« California still “researching the legal basis” for grabbing athletic inspector $ | Home | Lawyer Pat English slams USADA over handling of Erik Morales drug testing »
Court ruling against Dan Goossen will scare California-based fight promoters
By Zach Arnold | February 11, 2013
A Los Angeles Superior Court trial ruling by judge Conrad Aragon against California-based boxing promoter Danny Goossen last week could set the stage for all major California-based fight promoters to no longer sign or solidify contracts with fighters & associates while being located in California.
Judge Conrad Aragon, who was supposed to retire in February 2011, issued a rather … unique ruling against Dan Goossen in regards to Goossen’s lawsuit against boxer Tony Thomspon. For a full background on the lawsuit, click here to read Dan Rafael’s article on the matter.
A quick summary of facts regarding the lawsuit: Goossen (of Goossen-Tutor Promotions) is based in California. Tony Thompson is a DC-based fighter with Maryland jurisdiction. Goossen claims that he and Thompson made an oral agreement over the phone in which Thompson allegedly agreed to give Goossen a % of money in exchange for Goossen being his promoter in setting up a fight with Wladimir Klitschko (K2 Promotions). Goossen claims that after he negotiated the fee to set up the fight, Thompson breached the oral agreement and committed fraud by stiffing him on the deal while receiving the benefits of his work.
A California attorney representing Thompson responded to the lawsuit. No denial was made by the Thompson camp that there was an oral agreement. There was no denial that Danny Goossen’s efforts produced the fight for Thompson. What Thompson’s California lawyer argued is that the agreement wasn’t in writing… and that California regulations requires a deal be in writing.
That’s right, Thompson’s attorney claimed that Danny Goossen needed a written contract and that California has jurisdiction over worldwide business dealings.
Goossen’s side fired back and said that the jurisdiction for the oral contract is in Maryland. Furthermore, the state regulations for California applies to fights only in California. The California State Athletic Commission has regulatory power over what happens in California and nowhere else. Plus, the agreement between Goossen and Thompson isn’t a California contract.
We have a California promoter entered into an oral agreement (contract) with a Maryland fighter in Washington D.C. against a Ukranian fighter… for a fight that took place in Switzerland… and it was claimed that the bout contract itself ended up under the auspices of German law.
Goossen’s side argued that California cannot regulate interstate commerce because the Commerce Clause in the United States constitution establishes that only the Federal government can regulate interstate commerce. California has jurisdiction over what happens in California and the Ali Act has jurisdiction in all 50 US states. The Ali Act doesn’t extend outside the boundaries of America.
Judge Conrad Aragon ruled against Goossen and sided with Thompson.
One source, on background, claims that Goossen’s side will not go to the Court of Appeals to dispute the ruling because if the CoA upholds Aragon’s ruling, then such a ruling would be binding on other trial courts.
The net impact of Judge Aragon’s ruling? The major fight promoters who are based in California are going to be compelled to no longer sign deals in California with fighters who are licensed in other states like Nevada or Texas. If a promoter is licensed in Nevada and a fighter is licensed in Nevada, then the promoter will damn make sure that the deal is consummated in Nevada (where there is a hands-off approach) instead of California. You can bet that Goossen-Tutor Promotions and Golden Boy are going to make sure to conduct their contract dealings outside of California.
The text of Judge Conrad Aragon’s trial ruling
This document is a public record. Los Angeles Superior Court, case number BC487179.
In the ruling, you’ll notice a claim that argues that Washington D.C. also requires written contracts. That doesn’t pass the smell test. D.C.’s regulations apply to fights that happen in Washington D.C., not in a country like Switzerland.
Furthermore, take note that the ruling uses the word “manager” for Goossen when his side claims he entered into a deal with Thompson to be his promoter. This is critical to focus on. Why? Judge Aragon seizes upon this to claim that Goossen is a manager, not a promoter, and that California law takes precedent on the business dealings involving a non-California fighter for a fight taking place in a foreign country. In addition to arguing that Goossen was a manager and not a promoter, Judge Aragon claims that Goossen needs to be licensed as a manager by the California State Athletic Commission in order to file the lawsuit in LA Superior Court.
RULING ON THOMPSON DEMURRER
Defendant Anthony Thompson demurs to the first (breach of contract), second (false promise) and eighth (declaratory relief) causes of action in the first amended complaint.
In response to the sustaining of a prior demurrer (to the breach of contract cause of action), the plaintiff (GTP) amended by alleging that the contract between it and Thompson was entered into in Maryland (because Thompson is a Maryland resident and, as offeree, accepted the contract over the telephone while in Maryland). But that does not end the inquiry, since, even if Maryland law controls the legality of the contract (between Thompson and GTP), plaintiff neglects to defend its legality under Maryland law. For all we know, such contracts — between fight managers and professional boxers in that state, must be in writing. But this conflict of laws issue is entirely beside the point.
There is length, and in the end, fruitless discussion about the impropriety of applying California law regulating managers and boxers. The Commerce Clause is cited, plaintiff declaiming at one point that this state’s law “limiting its role to regulating boxing contests in California” is not so comprehensive in scope as “to regulate an international boxing contest in Bern, Switzerland.”
But what plaintiff misses is the simple fact that California law (Business & Professions Code 18620 et. seq) has no such pretensions. It is true that any contest occuring in California must be under the commission’s auspices (18640). Certainly, no California commission official could control the conduct of a contest outside of California. But that does not mean that a contract between a California manager, such as GTP, and a boxer, such as Thompson, is not subject to regulation. Quite to the contrary.
Under the statutory scheme, GTP is a “manager” as that term is defined under 18628. It is not a “promoter,” despite GTP’s self description. Under 18622, “the words ‘club’ and ‘promoter’ are synonomous [sic]… and mean a corporation [etc.] which conducts, holds, or gives a boxing… contest…” A manager, on the other hand, is “any person who” by contract “undertakes… to represent… the interest of any professional boxer… or with respect to the arrangement… of… any professional contest in which the boxer… is to participate.”
Thus, by its own allegations, GTP is a manager “duly authorized and existing by virtue of the laws of the State of California.” It then goes on incorrectly to allege that it does “business as a boxing promoter.” It may well be a promoter, but the allegations of this complaint as they relate to GTP’s contractual relationship to Thompson, fit the Code’s definition of a manager. As such manager, it is bound by the provisions of 18642: “No person shall… serve in the capacity of a… manager… unless he… has been licensed for that purpose by the commission.”
Either GTP is a licensed manager or it is not. If it is not, then it cannot seek the protections of this state to recover compensation for services as a fight manager. It if it licensed, then it has agreed to be bound by the commission’s rules and regulations relating to contracts between it and any boxer, including the regulations requiring a writing and approval of the contract by the commission, wherever in the world the contest might be venued. This result is consistent with the rationale and the holding in Castillo vs. Barrera (2007) 146 Cal. App 4th 1317 (which, among other points, held that plaintiff could not recover even under a quantum meruit theory, since to allow it would circumvent the protective provisions of the Boxing Act).
Plaintiff apparently hopes to distinguish this case from the Castillo case on the ground that the acceptance of the contract here under review was made in Maryland. This distinction might make a difference if it was the fight manager who accepted the contract in Maryland (assuming Maryland has no comparable Boxing Act). But so long as a manager, whether acting with or without a license, “does business in California” — as plaintiff admits it does, then it must make its contracts according to the dictates of the law of this state.
The “promise” that is the basis of the false promise cause of action is the same “promise” that serves as an element of the breach of contract cause of action. The promise is still the basis of a contract which should have been compliant with the rules and regulations promulgated under the state (B & P Code 18620 et. seq). Therefore, it fails for the same reason that the breach of contract action fails.
The declaratory relief action seeks a declaration of rights. However, since plaintiff does not allege that it is authorized to prosecute its oral contract claim against Thompson, it, too, must fail. Plaintif argues that it is impermissible to “reconsider” a demurrer to this cause of action because a prior demurrer to that cause of action was overruled. But, in the interests of judicial economy, it makes no sense to proceed to trial in order to seek a declaration that GTP has rights that it clearly does not have — namely, the right to enforce an oral fight contract.
The demurrers will be sustained without leave to amend unless plaintiff can make an offer of proof to the effect that it is a licensed manager and that its contract with Thompson was in writing approved by the commission.
Dated February 6, 2013.
Conrad Aragon
Superior Court Judge
Topics: Boxing, CSAC, Media, Zach Arnold | 9 Comments » | Permalink | Trackback |
“The net impact of Judge Aragon’s ruling? The major fight promoters who are based in California are going to be compelled to no longer sign deals in California with fighters who are licensed in other states like Nevada or Texas.”
I would think that the net impact of the ruling would be this: Get agreements articulated in writing and have both parties sign them. The crux of the Goosen-Thompson issue, as far as I can tell, is that the agreements were made in conversation via the telephone. No one signed anything or committed a single thing to paper. If things went down the way they seem, that’s pretty crappy of Thompson. But Dan has been in this business a long time. He should know better.
I wish it was that simple — but it’s not. Let me translate that ruling from Judge Aragon:
– “You’re a manager, not promoter for Tony Thompson.”
– “Since you’re suing in California and I consider you a manager and not a promoter, you need a manager’s license for your deal (even if Tony Thompson isn’t a fighter in California and the contract jurisdiction is outside of California).”
– “Since I consider you a manager and you have no manager’s license, you have no valid deal because it isn’t written and since you’re in California you need your contract signed off by the state athletic commission (even if the fighter isn’t based in California and even if the fighter isn’t fighting in California) from which you are supposed to get a manager’s license from.”
Do you see how convoluted this gets? The end conclusion from the ruling is that California’s athletic commission has the power to oversee business dealings throughout the entire United States and throughout the world for any California-based promoter.
Even if you agree that there should have been a written contract… and even if you *agree* that Goossen should be considered a manager and not a promoter in the deal… how on Earth does a judge logically claim that suing Thompson in California means that CSAC has jurisdiction over business dealings happening in other states, let alone other countries with fighters who are not California residents?
Trust me, the insider reaction in promoter circles to this ruling has been quite fascinating — and not many good words being said about California, either.
Follow Judge Aragon’s logic — he’s claiming that if you’re a California-based promoter and you sue over a contract with a fighter, even if they aren’t based in California and jurisdiction of the contract is outside the realm of California, you have to have the contract signed off by CSAC. When there’s a dispute over contracts signed off by CSAC, guess where it leads us (if past history is any sort of indicator)? To Karen Chappelle (that lying hack from the AG’s office in Los Angeles) and her string-pulling behind the scenes. The last time her name came up in a high-profile arbitration hearing, it happened to be in reference to a judge ruling that her and/or Earl Plowman at the AG’s office lied about Armando Garcia signing off on a deal to allow GTP fighter Robert Guerrero to move over to Golden Boy. The judge called it undue fraud and/or corruption.
Even if you agree that there should have been a written contract… and even if you *agree* that Goossen should be considered a manager and not a promoter in the deal… how on Earth does a judge logically claim that suing Thompson in California means that CSAC has jurisdiction over business dealings happening in other states, let alone other countries with fighters who are not California residents?
Goosen/Tudor Promotions is based in California, and the core problem here is that no contract was ever solidified or validated in the state or anywhere else, which is why Goosen lost. If Goosen had a contract made up that gave him the title of manager for Tony Thompson anywhere pertinent to that particular jurisdiction, then he would go to that jurisdiction. Instead, he had nothing, which meant he had no case, which meant he went to California where he was based and had the best chance at winning against Tony for work he did on less than a handshake deal.
Matter of fact, I feel like you’re intentionally misreading this to make a story out of it. If I’m a fighter based in Michigan and I sign a deal with Golden Boy Promotions, and I determine for whatever reason that GBP has illegally withheld purse money from me or is trying to enforce illegal contract stipulations regarding a fight I had in Mexico, I don’t sue them in Michigan because they do not operate here. I don’t sue them in Mexico because at best I’d get a shell company, if they even have a proper office there. I’d sue them in California. And the state of California does have jurisdiction in this sort of thing. Just doing a quick search, I see that Prize Fight Promotions LLC of TN has been sued twice by former fighters Shawn Porter (Ohio based) and Fernando Guerrero (MD based) in the state of Tennessee. I see that James Kirkland filed in Federal Court when he sued Golden Boy. Of course, those are promoters being sued by fighters, not the other way around. In MMA, the UFC sued Randy Couture in a Nevada district court. Apparently then that Nevada district court considered itself capable of claiming jurisdiction over Randy’s ability to fight overseas during the period that he beefed with Zuffa – is that a similarly abusive situation? I’m guessing not.
1) Before I wrote the article, I spent time discussing it with multiple lawyers to try to get a read on what I was digesting on this front. I found the ruling confusing because it didn’t make much sense and it makes even less sense now.
2) The UFC/Couture lawsuit involved both parties being based in Nevada. Thompson is not based in California nor was his scheduled fight against Klitscko in Nevada, let alone the US. Plus, the jurisdiction for the oral agreement is in Maryland/DC, not California.
3) Thompson’s lawyer did not deny that a deal existed. They simply claimed that a ‘sophisticated’ (their word) promoter like Goossen have a written contract and that the contract be approved by the California State Athletic Commission… for a fight that CSAC can’t regulate and for a business deal that isn’t happening in California!
That’s the bigger point of this goofy ruling — the judge said that if you’re going to sue in California, then you have to have approval of the state athletic commission for business dealings that are happening outside the state. And if there’s a dispute and it goes to arbitration, the hacks at the AG’s office in Los Angeles get involved along with CSAC to make a decision, not the courts!
I’m not disagreeing with anyone who said that there should have been a written contract instead of a verbal deal. However, the judge said that even if there was a written contract, CSAC would have authority over a business deal that doesn’t involve a fight in California. As I said earlier, this is simply going to push Goossen and Golden Boy from actually doing deals in California. It won’t stop them from holding fights in California, but they’ll just make deals in Nevada or Texas for contract negotiations from now on.
FuelTV is coming to Comcast….
It will add a potential 22 Million more homes…
Big news for FOX and the UFC…
And from what people are saying… It is going into the basic cable package on Comcast.
If they have FuelTV (FOX Sports 2) in more homes in HD…. I could see the UFC Fuel shows pulling in 500,000. Which means this FOX experiment could pay off. I think in a perfect UFC World they would do….
1) FOX – 4 to 5 Million
2) FX (FOX Sports 1) – 1.5 Million
3) FuelTV (Fox Sports 2) – 500,000
[…] February 11th, we wrote an article titled Court ruling against Dan Goossen will scare California-based fight promoters. A quick summary: Goossen had a verbal contract with Tony Thompson with Maryland jurisdiction. […]
Nice post and the information given in this blog is extremely good.
Whats really crappy, is that evidently/ ALLEGEDLY promoters will sign side deals with international promoters without the boxers consent to hold funds even when they have LOST the case!!!! SHAME ON K2 FOR NOT RELEASING THE PURSE, EVEN AFTER THE RULING! SHAME ON GOOSEN! BOXERS IF YOUR COMPETING OUTSIDE OF THE UNITED STATES, PLEASE BE AWARE THAT YOUR PROMOTER MAY HAVE A SIDE DEAL WITH THE OVERSEAS PROMOTER, THAT VEST THE INTEREST OF THE LOCAL PROMOTER!