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Case: 19-1068 Document: 00117449126 Page: 1 Date Filed: 06/07/2019 Entry ID: 6259555

No. 19-1068

IN THE UNITED STATES COURT OF APPEALS


FOR THE FIRST CIRCUIT

AUSTIN TROUT

PLAINTIFF-APPELLANT

v.

ORGANIZACIÓN MUNDIAL DE BOXEO, INC.

DEFENDANT-APPELLEE

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE


DISTRICT OF PUERTO RICO

REPLY BRIEF OF PLAINTIFF-APPELLANT

MIGUEL J. ORTEGA NUÑEZ


USCA No. 94262
CANCIO, NADAL, RIVERA & DIAZ, P.S.C.
PO BOX 364966
San Juan, Puerto Rico 00936-4966
Tel: (787) 622-2222
Fax: (787) 622-2238
mortega@cnrd.com
Attorneys for Plaintiff-Appellant Austin Trout

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TABLE OF CONTENTS

I. ARGUMENT ........................................................................................................5

A. The Honorable Court Erred when it ruled that the Contract Venue
Clause contained in Section 35(d) of the WBO’s Championship
Regulations is not controlling over the instant controversy. Likewise,
the Honorable District Court erred when it ruled that Defendant WBO
did not waive any and all rights with respect to the enforcement of an
arbitration clause.

B. The Honorable Court erred when it ruled that the claims under the
Muhammad Ali boxing Reform Act are bound by the purported
arbitration agreement.

II. CONCLUSION AND PRAYER ......................................................................14

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TABLE OF AUTHORITIES

Statutes

H.R.RepNo. 106-449 (1999)………………………………………………………10

Muhammad Ali Boxing Reform Act, 15 USCS §§ 6301 et seq ............................8, 9

Professional Boxing Safety Act of 1996, 15 USCS §§ 6301-


13…………………………………………………………………………………8

S.RepNo.106-83(1999)……………………………………………………………10

Section 35(d) of Appellee Organización Mundial de Boxeo, Inc’s .................. 5, 6,7

Section 35(e) of Appellee Organización Mundial de Boxeo, Inc’s ........................5,7

106Cong.Rec.H11653(daily ed. Nov. 8, 1999)……………………………………11

106Cong.Rec.H11654(daily ed. Nov. 8, 1999)……………………………………12

106Cong.Rec.H3489-H3490(dailyed.May22, 2000)……………………………5,13

Cases

Bercovitch v. Baldwin School, Inc.


133 F. 3d 141, 149 (1st Cir. 1998) .......................................................................8, 14

Tankanow v. Rivera
22 Mass.L.Rep.596 (Mass.Super 2007). ....................................................................9

Law Reviews and Journals

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D. Moore, "Down for the Count: Is McCain's Bill the One to Lift Boxing Off the
Canvas," 4 Va. Sports & Ent. L. J. 198, 212-14 (2005) …………………………….8

Michael J. Jurek, " Janitor or Savior: The Role Congress in Professional Boxing
Reform," 67 Ohio St.L.J. 1187 (2006). ……………………………………………..9

Scott Baglio, " The Muhammad Ali Boxing Reform Act: The First Jab at
Establishing Credibility in Professional Boxing," 68 Fordam L.Rev. 2257, 2268
(2000)………………………………………………………………………………9

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I. ARGUMENT

“The day this bill is signed into law cannot come soon enough.
I pray justice will be done and somehow, along the way, honor
can be restored to this sport.”

Muhammad Ali, 106 Cong. Rec. H3489-H3491 (daily ed. May


22, 2000)

The appearing Appellant hereby replies to Appellee WBO’s Opposition Brief.

This reply will address certain specific matters raised in Appellee’s opposition brief,

and it fully adopts and incorporates herein the Appeal Brief filed on April, 2019.

A. The Honorable Court Erred when it ruled that the Contract Venue
Clause contained in Section 35(d) of the WBO’s Championship Regulations
is not controlling over the instant controversy. Likewise, the Honorable
District Court erred when it ruled that Defendant WBO did not waive any
and all rights with respect to the enforcement of an arbitration clause.

In its opposition brief, the WBO tries to support the District Court’s finding that

there was “no tension between the two clauses (35(d) and 35(e))”, further concurring

with the District Court in that “these provisions of the Championship Regulations

can be reconclided by applying “Section 35(d) [to] govern[] choice of law forum in

the event the WBO is made a party to a litigation regarding a dispute not subject

to arbitration.”” (App. 474). The WBO goes further to argue that this is evidenced

by the fact of the forum-selection provision’s express applicability to appeals from

the Grievance Committee, which is the WBO’s arbitral forum. (Appellee’s

Opposition Brief, page 10).

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However, Section 35(d) provides a much broader jurisdictional window when

it comes to making the WBO a party.

Section 35(d) of the WBO Championship Regulations states:

These Regulations are to be interpreted in conformity with the Laws of


the Commonwealth of Puerto Rico. All WBO Participants agree and
consent that the exclusive venue for any or all action in which the
WBO is made a party, whether it is to enforce, interpret or declare
the application of these Regulations or to appeal from any
determination of the WBO, including, but not limited to a
determination of the Complaints and Grievance Committee1, may
be maintained only in the Superior Court of the Commonwealth of
Puerto Rico, or, if applicable, in the U.S. District Court for the
Commonwealth of Puerto Rico.

Contrary to the WBO’s contention, Section 35(d) not only applies to appeals

from determinations of the WBO, but also when a party seeks to enforce, interpret

or declare the application of these Regulations. Therefore, in cases dealing with

the enforcement, interpretation or a declaration of application of the WBO

Championship Regulations, where the WBO is a party, the only permitted

forums are the Courts of the Commonwealth of Puerto Rico or the Federal

District Court for the District of Puerto Rico.

As to the issue of waiver, the WBO seems to argue that it could have requested

the case to be sent to arbitration only after the case was brought to the Federal

District of Puerto Rico. This argument simply holds no water. The WBO could have

1 Further corroborating that a finding of the Grievance Committee is a finding of the WBO itself.

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requested the case to be sent to arbitration when the claim was first filed in the New

Mexico State Court on November 2015. It did not. The WBO could have requested

the case to be sent to arbitration when the case was removed to the New Mexico

Federal District Court in February 2016. It did not. As a matter of fact, Section 35(e)

of the WBO’s Championship Regulations is not used once in the WBO’s arguments

to bring the case to the District of Puerto Rico. If the WBO’s purported reason to

bring the case to the District of Puerto Rico was so that it could lawfully ask for the

case to be sent to arbitration, the WBO would, or should, have said so. It simply did

not. At all times, the WBO unequivocally averred that the parties were required to

litigate this claim in the courts of Puerto Rico, pursuant to Section 35(d) of the

WBO’s own Championship Regulations. After almost 4 years of litigation, and tens

of thousands of dollars in costs and fees, it would amount to a failure of justice to

allow the WBO to shift horses after arguing against any other section but 35(d) for

21 months2.

B. The Honorable Court erred when it ruled that the claims under the
Muhammad Ali boxing Reform Act are bound by the purported arbitration
agreement.

In order to establish that the claims under the Muhammad Ali Act are not subject

to arbitration, Appellant must point to something in the text or the legislative history

2 And now blaming Appellant for conducting himself in “defiance of governing forum-selection and
arbitration provisions contained in the WBO Championship Regulations”. (Appellees Opposition Brief, page
11)

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of the Act that precludes enforcement of the arbitration agreement, or show an

inherent conflict between the policies and purposes of the Act and mandatory

arbitration. Bercovitch v. Baldwin School, Inc., 133 F.3d 141, 149 (1st Cir. 1998).

While the discussion of the text of the Muhammad Ali Act was made in the appeal

brief, Appellant Austin Trout hereby proceeds to discuss the legislative intent behind

the statutory text. As the Honorable Court will readily observe, the legislative intent

is inapposite to a mandatory arbitration clause in which the entity against which

claims of illegal, fraudulent and potentially criminal acts are attributed, will

designate the individuals to decide upon such allegations.

Under the Professional Boxing Safety Act of 1996, Pub. L. No. 104-272, 110

Stat. 3309, codified at 15 U.S.C. § 6301-13, the first federal legislation related to

boxing was adopted. It established health and safety standards, and limited oversight

by the Justice Department and the Federal Trade Commission was authorized. See

D. Moore, "Down for the Count: Is McCain's Bill the One to Lift Boxing Off the

Canvas," 4 Va. Sports & Ent. L. J. 198, 212-14 (2005) ("Down for the Count"). This

legislation was amended in 2000 with the adoption of the Muhammad Ali Boxing

Reform Act of 2000, Pub. L. No. 160-210 § 3, 114 Stat. 321, 322 (2000), codified

at 15 U.S.C. § 6301 et seq. (hereinafter “Ali Act”). By adopting the Ali Act, Congress

made specific findings about the professional sport of boxing. Congress stated that,

unlike other sports, it operates without a centralized industry organization to

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establish uniform and appropriate business practices and ethical standards which has

led to disreputable and coercive business practices in the boxing industry. Pub. L.

106-210 § 2. Congress encouraged on the state officials to closely regulate boxing

events, the welfare of boxers, and to "serve the public interest by closely supervising

boxing activity in their jurisdiction." Id. Congress also indicated that state boxing

commissions do not receive adequate information to determine whether boxers

competing in their jurisdiction are being subject to contract terms and business

practices which may violate State regulations, or are onerous and confiscatory. Id.

Corruption and manipulation against professional boxing sport have been described
as a plague of problems and nightmarish reality.

It has all of the ingredients of an Oscar-winning movie or a best selling


novel--passion, glory, manipulation, scandal, corruption, a fall from
greatness, and a desperate fight for survival. This storyline is not the
vision of a screenwriter or novelist, but rather the nightmarish reality of
the current state of professional boxing. Tankanow v. Rivera, 22 Mass.
L. Rep. 596 citing Michael J. Jurek, " Janitor or Savior: The Role
Congress in Professional Boxing Reform," 67 Ohio St.L.J. 1187 (2006).
There are a variety of reasons offered for the problems that plague
boxing, including the lack of a central governing authority, but "[m]any
of the opportunities for manipulation result from an unequal balance of
power, in which promoters and sanctioning bodies can force boxers to
accept their contractual terms and fees." Id., citing Scott Baglio, " The
Muhammad Ali Boxing Reform Act: The First Jab at Establishing
Credibility in Professional Boxing," 68 Fordam L.Rev. 2257, 2268
(2000).

When the House of Representatives Committee on Commerce was referred


the bill (H.R. 1832) to reform unfair and anticompetitive practices in the professional

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boxing industry, while discussing the need for the legislation, it concluded the
following:

The Committee believes that this legislation is needed to reduce


corruption and conflicts of interest in boxing, to protect boxers from
unethical practices in the sport, to assist the States in regulating the
sport, and to increase public confidence in boxing's integrity. The
Committee also believes the legislation is necessary to make various
improvements to the Professional Boxing Safety Act of 1996 that have
been requested by the State regulators to provide them with more
flexibility and oversight.

H.R. Rep No. 106-449, at 9 (1999).

Meanwhile, the Senate’s Committee on Commerce, Science, and


Transportation which was referred the bill (S. 305), having considered the same,
reported favorably thereon with amendments and recommendations. The Senate’s
Committee referred the need to establish the Ali Act, as follows:
The Committee believes that a modest series of targeted public interest
reforms of the professional boxing industry can have a very positive
impact on the industry. The sport has no league, governing body, or
private sector association of industry leaders to establish fair business
practices and discipline improper and arbitrary conduct. There has long
been serious public concern about the continuing scandals and litigation
which occur in professional boxing due to the lack of responsible self-
regulation on a national basis. The Committee concurs with most
credible members of the boxing industry that problems stemming from
the activities of major promoters and sanctioning organizations cannot
be adequately addressed on a state-by-state basis. The Committee
emphasizes the vulnerability and lack of leverage most professional
boxers have with respect to various arbitrary business practices of
these entities in the sport.

S. Rep No. 106-83, at 2-3 (1999).

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Congress of the United States considered and passed the bill H.R. 1832. On
November 08, 1999, the House of Representatives of the United States moved to
suspend the rules and pass the bill H.R. 1832, as amended. Part of the discussions
made on such date was the inclusion of various letters for the Record. One which
was included was made by Mr. Muhammad Ali, on November 8, 1999 to the House
of Representatives, and expressed that “[w]e strongly support this bill which will
protect boxers from exploitations and unfair treatment by unscrupulous promoters
and other business interests that dominate this troubled industry.” 106 Cong. Rec.
H11653 (daily ed. Nov. 8, 1999).
Also, New York Representative, Eliot Engel spoke to the Members about his
strong support of the bill H.R. 1832. He added the following:

For years, there has been widespread concern about the boxing industry
in the United States. Not only have scandals plagued the industry as
long as I can remember, but fighters have been taken advantage of
financially and opportunities to compete for a title have not always been
awarded to legitimate contenders.
As you know, Madam Speaker, almost every other major sport in the
United States operates with a central body to establish appropriate
business standards and effective mechanisms of self-regulation. Not
boxing. Boxing exists in a world of alphabet soup organizations
whose rating methodologies are as ephemeral as the famous Ali
``mirage'' and promoters who are as untouchable as Ali was behind
the ``rope-a-dope.''
The purpose of the Muhammad Ali Boxing Reform Act is to
increase disclosure and prevent abuses in professional boxing,
specifically targeting conflicts of interest that arise for promoters.
H.R. 1832 limits contracts between boxers and promoters, ending the
coercive practice of requiring long contracts for fighters to obtain
particular bouts.
The bill also seeks to ensure that the manager is an independent
advocate of the boxer, not an agent serving the financial interest of the
promoter.

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Furthermore, the sanctioning organizations would have to


establish objective criteria for the rating of professional boxers and
fully disclose their by-laws, rating systems, and officials.
I firmly believe that with these limitations, the boxing industry can
take a giant step toward the 21st century and the ending of
corruption.

106 Cong. Rec. H11654 (daily ed. Nov. 8, 1999).

On May 22, 2000, the House of Representatives of the United States moved
to concur in the Senate’s amendments to the bill H.R. 1832 to reform unfair and anti-
competitive practices in the professional boxing industry. While discussing such
last amendments made by the Senate, Representative Michael G. Oxley, from the
State of Ohio, proudly sponsored bill H.R. 1832 and spoke to all Members the
following:
The Muhammad Ali Boxing Reform Act, which we consider today,
amends the Professional Boxing Safety Act to expand the consumer
protections and anti-bribery provisions. It prevents promoters,
sanctioning bodies, and networks from forcing boxers into coercive
contracts as a condition of participating in a mandatory bout. No
longer will promoters be able to abuse boxers and monopolize the sport
by requiring boxers to sign away all their rights in order to get a big
break or keep their ranking.
The bill also cleans up the arbitrary ranking systems of sanctioning
bodies. In the past, promoters and sanctioning bodies have been
able to rig the sport by placing favored boxers who have signed
away promotional rights in the top rankings. Boxers who do not
grant appropriate favors are arbitrarily dropped from the ranking
or prevented from moving up. This bill requires the sanctioning
bodies to publish written criteria for ranking boxers and requires
sanctioning bodies and promoters to disclose all revenues and other
compensation received in connection with the boxers to minimize
the opportunities for bribery and back-room dealing.
This new system will force sanctioning bodies to rank boxers based
on merit not subservience. It will mean new opportunities for honest
boxers who are trying to fight their way up the rankings and more

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integrity and respect for the sport since boxing fans will know that
championship matches are being fought by true champions.

106 Cong. Rec. H3489-H3490 (daily ed. May 22, 2000).

Several matters can be established from the review of the above referenced

excerpts. First, there is a strong concern on part of both Senators and Representatives

as to the corruption that has permed professional boxing and its elements, which

include sanctioning bodies like Appellee WBO. The clear intent of the Act is to

eradicate, to the greatest extent possible, corruption in professional boxing.

Second, it is evident that the legislative intent was to further regulate

professional boxing and provide states with more ample regulatory powers. In the

specific case of sanctioning bodies, the legislative intent was to enable a series of

statutory disclosures to ensure transparency and compliance with the Act.

The plain text of the Act and the legislative intent seek to limit the sanctioning

bodies’ powers by requiring, among other things, that they use an objective criteria

to rank professional boxers and to disclose their rankings and the reasons for any

change thereto. Said language and intent is wholly inconsistent with allowing the

WBO, and potentially promoters, managers and any other figure the Act seeks to

protect boxers from, to use an arbitration clause in its contracts deeming itself or a

self-appointed arbiter as the self-binding authority.

For all legal and practical purposes, to allow mandatory arbitration under the

Muhammad Ali Act would render the Act inoperative as to the vindication of
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professional boxers’ rights. In no time, promoters, managers and advisors will

include boilerplate arbitration clauses in their contracts with boxers in order to

effectively by-pass the requirements of the Muhammad Ali Act. Furthermore, if the

District Court’s ruling is upheld, said arbitration clauses will require boxers to

submit themselves to an arbiter appointed, and subject to removal, by the opposing

party.

It cannot be the legislative intent to require sanctioning bodies to use an

objective criteria for ranking boxers and make these disclosures only to leave them

the sole discretion, by way of a mandatory arbitration clause, of enforcing those

requirements and somehow discipline themselves for their unlawful acts.

The is an inherent conflict between the policies and purposes of the

Muhammad Ali Act and mandatory arbitration. Bercovitch v. Baldwin School, Inc.,

133 F.3d 141, 149 (1st Cir. 1998).

II. CONCLUSION AND PRAYER

The appearing party, Plaintiff/Appellant Austin Trout respectfully requests

from the Honorable Court to reverse the judgment entered by the Honorable District

Court on September 30, 2018 and November 26, 2018 and to remand the case to the

District Court for the continuance of any and all further proceedings.

RESPECTFULLY SUBMITTED.

In San Juan, Puerto Rico, this 7th day of June of the year 2019.

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CANCIO, NADAL, RIVERA & DIAZ, P.S.C.


PO BOX 364966
San Juan, Puerto Rico 00936-4966
403 Ave. Muñoz Rivera
Hato Rey, P.R. 00918-3345
Tel: (787) 767-9625
Fax: (787) 622-2238
s/ MIGUEL J. ORTEGA NUÑEZ
USCA No. 94262
mortega@cnrd.com

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