By Zach Arnold | November 7, 2013
A couple of days ago, Courthouse News published a basic summary of a 25-page court filing in the Southern District of New York by lawyer Jonathan Plaut on behalf of his client, boxer Bermane Stiverne, against Don King, King’s step-son Carl King, Don King Productions, Elite Sports and Entertainment Management, and Dana Jamison.
The last time we saw Don King was six months ago on HBO when a floor director/producer was pushing him around and nearly pushed him off the ring to the floor during a post-match interview with Bob Papa.
The long and the short of it: Stiverne alleges that Don King made him sign contracts to become his exclusive promoter in exchange for fighting another Don King fighter, Ray Austin, in 2011 for the WBC Silver Heavyweight title in Missouri. Stiverne wants out of the contractual agreements, claiming he was pressured & coerced into signing the deals which are being portrayed as contracts of adhesion (leverage all one-sided).
The text of the court filing is long but yet a very interesting read. When my colleague Rob Maysey talks about the Ali Act needing to be amended to cover MMA, this is a perfect example of why he is motivated to see changes occur. I’ve always stated that the Ali Act is largely toothless because no one has been criminally prosecuted since the Act passed. However, Rob has argued that the private right of action clause in the Ali Act provides civil relief and provides some legitimate protection to boxers.
Onto the lawsuit filing text. Not all 25 pages is included here but pertinent parts relating to the allegations are included. If you ever wanted to see supposed details of a Don King promotional contract and wanted to compare it to what a UFC contract reportedly looks like, here you go.
The plaintiff, Bermane Stiverne, is a heavyweight boxer originally from Haiti. On April 26, 2011 he was asked to appear at the office of defendants, Don King and Don King Productions, Inc. to sign a bout agreement with another heavyweight boxer named Ray Austin. The bout with Austin was a mandatory bout under the rules of the World Boxing Council. Austin’s exclusive promoter was DKP.
When he arrived at the meeting, however, Stiverne was informed that he would not be permitted to sign the bout agreement with Austin unless and until he first signed an exclusive promotional agreement with DKP. In fact, before they would present to Stiverne the bout agreement with Austin, Don King and DKP required that Stiverne sign three contacts at that meeting which related to either promoter or management services with Don King, DKP, Don King’s step-son Carl King, and Carl King’s company Elite Sports and Entertainment Management, Inc.
The Professional Boxing Safety Act of 1996, 15 U.S.C. 6301 et. seq., as modified by Congress in 2000 by Public Law 106-210, known as the “Muhammad Ali Boxing Reform Act” prohibits the foregoing conduct of the defendants in three separate ways. First, the Act prohibits a promoter from requiring a boxer to sign an exclusive promotional agreement as a precondition to obtaining a bout agreement with another boxer promoter by the same promoter. Such a contract provision is a restraint of trade, contrary to public policy and unenforceable against the boxer. Second, the Act prohibits a promoter from requiring that a boxer grant it future promotional rights as a precondition for competing in a bout which is mandatory under the rules of a sanctioning organization. Third, the Act further requires a firewall between boxing promoters and managers. It prohibits promoters from having either a direct or indirect financial interest in the management of a boxer, and vice versa. The three contracts at issue here — all signed at one place and in one sitting — constitute the precise type of conflict of interest that Congress proscribed in the Act. For these three reasons, the contracts at issue violate the Act and are therefore unenforceable and void ab initio.
Even if these contracts do not violate the Act (which they clearly do), they should be declared null and void because: (i) they are onerous, inequitable, unconscionable, confiscatory and in violation of public policy; (ii) the defendants procured Stiverne’s signature on them by duress, namely the threat that he would receive no further bouts; and (iii) they were induced by fraud, insofar as the defendants have not complied with these agreements and never intended to be bound thereby.
Stiverne seeks a declaration from this Court that these three agreements: (i) together violate the Act and are therefore void ab initio (including the arbitration provisions, notice to cure provisions and shortened statute of limitations provisions contained therein); and (ii) are void and unenforceable because they are onerous, inequitable, unconscionable, confiscatory, violative of public policy, and procured by fraud and/or duress. Stiverne seeks his attorney’s fees and costs as provided for by the Act, and seeks leave to bring tort and contract claims upon instruction of the Court as set forth below.
Venue and Jurisdiction
This court has Federal question subject matter jurisdiction pursuant to 28 U.S.C. 1331 and the Act, 15 U.S.C. 6309(d). This Court has supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. 1367. The Court also has diversity jurisdiction pursuant to 28 U.S.C. 1332(a)(1) because the matter in controversy exceeds $75,000, exclusive of interest and costs, and is between citizens of different states. There is complete diversity of citizenship.
The Act provides for a private cause of action in addition to public civil enforcement and criminal penalties.
This Court has personal jurisdiction over each defendant. Each of the contracts at issue in this case provide for disputes to be resolved in this judicial district. The forum selection clauses in the contracts demonstrate that New York is a convenient forum for the defendants and that they consent to personal jurisdiction herein. Also, there is no forum more convenient or more centrally located for all of the parties than this Court. Accordingly, venue is proper in this Court pursuant to 28 U.S.C. 1391.
The bout with Austin was a mandatory bout under the rules of the WBC because it was a bout for the WBC Silver Belt. Without first fighting for the WBC Silver Belt he would have not been eligible to fight for the WBC World Heavyweight Title against Vitali Klitschko.
Stiverne appeared as requested. At that meeting, (Dana) Jamison informed him that DKP would not provide the bout agreement with Austin unless and until Stiverne first signed a promotional agreement with DKP (the “Promotional Agreement”.)
Jamison informed Stiverne that Don King and DKP also required that Carl King be identified in the Promotional Agreement as Stiverne’s manager along with Stiverne’s actual manager, Camille Estephan, or else Don King and DKP would withhold the Austin fight and prevent him from receiving future bouts.
Additional bouts are obviously of paramount importance to a boxer, including Stiverne, because without them the boxer cannot advance his career. Further, when bouts are scheduled a boxer receives a so-called “maintenance fee” for several months prior thereto which pays for his daily living and training expenses.
Accordingly, Stiverne signed the Promotional Agreement.
Personal Management Agreement
Jamison then informed Stiverne that Don King also required that he sign a personal management agreement. The Personal Management Agreement was in the form of a letter printed on DKP letterhead, but with Stiverne as the purported drafter and author, when in fact he was not the drafter or author. The purported recipient of the letter was Don King.
Jamison informed Stiverne that Don King required that the Personal Management Agreement be signed or else he would withhold the Austin bout and prevent him from receiving future bouts.
The Personal Management Agreement purports to give Don King and DKP broad and sweeping powers over Stiverne’s career, financial independence and ability to contract with others. It also provides that Stiverne would be required to pay to DKP 25% of any and all gross monies or other consideration which Stiverne may receive as a result of his activities in and throughout the athletic, entertain and television industries, among others.
Among other onerous provisions, it grants Don King and DKP an irrevocable power of attorney for up to 8 years to: (i) execute for Stiverne in his name any and all agreements, documents and contracts for his services; (ii) collect and receive sums and endorse his name on any checks; and (iii) hire and fire any business managers and corporates who may be retained to obtain engagements or employment for Stiverne. Specifically, it provides, inter alia and with emphasis supplied:
DON KING PRODUCTIONS, INC.
April 26, 2011
Mr. Don King
Don King Productions, Inc.
501 Fairway Drive
Deerfield Beach, FL, 22441
Dear Mr. King:
I desire and request that Don King Productions, Inc. (“you”) act as my personal manager, excluding boxing, giving me the benefit of your advice, counsel and direction in the development and enhancement of my professional career… I, therefore, hereby engage you as my Personal Manager for a period of FOUR years from the above date. You shall have the right to renew this agreement (the “Agreement”) for an additional period of FOUR years upon written notice to me. During the term of this Agreement and any renewals hereof, I will not appoint any other personal manager. … You agree to perform for me one or more of the services as follows: advice and counsel in the selection of public appearances and promotional opportunities; advise and counsel with relation to the adoption of proper format for presentation of my professional boxing, physical fitness and other talents and in the determination of keeping with my talents; advise and counsel and direct in the selection of talent to assist, accompany or embellish my professional presentation; advise and counsel with regard to general practices in the entertainment and amusement industries and with respect to such matters of which you may have knowledge concerning compensation and privileges indented from time to time for similar professional values; advise and counsel concerning the selection of promotional agencies, artists, managers and other professional people who will counsel, advise, seek and procure employment and engagements for me.
You are authorized and empowered for me and in my behalf and as my attorney-in-fact and in your discretion to do the following: approve and permit any and all publicity and in the promotion and advertising of any and all products and services; execute for me in my name and/or in my behalf any and all agreements, documents, and contracts for my services…, collect and receive sums as well as endorse my name upon and cash any and all checks payable to me for my services… and retain there from [sic] all sums owing to you, engage, as well as discharge and/or direct for me, and in my name, promotional agents, business managers, and corporations who may be retain to obtain contracts, engagements or employment for me. The authority granted to you by this Agreement is coupled with an interest and shall be irrevocable during the term hereof.
[You will] represent me and act as my advisor in all business negotiations and matters of policy relating to my entertainment and professional career excluding boxing; to supervise my professional engagements, and to consult with employers in the entertain and athletic fields, to assure to the best of your ability the proper use of my services.
I shall not engage any promotional agents, employment agencies or business managers of which you disapprove. I shall advise you of all offers of employment submitted to me and will refer any inquiries concerning my services to you, in order that you may determine whether the same are compatible with my career. I shall instruct any promotional agency or business manager engaged by me to remit to you all monies that may become due me or may be received by them.
You may appoint or engage any and all other persons, firms and corporations throughout the world in your discretion to perform any or all of the services which you have agreed to perform hereunder.
As compensation for all services and rendered hereunder I agree to and shall pay you, as and when received by me, during and throughout the term of this Agreement 25% of any and all gross monies or other consideration which I may receive as a result of my activities in and throughout the athletic, advertising, promotion, entertainment, amusement, motion pictures, television, radio, music, audio/visual, video, Internet, computer, computer software, recording and publishing industries. The matters upon which your compensation shall be computed shall include any and all of my activities in connection with the following matters: …professional and theatrical engagements; personal appearances; public appearances in places of amusements and entertainment; records and recordings; publications; and the use of my name, likeness, image and talents for purposes of advertising and trade. I likewise agree to pay you a similar sum following the expiration of the term hereof upon and with respect to any and all engagements, contracts and agreements entered into during the term hereof relating to any of the foregoing… THe term “gross monies or other considerations” shall include, without limitations, salaries, earnings, fees, royalties, gifts, bonuses, shares of profit, shares of stock, partnership interests…
As to my gross monies or consideration earned after the death of Don King personally, I shall continue to pay the gross percentage required hereunder to Don King Productions, Inc.
Due to the threat of no further bouts including the Austin bout, Stiverne signed the Personal Management Agreement.
After Stiverne signed the Personal Management Agreement, he asked for the bout agreement with Austin.
However, Jamison informed Stiverne that Don King also required him to sign an additional agreement with Carl King, by and through Carl King’s company, Elite Sports. The agreement was described as an “Advisory Agreement.”
The Advisory Agreement provided that Stiverne would have to pay Elite Sports 16% gross compensation.
Upon information and belief, Elite Sports is an entity which has no legitimate business function.
Upon information and belief, Elite Sports is an entity which was established at the direction and instruction of Don King in order to serve as a corporate form to obfuscate Don King and DKP’s financial interest in boxer’s management.
Upon information and belief, Carl King has been caused or induced by Don King to establish at least one other entity in another state for the same purpose.
Upon information and belief, Carl King is financially dependent upon Don King.
Upon information and belief, Don King and DKP receive all or a substantial portion of the fees, commissions and payments which ostensibly are due to Carl King and/or Elite Sports.
Upon information and belief, Don King and DKP take the fees ostensibly due and paid to Carl King and/or Elite Sports and instead use them to pay, reward and incentivize DKP employees and officers.
DKP and Elite Sports are run and operated out of the same office in Florida and use the same managers and personnel.
Bermane Stiverne informed Dana Jamison that he did not want Carl King as an advisor, and he did not want to pay an additional 16% commission.
Jamison informed Stiverne that Don King and DKP required that this agreement be signed, or else he would withhold the Austin fight and prevent Stiverne from receiving future bouts.
Jamison also informed Stiverne that Don King and DKP routinely required boxers to sign advisory agreements with Carl King and/or entities in Carl King’s name.