Next fight for Pacquiao? Fending off class actions by angry viewers.

May 6, 2015
Pacquiao of the Philippines takes a punch from Mayweather, Jr. of the U.S. in the second round during their welterweight title fight in Las Vegas

Manny Pacquiao takes a punch from Floyd Mayweather, Jr. in Las Vegas, Nevada, May 2, 2015. REUTERS/Steve Marcus

Boxing metaphors are a cliché of legal journalism but for once they’re entirely appropriate: Filipino boxer Manny Pacquiao and his promoters and business advisers have been hit with a flurry of punches by viewers who paid between $90 and $100 apiece to watch Pacquiao’s fight Saturday against Floyd Mayweather Jr in the so-called Fight of the Century.

In seven different class actions filed in federal courts in four different states, consumers claim they wouldn’t have paid to see the match if Pacquiao had admitted his shoulder was injured. Instead, the lawsuits assert, Pacquiao, his promotion company Top Rank and his advisers hid the injury from the Nevada Athletic Commission and from prospective pay-per-view customers. Only after the fight, according to the filings, did Pacquiao’s camp admit he had been injured in a training session in early April and was fighting at significantly less than full strength.

Five of the suits just name defendants associated with Pacquiao. One, filed in federal court in Chicago, also names Mayweather and his promotion company as well as broadcasters HBO, Showtime, AT&T, Comcast and DirecTV. The Chicago complaint doesn’t offer specific evidence that anyone outside of Pacquiao’s entourage was aware of the injury but asserts all of the defendants concealed the news to maximize their pay-per-view profits.

My Reuters colleague David Ingram reached out to all of the defendants but received a response only from Pacquiao lawyer Daniel Petrocelli of O’Melveny & Myers, who said in an email, “The lawsuits are factually wrong and legally wrong, and we expect they will be dismissed in due course.”

Obviously, we’ll have to wait to see what arguments Petrocelli – a fierce lawyer who, to use one of those boxing clichés, is good to have in your corner – comes up with. (I called to ask him to expand on his email statement but didn’t hear back.) And unless the Chicago plaintiffs can come up with evidence that Mayweather and the broadcasters were aware of Pacquiao’s injuries, I don’t think those defendants have much to worry about.

The case against Pacquiao and his people, on the other hand, definitely has a lot of common-sense appeal (assuming the allegations are true and the Pacquiao camp really did cover up his injury): Because of Pacquiao’s supposed lies, customers didn’t get what they paid for. The class actions raise claims under state consumer and fraud laws, and eventually, judges are going to have to figure out whether the litigation should proceed as a nationwide class action or as statewide cases. (Two of the suits, one filed in Texas and the other in California, were brought on behalf of statewide classes.) Regardless of how that sorts out, viewers will argue that they were promised a fight between two healthy boxers and that’s not the product they received.

I’m pretty confident, however, that their simple, common-sense argument isn’t going to turn out to be so simple at all. One big issue will be whether consumers actually bought anything from Pacquiao and the Pacquiao defendants. Yes, the fighters received a cut of the pay-per-view proceeds, but was the money directly from pay-per-view customers? And if not – if money from consumers went to their television and internet service providers, which, in turn paid the boxers – do consumers have a right to sue Pacquiao for defrauding them? You can be sure Petrocelli and O’Melveny & Myers will argue that they do not.

There is also the complication of what pay-per-view customers agreed to in contracts with their television and Internet service providers. Most consumer contracts require arbitration and prohibit class actions. Pacquiao could argue that even if pay-per-view purchasers have a claim against him, they can’t sue as a class but must go to individual arbitration. Consumers typically don’t bother to bring $100 arbitration cases so if Pacquiao could win a ruling that their claims are subject to arbitration, he’d erase most of his exposure.

Plaintiffs’ lawyer William Federman of Federman & Sherwood, who represents a viewer in a Los Angeles federal court class action against Pacquiao and his promotion company, told me he anticipates the defendants will raise both mandatory arbitration and right-to-sue arguments. He said that because Pacquiao received pay-per-view revenue, consumers ought to be able to sue him for fraud. He also said he doesn’t believe consumer contracts with their television and Internet service providers will apply to the claims against Pacquiao so the case will be allowed to proceed as a class action. Plaintiffs’ lawyer Robert Duncan, who filed the Chicago case along with Agruss Law Firm and Cronin & Co, also said pay-per-view customers can sue Pacquiao even if they did not pay him directly to see the fight. “We believe our clients were sold a product that didn’t exist,” he said.

If courts do allow pay-per-view purchasers to litigate against Pacquiao, they may have a hard time showing that they didn’t get what they paid for, according to Michael McCann, a sports law professor at the University of New Hampshire. McCann pointed to suits by New York Jets ticket holders who said the New England Patriots owed them compensation for stealing Jets plays and by San Antonio Spurs fans who sued to recover ticket prices for a game in which the team rested star players. Both cases were tossed, McCann said.

Interestingly, the litigation that was expected to follow the fight hasn’t materialized. Before the match, Showtime, HBO and the boxers’ promotion companies filed a preemptive copyright infringement suit against unnamed Internet sites they expected to provide unauthorized live streams of the fight. The Wall Street Journal reported Monday that users of the services Periscope and Meerkat posted links to live-stream video during the fight. Both services told the Journal they’d received dozens of takedown notices from copyright holders. But so far – and maybe because the services responded quickly to the takedown notices – copyright holders haven’t sued any known sites for showing unauthorized video.

(This story has been corrected. A previous version incorrectly identified Dan Petrocelli’s law firm.)

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Yawn. Boxing is so boring.

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