenues and average wage share from 2010 to 2016, Plaintiffs argue that the information is “too old” to contain any competitive value.  Plaintiffs highlight the years in which each wants to seal their financial information from disclosure in arguing that the information is far removed from the litigation of today.

Bellator financial information:  2010-2016

Golden Boy financial information:  2015-2016

Top Rank financial information:  2013-2016

With Bellator and Golden Boy signing deals with streaming platform DAZN, Plaintiffs argue that the financial information is now obsolete.

Also, Bellator is asking to seal two passages from the deposition of Scott Coker.  Plaintiffs contend that there is not a compelling reason to do so.  Specifically, Coker reads from an email Zuffa produced that he wrote while he was Strikeforce president which is supposedly exemplifies Zuffa’s market share and its approach to competition.  The second passage asks the Court to seal identities of three principals in Strikforce’s parent company.

Finally, Plaintiffs claim that the Golden Boy standard contractual template is not a trade secret as it contains nothing specific or identifies an individual fighter.

Payout Perspective:

Top Rank, Bellator and Golden Boy will have a chance to respond to the Opposition Brief and argue the compelling reasons why the documents should remain confidential.  Alternatively, they might argue that the standard for exclusion is less than that proposed by Plaintiffs.  More likely, Bellator and Golden Boy will argue that the release and/or use of the financial information may provide a future template for competitors.  Regardless of how old the financial information is and despite any new partnerships, the information would be trade secrets that should not be disclosed to the public or utilized by Plaintiffs.  There is a lot riding on this ruling as Plaintiffs hope to use the information in late August for the expert hearings.  If not, it would present a big obstacle as they would have to find another way to present their evidence.  For Bellator and Golden Boy, the possible release of information might present more scrutiny on their company from its fighters and public as to the state of their finances as compared to prior statements of the company’s health.  MMA Payout will keep you posted.

Austin Trout appeal brief argues for Ali Act to remain in court, not moved to arbitration

June 21, 2019

The Deontay Wilder-Alexander Povetkin/WOB litigation is not the only boxing appeal going on.  The Austin Trout-WCB appeal is occurring in the First Circuit.  Recently, Trout’s lawyers filed its Reply Brief to the WBO’s Answering Brief.

Austin Trout filed a lawsuit against the sanctioning organization he was contracted with citing his fall in the rankings without reason causing him to miss out on the possibility of a title shot.

The federal court in Puerto Rico sided with the WBO in a motion to compel arbitration.  One of the allegations was that the Ali Act could not be subject to arbitration.  However, the federal court determined that due to an arbitration clause in the contract, that any claims arising under the contract were subject to arbitration. Trout appealed.

In the Opening Brief of its appeal, Trout argues that sanctioning bodies could circumvent the court of law by seeking refuge in an arbitration which would be subject to a panel designated by the WBO.

There was no surprise when the WBO’s brief supported the federal court ruling and arguing that the Ali Act was in fact subject to arbitration.  It cites case law which supports the argument that statutory claims (like those in the Ali Act) may be the subject of an arbitration agreement despite the fact that the statutory language contemplates court action.  The overarching policy cited by the WBO is that there is the federal policy favoring arbitration.  Moreover, they contend that if the burden is on the party resisting arbitration to show that the statute in question “overrides the mandate to arbitrate.”

WBO Opposition Brief by on Scribd

In its rebuttal, Trout argues the legislative text behind the reasoning of the statue and trumps the policy of arbitration.  Essentially, the reason why the law was made.  Through this, Trout makes the argument that “the legislative intent is inapposite to a mandatory arbitration clause in which the entity against which claims of illegal, fraudulent and potentially criminal acts are attributed, will designate the individuals to decide upon such allegations.”

Austin Trout Reply Brief by on Scribd

The argument contends that the purpose of the law was to regulate the power of promoters and sanctioning bodies.  Thus, an arbitration agreement which would have the drafter choose its own arbiter (as it does here) would fly in the face of the Ali Act’s purpose.  As a result, Trout argues that the Ali Act cannot go to arbitration.

Payout Perspective:

Trout makes a sound argument in its reply brief in citing the legislative intent of the Ali Act was to protect fighters and regulate those that may take advantage of them.  Based on this, it cites that the contract signed by Trout allowing for arbitration of disputes should be overridden due to the fact it is contra to the Ali Act’s intent.  However, the WBO cites the policy to arbitrate rather than litigate as the superseding factor to proceed to arbitration.  The appellate court will have to determine the rationale for each.  Although it does not seem monumental, this decision could shape the future of the Ali Act considering that contracts may include arbitration clauses sending these claims to arbitration instead of courts.

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