Case 2:20-cv-09277-PA-AS Document 30 Filed 10/26/20 Page 1 of 7 Page ID #:180

1 THE MALONEY FIRM, APC

GREGORY M. SMITH - State Bar No. 259971
2 PATRICK M. MALONEY - State Bar No. 197844

3 2381 Rosecrans Avenue, Suite 405

El Segundo, California 90245
4 T: (310) 540-1505│F: (310) 540-1507
E: gsmith@maloneyfirm.com
5 E: pmaloney@maloneyfirm.com

6 Attorneys for Plaintiffs, SANTOS SAUL ALVAREZ

7 BARRAGAN and SA HOLIDAY, INC.

8 UNITED STATES DISTRICT COURT

9 FOR THE CENTRAL DISTRICT OF CALIFORNIA
10

11 SANTOS SAUL ALVAREZ Case No.: 2:20-cv-09277-PA-ASx

2381 ROSECRANS AVENUE, SUITE 405

BARRAGAN; SA HOLIDAY, INC.,

THE MALONEY FIRM, APC
EL SEGUNDO, CALIFORNIA 90245
T: (310) 540-1505│F: (310) 540-1507

12

13 Plaintiffs, PLAINTIFFS’ STATEMENT

REGARDING ARBITRATION
14
v.
15

16
DAZN NORTH AMERICA INC.; DAZN
MEDIA INC.; DAZN US LLC;
17 PERFORM INVESTMENT LIMITED;

18
GOLDEN BOY PROMOTIONS, LLC;
GOLDEN BOY PROMOTIONS, INC.;
19 OSCAR DE LA HOYA; AND DOES 1-25,

20
Defendants,
21

22

23 Pursuant to the Court’s October 16, 2020 Minute Order (Document 21)
24 Plaintiffs SANTOS SAUL ALVAREZ BARRAGAN and SA HOLIDAY, INC.

25 (collectively “Alvarez”) submits this Statement Regarding Arbitration.

26 I. FACTS
27 As alleged fully in the Complaint, the parties to this action are entangled in a
28 triangular relationship to put on the biggest events in boxing. In October 2018,
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STATEMENT REGARDING ARBITRATION
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1 Defendants DAZN NORTH AMERICA INC., DAZN MEDIA INC., DAZN US LLC,

2 and PERFORM INVESTMENT LIMITED (collectively “DAZN”) entered into an

3 agreement (the “License Agreement”) with Defendants GOLDEN BOY

4 PROMOTIONS, LLC, GOLDEN BOY PROMOTIONS, INC., OSCAR DE LA

5 HOYA (collectively “GBP”) to broadcast boxing matches headlined by Canelo

6 Alvarez, the sport’s biggest star. Shortly thereafter, GBP and Alvarez entered into an

7 agreement (the “Promotion Agreement”) for GBP to promote Alvarez’ bouts, which

8 were to be broadcast by DAZN. At the same time, Alvarez executed a deed (the

9 “Deed”) wherein he agreed to a limited subset of terms between GBP and DAZN and

10 agreed to undertake certain promotional activities for the benefit of DAZN. Although

11 GBP and DAZN could have shared the entirety of their agreement with Alvarez and
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12 asked him to ratify it in its entirety, they instead hid behind a confidentiality clause

13 and refused to share it.

14 For all intents and purposes, the Agreements and Deed are a single transaction
15 and no part of the arrangement would make sense without the others. The License

16 Agreement required DAZN to pay GBP $40 million dollars per Alvarez bout. The

17 Promotion Agreement required GBP to pay Alvarez at least $35 million dollars per

18 bout, plus percentages of ticket revenue from each event. All parties understood that
19 GBP would be paying Alvarez from the money it received from DAZN. The

20 Promotion Agreement acknowledged the interdependence of the contracts and

21 allowed GBP to terminate the Promotion Agreement if DAZN breached the License

22 Agreement.

23 Beginning in or about May 2020, DAZN told both GBP and Alvarez that it
24 would not be paying its contracted fee for Alvarez’ planned September 2020 bout or

25 his bouts thereafter. DAZN asserted that GBP had breached the License Agreement

26 by not supplying specified opponents for Alvarez in 2019. In response, GBP asserted
27 that DAZN’s claims were pretextual, that it had fully complied with the License

28 Agreement, and that DAZN was in breach for failing to pay the money due.
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1 Despite DAZN’s breach, GBP refused to: 1) pay Alvarez, 2) find another
2 broadcaster to help finance the sums it owed Alvarez, or, 3) release Alvarez from his

3 contract, which GBP could not afford to pay without DAZN’s broadcast fee.

4 Although neither GBP nor DAZN has yet filed a responsive pleading in this
5 action, because each has accused the other of breaching the License Agreement,

6 Alvarez anticipates that they will each allege, in both cross-actions and affirmative

7 defenses, that the other is the liable party. To date, both GBP and DAZN have taken

8 the paradoxical position that they should not be bound by their commitments to pay

9 Alvarez because of each other’s broken promises, but that Alvarez should be bound to

10 his commitments, in the Promotion Agreement and the Deed, to only participate in

11 bouts that they promote or broadcast. After working for several months to persuade
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12 both DAZN and GBP to honor their commitments to promote, broadcast, and pay for

13 his fights, Alvarez – now 30 years old – filed this action to break the logjam of blame

14 between his “partners” and make the most of the remains of his athletic prime.

15 On or about October 8, 2020, DAZN Media Inc. – a New York Corporation,

16 with its principal place of business in New York – removed this action to this Court

17 alleging that this Court has jurisdiction under 9. U.S.C. §205 because PERFORM

18 INVESTMENT LIMITED is a UK entity and its agreement with GBP contains an

19 arbitration clause.

20 On Thursday October 22, the counsel for Alvarez and counsel for all
21 Defendants participated in a meet and confer call to discuss arbitration and

22 Defendants’ appearances in the matter. Although counsel for Defendants received the

23 Complaint at issue on September 29, 20201, David Y. Livshiz lead counsel for DAZN

24 asserted that the parties needed at least another 45 days to file a responsive pleading.

25 Although Ricardo Cestero, counsel for GBP, asserted his clients have not yet been

26 served, he also participated in the meet and confer call.

27
1
See, Notice and Acknowledgment, Exhibit A to Notice of Removal (Document 1)
28
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1 Both DAZN and GBP indicated intentions to move to compel arbitration under
2 their respective agreements. If they do so, Alvarez intends to oppose the Motion(s) to

3 Compel on grounds including: 1) there was no “meeting of the minds” regarding

4 arbitration between the three factions to this litigation, 2) that the arbitration

5 frameworks in each contract are inconsistent in venue, rules, methodology for

6 selecting arbitrators, and choice of law, and cannot be simultaneously both enforced,

7 3) that the matter cannot be fully and fairly adjudicated without all three factions

8 asserting all of their claims against each other, and the controlling law of the

9 Alvarez/GBP agreement allows for consolidation of separate arbitration proceedings,

10 and 4) there are causes of action for both torts and declaratory relief that would not be

11 subject to the arbitration, even if it was ordered.

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12 Although Alvarez reserves the right to fully brief these, and other, issues and/or
13 defenses if and when the Defendants appear and bring Motions to Compel, the

14 positions are briefly summarized below.

15 II. THIS COURT SHOULD NOT COMPEL ARBITRATION

16 1. The Three Factions to this Dispute Did Not Enter into An Agreement to
17 Arbitrate Claims Involving All of Them.
18 As explained above, there is no single agreement executed by DAZN, GBP, and
19 Alvarez. Instead, DAZN and GBP have the License Agreement, with an arbitration

20 clause and one framework, GBP and Alvarez have the Promotion Agreement, with a

21 different arbitration clause and a totally different arbitration framework, and Alvarez

22 and DAZN have the Deed wherein he approved limited portions of the License

23 Agreement, but without reference to the arbitration clause under which DAZN

24 removed this action.

25 Thus there was no meeting of the minds between the three factions that any
26 dispute amongst them would be arbitrated. Federal Courts have held that where there
27 are conflicting arbitration agreements, there is no “meeting of the minds” and the

28 Court should decline to enforce arbitration.

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1 In Ragab v. Howard et al., two parties entered into six different agreements
2 between them that included six conflicting arbitration provisions; “the conflicts

3 involve (1) which rules will govern, (2) how the arbitrator will be selected, (3) the

4 notice required to arbitrate, and (4) who would be entitled to attorneys’ fees and on

5 what showing.” 841 F.3d 1134, 1136 (10th Cir. 2016). The trial court held, and the

6 Court of Appeal affirmed, that because the parties had no “meetings of the minds”

7 regarding arbitration, that it could not be enforced. Id. at 1138. Although that case

8 was decided under Colorado substantive law, California law is not materially different

9 in that both require the parties to “agree on all essential terms.” See, I.M.A. Inc. v.

10 Rocky Mountain Airways, Inc. 713 P.2d 882, 888 (Colo. 1986); See, Krasley v.

11 Superior Court, 101 Cal.App.3d 425, 431-432 (1980).

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12 Although Ragab is an out of circuit decision, the rational still holds. The case
13 was recently cited in this district by Judge Michael W. Fitzgerald, who did not dispute

14 the reasoning or the applicability, but instead factually differentiated it from the case

15 before him. See, Cadena et al. v. American Honda Motor Co., Inc., No. 20-511-

16 MWF(PJWX) 2020 WL 3107797 (C.D. Cal. June 10, 2020).

17 2. If this Court Does Not Follow Ragab and Deny Arbitration, It Should
18 Follow Justice Gorsuch’s Dissent Therein, and Order A Single
19 Arbitration under California Law and/or the FAA.
20 Prior to being elevated to the Supreme Court, Justice Gorsuch was on the 10th
21 Circuit panel that decided Ragab. In a dissent to the decision, Justice Gorsuch argued

22 that because there were six contracts between the parties containing agreements to

23 arbitrate, it was clear that they intended to do so, but that the discrepancy between the

24 agreements was about how the arbitration should proceed. Ragab v. Howard et al. at

25 1139. Justice Gorsuch argued that Colorado law and the Federal Arbitration Act be

26 used to supply the rules as to how the parties would arbitrate the matter. Id.
27 Similarly, if the Court believes that there is somehow an agreement between the
28 three factions to arbitrate claims amongst them, but no agreement as to the law, rules,
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1 or means of selecting arbitrators, the Court should order arbitration with California

2 law and the Federal Arbitration Act controlling.

3 3. If this Court Might be Inclined to Grant Separate Motions to Compel

4 From Each GBP and DAZN, Those Arbitrations Should be
5 Consolidated.
6 Should Alvarez be forced to go to separate arbitrations with GBP and DAZN –
7 who will presumably assert claims or defenses related to the conduct of the other – it

8 would result in duplicative efforts and could, potentially, lead to inconsistent findings

9 of fact and application of law. Although Alvarez will not fully brief the underlying

10 statutory and case law here, the law of the controlling jurisdictions allows for

11 consolidation of otherwise separate arbitrations when they arise from related

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12 transactions and have common issues of fact and law.

13 4. If this Court Might be Inclined to Grant a Motion to Compel

14 Arbitration, It Should Not Stay the Remaining Causes of Action and
15 Should Immediately Set Trial on Alvarez’ Declaratory Relief Action.
16 Even if it grants Arbitration in some form, the Court has the discretion to, and
17 should, proceed with the non-arbitrable claims. See, United States for Use & Benefit

18 of Newton v. Neumann Caribbean International, Ltd., 750 F.2d 1422, 1426 (9th Cir.
19 1985). Specifically the Court should immediately set trial on the declaratory relief

20 action so that the parties may have clarity to their obligations moving forward and

21 Alvarez can return to the boxing ring as soon as possible, free of his obligations to

22 only participate in GBP-promoted, DAZN-broadcast bouts.

23 Declaratory judgment allows the party to clarify what his obligations are, so
24 that he can avoid future lawsuits. Seattle Audubon Soc. v. Moseley, 80 F.3d 1401,

25 1405 (9th Cir.1996). Declaratory judgment is appropriate “whether or not further

26 relief is or could be sought.” 28 U.S.C. § 2201; Fed.R.Civ.P. 57 (“The existence of

27 another adequate remedy does not preclude a declaratory judgment that is otherwise

28 appropriate.”). Rule 57 allows the Court to order a speedy hearing of declaratory

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1 judgment action. This is even more appropriate here where they can be no monetary

2 remedy to depriving Alvarez of his opportunity to further cement his legacy as one of

3 the greatest boxers of all times.

4 Recently, Federal Courts in California have held that even when declaratory
5 relief actions are based on similar contracts and facts as contract claims, they are not

6 redundant in that “contract claims seek ‘past damages’ for Defendants conduct, the

7 declaratory relief claim seeks ‘a forward-looking declaration’…” In re Yahoo! Inc.

8 Customer Data Sec. Breach Litig., 313 F. Supp. 3d 1113, 1139 (N.D. Cal. 2018).

9 III. CONCLUSION
10 Based on the forgoing, including the fact that all Defendants have not yet
11 appeared in this matter, Plaintiffs respectfully request that this Court allow them to
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THE MALONEY FIRM, APC
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12 fully brief any issue that might be raised by Defendants in a Motion to Compel

13 Arbitration before making any determinations or orders on the issue.

14

15
Dated: October 26, 2020 THE MALONEY FIRM LLP
16

17 By: /s/ Gregory M. Smith .

Gregory M. Smith
18 Patrick M. Maloney
19 Attorneys for Plaintiffs, SANTOS SAUL
ALVAREZ BARRAGAN AND SA
20 HOLIDAY, INC.
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STATEMENT REGARDING ARBITRATION