Top Rank seeks to dismiss claims in Garcia’s lawsuit

October 20, 2014

This past Friday, attorneys for Top Rank Boxing filed a Motion for Judgment on the Pleadings in U.S. District Court in Nevada seeking to dismiss a bulk of boxer Mikey Garcia’s lawsuit.

Garcia’s lawsuit was originally filed in Riverside County (CA) Superior Court.  Top Rank lawyer’s removed the case to Federal Court in Nevada via a procedural rule allowing such transfers based on the lawsuit dealing with federal legal issues (i.e., Muhammad Ali Act).  Garcia alleged that his promotional contract with Top Rank violated California law and the state’s strong public policy to protect California-based boxers from being taken advantage of by promoters and managers.  In the lawsuit, 3 of California’s claims relate to violations of California law.  Garcia claims that the promotional contract with Top Rank violated California’s Boxing Act and Professional Boxing Rules and California Labor Code section 2855.  He also claimed it was a violation of California’s restraint on competition.

Top Rank has moved for the court to make a judgment to dismiss Garcia’s claims based on the boxer’s claims under state law in California.  Essentially, Top Rank argues that Garcia entered into contracts with the promotion that state that the contract was governed by the state of Nevada.   Thus, any claims Garcia makes that violate California law should be dismissed since the contract is based on Nevada law.

Basically, Top Rank argues that despite the fact that Garcia is a resident of California and has had events where he fought in California; the contract dispute should be governed by the state of Nevada.  As such, Garcia’s legal claims related to violations of California law should be dismissed.

Top Rank argues several reasons why Nevada law should prevail under the terms of the contract. Namely, the terms of the contract dictate it, Garcia fought in Nevada and his manager does business in Nevada.  Also, Nevada law would not contradict California law.  It also cited the fact that prior boxing contracts with choice of law provisions are typically enforced by boxing commissions and courts.  Notably, it cited Robert Guerrero’s lawsuit against Golden Boy Promotions in which Guerrero lost his legal battle allowing the parties to settle their case in New York per the terms of the contract.  Guerrero argued that Top Rank did not use the   appropriate CSAC forms and the case should be heard in California.

Payout Perspective:

The motion to dismiss a portion of Garcia’s lawsuit was not surprising.  The legal strategy here was that Top Rank transferred the lawsuit to federal court and out of California where the state laws would seemingly favor the boxer.  Once the case was in Nevada, it sought to dismiss the California-specific claims.  Certainly, prior cases reflect the fact that Top Rank had the right, based on the contract, to seek out the appropriate governing law.  Whether or not the Court will grant the motion this time is another issue.

MMA Payout will keep you posted.

Le expected to appeal suspension

October 9, 2014

ESPN reports that Cung Le is expected to appeal his one-year UFC suspension for testing positive for elevated levels of human grown hormone (hGH).  The appeal provides a unique scenario in which a UFC fighter will appeal a drug suspension to the UFC acting in the capacity of regulatory authority.

Dana White confirmed that Le has a right to file an appeal which will be overseen by a third-party arbitrator.  The arbitration will be through the American Arbitration Association which is standard for many contracts where there are arbitration clauses.

White states in the article that a WADA-certified lab was not used to collect the blood samples for the August 23rd fight card in Macau because the drug testing was decided upon that week.  Le’s manager notes that there was a WADA-approved lab in Beijing, China but was not used.  A Hong Kong contracted lab was utilized instead.

No date has been set for the arbitration.

Payout Perspective:

A look at a standard UFC contract indicates that a fighter may appeal to a regulatory body and/or commission that oversee drug testing.  However, we presume that the UFC was not named as an entity a fighter could appeal to as the ESPN piece initially indicated that Le’s appeal was “breaking news.”  If Le’s contract with the UFC had language that he could appeal his drug suspension to whatever entity was regulating the drug tests, it would not really be breaking news.  This poses the question of what the UFC should do in the future with more international cards on the horizon yet know concrete policy in place on how to address testing and the potential for appeals of the process.

Le’s appeal will be an interesting case considering the points raised by Le’s manager in response to the positive drug test.  Initially thought as damage control, it appears that Le might have raised viable case against the test results. In the end, it points to a problem for the UFC.

Don King found liable for breach of fight agreement

October 3, 2014

Earlier this week, a Federal District Court in New York ruled that boxing promoter Don King liable was in breach of contract when his fighter failed a drug test for a boxing event to be held in Russia earlier this year. The parties will now argue about how much in monetary damages that the boxing promoters World of Boxing is entitled to as a result of the breach.

King’s Don King Promotions entered into an agreement which pitted King’s Guillermo Jones for a bout against Denis Lebedev on April 25, 2014. However, the day of the bout Jones tested positive for furosemide, an illegal performance-enhancing diuretic. The drug test disqualified Jones from competing and the fight was called off.

A month later, World of Boxing filed a lawsuit citing a breach of the fight agreement which articulated that Jones was “subjected to drug testing before and after the fight.” King denied the allegations of a breach of contract citing the fact he was only required to “do everything within his control…to cause Jones’s participation.” King argued that he could not prevent Jones from taken an illegal substance. However, while the court acknowledged the fact that King might have to personally supervise Jones to prevent his use of an illegal substance, the issue is whether King failed to perform under the contract (i.e., produce Jones for the contracted event), not whether he could be excused for nonperformance.

He also argued the legal defense of “impossibility.” Essentially, King argued that even if there was a breach, his performance should be excused due to a “supervening event” that was an “unanticipated” event. Here, King argues that he could not have known that his fighter would have used an illegal substance. However, the opinion notes that Jones had a history of using furosemide and the fact that the contract specifically required pre-bout drug testing.

King also filed two counterclaims which were summarily dismissed by the court.

Opinion – World of Boxing v. Don King

The case was heard in the Southern District of New York which is the same venue in which the Zuffa-New York lawsuit is filed.

Payout Perspective:

For you law school students that are heading back to school this year, this case is a very good one on the basics of a breach of contract and the legal defense of impossibility. The court clearly spells out that in its opinion, there was a clear breach of contract due to the fact that King’s boxer could not fight. Even though King argued that a breach should be excused, he did not satisfy the legal requirements (i.e., the breach was foreseeable due to Jones’ past use and the contract specified a drug test pre-fight). It will be interesting to see what damaged are assessed to King and whether there will be an appeal of the ruling.

Boxer Ward loses again to promoter

August 21, 2014

A Los Angeles Superior Court judge has dismissed a lawsuit filed by boxer Andre Ward which attempted to terminate his promotional contract with promoter Dan Goossen.  Although the case was dismissed, there are other pending lawsuits between the boxer and promoter.

Ward had filed a lawsuit in Los Angeles Superior Court seeking declaratory relief which would invalidate the promotional contract with Goossen.  Ward argued that the promotional contact he signed with Goossen exceeded the seven year maximum which would be in violation of California Labor Code Section 2855.  Ward and his counsel had argued that the Court ruling should have preceded the CSAC Arbitration hearing this past spring.  As you may recall, the CSAC ruled in favor of Goossen in determining the validity of the promotional contact.  Adding insult to injury, the court used the CSAC ruling as guidance for its own ruling that the promotional contract was valid.

Although Ward lost here, he has filed a lawsuit in federal court in the Bay Area citing violation of the Muhammad Ali Act.  As a result, Goossen has filed his own lawsuit for defamation which relates to statements made alleging Goossen’s promotional activities should be investigated for criminal activities.

Payout Perspective:

Realistically, the loss here may not be as big as one might think.  Essentially, the CSAC had ruled on the promotional agreement and the court appears to have just followed suit.  Ward’s legal team is likely focusing on the Ali Act violations as well as defending the Goossen defamation lawsuit.  Ward’s team might try to remove the Goossen lawsuit from LA Superior Court and “consolidate” it with its claim in federal court.  This may be a strategic maneuver by Ward’s legal team and also a practical matter as there would be two different lawsuits in different courts (one federal, one state) with different court deadlines.

Promoter sues boxer Ward for defamation

August 20, 2014

Boxing promoter Dan Goossen has filed a lawsuit against boxer Andre Ward and his attorneys as a result of Ward’s lawsuit claiming that the promoter violated the Ali Act when promoting the super middleweight.

The lawsuit filed in Los Angeles Superior Court accuses Ward, his attorney James McCarroll and McCarroll’s law firm Reed Smith of “character assassination.”  Ward had filed a lawsuit claiming that Dan Goossen of not providing financial disclosure information pursuant to the Muhammad Ali Boxing Reform Act.  Prior to that, the two sides battled over the length of Ward’s promotional contract with Goossen.  In that round this past spring, in an arbitration hearing, the California State Athletic Commission ruled in favor of Goossen,

Goossen now is claiming $10 million dollars in damages plus attorney fees as a result of what the promoter claims is a “vicious campaign to smear” him.  The lawsuit appears to be due in part to public comments made by Andre Ward to BoxingScene.com that Goossen violated the Ali Act and that the U.S. Attorney’s Office launch a criminal investigation.

(H/t:  Boxing Scene)

Payout Perspective:

Boxing lawsuits never disappoint.  From Goossen’s perspective, the inference that he is doing something criminal without factual evidence (not yet presented) feasibly hurts his business and you may see why he is filing the lawsuit.  But can he prove a claim of defamation?  The key issue in a defamation claim is that the individual making the defamatory statement must know that the statement is false.  This may be a tough hurdle to surpass but we recently saw this occur with the Jesse Ventura defamation lawsuit.

Obviously, a lawyer accusing another lawyer of misrepresenting the truth is (believe it or not) frowned upon and is the proverbial “white glove slap across the face.”  Look for this lawsuit, and the Andre Ward lawsuit, to heat up in the future.  MMA Payout will keep you posted.

Andre Ward sues promoter for Ali Act violations

August 11, 2014

Andre Ward has filed a lawsuit in U.S. District Court of the Northern District of California against his promoter, Goossen Tutor Promotions and Dan Goosen.  The lawsuit is premised upon the Muhammad Ali Act.

The lawsuit, filed on August 4th cites violations made by Dan Goossen which violate the federal law which was put in place to protect boxers from exploitation inside and outside of the ring.  Namely, Ward accuses Goossen of not providing him with the proper payout information prior to an event which is required pursuant to the Ali Act.

The Complaint (found here) states that “Since the inception of Goosen’s tenure as Mr. Ward’s promoter in 2004, and continuing to the present, Goossen has repeatedly and systematically violated all disclosure requirements under the Ali Act by failing to timely provide Mr. Ward with full and complete disclosures.”  The Complaint cites several specific fights where Goossen did not provide Ward the necessary payout information which would have included: 1) the amounts of any compensation or consideration that a promoter has contracted to receive from such match; 2) all fees, charges, and expenses that will be assessed by or through the promoter on the boxer pertaining to the event, including any portion of the boxer’s purse that the promoter will receive, and training expenses; 3) and any reduction in a boxer’s purse contrary to a previous agreement between the promoter and the boxer or a purse bid held for the event.  (per Ali Act 15 U.S.C. sec 6307(c).

It was not until the spring of 2013 that Ward’s manager demanded the information from Goossen. According to the Complaint, Goossen failed to comply and when he did provide information it was “woefully inadequate.”

The Complaint requests that Goossen “provide a full accounting of all revenues and expenses related to any boxing matches in which Mr. Ward participated and Goossen served as promoter including, but not limited to, barter arrangements, multi-bout television and venue agreements, or any other boxing events originating from the relationship with Mr. Ward.”

Notably, the parties have gone to Arbitration in California this past spring with Goossen prevailing.  However, Ward did not even show up to the Arbitration as it was his counsel’s contention that the Arbitration was not valid.  The California State Athletic Commission ruled that the Arbitration this spring was valid since there was no previous objection.  As far as the substantive issue at Arbitration goes, the parties disputed the duration of the promotional agreement.  Due to a shoulder injury which sidelined Ward for a year, the question was whether the promotional agreement should be extended due to the injury to Ward.  CSAC held that Ward was uncooperative when he returned from injury in seeking out a fight and thus the agreement’s original expiration was extended 14 months.

CSAC Arbitration Decision Ward-Goossen

Payout Perspective:

The lawsuit is just the latest in the ongoing saga with Andre Ward and his promoter.  For what it is supposed to be, the Muhammad Ali Act has not had many boxers use it and prevail.  We will see based on the information that will undoubtedly surface in the discovery process.  It will be interesting what explanation is given by Goossen as it relates to the purported failure to provide Ward with payout information.  Then again, the question of why it took so long for Ward to report this violation is something that will likely come up too.

MMA Payout will keep you posted.

Main Events dismisses lawsuit against Golden Boy, et al.

August 4, 2014

The parties in the lawsuit involving promoter Main Events and Adonis Stevenson, Al Haymon, Golden Boy, Showtime and Stevenson’s manager have been dismissed per a letter sent to the Court on Saturday morning.

As we reported, the lawsuit filed this past May was based on alleged agreement for Main Events and their fighter Sergey Kovalev to face Adonis Stevenson what was anticipated as a big money fight on HBO.  However, Stevenson signed on with consultant Al Haymon and took a fight under the Golden Boy banner.  After the schism within Golden Boy, it was believed that the fighter left with Haymon.

A lawsuit was filed by Main Events claiming breach of contract, breach of fiduciary duty, fraud, tortious interference and interference with prospective economic advantage premised upon emails between Main Events and Stevenson’s manager. Main Events claimed that the emails constituted a contract while the defendants claimed that the emails were not a contract as other details needed to be hashed out before a contract could be signed.

As one might expect, the defendants filed a Motion to Dismiss based on their theory that the emails did not constitute a contract.  The court allowed Main Events to Amend its Complaint on August 4th but decided to settle the case.

In a letter which looks to be sent on Saturday morning, August 2nd, counsel for Main Events let the court know of a settlement and sought a cursory request to extend the deadline to file an Amended Complaint in the event the settlement fell through.

Memo Endorsement Re Dismissal

As a result of the settlement, Kovalev faces Bernard Hopkins this fall which will be co-promoted by Golden Boy and Main Events.

Payout Perspective:

It appears that all is well that ends well.  It’s clear that Kovalev’s promoters, Main Events, wanted to be made whole based upon the feeling of being left with nothing after Stevenson signed with Al Haymon.  The Hopkins fight is a good substitute for Stevenson.  Moreover, the legal claims made by Main Events were tenuous especially with the theory of a contract based upon emails. Instead of spending money on legal bills, the parties were able to negotiate an alternative.

Golden Boy, Haymon file motion to dismiss claims in Main Events lawsuit

July 25, 2014

Al Haymon and the rest of the defendants sued by promoter Main Events for allegedly breaching a contract for a fight between Adonis Stevenson and Sergey Kovalev have filed motions to dismiss the lawsuit.  However, the Court has allowed Main Events to amend its Complaint which may render the motions moot.

Some background on the lawsuit is here.

Haymon, Showtime Networks, Inc. and Adonis Stevenson filed a motion requesting an oral argument be heard in the motion to dismiss the Complaint.  In general, in federal court, most preliminary motions are decided on the moving papers unless oral argument is requested.  Even then, the Court may deny a request.   In addition, Richard Schaefer filed a motion to dismiss as well under the theory of respondent superior.

Essentially, Haymon et al. argue that there was no valid contract and as a result the Complaint filed against them should be dismissed.  Since there is no contract, the allegations of tortious interference with a contract and interference with economic prospective advantage must be dismissed.  Additionally, defendants claim that it lacked the requisite malice and intent needed for these claims.

The overarching issue is the lack of contract agreement.  The defendants cite an email which preceded the purported email agreement between Stevenson’s promoter and Main Events.  The email indicates that there was an agreement to agree on terms but details needed to be hashed over by attorneys at a later date.  According to the defendants’ brief, in New Jersey, an “agreement to agree” upon material terms at a future time is an unenforceable indefinite promise.

Golden Boy also filed a motion to dismiss the tortious interference with contract and interference with prospective economic advantage claims as well.  Golden Boy joined the motion of the other defendants but argued in addition that it was not responsible for Schaefer’s conduct on the basis of respondeat superior as the allegations occurred after Schaefer’s resignation.  Basically, Golden Boy attempts to absolve itself from any conduct Schaefer may have done while as CEO as it pertains to dealings in the Stevenson-Kovalev deal.

While these Motions to Dismiss were filed, the Court allowed Main Events to submit an Amended Complaint no later than August 4, 2014 (which would make it the Second Amended Complaint).  Discovery is stayed (halted) until further action from the Court

Payout Perspective:

As predicted, defendants have filed a Motion to Dismiss citing no formal contract.  While emails between parties may be considered a binding contract, defendants make the argument that the terms were not definite and were only an “agreement to agree.”  However, the news that Main Events may amend its Complaint may mean it will provide further definitive information on its claim.  MMA Payout will keep you posted on the lawsuit.

Main Events sues promoter, Schaefer and Stevenson

June 30, 2014

MMA Payout has obtained a copy of the lawsuit filed by promoters Main Events as it is suing the promoter for Adonis Stevenson for bowing out of an intended fight with Sergey Kovalev.  The lawsuit centers around the involvement of boxing insider Al Haymon.  It was filed last month with little occurring in the lawsuit so far.

The lawsuit was filed last month and has not seen much movement in the initial filing at this point.  The plaintiff is New Jersey Sports Productions, Inc. which does business as Main Events.  The promotion is owned by Kathy Duva.  As MMA fans may recall, Duva filed a Declaration in Support of Bellator in the Eddie Alvarez lawsuit.

The defendants include Yvon Michel, his promotion, GYM; Golden Boy Promotions; Showtime Network, Inc. and boxer Adonis Stevenson.

To set the stage, Main Events’ Kathy Duva claims that it had an agreement for her fighter, Sergey Kovalev to face Yvon Michel’s promoted fighter Adonis Stevenson.  The deal was allegedly sealed with emails in late January 2014 between Duva and Michel.  The deal included a co-promoted fight on HBO which carried a $2.4 million rights fee.  The fee was offered by HBO executive Peter Nelson which Main Events contends was accepted by Michel on behalf of his fighter.

However, Main Events learned that Al Haymon became involved and Main Events’ attorney sent a letter to Haymon confirming the Stevenson-Kovalev.  Presumably, the letter was to prevent an anticipated breach on the part of Stevenson.

The Complaint paints Haymon as an individual with “a relationship with Showtime wherein certain promoters rely…for allocation of television dates and rights fees rather than negotiating those dates and fees directly with Showtime.”  It also alleges that Haymon has an alliance with Richard Schaefer (then CEO of Golden Boy) and they had planned to “wrest control” of Golden Boy.  As we know now, Schaefer and others have left Golden Boy and it’s not clear whether Schaefer and Haymon are entering into a venture together.  The Complaint alleges that Haymon violates the Muhammad Ali Act as he acts as a manager or advisor to boxers despite not following the rules related to the Ali Act.

Main Events claims that Showtime interfered with the negotiations between HBO and the Kovalev/Stevenson fight despite Haymon pushing for a Stevenson-Bernard Hopkins fight with Showtime.

The legal claims:

Breach of Contract

Main Events claims that Stevenson’s management group, GYM, breached its contract to co-promote a bout between Stevenson and Kovalev.

Breach of Fiduciary Duty

Main Events claims that GYM breached a fiduciary duty premised upon the co-promoted agreement as the two sides were to have split revenue on the proposed fight. It goes on to claim that since the co-promotion is considered a joint venture, GYM breached a fiduciary duty to Main Events for not going through with the co-promotion.

Fraud by Stevenson’s Promoter

Main Events has sued Stevenson’s Promoter, Yvon Michel, personally for fraud as it is alleged that he represented to Main Events that it “had nothing to worry about” regarding the agreed Stevenson-Kovalev fight and Haymon’s involvement was a mere way to “increase the rights fees for the unrelated interim bout.”  The interim bout that is being referred to was a fight in Montreal between Stevenson and Andrzej Fonfara.  Stevenson fought Fonfara in late May on Showtime.  In that fight, Stevenson hit the canvas once, but eventually won a decision over Fonfara.

Tortious Interference with Contract

Main Events claims that Haymon, Golden Boy, Stevenson and Showtime based upon the set of events, claims it had a deal for Stevenson-Kovalev, but the defendants interfered with that contract.

Interference with Prospective Economic Advantage

Premised upon the alleged agreement for a fight between Stevenson-Kovalev, Main Events contends that Haymon, Golden Boy, Stevenson and Showtime interfered with an existing contract for the fight and that there was “a reasonable expectation that plaintiff [Main Events] would have economically benefitted from the business relationship.”  Essentially, Main Events claims that it would have benefited (and it would have) from the fight between their fighter and Stevenson.  But there was interference which caused Stevenson to back out of the agreement.

Payout Perspective:

This is another example of the competitive nature between HBO-Showtime and Top Rank-Golden Boy.  Actually, here its Main Events.  Since the lawsuit was filed, Schaefer has left Golden Boy and the move may impact this lawsuit as it relates to the accusations between the companies.  The latest has a Summons issued to Schaefer in Laguna Beach, California.  A  pretrial conference that was to occur last week has been pushed to July 11th.

As for the legal maneuvering, it’s likely that Haymon, et al. will file a motion to dismiss the Complaint premised upon the argument that there was no binding contract between Main Events and GYM, and as such, there was no breach.  Premised upon the fact that there was no breach, there would be no fraud by Michael or interference with a contract.

The lawsuit underscores the power of Al Haymon in the boxing industry.  It’s clear that he has a powerful stable of fighters and has had working relationships with Showtime.  As many know, Haymon advises Floyd Mayweather.  Main Events alleges that Haymon acts as manager to his boxer which circumvents the Muhammad Ali Act which attempts to protect fighters.  The Complaint does not delve into this violation as it is not a plead cause of action at this point.  However, if discovery commences in this lawsuit, we may see allegations of specific violations.

It will be an interesting lawsuit to follow and MMA Payout will keep tabs on it.

UFC policy now requests background checks for fighters

May 29, 2014

MMA Junkie reports on the UFC’s new policy of requesting its contracted fighters to sign a release of their personal information for background checks including details related to their medical, educational and criminal history.

As pointed out by Stephen Marocco’s piece, the request includes a waiver of “doctor/patient confidentiality” which circumvents HIPAA (Health Insurance Portability and Accountability Act) privacy laws.  Essentially, Zuffa could discuss a fighter’s health history with a fighter’s medical provider.

According to the article, the information has been collected for several years but the new document encompasses all of the releases in one form.

Payout Perspective:

There are obvious needs for the releases from the fighters.  The UFC does not want to be surprised by any unknown criminal issues or associations such as Will Chope or Benjamin Brinsa.  The health information is important because the UFC probably does not want to discover a pre-existing health condition which might preclude the fighter from fighting.

The Junkie article also talked to Sports Law professor Warren Zola about whether the release of information is standard for independent contractors.   Zola indicated that while the request is “more than many employers would ask,” it was not illegal.  Zola goes on to indicate that Zuffa’s leverage allows it to request the information and most fighters wanting to fight for the company must abide by its rules otherwise there’s the possibility that they may not work for the company.  Only top-notch talent would have some bargaining power over these consents.

Overall, the request for information is a way that the UFC is trying to protect its brand.  As it continues to grow and expand internationally, these new consents are a way to ensure that all of its bases are covered with its fighters so that it does not get blindsided with possible PR issues in the future.

If you read the article, you will find that Professor Zola uses the “M” word (he actually says “They have close to a monopoly…”) when talking about the UFC and its leverage to obtain these consents from its contracted workers.

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