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Case: 19-1068 Document: 00117440099 Page: 1 Date Filed: 05/16/2019 Entry ID: 6254601

No. 19-1068

UNITED STATES COURT OF APPEALS


FOR THE FIRST CIRCUIT

AUSTIN TROUT,

Plaintiff-Appellant,

vs.

ORGANIZACIÓN MUNDIAL DE BOXEO, INC.,

Defendant-Appellee.

__________________________________________________________________

Appeal from the United States District Court for the District of Puerto Rico
__________________________________________________________________

BRIEF OF APPELLEE

JOSEPH LAWS PSC RODEY, DICKASON, SLOAN,


Joseph C. Laws, Jr., Bar No. 25698 AKIN & ROBB, P.A.
Post Office Box 10143 Edward Ricco, Bar No. 1187395
San Juan, Puerto Rico David W. Bunting, Bar No. 1187442
Telephone: (787) 754-7777 Post Office Box 1888
Albuquerque, New Mexico 87103
LAW OFFICES OF ANDREW W. Telephone: (505) 765-5900
HORN, P.A. FAX: (505) 768-7395
Andrew W. Horn, Bar No. 1187441
2665 South Bayshore Dr., Suite 800
Miami, Florida 33133
Telephone: (305) 373-7789
Fax: (305) 372-9180 Attorneys for Appellee
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CORPORATE DISCLOSURE STATEMENT

Appellee Organización Mundial de Boxeo, Inc, has no parent corporation,

and no publicly traded corporation owns 10 percent or more of its stock.

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TABLE OF CONTENTS

Corporate Disclosure Statement .................................................................................i

Table of Authorities ..................................................................................................iv

Reasons Why Oral Argument Need Not Be Heard ............................................... vii

Statement of Issue ...................................................................................................... 1

Statement of the Case................................................................................................. 1

Summary of Argument .............................................................................................. 3

Argument.................................................................................................................... 5

THE DISTRICT COURT CORRECTLY DETERMINED THAT


TROUT’S CLAIMS AGAINST THE WBO MUST BE ARBITRATED. ............... 5

A. Section 35(e) of the Championship Regulations Is an


Arbitration Clause. ................................................................................ 5

B. Trout Raises No Valid Objection To Enforcing the


Arbitration Clause. ................................................................................ 8

1. The Venue Clause in Section 35(d) of the


Championship Regulations Does Not Negate
the Arbitration Clause in Section 35(e). ..................................... 9

2. The WBO Did Not Waive Arbitration. ..................................... 11

3. Trout Offers No Grounds That Render the


Arbitration Clause Unenforceable. ........................................... 15

4. Trout’s Claims Under the Muhammad Ali


Boxing Reform Act Are Arbitrable. ......................................... 18

Conclusion ............................................................................................................... 23
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ADDENDUM:

WBO Appeal Regulations (Doc. 40-3) ................................................................. A-1

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TABLE OF AUTHORITIES

CASES

Bercovitch v. Baldwin School, Inc.,


133 F.3d 141 (1st Cir. 1998) .................................................................................... 21

Campbell v. General Dynamics Government Systems Corp.,


407 F.3d 546 (1st Cir. 2005) .................................................................................... 21

Citibank Global Markets, Inc. v. Santana,


573 F.3d 17 (1st Cir. 2009) ...................................................................................... 17

Comite Fiestas de la Calle San Sebastian, Inc. v. Cruz,


170 F. Supp. 3d 271 (D.P.R 2016)........................................................................... 10

CompuCredit Corp. v. Greenwood,


565 U.S. 95 (2012) ................................................................................................... 20

Creative Solutions Group, Inc. v. Pentzer Corp.,


252 F.3d 28 (1st Cir. 2001) ..................................................................................... 14

Cruz v. Bristol-Myers Squibb Co.,


699 F.3d 563 (1st Cir. 2012) .................................................................................... 15

Davis v. Global Client Solutions, LLC,


No. 10-322, 2011 U.S. Dist. Lexis 116063 (W.D. Ky. Oct. 7, 2011) ..................... 17

Dialysis Access Center, LLC v. RMS Lifeline, Inc.,


638 F.3d 367 (1st Cir. 2011) .................................................................................... 10

FPE Foundation v. Cohen,


801 F.3d 25 (1st Cir. 2015) ..............................................................................6, 7, 13

Gilmer v. Interstate/Johnson Lane Corp.,


500 U.S. 20 (1991) ................................................................................................... 20

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Hilti, Inc. v. Oldach,


392 F.2d 368 (1st Cir. 1968) .................................................................................... 14

Joca-Roca Real Estate, LLC v. Brennan,


772 F.3d 945 (1st Cir. 2014) ..............................................................................13, 14

Kristian v. Comcast Corp.,


446 F.3d 25 (1st Cir. 2006) ...................................................................................... 17

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,


473 U.S. 614 (1985) ...........................................................................................20, 21

Prime Healthcare Services-Landmark LLC v.


United Nurses & Allied Professionals Local 5067,
848 F.3d 41 (1st Cir. 2017) ...................................................................................... 21

Puerto Rico Telephone Co. v. U.S. Phone Manufacturing Corp.,


427 F.3d 21 (1st Cir. 2005), overruled in part on other grounds by
Hall Street Associates, L.L.C. v. Mattel, Inc.,
552 U.S. 576 (2008) ................................................................................................. 18

Ramirez-De-Arellano v. America Airlines, Inc.,


133 F.3d 89 (1st Cir. 1997) ...................................................................................... 16

Seacoast Motors of Salisbury, Inc. v. DaimlerChrysler Motors Corp.,


271 F.3d 6 (1st Cir. 2001) ........................................................................................ 22

Sevinor v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,


807 F.2d 16 (1st Cir. 1986) ...................................................................................... 14

Shearson/American Express Inc. v. McMahon,


482 U.S. 220 (1987) .....................................................................................20, 21, 22

Soto-Fonalledas v. Ritz-Carlton San Juan Hotel Spa & Casino,


640 F.3d 471 (1st Cir. 2011) .................................................................................. 6, 7

Unisys Puerto Rico, Inc. v. Ramallo Brothers Printing, Inc.,


128 P.R. Dec. 842 (1991)......................................................................................... 15
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Willis v. Nationwide Debt Settlement Group,


878 F. Supp. 2d 1208 (D. Ore. 2012) ...................................................................... 17

STATUTES AND RULES

9 U.S.C. § 2 ............................................................................................................. 6

9 U.S.C. § 5 ....................................................................................................... 5, 18

9 U.S.C. § 10(a) ....................................................................................................... 16

15 U.S.C. § 6307c(b) ............................................................................................... 19

15 U.S.C. § 6307c(c)................................................................................................ 19

15 U.S.C. § 6309(d) ................................................................................................. 19

1st Cir. R. 28.0(a)(2) ................................................................................................. 7

OTHER AUTHORITIES

Muhammad Ali Boxing Reform Act,


Pub. L. No. 106-210, 114 Stat. 321 (2000)................................................................ 1

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REASONS WHY ORAL ARGUMENT NEED NOT BE HEARD

The facts relevant to this appeal are few and are clearly presented in the

record. The issues are straightforward and the parties’ arguments are adequately

presented in the briefs, such that oral argument will not significantly aid the

decisional process. The additional cost to the parties and burden on the Court of

holding oral argument are not justified by need or benefit in the circumstances

presented by this appeal.

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STATEMENT OF ISSUE

Whether the district court correctly determined that the claims asserted by

Appellant Austin Trout against Appellee World Boxing Organization in this lawsuit

must be arbitrated?

STATEMENT OF THE CASE

Appellant Austin Trout is a resident of New Mexico and a professional

boxer. (App. at 281-82, ¶¶ 4, 6.) Appellee Organización Mundial de Boxeo, Inc. –

the World Boxing Organization (“WBO”) – is an organization that sanctions

professional boxing matches and awards championship titles. (App. at 284-86,

¶¶ 14, 22.) In the currently operative amended complaint, Trout alleges that he

was wrongfully dropped from the WBO rankings in his weight class, as a result of

which he was deprived of an opportunity to compete for a world championship.

(App. at 292-95.) He claims that the WBO’s actions violate requirements imposed

on sanctioning organizations in connection with the ranking (rating) of

professional boxers by the Muhammad Ali Boxing Reform Act (“Ali Act”), Pub.

L. No. 106-210, 114 Stat. 321 (2000). (App. at 295-98.) Trout also claims that the

WBO’s actions constitute a breach of contract, fraud, and negligence. (App. at

298-303.)

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This litigation developed in three phases leading to the present appeal from

the district court’s order compelling arbitration. In its initial phase, the suit was

filed in New Mexico state court in November 2015 (App. at 5) and was removed to

the United States District Court for the District of New Mexico in February 2016

(see App. at 262).

In the second phase, the case was transferred to the United States District

Court for the District of Puerto Rico. In lieu of an answer in the New Mexico

federal district court, the WBO moved to dismiss the action for improper venue,

relying on a forum selection provision in the WBO’s regulations governing

championship contests (“Championship Regulations”) requiring suits in which the

WBO is made a party to be brought only in the Commonwealth or federal courts of

Puerto Rico. (App. at 89-95.) In August 2016, the district court denied the motion

to dismiss but directed the parties to address whether the case should be

transferred. (App. a 137-48.) The parties did so (App. at 149-243) and in July

2017 the court ordered the case transferred to the District of Puerto Rico (App. at

244-61).

In the third phase, the case was referred to arbitration by the Puerto Rico

federal district court. In August 2017 the WBO answered Trout’s complaint after

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transfer and included in its answer a motion to compel arbitration pursuant to an

arbitration provision contained in the Championship Regulations. (App. at 277-

78.) The following day, Trout amended his complaint and the WBO’s answer

again included a motion to compel arbitration. (App. at 280-305, 355-56.) The

parties briefed the motion (App. at 362-401, 404-18) and in September 2018 the

district court granted it (App. at 468-79, 480). Trout sought reconsideration of that

ruling (App. at 481-502, 515-32), which was denied (see Aplt. Br. at 11).1

Trout has appealed from the district court’s orders dismissing his lawsuit

without prejudice in favor of arbitration and denying his motion for

reconsideration. (App. at 533-34.)

SUMMARY OF ARGUMENT

Section 35(e) of the WBO Championship Regulations requires Trout to

arbitrate his present dispute before a Grievance Committee appointed by the

President of the WBO. Trout does not dispute that he is bound by the Regulations.

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While the foregoing proceedings were underway, the parties engaged in
discovery in the ordinary course of the litigation. As documents included in the
record indicate, the Puerto Rico district court entered a case management order
even before the WBO’s answer was filed which established a discovery deadline in
March 2018 (App. at 420 ¶ 3) which was subsequently extended to July 2018
(App. at 441, ¶ 14) and a further extension was requested (App. at 445, ¶ 29(a)).

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He objects to arbitration, however, for four reasons, none of which is meritorious.

First, Trout contends that another part of the Championship Regulations,

Section 35(d), is controlling and allows him to litigate his claims in the District of

Puerto Rico. But Section 35(d) is a forum-selection clause that does not affect the

arbitration requirement in Section 35(e). Both provisions can readily be

harmonized.

Second, Trout contends that the WBO waived arbitration. The WBO

initially litigated issues of removal and transfer of venue occasioned solely by

Trout’s failure to observe the forum-selection clause and arbitration requirement.

The WBO invoked arbitration as soon as it was required to answer. Although the

parties engaged in discovery pursuant to a scheduling order, the WBO never

substantially invoked the judicial process in lieu of arbitration. Trout has failed to

show prejudice, which is necessary to establish waiver.

Third, Trout claims that the arbitration provision is unenforceable. Trout

provides no authority in support of this argument. The argument, moreover, lacks

merit. The mere fact that the WBO has the power to select the members of the

Grievance Committee does not make the arbitration provision invalid or

unconscionable as a matter of law, where Puerto Rico law presumes good faith in

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contract performance and the Championship Regulations expressly require the

Grievance Committee members to be fair and independent. Even if the arbitrator

selection term were to be invalidated, the arbitration clause would not fail. The

selection provision may be severed and arbitrators may be selected by the district

court pursuant to Section 5 of the Federal Arbitration Act.

Finally, Trout argues that his claims under the Muhammad Ali Boxing

Reform Act cannot be arbitrated. It is settled, however, that rights conferred by

statute may be subject to an arbitration agreement. Trout fails to show that there is

anything about the Ali Act that would cause it to be construed as a congressional

command against arbitration. Therefore the Ali Act claims are subject to

arbitration.

ARGUMENT

THE DISTRICT COURT CORRECTLY DETERMINED THAT TROUT’S


CLAIMS AGAINST THE WBO MUST BE ARBITRATED.

A. Section 35(e) of the Championship Regulations Is an Arbitration


Clause.

In the familiar and oft-cited language of the Federal Arbitration Act, “[a]

written provision in . . . a contract . . . to settle by arbitration a controversy

thereafter arising out of such contract . . . shall be valid, irrevocable, and

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enforceable, save upon such grounds as exist at law or in equity for the revocation

of any contract.” 9 U.S.C. § 2. The district court correctly concluded that Section

35(e) of the WBO Championship Regulations constitutes just such a provision and

requires arbitration of Trout’s claims. This Court “review[s] a district court’s

decision to enforce an arbitration clause, de novo.” FPE Found. v. Cohen, 801

F.3d 25, 29 (1st Cir. 2015). The Court may affirm the district court “on any

independent ground made manifest by the record.” Soto-Fonalledas v. Ritz–

Carlton San Juan Hotel Spa & Casino, 640 F.3d 471, 474 (1st Cir. 2011) (internal

quotation marks & citation omitted).

Section 35(e) provides:

All WBO participants acknowledge and agree that the


mandatory resort to the WBO Appeals Regulation is the sole and
exclusive remedy for any claim, appeal or contest that arises from any
right or status that is or could be subject to these Regulations or which
results or could result from or relate to the interpretation or
application of these Regulations.

(App. at 45.) The WBO Appeal Regulations describe a process for resolving any

“Appeal, Complaint, or Grievance” by the majority vote of a three-member

Grievance Committee appointed by the President of the WBO, which is to function

as “a fair and independent arbitrator.” (Addendum at A-1 & A-2 (Articles 1, 3 &

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4).)2 Section 35(e) of the Championship Regulations further states that the

determinations of the Grievance Committee “are Arbitrations within the

contemplation of . . . the US Arbitration Act, Title 9 of the United States Code.”

(App. at 45.)

Arbitration is fundamentally “a matter of contract.” Soto-Fonalledas, 640

F.3d at 475 (internal quotation marks & citation omitted). Generally, “principles

of state contract law control the determination of whether a valid agreement to

arbitrate exists.” Id. (internal quotation marks & citation omitted). Section 35(e)

requires arbitration of Trout’s claims against the WBO if it is “a valid arbitration

clause[,] . . . the movant is entitled to invoke the clause, . . . the non-moving party

is bound by it, and . . . the clause covers the claims asserted.” FPE Found., 801

F.3d at 29. There is no dispute that the WBO is entitled to invoke its regulation

requiring claims against it to be submitted to arbitration by the Grievance

Committee. And Trout has affirmatively alleged that the WBO’s “Constitution,

Rules and Regulations constitute binding contracts between the WBO and its

2
The Appeal Regulations appear in the record as Doc. 40-3 (and elsewhere)
and are cited in Appellant’s opening brief (Aplt. Br. at 25-26), but they are not
contained in Appellant’s appendix. For completeness, they are included as an
addendum to this brief. 1st Cir. R. 28.0(a)(2).

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Members, including Plaintiff.” (App. at 286, ¶ 20.) Against the remaining

requirements – a valid arbitration clause covering the claims at issue – Trout raises

four objections which the district court rejected. This Court should do the same,

because each of Trout’s objections lacks merit.

B. Trout Raises No Valid Objection To Enforcing the Arbitration


Clause.

In opposing arbitration, Trout contends that (1) there actually is no

agreement to arbitrate because the WBO’s regulations call for disputes to be

litigated in the Puerto Rico courts; (2) the WBO waived arbitration through its

recourse to litigation; (3) the arbitration clause should not be enforced because it is

unreasonable, unjust, inequitable, and contrary to public policy; and (4) his claims

under the Ali Act are exempt from arbitration.

Each of these contentions fails. Read as a whole, the Championship

Regulations require arbitration of covered disputes while providing exclusive

venue in the Puerto Rico courts for matters that may properly be brought in a

judicial forum. The WBO timely invoked arbitration, and its litigation efforts were

devoted to countering Trout’s attempts to disregard both the venue and arbitration

provisions of the Championship Regulations and to complying with discovery

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requirements in the meantime. Trout offers no support for his assertion that the

arbitration clause is unenforceable. Finally, Trout has made no showing that the

Ali Act constitutes a congressional command against arbitration.

1. The Venue Clause in Section 35(d) of the Championship


Regulations Does Not Negate the Arbitration Clause in
Section 35(e).

Trout argues that Section 35(d) of the Championship Regulations is

“controlling” and requires Trout’s claims to be litigated in the District of Puerto

Rico. (Aplt. Br. at 14-16.) Section 35(d) begins by stating that the Regulations are

to be interpreted in conformity with Puerto Rico law and continues:

[T]he 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 Committee, 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.

(App. at 45.) This provision, which quite plainly is a choice-of-law and forum-

selection clause, says nothing about the manner of dispute resolution, which is

addressed in Section 35(e). Supra p. 6. Therefore, it hardly could be “controlling”

on the dispute resolution question. And Section 35(e) unmistakably calls for

arbitration. The district court properly found “no tension between the two

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clauses,” which it viewed as “clear an[d] unambiguous.” (App. at 474.)

Even if one were to detect a degree of tension between Section 35(d) and

Section 35(e), it is easily resolved. The law of Puerto Rico requires parts of a

contract to be interpreted in relation to one another, giving any part that is doubtful

the meaning that appears from considering the provisions as a whole. See Comite

Fiestas de la Calle San Sebastian, Inc. v. Cruz, 170 F. Supp. 3d 271, 273 (D.P.R

2016). As the district court recognized, these provisions of the Championship

Regulations can be reconciled by applying “Section 35(d) [to] govern[ ] choice of

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

subject to arbitration.” (App. at 474.) That Section 35(d) is meant to be

harmonized with Section 35(e) is made clear by the forum-selection provision’s

express applicability to appeals from the Grievance Committee, which is the

WBO’s arbitral forum. See supra pp. 6-7, 9. Finally, as the district court noted,

any arguable ambiguity in the two provisions cannot be resolved against the WBO

in these circumstances, because “the strong federal policy in favor of arbitration

would nonetheless trump the Puerto Rico law tenet” that would resolve ambiguous

adhesion contracts against the drafter. (App. at 474.) See Dialysis Access Ctr.,

LLC v. RMS Lifeline, Inc., 638 F.3d 367, 382 n.14 (1st Cir. 2011) (stating that,

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even if Puerto Rico principle of contra proferentem would lead to different result,

strong federal policy favoring arbitration prevails in determining scope of

arbitration clause).

The district court carefully construed the Championship Regulations. It

correctly concluded that Section 35(e) is a governing arbitration provision that

requires arbitration of Trout’s claims.

2. The WBO Did Not Waive Arbitration.

From the beginning of this litigation, Trout has conducted himself in

defiance of governing forum-selection and arbitration provisions contained in the

WBO Championship Regulations. That defiance has required sustained measures

on the WBO’s part to bring this dispute to the proper venue to enforce the

arbitration clause and finally to an arbitral tribunal. The WBO has consistently

proceeded in an orderly fashion through appropriate procedural steps, removing the

case from New Mexico state court, transferring venue to the District of Puerto

Rico, and – when required to answer the complaint – moving at the same time to

compel arbitration. See supra pp. 2-3. None of these measures would have been

necessary if Trout had complied with the Championship Regulations by originally

presenting this matter for arbitration by the WBO’s Grievance Committee. Supra

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pp. 6-7. Trout, who is single-handedly responsible for the extended judicial

proceedings, is hardly in a position to argue that the WBO has waived arbitration

by raising the forum-selection clause as a basis to transfer venue or by moving to

compel arbitration as soon as it was required to answer. (Aplt. Br. at 17-20.)3

Nor can the WBO’s participation in discovery be seen as a waiver of

arbitration. (Aplt. Br. at 20-22.) The parties were subject to a case management

order imposing a discovery cutoff date, so they had no choice but to engage in

discovery while awaiting the district court’s ruling on whether arbitration would be

compelled. The discovery that did occur – “written discovery in excess of 800

pages, . . . 8 depositions and . . . exchang[ing] expert reports,” as Trout describes it

(Aplt Br. at 20) – falls well short of a full-spirited commitment to litigation that

might be held to constitute an arbitration waiver.

The district court carefully analyzed the factors this Court considers in

assessing whether arbitration has been waived and correctly concluded that Trout’s

claim of waiver was not persuasive. (App. at 477.)

Although a party may waive a right to arbitrate – either


explicitly or through its conduct – we resolve any doubts in favor of

3
To say, as Trout does, that the delay that occurred “is not attributable to
him” (Aplt. Br. at 23) grossly mischaracterizes the course of proceedings.

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arbitration. Such an approach is consistent with a liberal federal


policy favoring arbitration. A number of considerations guide our
waiver inquiry. These factors include: (1) whether the parties
participated in a lawsuit or took other action inconsistent with
arbitration; (2) whether the litigation machinery has been substantially
invoked and the parties are well into preparation of a lawsuit by the
time an intention to arbitrate is communicated; (3) whether there has
been a long delay and trial is near at hand; (4) whether the party
seeking to compel arbitration has invoked the jurisdiction of the court
by filing a counterclaim; (5) whether discovery not available in
arbitration has occurred; and, (6) whether the party asserting waiver
has suffered prejudice.

FPE Found., 801 F.3d at 29 (internal quotation marks & citations omitted)

(alterations omitted).

As the district court noted, before the WBO filed its motion to compel

arbitration it had only “raised issues related to jurisdiction and venue, without

reaching the merits of the complaint.” (App. at 475.) Raising those limited,

threshold issues did not substantially invoke the judicial process so as to amount to

waiver. (App. at 475-76.) Cf. Joca-Roca Real Estate, LLC v. Brennan, 772 F.3d

945, 949 (1st Cir. 2014) (finding waiver where party “evinced a clear intent to

forgo arbitration and resolve the disputed matter through litigation”). The WBO

filed a motion to compel “with its answer as soon as the complaint was brought to

the proper forum,” and no meaningful discovery had been conducted at that point.

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(App. at 476.) The WBO did not affirmatively invoke the district court’s

jurisdiction by advancing a counterclaim, moving to dismiss or for summary

judgment on the merits, or requesting a trial. (Id.) The court therefore could not

conclude that Trout and the WBO were “‘well into preparation of the case by the

time an intention to arbitrate was communicated.’” (Id. (quoting Creative Sols.

Grp., Inc. v. Pentzer Corp., 252 F.3d 28, 33 (1st Cir. 2001).)

Finally, a plaintiff seeking to establish waiver “must show prejudice.”

Sevinor v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 807 F.2d 16, 19 (1st Cir.

1986). Trout did not demonstrate prejudice, because the delay and litigation

expense about which he complains (Aplt. Br. at 22-23) were the result of his own

decision to disregard the forum-selection and arbitration provisions of the

Championship Regulations. Because the WBO invoked arbitration with its answer

and before any significant discovery had occurred, Trout had notice of the

arbitration defense and bore a “heavy” burden to show prejudice resulting from

subsequent proceedings. Hilti, Inc. v. Oldach, 392 F.2d 368, 371 (1st Cir. 1968);

see also Joca-Loca Real Estate, 772 F.3d at 950. In light of the “vigorous policy

favoring arbitration,” 392 F.2d at 371, the district court did not err in declining to

find waiver.

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3. Trout Offers No Grounds That Render the Arbitration


Clause Unenforceable.

Trout appears to argue that the arbitration clause in the Championship

Regulations cannot be enforced because it is invalid under Puerto Rico law. (Aplt.

Br. at 23.) But Trout cites no authority applicable generally to the enforceability of

contracts under the law of Puerto Rico. Instead, he relies on a single case

applicable specifically to forum-selection clauses. Unisys Puerto Rico, Inc. v.

Ramallo Bros. Printing, Inc., 128 P.R. Dec. 842 (1991). As the district court noted,

Trout’s authority “ha[s] no bearing on the arbitration clause” and Trout’s

contention that the arbitration clause is invalid lacks any support. (App. at 471

n.3.) The court could properly disregard Trout’s argument. See Cruz v. Bristol-

Myers Squibb Co., 699 F.3d 563,572 (1st Cir. 2012) (treating “woefully

undeveloped” argument that was “not supported by reference to . . . legal

authority” as waived).

The court nonetheless rejected Trout’s argument on the merits, and rightly

so. (App. at 477.) Trout objects that the WBO Appeal Regulations allow the

WBO to appoint and replace members of the Grievance Committee. (Aplt. Br. at

25-26; see Aplee. Addendum p. A-1.) He asserts in conclusory fashion that “there

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is simply no way” he could be treated fairly in arbitration and arbitration therefore

would be “inequit[able],” “unreasonable,” or “unjust.” (Aplt. Br. at 27, 28.)

Looking beyond this rhetoric, however, the district court observed that a

complaining WBO participant has a right to notice and an evidentiary hearing.

(App. at 477; see Aplee. Addendum p. A-2.) The Grievance Committee is charged

to “act as a fair and independent arbitrator of any grievance . . . and it shall conduct

all of its proceedings as Amiable Compositeur, Ex Aequo et Bono.” (Aplee.

Addendum p. A-2; see App. at 477.) “Arbitration proceedings must meet the

minimal requirements of fairness – adequate notice, a hearing on the evidence, and

an impartial decision by the arbitrator.” Ramirez-De-Arellano v. Am. Airlines,

Inc., 133 F.3d 89, 91 (1st Cir. 1997) (internal quotation marks & citation omitted).

That one party may appoint the arbitration tribunal does not establish that the

members of the tribunal, charged with the duty to be “fair and independent,”

cannot act impartially. Moreover, as the district court noted, the decision of the

Grievance Committee is subject to judicial review. (App. at 477.) While review of

arbitration awards is limited, it is sufficient to guard against the partiality that

Trout implies, without evidence, could exist. See 9 U.S.C. § 10(a).

The method of arbitrator selection does not make the arbitration clause in the

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Championship Regulations invalid or unconscionable as a matter of law. See

Willis v. Nationwide Debt Settlement Grp., 878 F. Supp. 2d 1208, 1224-25

(D. Ore. 2012); Davis v. Global Client Sols., LLC, No. 10-322, 2011 U.S. Dist.

Lexis 116063 at *11-*12 (W.D. Ky. Oct. 7, 2011). Trout’s implicit assumption

that the WBO will exercise its power of selection in bad faith to obtain a biased

tribunal runs contrary to the law of Puerto Rico. “[T]he Puerto Rico Supreme

Court has made clear that good faith on the part of contracting parties is always

presumed[.]” See, e.g., Citibank Glob. Mkts., Inc. v. Santana, 573 F.3d 17, 29 (1st

Cir. 2009) (internal quotation marks & citations omitted). Trout’s suspicions

cannot overcome this legal presumption or the duty of fairness and independence

required of the arbitrators by the Championship Regulations.

Even if this Court were to conclude that the arbitrator selection provision of

the Championship Regulations is invalid, the proper result still would permit

arbitration essentially as the district court ordered. The Championship Regulations

include a savings clause, providing that “[i]f any of these Rules are determined to

be unenforceable, the balance of these Rules shall remain in full force and effect.”

(App. at 46.) In such circumstances, the Court may sever the offending provision

and “[w]ith the[ ] provision[ ] removed, arbitration . . . can proceed.” Kristian v.

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Comcast Corp., 446 F.3d 25, 64 (1st Cir. 2006). If the arbitration agreement does

not provide a method for selecting arbitrators, “or if for any other reason there shall

be a lapse in the naming of an arbitrator or arbitrators . . . , then upon the

application of either party . . . the court shall designate and appoint an arbitrator or

arbitrators . . . who shall act under the . . . agreement with the same force and effect

as if he or they had been specifically named therein.” 9 U.S.C. § 5; see Puerto

Rico Tel. Co. v. U.S. Phone Mfg. Corp., 427 F.3d 21, 26 (1st Cir. 2005) (stating

that “[u]nder the [Federal Arbitration] Act, federal courts may . . . appoint neutral

arbitrators” (citing 9 U.S.C. § 5)), overruled in part on other grounds by Hall St.

Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 584 (2008).

For multiple reasons, therefore, Trout’s challenge to arbitrability based on

his objection to the arbitrator selection provision of the Championship Regulations

should be rejected.

4. Trout’s Claims Under the Muhammad Ali Boxing Reform


Act Are Arbitrable.

Trout is required by Section 35(e) of the Championship Regulations to

arbitrate disputes with the WBO “aris[ing] from any right or status that is or could

be subject to these Regulations or which results or could result from or relate to the

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interpretation or application of these Regulations.” (App. at 45.) Trout contends

in this lawsuit that the WBO deprived him of his right under the Regulations to

compete for a world championship title by dropping him, without explanation,

from its rankings in violation of the Regulations. (App. at 13-16.) As the district

court concluded, Trout’s claims “fit neatly within the . . . reach” of the arbitration

clause. (App. at 473.) Trout does not challenge this conclusion.

Trout contends, however, that his claims brought under the private right of

action provision of the Ali Act, 15 U.S.C. § 6309(d), “cannot be [the] subject of an

arbitration proceeding.” (Aplt. Br. at 28.) He is incorrect.

The Ali Act requires sanctioning organizations, in order to receive

compensation in connection with any boxing match, (1) to notify the boxers that it

will provide, upon inquiry, a written explanation of the organization’s rating

criteria, the boxer’s rating, and the basis for the rating and (2) to post on its website

and report any change in ranking of a top-10 boxer and an explanation of the

change. See 15 U.S.C. § 6307c(b), (c). These provisions form the basis for

Trout’s Ali Act claims. (App. at 288-90.)

Trout argues that enforcement of the Ali Act “is clearly vested upon courts

of law” (Aplt. Br. at 28) by the private remedies provision. But “[i]t is by now

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clear that statutory claims may be the subject of an arbitration agreement.” Gilmer

v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991). “By agreeing to arbitrate

a statutory claim, a party does not forgo the substantive rights afforded by the

statute; it only submits to their resolution in an arbitral, rather than a judicial,

forum.” Mitsubishi Motors Copr. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614,

628 (1985). If the statutory creation of a private right of action were sufficient to

preclude arbitrability, “valid arbitration agreements covering federal causes of

action would be rare indeed.” CompuCredit Corp. v. Greenwood, 565 U.S. 95,

101 (2012).

Instead, arbitration provisions covering statutory claims are viewed “with a

healthy regard for the federal policy favoring arbitration.” Gilmer, 500 U.S. at 26

(internal quotation marks & citation omitted). “Th[e] duty to enforce arbitration

agreements is not diminished when a party bound by an agreement raises a claim

founded on statutory rights.” Shearson/American Express Inc. v. McMahon, 482

U.S. 220, 226 (1987). Thus, a litigant seeking to avoid arbitration of a statutory

claim must demonstrate that the statute in question overrides the mandate to

arbitrate “by a contrary congressional command.” Id.

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“[T]he burden is on the party resisting arbitration to show . . . that Congress,

in enacting a particular statute, intended to preclude a waiver of a judicial forum

for certain statutory claims.” Campbell v. Gen. Dynamics Gov’t Sys. Corp., 407

F.3d 546, 552 (1st Cir. 2005). To carry that burden here, Trout “must point to

something in the text or legislative history of the [Ali Act] that precludes

enforcement of arbitration agreements . . . , or show an ‘inherent conflict’ between

the policies and purposes of the [Ali Act] and mandatory arbitration.” Bercovitch

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

Trout’s sparse argument fails to do so. Expanding slightly on the even more

bare-bones argument he made to the district court (App. at 29-30), Trout asserts

that it would “defeat the purpose of the Act” to allow an arbitration panel

appointed by the WBO to hear claims against the WBO. (Aplt. Br. at 29.) Trout

supports this assertion with no evidence. In its essence, Trout’s argument reflects

the “mistrust of arbitration” that has long been rejected by the law. Shearson, 482

U.S. at 233. “[T]here is no reason to assume at the outset that arbitrators will not

follow the law[.]” Id. at 232; see also Mitsubishi, 473 U.S. at 632-34 (discounting

concern that arbitrators drawn from business community would be innately hostile

to antitrust claims); Prime Healthcare Servs.-Landmark LLC v. United Nurses &

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Allied Professionals Local 5067, 848 F.3d 41, 49 (1st Cir. 2017) (“We are not to

presume that an arbitrator will make mistakes.”). And “although judicial scrutiny

of arbitration awards necessarily is limited, such review is sufficient to ensure that

arbitrators comply with the requirements of the statute.” Shearson, 482 U.S. at

232.

Trout’s claims under the Ali Act are no more “important or complex” than

other statutory claims that have been held to be suitable for resolution through

arbitration. See Seacoast Motors of Salisbury, Inc. v. DaimlerChrysler Motors

Corp., 271 F.3d 6, 11 (1st Cir. 2001). Indeed, arbitration of Trout’s claims is

particularly appropriate because, as the arbitration provision of the Championship

Regulations states, “the nature of the sport requires a prompt, final and uniform

resolution of all disputes concerning application of these Regulations by a tribunal

experienced with the application of these Regulations and with special knowledge

and experience in world championship professional boxing.” (App. at 45.)

The district court correctly stated the law: “[C]ontractually required

arbitration satisfies the statutory prescription of civil liability in court.” (App. at

478.) “So long as the prospective litigant effectively may vindicate its statutory

cause of action in the arbitral forum, the statute will continue to serve both its

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remedial and deterrent function.” (Id. (internal quotation marks & citations

omitted).) The court correctly concluded that Congress did not foreclose

arbitration of claims like Trout’s brought under the Ali Act.

CONCLUSION

In his pleadings Trout correctly characterizes the WBO Championship

Regulations as a “binding contract between the WBO and is members,” including

himself. (App. at 286, ¶ 20.) Section 35(e) of the Championship Regulations

requires him to arbitrate the claims he asserts in this lawsuit. Trout offers no valid

reason why the arbitration provision should not be enforced according to its terms.

The district court’s order compelling arbitration therefore should be affirmed.

Respectfully submitted,

RODEY, DICKASON, SLOAN,


AKIN & ROBB, P.A.

s/ Edward Ricco
By_________________________
Edward Ricco, Bar No. 1187395
David W. Bunting, Bar No. 1187442
Post Office Box 1888
Albuquerque, New Mexico 87103
Telephone: (505) 765-5900
FAX: (505) 768-7395

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JOSEPH LAWS PSC


Joseph C. Laws, Jr., Bar No. 25698
Post Office Box 10143
San Juan, Puerto Rico
Telephone: (787) 754-7777

LAW OFFICES OF ANDREW W. HORN,


P.A.
Andrew W. Horn, Bar No. 1187441
2665 South Bayshore Dr., Suite 800
Miami, Florida 33133
Telephone: (305) 373-7789
Fax: (305) 372-9180

Attorneys for Appellees

CERTIFICATE OF SERVICE

I hereby certify that on May 16, 2019, I electronically filed the foregoing
document with the United States Court of Appeals for the First Circuit by using the
CM/ECF system. I certify that the following parties or their counsel of record are
registered as ECF Filers and that they will be served by the CM/ECF system: (for
Appellant Austin Trout) Miguel J. Ortega Nuñez, mortega@cnrd.com; (for
Appellee WBO) David W. Bunting, dbunting@rodey.com, Andrew W. Horn,
lawofficehorn@msn.com, Joseph C. Laws, lawofficesofjosephlaws@gmail.com,
Edward Ricco, ericco@rodey.com.

RODEY, DICKASON, SLOAN,


AKIN & ROBB, P.A.

s/ Edward Ricco
By_________________________
Edward Ricco

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ADDENDUM

Table of Contents

WBO Appeal Regulations (Doc. 40-3) ....................................................................A-1


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WBO APPEAL REGULATIONS

ARTICLE: 1
Three persons designated by the President will constitute the WBO
Grievance Committee. They shall not be members of the Executive
Committee. The Members of the Grievance Committee shall be nominated
by the President and confirmed by the Executive Committee.

ARTICLE: 2
Of the three members of the Committee, one designated by the President will
exercise the function of Chairman. The Chairman and all other members of
the Committee have indeterminate terms and, and are subject to replacement
by the nomination of the President of the WBO and confirmation of their
replacement by the Executive Committee.

ARTICLE: 3
Any Appeal, Complaint, or Grievance (hereinafter referred to as a
"Complaint") shall be submitted in writing to the President. Any WBO
participant may submit a Complaint. The President is authorized to attempt to
resolve any such Complaint by alternative dispute resolutions such as
negotiation or mediation. If, after ten (10) days of attempting methods of
alternative resolution, the President determines such methods of alternative
dispute resolution will not fully and finally resolve the Complaint, he shall
submit such Complaint for determination to the Complaints and Grievance
Committee.

All such Complaints shall:

a) Be presented in writing and directed to the President, with the


identification of the interested party, including the names, surnames,
domicile, nationality and the address of the place where will be made the
relevant notices. This identification shall include the complete telephone
number, fax number, e-mail address and mailing address of the WBO
participant or participants submitting the Complaint or sought to be affected
by the Complaint, and the same information for any representative. If the
President determines that a WBO participant other than the Complainant is
interested in the subject matter of the Complaint, the President may forward a
copy of the Complaint to such interested WBO participant and require that
such interested WBO participant take part in and be bound by the process of
the Complaint. Said interested Participant shall file a written Appearance,
which will include the complete telephone number, fax number, e-mail
address and mailing address of the interested WBO participant and any
representative.

b) Contain a clear and specific summary of the Complaint, reasons and


arguments upon which it is based, with a clear statement of the relief that the
Complainant is seeking.

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c) Shall have attached clear and legible copies of all the documents,
contracts, instruments, reports, tests, precedents or other materials relevant to
the Complaint, and shall indicate clearly the provision of the WBO
constitution, by-law, rule or regulation the Complainant considers relevant to
the resolution of the Complaint.

d) Submitted in English or Spanish.

e) Any Complaint must be filed as soon as reasonable after learning of a


dispute and in no event shall be filed later than 14 days after the occurrence
of the event that gives rise to the complaint.

ARTICLE: 4
Upon receipt of the Complaint, the Chairman will confer by teleconference
with the WBO Participants interested in the Complaint to determine a
schedule for submittals and assembly for hearing. The hearing may be
conducted by live hearing, by teleconference, or by written submittals only,
in the discretion of the Chairman. The format for the hearing shall be
designated by the Chairman and communicated to all participants within 10
days. In the event that live testimony is received, either by live hearing or
teleconference, it shall be recorded in such manner as the Chairman
determines, including by court reporter, by tape recorder, or by notations by
the Chairman. The Chairman will attempt to have as many members of the
Committee hear the testimony as is practical, but a committee member need
not be present for testimony to participate in the decision of the Committee.
The Chairman will close the hearing as soon as practical, and will prepare a
summary of the testimony, documents, contracts, instruments, reports, tests,
the Complaint and arguments of the interested WBO Participants for each of
the members of the committee, and shall transmit a copy of said summary to
each such member and the President. It is the intention of the WBO
Constitution, the WBO By Laws, and the WBO World Championship Rules
that the Grievance Committee shall act as a fair and independent arbitrator of
any grievance arising out of WBO Participation and it shall conduct all of its
proceedings as Amiable Compositeur, Ex Aequo et Bono.

The Committee will render its decision as soon as practicable, and not later
than ten (10) business days after close of the hearing or thirty (30) days after
referral of the Complaint from the President.

ARTICLE: 5
The decisions of the Grievance Committee will be issued in writing, through
the vote, of the majority of its members. The Chairman shall transmit this
decision to the WBO Participants at the addresses, fax numbers and/or e-mail
address as identified in the Complaint and any Appearances filed by any

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other interested WBO Participants.

ARTICLE: 6
All the activities of the Grievance Committee, recommendations and relevant
conclusions, will be reported to the General Assembly of the Organization.
The Chairman will be available at the request of the President to report on the
activities of the Committee. The Chairman will prepare an annual report to
the President of the activities of the committee to be presented to the
Executive Committee at the WBO Convention.

ARTICLE: 7
The decision of the Grievance Committee is a final Arbitrations within the
contemplation of 32 LPRA Section 3201 et. seq. and the US Arbitration Act,
Title 9 of the United States Code, and the Inter-American Convention on
International Commercial Arbitration of July 30, 1975 and the Convention on
the Recognition and Enforcement of Foreign Arbitration Awards of June 10,
1958. All WBO participants stipulate and agree that the nature of the sport
requires a prompt, final and uniform resolution of all disputes concerning
application of these Regulations by a tribunal experienced with the
application of these Regulations and with special knowledge and experience
in world championship professional boxing.

ARTICLE: 8
These WBO Appeals Rules 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 to appeal from any
determination of the WBO Grievance Committee, may be maintained only in
the Superior Court of the Commonwealth of Puerto Rico pursuant to the
Arbitration Law of Puerto Rico, 32 LPRA Section 3201 et. seq. , or, if
applicable, in the U.S. District Court for the Commonwealth of Puerto
pursuant the US Arbitration Act, Title 9 of the United States Code.

ARTICLE: 9
These Rules and Regulations may be modified or amended in accordance
with the Constitution and By Laws of the World Boxing Organization. All
provisions of these Rules are subject to, and shall be interpreted and enforced
as consistent with, the Professional Boxing Safety Act, Title 15 Chapter 89
Sections 6301 et. seq., and any other Federal statute or regulation in force.,
and as amended from time to time.

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