Gomez v. New Champion Promotions, LLC

Background

Andy Cruz Gomez, a professional boxer and Olympic gold medalist, sued New Champion Promotions, LLC (NCP), Jesse Rodriguez, Matchroom Boxing USA, LCC (Matchroom), and 25 unnamed defendants. Gomez alleged that NCP entered a promotional agreement with him in November 2022, did not promote any matches featuring him, and later brought him to Matchroom. In May 2023, Gomez, NCP, and Matchroom entered another promotional agreement. The agreement provided for a $250,000 signing bonus and payments for four bouts. It stated that Matchroom would pay NCP and, as directed by NCP, NCP would pay Gomez.

Gomez alleged that NCP received payments from Matchroom but paid him less than the amounts he was owed. He alleged that NCP wrongfully withheld approximately $124,465. His Second Amended Complaint asserted ten causes of action: two claims under the Muhammad Ali Boxing Reform Act of 2000; a California boxing-manager licensing claim; breach of contract; breach of the duty of good faith and fair dealing; breach of fiduciary duty; conversion; accounting; declaratory relief; and violation of a New York boxing-compensation regulation.

The NCP defendants moved to dismiss and strike portions of the complaint. Matchroom moved to compel arbitration and alternatively sought dismissal based on improper venue or the doctrine of forum non conveniens, which allows a court to decline to keep a case when another forum is more appropriate.

Motion to Dismiss and Motion to Strike

The court applied Federal Rule of Civil Procedure 12(b)(6), which asks whether the complaint alleges enough facts to state a legally plausible claim. The court treated Gomez’s allegations as true at this stage but did not accept conclusory allegations or unreasonable inferences.

The court denied dismissal of the Ali Act firewall claim. Gomez plausibly alleged that the NCP defendants had a direct financial interest in his management because they deducted portions of his purse before paying him. He also plausibly alleged economic injury because he lost part of his prize money.

The court also denied dismissal of Gomez’s Ali Act disclosure claim. Gomez plausibly alleged that the NCP defendants failed to disclose portions of his purse that they would receive and that this failure caused him economic injury. The court rejected the argument that Matchroom’s role as lead promoter relieved the NCP defendants of their disclosure obligations.

The court denied dismissal of the California boxing-manager licensing claim. California law defines a boxing manager in part as someone who receives or is entitled to receive more than 10 percent of a professional boxer’s gross purse. Gomez alleged that the NCP defendants received more than 10 percent and were not licensed as boxing managers. The court also rejected the argument that the California State Athletic Commission had exclusive jurisdiction over the claim.

The court dismissed Gomez’s claim under the New York boxing-compensation regulation. It identified several problems, including that Gomez did not allege that he was not paid by check, did not explain why the regulation applied to his matches or dealings, and did not provide legal support for applying New York law merely because the contract selected New York law. The court stated that Gomez had leave to amend if he could properly assert the claim.

The court determined that New York law governs Gomez’s contract-related claims because the agreement contains a New York choice-of-law provision. The court then denied dismissal of the breach-of-contract claim. Gomez plausibly alleged that the agreement required NCP to pay him the full prize money after receiving it from Matchroom and that NCP breached the agreement by deducting amounts before paying him.

The court dismissed the breach-of-fiduciary-duty claim with leave to amend because Gomez pleaded that NCP was a fiduciary under California law but did not plead that NCP was a fiduciary under New York law or explain how the claim could proceed alongside the contract claim.

The court dismissed the conversion claim with leave to amend. Gomez did not allege that he had ownership, possession, or control of the property before the alleged conversion, and he did not plausibly explain how the conversion claim could proceed alongside the contract claim under New York law.

The court dismissed the accounting claim with leave to amend. Gomez did not allege that NCP was a fiduciary under New York law or explain how an accounting claim could coexist with his contract claim.

The court denied dismissal of the declaratory-relief claim because Gomez had adequately alleged a real and legally actionable dispute. The court declined to decide at that early stage whether it would ultimately exercise its equitable power to deny declaratory relief.

The court also denied the NCP defendants’ motion to strike allegations, primarily those concerning declaratory relief. The court noted that the defendants did not address the legal standard for striking material from a pleading.

Motion to Compel Arbitration

The court applied the Federal Arbitration Act. It considered whether a valid arbitration agreement existed and whether that agreement covered the dispute. The court rejected Gomez’s argument that Matchroom waived arbitration by waiting to move to compel. Although Matchroom should have asserted arbitration in its first two answers, it moved to compel relatively soon after Gomez filed the Second Amended Complaint and had not litigated a merits motion or received an adverse merits ruling.

The court denied Matchroom’s request to compel arbitration of claims asserted only against the NCP defendants. Matchroom was a signatory to the arbitration agreement, but it sought to enforce arbitration against different parties. The court found no supporting authority allowing one signatory to compel arbitration of claims brought against another signatory, particularly where the other signatory had waived its own right to compel arbitration.

The court granted Matchroom’s request to compel arbitration of Gomez’s accounting and declaratory-relief claims against Matchroom. The agreement broadly covered “[a]ny dispute, controversy, or claim arising out of or in connection with this Agreement,” and the court concluded that those claims arose directly from the parties’ contractual relationship. The claims against Matchroom were stayed pending arbitration.

The court denied Matchroom’s request to dismiss or transfer the case based on forum non conveniens. It was not persuaded that the domestic arbitration clause operated as a forum-selection clause requiring transfer to the location of arbitration. The court also noted that the Northern District of California was a sensible venue because one bout occurred in the same city as the courthouse, another occurred in Southern California, and one defendant was a California resident.

Disposition

Judge William H. Orrick ordered that the motion to dismiss was granted in part and denied in part, with leave to amend. The New York boxing-regulation, breach-of-fiduciary-duty, conversion, and accounting claims were dismissed as described above; the other specified claims survived at the pleading stage. Any amended complaint was due within 20 days of the order.

The motion to strike was denied. The motion to compel arbitration was granted in part and denied in part: Gomez’s claims against Matchroom were ordered to arbitration and stayed pending arbitration, while the request to compel arbitration of claims against the NCP defendants was denied. The motion to dismiss and transfer venue was denied.