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Boxing Fans Knocked Out Twice: Ninth Circuit Affirms Dismissal of Class Action Alleging Fraud in Pacquiao-Mayweather Fight

December 6 2019

 

By Josiah M. Prendergast
Litigation Law Blog

In 2015, world-renowned boxers Manny Pacquiao and Floyd Mayweather, Jr. faced off in what was promoted as the “Fight of the Century.” After twelve largely uneventful rounds, the fighters and fans walked away without much fanfare—no knockout, no technical knockout, just a scorecard victory for Mayweather.

Leading up to the fight, Pacquiao’s camp extolled his excellent fitness and preparedness, describing him as being in “pristine condition” and boasting that he was “a freak” and “better than I’ve ever seen him.” After the fight, a different story emerged—Pacquiao had torn the rotator cuff in his right shoulder a month before the fight, which materially affected his preparation and fighting condition.

Fans were outraged. On the promise of a historic bout, the fight drew the largest total of pay-per-view receipts in boxing history. But the fight was a tiresome slog, many believed in part because Pacquiao was not fully healthy.

Based on a sense of entitlement to the fight as billed—a bout between historically great boxers in peak condition—multiple class action lawsuits were filed alleging false advertising and fraud. The suits brought to the fore a constant tension between fans, athletes, and sports enterprises—the degree to which a paying fan is entitled to be entertained at a level commensurate with their expectations.

Although the United States Court of Appeals for the Ninth Circuit had not confronted this issue before, it is hardly new. And the issue resurfaces any time a blown call obviously affects the outcome of a game (Houston Rocket James Harden’s December 3, 2019 dunk that wasn’t counted might come to mind, or maybe you’re a Saints fan… is it still too soon to talk about Nickell Robey-Coleman mugging Tommylee Lewis in last year’s NFC Championship Game?). Or anytime an NBA team engages in “load management,” such as the Los Angeles Clippers gave reigning NBA Finals MVP Kawhi Leonard a rest day on October 26, 2019, disappointing Phoenix Suns fans who paid premium ticket prices to see Kawhi play in person.

If nothing else, it just feels that professional sports breach their relationship of trust with fans whenever the product on the court or field, or in the ring is less than what was promoted. The NBA seemed to appreciate that sense of unfairness and wrongdoing when it fined Clippers head coach Doc Rivers $50,000 for saying that Kawhi has “never felt better” shortly after the Clippers held Kawhi out of a much anticipated matchup against the Milwaukee Bucks for alleged injury reasons. (That’s not to say the NBA wasn’t also punishing Rivers for embarrassing the league office—prior to Rivers’ statement, the NBA had approved sitting Kawhi based on a determination that he was suffering from a knee injury.)

Increasingly, sports media shines a light on the unjustness with which sports enterprises operate, selling a winning vision and top-product to season ticket holders and fans, only to then engage in “tanking,” “load management,” or just gross negligence (back to that Saints game already?). For example, Dan Patrick—host of the Emmy nominated Dan Patrick Show and known for leading SportsCenter to its height of popularity—regularly argues that franchises should reduce ticket prices when the franchise chooses to rest an uninjured star player or engages in tanking to achieve better draft pick placement.

But the question of what should be done (à la Dan Patrick’s proposals) is different than what can be done (i.e., compelled by law), as the Pacquiao-Mayweather litigation demonstrates. There, the United States District Court for the Central District of California was asked to determine whether the plaintiffs’ factual allegations, which are assumed to be true against a motion to dismiss, amount to actionable fraud. The District Court held that the seemingly false and misleading statements used to promote the Pacquiao-Mayweather fight were not actionable because plaintiffs were not actually harmed. The Ninth Circuit agreed and affirmed the District Court’s order dismissing the class action claims.

In finding that pay-per-view subscribers and ticketholders were not harmed, the Ninth Circuit started by recognizing that “[a] majority of courts that have considered claims brought by dissatisfied sports fans follow what is known as the ‘license approach[,]’” under which “a ticket holder enjoys only the right to view the ticketed event, and therefore no cognizable injury arises simply because the event did not meet fan expectations.” The Ninth Circuit also looked to decisions by the Seventh and Third Circuit Courts of Appeals in which aggrieved fans sought legal recompense for their dissatisfaction with a sporting event.

In 2007, the Seventh Circuit ruled against attendees of a Formula One race who alleged breach of contract after 14 of 20 race participants withdrew from the race due to tire problems. In 2010, the Third Circuit ruled against a Jets season ticket holder, seeking to represent a class of allegedly wronged Jets season ticket holders, who claimed breach of contract and fraud arising from the “Spygate” scandal—where the New England Patriots were caught secretly videotaping their opponents’ sideline signals in violation of National Football League rules. The Jets season ticket holder alleged he anticipated and had contracted for the right “to observe an honest match played in compliance with all laws, regulations and NFL rules.” Following the Third and Seventh Circuits, the Ninth Circuit agreed that ticket holders or pay-per-view subscribers purchase only the right to view the sporting event, not the right to any particular quality of competition or outcome.

The plaintiffs attempted to cast their claims in terms of consumer protection, but the Ninth Circuit quickly distinguished the cases on which the plaintiffs relied. Two cases of note involved NFL season ticket holders who claimed they were fraudulently induced to purchase season tickets based on statements by the Los Angeles Rams and Cleveland Browns, respectively, committing to keep the franchise in its city—the Rams later moved to St. Louis and the Browns to Baltimore. The court distinguished those cases by noting that promises not to move a franchise gave the season ticket purchase a reasonable expectation that he or she would be able to secure a right to future season ticket purchases in their home market, whereas a ticket to a sporting event does not guarantee any particular outcome—good players might play poorly, injured players might overcome the limitation of their injuries, underdogs might prevail, and a match between seemingly equal competitors might turn out lopsided.

That line of analysis speaks to a principle that underlies all judicial decision making—the importance of clear boundaries to guide everyday conduct. As the Ninth Circuit explained, an important aim of the law is to set expectations ahead of time as to what is and is not required under the law so as to not present traps for the unwary:

Plaintiffs’ theory of liability also presents serious workability problems. Would athletes be required to make an affirmative disclosure regarding any discomfort they felt, or only with respect to diagnosed injuries? Would it matter whether a diagnosed injury caused an athlete no pain? And how far in advance of a game or match would such disclosures be required?

The Third Circuit recognized that the failure to define the law in terms of bright lines would not only unduly burden private actors, but would overburden the judiciary as well:

This Court refuses to countenance a course of action that would only further burden already limited judicial resources and force professional sports organizations and related individuals to expend money, time, and resources to defend against such litigation.

From a sports perspective, the Pacquiao-Mayweather litigation serves as a reminder that sports is a form of entertainment. What we purchase as paying ticketholders or viewers is the right to watch the event, as much as we feel entitled to a particular quality of play, competition, refereeing, or performance.

From a legal perspective, the Ninth Circuit’s decision offers a glimpse into how courts interpret and apply the law in many seemingly unrelated areas of law—courts look to interpret and apply the law in terms of bright lines, fair and foul, so that we may conduct ourselves with reasonable expectations as to the consequences of our actions.