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« | Home | »

California State Athletic Commission gets served with $1.9M legal notice

By Zach Arnold | September 17, 2012

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On June 22nd, CSAC athletic inspector Dwayne Woodard filed an age discrimination & retaliation lawsuit against the California State Athletic Commission and the agency that controls CSAC, the Department of Consumer Affairs. The lawsuit was filed in Los Angeles County Superior Court and Woodard’s attorney, Farzad Tabatabai, made sure to serve the state Attorney General’s office with papers notifying them of the civil lawsuit. As our June 25th report displayed, we saw a stamped copy of the court filing and everyone at CSAC & DCA knew about the court case at hand. In other words, ignorance is not an excuse in this matter.

The AG’s office in Los Angeles had 30 days to respond to the matter. For whatever mysterious reason(s), the state decided not to respond to the court complaint.

60 days after the lawsuit was filed, the state AG’s office bizarrely didn’t respond to the filing.

Over 80 days after the case was filed, the AG’s office still hasn’t responded to the lawsuit. Because of the ineptness of the AG’s office & the bureaucrats in Sacramento, they just got whacked in court last Friday with an entry of default notice.

To make a long story short, a lawyer from the Attorney General’s office will have to respond to the entry of default notice and explain why they have been dragging their feet on responding to Dwayne Woodard’s lawsuit. Whomever is sent from the AG’s office to explain to the court why they didn’t do their job is going to be walking into their courtroom with their tail between their legs.

With the entry of default notice comes a statement of damages — and in the case of Dwayne Woodard’s lawsuit, it’s a really, really big price tag.

Farzad Tabatabai, the lawyer representing Woodward, filed a statement of damages on behalf of his client. On the statement of damages, there’s a claim of $750,000 for age discrimination, $750,000 for retaliation, $164,954.24 for lost earnings, $100,000 for attorney fees, and $123,715.68 for three years of future earnings. The grand total for the statement of damages is roughly $1.9 million dollars.

If I had to venture a guess as to where the $750,000 figure came from for each claim, it’s a number similar to what the Department of Consumer Affairs had to pay out because former CSAC Executive Officer Dave Thornton was sued for racial & sexual harassment. As for the calculation about earnings, we went through our CSAC tax records article and noticed one record in particular — Sid Segovia, the highest-paid CSAC inspector that doesn’t hold a state job. For a refresher course, here are his tax records:

$41,238.56 was what Consumer Affairs claimed they paid Segovia for 2011. If you multiply that out by three, you get $123,715.68. If you multiply that out by four, you get $164,954.24. Coincidence?

What’s next in court for the lawsuit

Given the good reputation that Dwayne Woodard has, along with his attorney Farzad Tabatabai, in terms of credibility & track record, the Department of Consumer Affairs cannot be happy about what is coming next.

Will a judge at LA County Superior Court grant a $1.9 million dollar judgment automatically to Woodard? No, not a chance. So why would Tabatabai file a statement of damages like this? It’s a wake up call to the AG’s office to get off their ass and start responding to the lawsuit. It’s a message essentially telling Karen Chappelle and company at the AG’s office to stop screwing around and to start acting like professionals.

Once the Attorney General’s office responds to the statement of damages, they are facing an outcome in court that will likely end in a sweet settlement or a jury trial where there’s a fairly good chance that DCA & CSAC loses their shorts, monetarily-speaking. In either scenario, someone’s likely going to get fired in Sacramento for this mess and the finger-pointing will commence.

In my opinion, a factor to watch out for in the upcoming court proceedings for this lawsuit is something called the California Code of Civil Procedure, Section 36. Section 36 says that a plaintiff or defendant in a civil case over the age of 70 can petition the court for preference in having their case moved up the court docket so that the process goes much faster than a civil case normally proceeds. Given the fact that the AG’s office has already demonstrated a lack of respect for the court in terms of responding to the initial complaint, leverage is not on their side here. They must respond and be on good behavior now.

DCA now has to fight this court battle. They cannot, under current political circumstances, simply allow the AG’s office to ignore to the lawsuit and let it go to default for good. The consequences would be miserable for the attorneys involved. In front of the California State Bar, you can almost be certain that any attorney involved in costing the state 7-figures by not responding to a civil lawsuit would face consequences for malpractice at a hearing. Any lawyer working for the AG’s office and the state has a fiduciary responsibility to defend the state and has a legal responsibility to act in a professional & timely manner in responding to all cases. There’s a big difference in terms of what a judge expects from Joe Blow representing himself pro se versus an attorney working for the California AG’s office.

Given the public nature of the turmoil at the California State Athletic Commission and the complicit nature of Consumer Affairs in ongoing fraud & other criminal activity (such as altering the date of fighter paperwork), the AG’s office cannot afford to screw around with a public case like the one Woodard has filed. Any sort of misstep by the AG’s office that costs state taxpayers significant cash will result in mews coverage in mass media outlets.

If the AG’s office stunningly decides not to fight and simply lets Woodard’s case get a default judgment from LA Superior Court, it’s an invitation to others to jump into the fray and go after DCA with their own lawsuits. The end result will be very ugly for someone like Karen Chappelle at the AG’s office. She’s a big talker and likes to flaunt the fact that she handles some legal affairs for CSAC at public meetings. I suspect that she doesn’t want to lose her job at the AG’s office for malpractice, but given her past track record you never know what kind of professional behavior to expect from her. I’ll elaborate on this later.

Bottom line? The game of chicken that the state AG’s office & Consumer Affairs is playing with Dwayne Woodard’s lawsuit isn’t going to last much longer. Now things start to get serious for the state of California. If they don’t play ball, it will cost taxpayers a lot of money. It’s the kind of headline that Governor Jerry Brown & other power brokers in the California Democratic Party want no part of, given how sensitive the political climate is right now for Governor Brown’s tax initiative on the ballot this November. We all know about the firestorm that has been created by the Parks & Recreation Fund accounting scandal. If you don’t think that the Governor’s office would care about the state AG’s office screwing up cases like Dwayne Woodard’s lawsuit, I would like to give you this friendly reminder of just how much attention the big boys in Sacramento politics are paying attention to what is happening at the Athletic Commission right now. It should be duly noted that many members of Governor Brown’s Sacramento staff & cabinet come from the Department of Justice/AG’s office in Los Angeles.

The history between Farzad Tabatabai and the state AG’s office

As we outlined in this August 3rd article, Farzad represented Goossen-Tutor in an arbitration dispute at CSAC over Robert “The Ghost” Guerrero. The other party involved was Golden Boy Promotions. From the article:

Again, this is a woman whose arbitration decision in the Robert Guerrero matter (Goossen-Tutor vs. Golden Boy) was labeled by a judge as an action based on fraud and/or corruption. The judge (Robert H. O’Brien) found that Deputy AG Earl Plowman, supervised by Karen Chappelle, had written the arbitration ruling and had it signed by someone else other than the arbitrator!

As Farzad Tabatabai put it:

“Justice was done. The Court’s ruling correctly recognizes what should be obvious to everyone: an arbitration decision that is drafted by someone other than the arbitrator and signed by an outsider to the arbitration, without ever being seen by, reviewed by, or approved by the arbitrator, may not be binding on the parties. The question that remains to be answered is how CSAC and the Attorney General’s office allowed this to happen in the first place.”

The judge cited California Code of Civil Procedure Section 1286.2, which states the following:

(a) Subject to Section 1286.4, the court shall vacate the award if the court determines any of the following:
(1) The award was procured by corruption, fraud or other undue means.

There’s strike one.

Strike two was the Antonio Margarito debacle. From the same August 3rd article:

When (Bill) Douglas was in charge as E.O. at CSAC, you had the infamous hand-wrapping incident with Antonio Margarito at the Staples Center when he was preparing to fight Shane Mosley. Che Guevara, working as an inspector, missed the illegal hand wraps. If it wasn’t for Nazim Richardson, Shane Mosley’s trainer, who had caught the infraction then all hell would have broken loose for the Margarito/Mosley fight. Instead, Richardson caught the illegal hand wraps and Chief Athletic Inspector Dean Lohuis came in to handle the situation. Lohuis and fellow inspector Mike Bray did what needed to be done to rectify the matter.

When Margarito ended up having his hearing in front of the California State Athletic Commission, it became a circus thanks to California Deputy AG Karen Chappelle. What was an open-and-shut case turned out to be a farce of a presentation. Instead of one viewpoint being told by the three inspectors in question (Guevara, Lohuis, and Bray), you ended up with Chappelle & Guevara having their version of events and Lohuis & Bray giving their version of events. Even though CSAC ruled against Margarito, Chappelle had managed to screw up the process.

This is a nice way of saying that Chappelle had Che Guevara perjure himself at the CSAC disciplinary hearing in regards to what happened with the Margarito hand wraps. This was largely a clear cut, open-and-shut case with the illegal hand wraps. There was no need to manipulate any of the evidence or testimony. However, Chappelle inexplicably decided to screw up everything by having DCA’s golden boy Guevara tell one story while Lohuis & Bray told the truth. Instead of Guevara simply admitting to making a mistake and moving on, you had the circus that broke out at the CSAC hearing.

After this fiasco, DCA terminated Dean Lohuis from his job and put Che Guevara in his place. That’s right, they gave the stooge a job promotion after he screwed up in a high-profile manner. Mike Bray ended up being retaliated against by Consumer Affairs, as our tax records demonstrate here.

When Consumer Affairs decided to terminate Lohuis “for cause” (with a notice of adverse action) in front of the State Personnel Board, they decided to trot out Karen Chappelle, Che Guevara, and… Earl Plowman, the same man from the AG’s office who a judge determined was involved in writing the arbitration decision for CSAC regarding Robert Guerrero. Yes, the decision that a judge determined was based on fraud and corruption.

Take a look at how Consumer Affairs in their prehearing conference statement attempted to frame Chappelle’s actions at the Margarito CSAC hearing:

Che Guevara: Guevara will testify to the events and circumstances involving the Margarito disciplinary hearing in February, 2009. On or about February 4, 2009, prior to the Margarito disciplinary hearing, Lohuis attempted to have a portion of Inspector Che Guevara statement altered. In his statement regarding observation of the wrapping of Boxer Margarito’s hands, Inspector Guevara relayed that Lohuis initially refused to have Margarito’s right hand re-wrapped asserting that the Commission had already approved that hand or words to that effect. Following insistence from Inspector Guevara and Shane Mosley’s trainer, Nazim Richardson, the wrapping on the right hand was removed. In the presence of two deputy attorney generals, Lohuis sought to have this statement withheld from the disciplinary record. This attempt to alter the record placed the Commission in a compromising position and harmed the integrity of the disciplinary process and of the agency.

Supervising Deputy Attorney General Karen Chappelle: Chappelle will testify regarding the events and circumstances involving the Margarito disciplinary hearing in February 2009. On February 4, 2009, prior to the Margarito disciplinary hearing, Lohuis attempted to have a portion of Inspector Che Guevara statement altered. In his statement regarding observation of the wrapping of Boxer Margarito’s hands, Inspector Guevara relayed that Lohuis initially refused to have Margarito’s right hand re-wrapped asserting that the Commission had already approved that hand or words to that effect. Following insistence from Inspector Guevara and Shane Mosley’s trainer, Nazim Richardson, the wrapping on the right hand was removed. In the presence of two deputy attorney generals, you sought to have this statement withheld from the disciplinary record. This attempt to alter the record placed the Commission in a compromising position and harmed the integrity of the disciplinary process and of the agency.

Deputy Attorney General Earl Plowman: Plowman will testify regarding the events and circumstances involving the Margarito disciplinary hearing in February, 2009. On February 4, 2009, prior to the Margarito disciplinary hearing, Lohuis attempted to have a portion of Inspector Che Guevara statement altered. In his statement regarding observation of the wrapping of Boxer Margarito’s hands, Inspector Guevara relayed that Lohuis initially refused to have Margarito’s right hand re-wrapped asserting that the Commission had already approved that hand or words to that effect. Following insistence from Inspector Guevara and Shane Mosley’s trainer, Nazim Richardson, the wrapping on the right hand was removed. In the presence of two deputy attorney generals, you sought to have this statement withheld from the disciplinary record. This attempt to alter the record placed the Commission in a compromising position and harmed the integrity of the disciplinary process and of the agency.

A week after this document, lawyer Farzad Tabatabai (on behalf of Dean Lohuis) responded to the charges from Consumer Affairs.

This is perhaps the most outrageous of Respondent’s pretexts for terminating Mr. Lohuis. CSAC claims Mr. Lohuis attempted to have Inspector Guevara’s statement altered or withheld from the disciplinary committee. Nothing is further from the truth. Mr. Lohuis did not attempt to alter Mr. Guevara’s testimony, only to ensure that truthful and honest testimony was presented to the Commission.

Furthermore, it is not Mr. Lohuis’s role, and it is not even within his authority, to determine what testimony is offered before the Commission. That decision rests with the Attorney General(s) who handled that case. Therefore, any question or comment Mr. Lohuis may have made, even if misunderstood, is not grounds for terminating him.

Furthermore, we expect the evidence will show that Inspector Guevara did in fact perjure himself in his testimony before the Commission, and Mr. Lohuis would have been justified in questioning the truth of testimony Mr. Guevara intended to offer to the Commission.

After this response, the state reached a settlement with Dean Lohuis. They didn’t get the clean firing they wanted, as they wanted Lohuis fired without having any sort of consequences for their actions. Chappelle’s middle name, appropriately, is Burden and she’s proven herself to be a hell of a burden for the AG’s office in Los Angeles. Strike two for Chappelle and Consumer Affairs.

Strike three is coming up for Chappelle, the AG’s office, and the Department of Consumer Affairs if they don’t get their act together in responding to Dwayne Woodard’s lawsuit. A can of worms could very well be opened up by the lawsuit. After all, one of the remedies in the lawsuit is a court order to terminate the employment of anyone who was involved in the process of age discrimination & retaliation that Woodard is alleging took place. Woodard has the right attorney with the right experience in dealing with the AG’s office to get the job done in court.

The question is how hard will Consumer Affairs and the AG’s office fight back. They have no choice but to respond now with the $1.9 million dollar statement of damages being filed in court. If the state doesn’t respond, somebody’s going to get fired in a hurry.

The CSAC office is already in a state of disrepair. Let’s see how fast the rats start to jump off this sinking ship.

Topics: CSAC, Media, Zach Arnold | 14 Comments » | Permalink | Trackback |

14 Responses to “California State Athletic Commission gets served with $1.9M legal notice”

  1. Alan Conceicao says:

    What is the end game of all this? A lawsuit wasn’t responded to quickly? Honestly, I know nothing about the Parks and Recreation “firestorm” living in Michigan and googling it finds precious little other than that they planned on using up their general fund. That might be the least shocking “firestorm” in history, and it would seem most people realize that.

    Almost no one replies to this stuff because it is conspiracy driven. Do you really think the Governor of a state as big as California is really micromanaging people making $40K a year? You are killing your site endlessly going on about this.

  2. Zach Arnold says:

    What is the end game of all this? A lawsuit wasn’t responded to quickly? Honestly, I know nothing about the Parks and Recreation “firestorm” living in Michigan and googling it finds precious little other than that they planned on using up their general fund. That might be the least shocking “firestorm” in history, and it would seem most people realize that.

    The Parks & Recreation scandal, which has at least $54M socked away in ‘hidden funds,’ is a big scandal out in California. If you don’t live in the region, then no you haven’t heard much about it in the national press. But in Sacramento, LA, SF, and other markets, it’s a story that is haunting Jerry Brown’s tax raise initiative on the ballot in November.

    Remember the words of Tip O’Neill, “All politics is local.”

    Any misstep by anyone in his party that could change the support for his tax proposal is bad news. He’s around 54% support and slowly sinking. He can’t afford any more bad press.

    Almost no one replies to this stuff because it is conspiracy driven.

    It’s been over four months now since we started the investigation. Not one person ever named in any of our articles has ever denied a claim we’ve made. Try finding that track record in other reporting, especially in the MMA world.

    You sound exactly like the PRIDE fans did on Sherdog before things started going public about just how shaky the situation was. Same case here.

    None of this is a conspiracy. Keep your eyes open and you’ll find this out soon enough.

    The lawsuit has potential in dressing down the Department of Consumer Affairs, which Jerry Brown controls. Given the past developments of the biggest players in Sacramento getting involved in micromanaging the commission — which they have, despite your impaired perception — they are nervous right now about what’s next.

    You are killing your site endlessly going on about this.

    No, DCA and Sacramento is killing the athletic commission and that’s a story. This state hosts twice as many combat sports as Nevada or other states. It’s a real story that impacts a lot of fighters, promoters, and fans.

    When you can’t run a box office, can’t figure out when a fighter is using a skinned glove or a glove of wrong size, are caught altering fighter paperwork & losing medical records, and have ongoing fraud going on in the office… that’s a recipe for disaster.

    • Alan Conceicao says:

      The Parks & Recreation scandal, which has at least $54M socked away in ‘hidden funds,’ is a big scandal out in California. If you don’t live in the region, then no you haven’t heard much about it in the national press. But in Sacramento, LA, SF, and other markets, it’s a story that is haunting Jerry Brown’s tax raise initiative on the ballot in November.

      Okay. It would seem to me that Parks and Rec probably has a much higher amount of income and requires a larger amount of state funds to operate than does the Athletic Commission.

      It’s been over four months now since we started the investigation. Not one person ever named in any of our articles has ever denied a claim we’ve made. Try finding that track record in other reporting, especially in the MMA world.

      What is being investigated? General impropriety?

      You sound exactly like the PRIDE fans did on Sherdog before things started going public about just how shaky the situation was.

      You didn’t answer my initial question. That question again: What is the endgame? It isn’t going to be the end of MMA and boxing, I can tell you that for certain. The tax value is too great and they’ll just shuffle around the names in the chairs for show. These aren’t the money people, after all. That’s what killed PRIDE: the discovery that the promoters were involved with organized crime. This doesn’t even generally concern the promoters, but rather the regulators. There’s nothing about this that would cause people to cease going to boxing, kickboxing, or MMA events. Those fans don’t give a damn about the way the urine samples are taken much less if it is taken at all.

      The lawsuit has potential in dressing down the Department of Consumer Affairs, which Jerry Brown controls. Given the past developments of the biggest players in Sacramento getting involved in micromanaging the commission — which they have, despite your impaired perception — they are nervous right now about what’s next.

      Your evidence of this claim – that the biggest players in Sacramento are getting involved in micromanaging the commission – falls largely on the basis of completely circumstantial evidence like campaign donations from past electoral cycles, inaction on past movements in state government, or a general inference that they must be involved because they just have to be. Which brings me to this:

      No, DCA and Sacramento is killing the athletic commission and that’s a story.

      And then they’re going to replace it with more cronies and partially retired people. NGAF and since it is all you post on this blog, there are no stories about actual fights or events in the fight game not related to this investigation that will lead to no significant change in the fight game. Nothing about TV ratings. Nothing about buys. Nothing about fights. Nothing about signings. Nothing about the relationship of UFC with its TV network. Nothing about the growth of the sport in Brazil. Nothing about using Macau as a gateway to China. Nothing about the UFC 153 changes. Nothing. Nothing Nothing Nothing.

      Boxing has two TV network deals this year. UFC has a stacked card on Fox in December. K-1 staged a semi-successful show and paid everyone that fought in LA. OneFC and LegendFC keep on trucking. Chavez Jr., GSP, Ward, Badr Hari – no stories about them. Everyone that posts on the site jacks these threads to talk about other things. It is a miracle they still come!

    • Alan Conceicao says:

      Seriously, this doesn’t require 3000 pieces. You should be doing at most a piece about this every month that is concise and gives a summation of the events. This is ridiculous. It is incredibly difficult to try and follow this “story” because you’ve made the foibles of irrelevant men into mountain rather than quickly sum up the vast array of molehills that they are.

      • Tomer says:

        Well, hey, I’ve been following this story pretty well and I enjoy the detail Zach’s put into it, but to each their own… *shrugs*

      • Zach Arnold says:

        You should tell that to the state Legislature, which based their audit request on our budget articles. Might want to tell that to the folks at DCA, Governor Brown’s office, and the AG’s office in LA who I can comfortably say are reading this site daily.

        It’s OK, though, just a conspiracy theorist. 🙂

        • Alan Conceicao says:

          Awesome. I hope their traffic validates any that has departed since you stopped actually writing about fighting.

      • Zach Arnold says:

        It’s either reporting legitimate news or doing a recap of how bad TUF ratings are (947k), how one of the poster children for the show (Bristol Marunde) is a (reported by Dave Meltzer) testosterone user, and how Dana keeps saying he’s bored during the show.

        http://www.mmafighting.com/ufc/2012/9/17/3349630/michael-bisping-on-joseph-benavidez-ill-expletive-strangle-him-when-i

        Or I could focus on Michael Bisping and Joe Benavidez having a Twitter war over who punches harder.

        I can be accommodating for you.

        • Alan Conceicao says:

          I gave you probably 20 examples of things that you could be writing about. I’d honestly rather see a recap of TUF than read another one of these pieces that should be compressed into about 4 sentences in a more coherent and comprehensive piece. I know I talk bad about women’s MMA all the time, but you didn’t even cover the last Ronda Rousey fight at all, and that was viewed by more people than any of the UFC on Fuel cards by a wide margin.

  3. Clint says:

    Alan
    You protest too much about somethin you are not concerned about.
    I think you agenda is to shut Zach up.

    • Zach Arnold says:

      No, his agenda is to always tell me how he’s right and I’m wrong. He’s been doing it for many years now. 🙂

      I invited him before to write for the site and would always be open to him contributing.

  4. The bottom line is the DCA has no business involved with combat sports in California. They are ignorant to the responsibilities and were completely blind years ago when they hired Armando Garcia at EO for the CSAC. He was from Florida and had no experience in California. Pat Russell and Dean Lohuis for that matter had 25 years experience in the State dealing directly with promoters, fighters, managers and trainers and were logical candidates for the position. The DCA hired Garcia instead and the carnage of his 3 years in office is still being dealt with, and in fact is the primary reason I am no longer promoting professional boxing shows in Monterey. It’s comical that Garcia was removed from office charged with sexual harassment of the very female he instructed to make things difficult for me and I assume other small promoters. Interesting that Mr. Woodward, who was well aware of how Garcia intentionally injured my last 6 shows during his reign of terror was prevented to speak on my behalf despite seeing the unsupported decisions Garcia made to disrupt my events that were incredibly smooth and successful prior to his appointment. Note also, the Dean, Che, and other staff members were also gaged, and in fact were complicit in messing with my promotions for fear the Garcia would come down on them.

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