A Federal Court in Puerto Rico has dismissed boxer Austin Trout’s lawsuit against the World Boxing Organization for claims of violating the Muhammad Ali Boxing Reform Act. The court determined that due to the signed contact, Trout must submit to arbitration.
Austin Trout Case Order on … by on Scribd
Trout claimed that the WBO had dropped him from the promotion’s ranking arbitrarily which affected his ability to receive a title shot.
The lawsuit landed in Federal Court in Puerto Rico after the boxing promotion moved the case to Puerto Rico where its offices are located. Originally Trout filed the lawsuit in state court in New Mexico. The WBO moved the case to Federal Court in New Mexico and then requested the venue change to Puerto Rico which the Court granted.
The WBO claimed that Trout was bound by the terms of his WBO contract which required that he arbitrate any disputes he had with the contract. According to the contract, the WBO would handle the arbitration and any appeal would be heard by a grievance committee put together by the promotion.
Trout argued that the lawsuit should remain in court for two reasons. First, Trout’s attorneys argued that the WBO waived its right to arbitration as it already appeared in the case and filed procedural motions for the case to be moved to federal court and then to Puerto Rico. Secondly, Trout argued that his claims were based upon violations of the Ali Act which should be litigated instead of arbitrated. Furthermore, it argued that the arbitration clause was invalid because the WBO would effectively “be both a party and a judge.”
The WBO moved to compel arbitration and dismiss the lawsuit. In siding with the WBO, the Court indicated that the WBO’s contract which included the arbitration clause was valid and related to the dispute alleged by Trout and therefore it was a valid arbitration clause. Trout unsuccessfully argued that there was ambiguity in the contract and with contracts of adhesion, they should be found in favor of the non-drafting party. Here, Trout argued that the arbitration clause related to disputes with third parties whereas disputes directly with the promotion could be litigated. Part of this argument was due to the WBO serving as the arbitrator in the matter. However, the court found no ambiguity and that the contract availed the parties to arbitration on all matters.
As to the argument that the lawsuit was litigated by the WBO and as a result, it had waived its right to arbitration, the court argued that the sole responses made by the promotion in court were procedural and not substantive. Hence, it had not participated in litigation of the case and did not waive its right to an arbitration.
There is no indication that Trout will appeal this decision at this point.
Payout Perspective:
The underlying issue in this decision is that claims under the Muhammad Ali Act could be arbitrated based on a contract signed by the parties. This does not bode well for the possibility of the Ali Act Expansion to combat sports. The reason being is that if the party drafting the contract (e.g., Zuffa) includes a provision that all disputes under the contract shall be resolved via arbitration, it might mute the effectiveness of the Ali Act. While arbitration is a faster way to resolve disputes, in the Trout case, he was concerned with the ability for the WBO to be judge and a party. One might foresee an MMA promotion including in its contract its ability to choose an arbitrator. We have already seen that the UFC Anti-Doping Policy has chosen its own vendor and arbitrator. It would likely do the same for any case claiming a violation of the Ali Act. Unless there is an appeal, look for this decision to rear its head in the future.
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