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DUVA v. WORLD BOXING ASSN.

April 20, 1982

LOUIS DUVA, TONY AYALA, JR., and TONY AYALA, SR., Plaintiffs,
v.
WORLD BOXING ASSOCIATION, Defendant, and BOB ARUM ENTERPRISES, INC., Intervenor



The opinion of the court was delivered by: STERN

 Tony Ayala, Jr. is a prize fighter. He is currently the third-ranked junior middleweight in the world according to the rankings of the World Boxing Association ("WBA"). He and his managers, Louis Duva and Tony Ayala, Sr., bring this action against the WBA, challenging the lawfulness of a WBA-sanctioned championship fight scheduled for April 24, 1982 which pits the WBA's fourth-ranked junior middleweight contender, Charlie Weir, against the current WBA junior middleweight champion, Davey Moore.

 Plaintiffs allege that the prospective fight is unlawful because the WBA has, in effect, stripped Ayala of his third-place ranking by enabling Weir to elbow his way past Ayala in the line of boxers waiting for the opportunity to challenge the champion. Plaintiffs contend that the WBA's sanction of this fight, done in violation of the WBA's own charter, has deprived Ayala of a property interest without due process of law. Plaintiffs further contend that the WBA has improperly sanctioned the Moore-Weir bout solely to cater to the pecuniary advantage of a fight promoter who seeks to capitalize financially on the occasion of the opening of a new 80,000-seat stadium in Johannesburg, South Africa by bringing a black champion, Moore, to fight a white South African, Weir. *fn1"

 The WBA responds by alleging that its actions have at all times been prompted by the "best interests" of boxing. The WBA admits that Ayala is ranked higher than Weir and that Regulation 6 of its World Championships Regulations requires champion Moore to defend against "the leading available contender." The WBA contends, however, that Regulation 19 of those same regulations permits it to suspend any or all of the other rules in its discretion, and that it chooses to suspend Regulation 6 in order to permit Moore to fight Weir for the championship. Alternatively, the WBA argues that "the leading available contender rule" only protects the right of the first-ranked challenger to fight the champion and that since the number one contender, Ayub Kalule, has relinquished that right to the promoter of the Moore-Weir contest, Ayala is not injured and has no standing to be heard.

 The promoter of the South African fight, Bob Arum Enterprises ("Intervenor Arum"), moved for and was granted the right to intervene in this action. It is Intervenor Arum's position that whether or not Regulation 6 confers a property right on Ayala is immaterial. Intervenor Arum argues that the WBA may and should suspend its rules to enable this fight to take place because the public wants it. He contends that if the WBA were forced to follow Regulation 6, and its fighters given their turn at the championship in the order of their earned rankings, the public would be denied the opportunity to see those contests which it wished, when it wished, between the fighters of its choice.

 Intervenor Arum claims that he knows what the public wants -- namely, that the next championship fight take place between Weir and Moore in South Africa -- and that even though the WBA's sanction means that Weir will be leapfrogging over Ayala's place in line for the championship, the WBA may suspend its rules so that this particular fight may be made possible and the public accommodated.

 For the reasons that follow, this Court determines that plaintiff Tony Ayala, Jr. has a property right in his WBA ranking and in the procedures established by Regulation 6. We also hold that the WBA, which awarded him that ranking after Ayala repeatedly fought under its auspices, is an authority which exercises governmental power, and that the WBA may not summarily or arbitrarily wield that power to deprive Ayala of his property rights. Under the facts of this case, we find that the WBA's invocation of Regulation 19 -- in part through a body constituted in violation of its By-laws -- without a proper hearing, without any statement of the reasons for its decision and only after the Moore-Weir fight was already in place and the plaintiffs had appealed to this Court for relief, was arbitrary, capricious and a violation of Ayala's due process rights.

 The Court will therefore enter an injunction prohibiting the WBA from sanctioning the Moore-Weir fight as a championship fight.

 FACTS

 The WBA is an incorporated association of national, state and local boxing regulatory authorities established "to ensure greater efficiency and uniformity in the supervision of professional boxing, to obtain more effective control, to regulate professional boxing, . . . to encourage and assist professional boxing throughout the world [and to] encourage and inspire greater public appreciation of boxing as an international sport and as a builder of the athlete's character and body." WBA Constitution, Art. II. Regular membership in the WBA, the only category of membership by which members may exercise a vote, is limited to organizations which can demonstrate that they are "legally organized to regulate, control and/or supervise professional boxing in a country or in any of its political or territorial subdivisions." Id.2 In addition, with the exception of the International Commissioner, all WBA officers and committee chairmen must be "members in any official capacity of a National, State, Provincial or Municipal Boxing Authority." WBA Constitution, Art. IV. *fn3"

 
"is not the personal property of any boxer [but] is and must be a trusteeship, subject to the terms of a trust hereinafter for the first time fully defined, for the use and benefit of all those boxers and followers of boxing who by their contributions of time, effort, risk and resources sustain the profession in existence."

 Id. paras. 3, 4.

 Championships Regulation 6 provides, in pertinent part, that:

 
"should the World Champion lose his title against an opponent other than the leading available contender, the new World Champion shall be required to make his first title defense against the leading available contender, on his weight class in accordance with the current rating list of the Association, within a period of ninety (90) days after the acquisition of this title thereafter throughout the Champion's reign as World Champion he shall defend his championship within intervals of no more than six (6) months against the leading available contender in his weight class in accordance with the current rating list of the Association."

 The leading available contender is determined by reference to the current rating list promulgated by the WBA's Ratings Committee. *fn6"

 Championships Regulation 19 provides that "any exception to these World Championships Regulations must be approved by a two-thirds vote of the Championships Committee, approved by the President and approved by a majority vote of the Executive Committee."

 On February 2, 1982, Davey Moore, having fought only eight professional fights and having entered the WBA Junior Middleweight rankings shortly before at Number Ten, defeated Tadashi Mihara for the Junior Middleweight title. There is no dispute that under Regulation 6 Moore thereupon became obligated to defend his title against "the leading available contender" in the Junior Middleweight Division by May 2, 1982. *fn7"

 On February 3, 1982, plaintiff Duva informed WBA President Sanchez that Ayala, who has been ranked Number Three at all times relevant to this litigation, was available to fight Moore for the title.

 Prior to the Moore-Mihara fight, however, Intervenor Arum had negotiated a contract between Moore and Weir, who was ranked Number Six at the time and is currently ranked Number Four, providing that should Moore defeat Mihara, his first title defense would be against Weir, in South Africa, on April 24, 1982. In December 1981, WBA President Sanchez "approved" this arrangement. *fn8" All parties agree that the Moore-Weir fight, expected to draw 80,000 people to a new stadium in Johannesburg, will be financially beneficial to Moore, Weir and Intervenor Arum. *fn9" In addition, since the WBA receives a percentage of the purse from each fight it sanctions, *fn10" the fight will also be of particular financial benefit to the WBA.

 At the time of the Moore-Mihara fight, Ayub Kalule was ranked Number One and Carlos Herrera was ranked Number Two. *fn11" Kalule filed a protest with the WBA, based on Regulation 6, against the sanction of the Moore-Weir fight, contending that Regulation 6 required Moore to fight him rather than Weir. On March 16, 1982, *fn12" after negotiations with Intervenor Arum, Kalule withdrew his protest on the representations that the winner of the Moore-Weir fight would fight him within 60 days and that his acquiescence in the Moore-Weir fight would benefit him financially. *fn13" He has signed a contract with Intervenor Arum to meet the Moore-Weir winner in June 1982.

 In a letter dated February 8, 1982, *fn14" Championships Committee President Salas informed WBA President Sanchez that he had "ordered the new champion, Moore, to defend his title against Richard Weird [sic] and, sixty days after said fight, against Auyb Kalule." *fn15" Salas noted that the situation was a "legally interesting" one, since the Moore/Weir/Kalule contracts involved a "kind of arrangement [which] is not acceptable for the World Championships Committee, unless all affected parties agree." *fn16" In his view, however, the sanctioning of the Moore-Weir fight did not violate Regulation 6, since Kalule, whom Salas considered the only "affected party," had agreed to the WBA's sanction of the fight. *fn17"

 On March 4, 1982, plaintiffs filed this suit, contending that the Moore-Weir fight violated Regulation 6. On March 9, 1982, the day after a hearing on the plaintiff's application for temporary injunctive relief was postponed at the request of the defendant and Intervenor Arum, the WBA began to take steps apparently designed to utilize Regulation 19 to suspend Regulation 6 and waive any violation of it which may have occurred. Salas, President of the World Championships Committee, sent a telegram to all committee members which stated that:

 
"President Rodrigo Sanchez agreed to let former champion Mihara fight David Moore and the winner to fight Charlie Weird [sic]. Leading available contender Kalule agreed to wait until that fight. This is the same arrangement given to Leonard in order to fight Kalule. I'm asking a vote from the championship committee to ratify decision taken by Rodrigo Sanchez.
 
"If you don't answer in five days we will accept your vote in favor of ratification." *fn18"

 One member of the Championships Committee, Greene, informed Salas that he objected to the ratification, and suggested that the matter "be held in abeyance until the Executive Committee meeting on March 27." *fn19" Another member of the Committee, Sleep, responded that he was unable to vote on the matter until he had reviewed the matter with the other members of the Committee, *fn20" while a third member, Ziegler, informed Salas ...


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