Deontay Wilder filed its appeal brief in requesting that the court overturn the trial court’s ruling in favor of World of Boxing and Alexander Povetkin. The appeal highlights an incongruent ruling by the court which appeared to defer to the World Boxing Council in its determination of Povetkin’s drug test failure.
The match between the two heavyweights was set by the World Boxing Council to take place in May 2016 in Moscow, Russia. Wilder was training in England when he learned that Povetkin and tested positive for a banned substance. Wilder decided to return to the United States instead of going to Russia believing that the fight was cancelled due to the failed drug test. Povetkin and his promotion, World of Boxing claims that Wilder breached the contract when he failed to go to Russia for the match which prompted the WBC to cancel the fight.
In limbo is a purse of $7.15 million still in escrow. The trial court granted World of Boxing’s request for the escrow money to be return. Of course, Wilder believed that he should be granted his share of the money since Povetkin failed the drug test. A lawsuit filed by the heavyweight champion ensued in which WOB and Povetkin filed counterclaims against Wilder.
From our post this past April:
In February 2017, a jury just took 32 minutes to determine that Povetkin took the banned substance Meldonium post-January 1, 2016, however that did not mean much in the outcome of this Summary Judgment motion.
One of the overarching issues in the lawsuit as to who is to blame for the failed fight in Russian in May 2016. You might infer from the news of a failed drug test from Povetkin that it was the Russian. However, Povetkin claimed that Wilder’s failure to appear in Russia forced the hand of the regulating body, the WBC, to call off the fight.
The WBC Bout Agreement takes precedent here as the Court examines the contract in applying basic contract principles. But in its application, there seem to be things that don’t make sense.
“We begin by noting that the Bout Agreement contains no language mandating that each fighter refrain from ingesting banned substances.”
The inference one might yield from this sentence of the Court opinion is that tis ok to used banned substances. Based on this, the Court held that Povetkin did not breach the Bout Agreement because it cannot conclude when/if he ingested the banned substance Meldonium. Obviously, this is opposite the jury finding.
The good news for Wilder is that there was no finding of a breach of the Bout Agreement when Wilder did not go to Russia for the fight with Povetkin. The Court notes, “[t]here is simply no evidence that the WBC’s postponement decision was a “normal or foreseeable consequence” of Wilder’s actions, or that Wilder’s acts otherwise caused the WBC’s decision.” Povetkin and World of Boxing sought $2.5 million in liquidated damages that was part of the Escrow Agreement. “While the WOB Parties argue that it was Wilder’s failure to appear in Moscow, rather than Povetkin’s positive test result, that caused the WBC to postpone the Bout…no reasonable jury could indulge in the speculation that would be required to conclude that this was so,” stated the Court opinion. It went on to state, “[B]ecause a reasonable jury could not find that any breach by the Wilder Parties proximately caused the WOB Parties’ damages, the Wilder Parties’ motion for summary judgment dismissing the WOB Parties’ claim for breach of the Bout Agreement is granted.”
As for the escrow funds, World of Boxing is entitled to its release held in escrow but no interest because no judgment was entered against Wilder.
The claims for defamation filed by Povetkin remain although they may be dismissed pending further movement in this case.
The Court opinion seems to fly in the face of the original jury finding that Povetkin took Meldonium post-January 2016. The opinion seems to lean entirely on the WBC Agreement for its determination on its procedure in determining the status of Povetkin based upon his drug tests. The Court quotes WBC Rules and Regulations when it notes, “the WBC may in its discretion consider all factors in making a determination regarding responsibility, relative fault, and penalties, if any.”
The WBC did not issue a ruling on Povetkin’s positive drug test until August 17, 2016. It noted that it called the bout off and reserved any further ruling. It then determined that it was not “possible to ascertain that Mr. Povetkin ingested Meldonium after January 1, 2016. After two additional rulings by the WBC which opposed the August 17, 2016 ruling, it overturned the decision and stuck with its August ruling. It based this on a study showing Meldonium having the ability to stay in one’s system for more than five months. It also noted Povetkin had negative drug tests six other times.
The WBC seemed to be dragging its feet in this case as it put off the ruling on Povetkin despite the litigation moving ahead. There’s also the issue of Povetkin’s positive test for ostarine which happened after the lawsuit began. Yet, the WBC did not penalize him for this and even stressed negative drug tests notwithstanding the two positive tests for Meldonium and ostarine.
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The appeal brief, which was filed in August 31, 2018, brought up the glaring disparity in issues regarding the WBC ruling and that of the jury trial.
Wilder notes that the WBC confirmed in its August 2016 ruling that the bout was called off due to Povetkin’s positive test. In December 2016, Povetkin tested positive for another banned substance. It issued a March 2017 ruling which doled out an indefinite suspension and a $250,000 fine. But, in November 2017, it issued another ruling which amended the indefinite suspension to a fixed one-year fine and reaffirmed its ruling that it could not be found whether Povetkin ingested meldonium post-January 1, 2017.
Wilder points out that WOB’s attorney argued to the Court that “only the WBC, and not a jury, was competent to decide the issue, and that a jury verdict would merely be an advisory opinion.” Despite the trial judge’s disagreement, WOB attorney believed that the contractual agreement of the WBC would be the controlling factor in determining whether Povetkin took Meldonium.
However, Wilder believes that the District Court’s interpretation of the Bout Agreement was wrong. Wilder argues that the “WBC does not have the discretion to resolve private disputes between parties to a contract.” The Bout Agreement includes a clause which states that the parties “irrevocably accept and consent to the jurisdiction of” the District Court to “resolve any disputes arising out of” the Bout Agreement.” Wilder claims that whether or not Povetkin ingested Meldonium constituting a breach of the Bout Agreement is clearly a dispute arising out of the agreement, over which the District Court has exclusive jurisdiction. Essentially, while the Bout Agreement gives discretion to the WBC, it does not supersede the authority of the courts to interpret the contract. And Wilder argues, “[b]y cedeing the decision regarding whether Povetkin breached the Bout Agreement to the WBC,” it committed reversible error. Additionally, the counterclaims filed by WOB and Povetkin reflect the authority of the courts over the WBC Bout Agreement.
Wilder also argued that even if the appellate court holds that the trial court was correct in holding that the WBC and not the trial court could determine whether the Bout Agreement was breached, it caused error in its application of the facts of the case.
Wilder cites the following press release from the WBC:
They also argue that the date of the bout is a material term in the contract. Thus, whether or not the date of the bout was postponed is not relevant. WOB asserts that Wilder breached the agreement due to his failure to fly to Russia for the intended fight. Wilder cites several cases in which the exact date of the events is deemed essential to the terms of the contracts.
Following along the line of logic that the WBC had some authority in its contract, Wilder argues that the WBC delegated its duty to the trial court:
As a result, Wilder argues that the WBC applied a “strict liability” standard wherein if a jury found that Povetkin ingested Meldonium after January 1, 2017, he would be stripped of his mandatory challenger status which meant that his fight with Wilder would be off the table.
Wilder also indicates something amiss with what may be infers as a “quid pro quo” with Povetkin and the WBC. Pointing out the press release by the WBC, it seems as though if Povetkin paid his fine, he would be reinstated.
In a footnote of its brief, Wilder states that the trial court denied a request to reopen discovery on this limited issue but Wilder request this court again.
Finally, Wilder argues that he is entitled to the escrow property in the amount of $4,369,365 as a result of WOB’s breach of the Bout Agreement.
Payout Perspective:
This is a fascinating legal case premised on the basic tenets of a contract. The trial court’s decision to side with Povetkin and WOB in determining that the WBC would be the only entity capable of deciding whether Povetkin ingested Meldonium seems out of line with the job of the court to interpret the contract when a dispute comes before it. We have seen with the Austin Trout case that the Court has deferred to the drafter of the private contract despite the aggrieved party bringing a lawsuit. MMA Payout will continue to follow once WOB files its appellate brief.
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