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Trout v. Organizacion Mundial De Boxeo, Inc.

United States District Court, D. New Mexico

July 5, 2017

AUSTIN TROUT, Plaintiff,


         On August 23, 2016, Defendant Organizacion Mundial de Boxeo, Inc. (“WBO”) filed an Amended Motion for Transfer of Venue to the District of Puerto Rico (ECF No. 11), seeking an order transferring this case to the District of Puerto Rico because of a forum-selection provision in the Regulations of World Championship Contests (“WBO Regulations”). The Court, having considered the motion, briefs, pleadings, evidence, and applicable law, concludes that the motion should be granted and this case transferred to the United States District Court for the District of Puerto Rico.


         Plaintiff Austin Trout is a professional boxer and longtime resident of Las Cruces, New Mexico. Compl. ¶¶ 1, 3, ECF No. 1-2. The WBO, a boxing sanctioning organization, is a foreign corporation with its principal place of business in San Juan, Puerto Rico. Id. ¶¶ 2, 10. The WBO's operations are purportedly governed by its Constitution, By-Laws, and Regulations. See Id. ¶ 13. Under the rules set out in these governing documents, the WBO establishes and recognizes championships in various weight divisions. See Id. ¶ 14. These rules also require the WBO to rank professional boxers in each weight division. Id. ¶ 15. Pursuant to the WBO Regulations, attached as Exhibit B to Mr. Trout's Complaint, the WBO uses these rankings to determine which boxers will have an opportunity to fight for each WBO championship. Id.

         After discussions with and approval by the WBO, Mr. Trout entered the WBO's rankings as the ninth-ranked junior middleweight boxer in November 2014, giving up other potential prospects and career paths as a result. Id. ¶ 27. Following a number of victories, Mr. Trout rose steadily through the WBO's rankings, peaking as the WBO's fourth-ranked junior middleweight boxer by June 2015. Id. ¶¶ 28-29.

         The WBO's Junior Middleweight World Championship was declared vacant on July 31, 2015. See Id. ¶¶ 31-33 and Ex. G. Under its Regulations, the WBO was supposed to provide an opportunity for the two best available contenders to negotiate to fight for the vacant title. Id. ¶ 33. Because the two top-ranked contenders in the WBO's Junior Middleweight division were unavailable for a championship fight at the time, Mr. Trout would have qualified as one of the two best available contenders on the basis of his June 2015 ranking. Id. ¶¶ 34-36. Instead of awarding him this valuable opportunity, the WBO completely removed him from its Junior Middleweight Rankings for July and August 2015, despite that he had not lost a fight during his time as a WBO-ranked boxer. See Id. ¶ 37. The WBO instead improperly elevated Liam “Beefy” Smith to the fourth-ranked and third-ranked positions, in the respective monthly rankings, and granted Mr. Smith a championship fight with John Thompson. See Id. ¶¶ 37-41. Mr. Trout did not reenter the WBO's Junior Middleweight Rankings until September 2015. Id. ¶ 39. Mr. Trout asserts that “the WBO disregarded its rules and regulations in exchange for financial payments from English promoter Frank Warren, whose financial clout” induced the WBO to “prevent Mr. Trout from obtaining a deserved title fight.” Id. ¶ 41.


         Mr. Trout brought suit in the Third Judicial District Court for the State of New Mexico on November 16, 2015, alleging claims of violation of the New Mexico Unfair Trade Practices Act (Count I), Fraud (Count II), and a Petition for Injunctive Relief (Count III). Id. ¶¶ 43-69. In addition to various forms of damages, Plaintiff sought appointment of a Special Master to oversee the operation of the WBO and its related entities to ensure it operated in compliance with law and its Constitution, Regulations, and By-laws. See Id. ¶¶ 64-67, 69. The WBO subsequently removed the case. Notice of Removal, ECF No. 1

         On February 12, 2016, the WBO filed a motion to dismiss for improper venue under Rule 12(b)(3), contending that a forum selection clause in its WBO Regulations required this Court to dismiss Plaintiff's action. Following briefing, on August 3, 2016, the Court denied the motion to dismiss based on a recent Supreme Court decision explicitly holding that motions under Rule 12(b)(3) are improper procedural mechanisms for the enforcement of forum selection clauses. See Mem. Op. And Order 7-8, ECF No. 9 (citing Atlantic Marine Constr. Co., Inc. v. U.S. Dist. Court, --- U.S. __, 134 S.Ct. 568, 575-579 (2013)). After determining that venue is proper in this Court under 28 U.S.C. § 1441, this Court explained the grounds for why a motion to transfer under § 1404 is the proper mechanism for enforcement of a forum selection clause. See Id. at 8-9. Because neither party had addressed the relevant private and public interest factors that the Court must consider in deciding a § 1404 transfer, nor had they conducted a conflict-of-law analysis to establish which law applied in determining whether the forum selection clause was valid and binding on the parties, the Court requested the parties brief these issues. See Id. at 11-12.

         Defendant responded by filing its Amended Motion for Transfer of Venue to the District of Puerto Rico under § 1404(a) (ECF No. 11). Defendant contends the forum selection clause is valid and enforceable and requires Plaintiff to litigate his claims, which arise out of and are inextricably linked to the Regulations, in the District of Puerto Rico. Def.'s Am. Mot. 2, ECF No. 11. Defendant asserts that, because Plaintiff has invoked the Regulations to support his position, he cannot now ignore the forum selection clause. Id. at 5. The WBO additionally argues that Mr. Trout cannot meet his burden of establishing extraordinary circumstances to overcome the enforceability of the mandatory forum selection clause, because the interests-of-justice factor favors litigation in the District of Puerto Rico where the court will be familiar with the applicable law, where the events underlying the dispute arose, where the majority of evidence and witnesses are located, and which has a less congested docket than this Court. See Id. at 6-11. Finally, Defendant contends that, even if the forum selection clause is not valid, the Court should transfer the action for convenience, efficiency, and the interests of justice. See Id. at 11-14.

         In response, Plaintiff argues that the purported contract lacks mutuality to support enforcement of the forum selection clause and is illusory because the WBO Regulations permit the WBO unilaterally to amend its regulations at any time. Pl.'s Resp. to Def.'s Am. Mot. 1-2, ECF No. 12. Plaintiff incorporates the arguments and authorities he set forth in his Response to the Motion to Dismiss for Improper Venue. Id. at 1. Plaintiff additionally asserts that the forum selection clause should not apply to a fraudulent scheme that occurred while the alleged contract was not in force. Id. at 2. Plaintiff contends that when the WBO removed Mr. Trout from the rankings, it undertook a fraudulent scheme that removed him from the scope of the purported contract, and thus, the WBO cannot seek the protections of the contract it intentionally abdicated. See Id. Plaintiff acknowledges that the injunctive relief he seeks is “so intrinsically intertwined with application of the Regulations in question that Plaintiff would agree that this individual claim would be more properly subject to litigation in the District of Puerto Rico.” Id. Plaintiff therefore “would agree to transfer and/or a stipulated dismissal of this particular cause of action.” Id. at 3. Plaintiff asserts that venue of the fraud and unfair trade practices act claim should be in New Mexico because the balance of factors favors Plaintiff's choice of forum. See Id. at 3-6.

         Although Defendant did not file a reply brief, the motion is ready for the Court's decision. Notice of Completion of Briefing, ECF No. 13. Because Plaintiff expressly incorporated his response to the motion to dismiss, the Court has considered Plaintiff's response to the motion to dismiss (ECF No. 6), Defendant's reply in support of its motion to dismiss (ECF No. 7), Defendant's amended motion to transfer (ECF No. 11), and Plaintiff's response to the amended motion to transfer (ECF No. 12).

         III. STANDARD

         The appropriate mechanism for enforcement of a forum selection clause that provides for suit in a federal forum is a motion for transfer under 28 U.S.C. § 1404(a). See Atlantic Marine, 134 S.Ct. at 575, 579-81. Section 1404(a) states: “For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.”

         Generally, the movant bringing a motion for transfer under § 1404(a) “bears the burden of establishing that the existing forum is inconvenient.” Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1515 (10th Cir. 1991). In deciding whether the movant has met this burden, a district court ordinarily evaluates both private interests of the parties and public-interest considerations. Atlantic Marine, 134 S.Ct. at 581 & n.6. Among the factors a district court should consider when ruling on a § 1404(a) motion are

the plaintiff's choice of forum; the accessibility of witnesses and other sources of proof, including the availability of compulsory process to insure attendance of witnesses; the cost of making the necessary proof; questions as to the enforceability of a judgment if one is obtained; relative advantages and obstacles to a fair trial; difficulties that may arise from congested dockets; the possibility of the existence of questions arising in the area of conflict of laws; the advantage of having a local court determine questions of local law; and, all other considerations of a practical nature that make a trial easy, expeditious and economical.

Chrysler Credit, 928 F.2d at 1516 (quoting Texas Gulf Sulphur Co. v. Ritter, 371 F.2d 145, 147 (10th Cir. 1967)).

         In contrast, when a § 1404(a) motion is based on a “contractually valid” forum selection clause, the motion to transfer should be granted absent “extraordinary circumstances unrelated to the convenience of the parties.” Atlantic Marine, 134 S.Ct. at 581 & n.5. “The enforcement of valid forum-selection clauses, bargained for by the parties, protects their legitimate expectations and furthers vital interests of the justice system.” Id. (internal quotations omitted). When a plaintiff has agreed in a contract to bring suit in a specific forum, the plaintiff's choice of forum merits no weight and the plaintiff bears the burden of establishing why the court should not transfer the case to the initial choice of forum set forth in the contract. Id. at 581-82. Moreover, a court should not consider private interest factors when the parties agreed to a valid forum-selection clause, because any inconvenience to the parties should have been clearly foreseeable at the time they agreed to the forum. Id. at 582. Instead, when evaluating a defendant's § 1404(a) motion to transfer based on a forum-selection clause, the court may only consider arguments about public-interest factors. Id. “Because those factors will rarely defeat a transfer motion, the practical result is that forum-selection clauses should control except in unusual cases.” Id.

         IV. ...

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