Case 3:17-cv-01953-PAD Document 77 Filed 11/06/18 Page 1 of 9

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

AUSTIN TROUT,

Plaintiff,

v. Case No. 17-1953 (PAD)

ORGANIZACION MUNDIAL DE BOXEO, INC.,

Defendant.

RESPONSE IN OPPOSITION TO PLAINTIFF’S MOTION FOR RECONSIDERATION

Plaintiff has not set forth a basis for this Court to grant the extraordinary relief of

reconsidering its Opinion and Order granting WBO’s motion to compel arbitration (Doc. 71).

Plaintiff has identified no error of law or fact, which are the only grounds that he raises in support

of the Motion for Reconsideration (“Motion”). The Motion is instead an improper attempt by

Plaintiff to relitigate issues that he has already presented and lost, which is a prohibited use for a

motion for reconsideration. Plaintiff has not established that the WBO waived its right to

participate in arbitration, that the WBO World Championship Regulations disallow arbitration,

that the claims under the Muhammed Ali Act are not subject to arbitration, or that Plaintiff has

suffered any prejudice. The Court should deny the Motion.

INTRODUCTION

Plaintiff originally filed his Complaint in New Mexico state court on November 16, 2015.

(Doc. 1-1). Upon being served with the Complaint and determining that it was removable to

federal court, WBO removed the matter to the United States District Court for the District of New

Mexico on February 9, 2016. Immediately thereafter on February 12, 2016, WBO moved to

dismiss the Complaint because it was brought in the wrong forum – New Mexico – instead of

Puerto Rico (Doc. 4). That motion was briefed, and the court ordered the parties to submit
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additional briefing on the question of proper venue (Doc. 9). Per the court’s order, on August 23,

2016, WBO filed a motion to transfer the case to the United States District Court for the District

of Puerto Rico (Doc. 11). The New Mexico court ultimately granted that motion on July 5, 2017

(Doc. 15), finding that venue was proper in this Court. Not one of these pleadings addressed the

merits of this case, and instead each was directed solely to moving the Complaint to the proper

venue. Thereafter, on August 28, 2017, on the same day and in the same pleading as its answer,

WBO moved to compel arbitration pursuant to the WBO grievance procedure required under

Section 35(e) of the WBO World Championship Regulations (“Regulations”). (Doc. 27). The

Court did not rule on the motion to compel arbitration until over a year later, on September 30,

2018. (Doc. 71). None of the WBO’s previous motions directed to jurisdiction and venue were

related to the merits of this matter. Most importantly, by the time the WBO communicated its

intent to arbitrate this matter, WBO had not engaged in any discovery, litigation on the merits, or

any other activity inconsistent with its right to arbitrate.

I. WBO DID NOT WAIVE ITS RIGHT TO ARBITRATION.

Plaintiff’s brief highlights the “strong” federal policy favoring arbitration and that “[a]ny

doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” (Mot.

at 4 (quoting Restoration Preservation Masonry v. Grove Europe, 325 F.3d 54, 60 (1st Cir. 2003)

(emphasis added)). “The Supreme Court has stated that any doubt concerning arbitrability ‘should

be resolved in favor of arbitration, whether the problem at hand is the construction of the contract

language itself or an allegation of waiver, delay, or a like defense to arbitrability.’” Creative

Solutions Group v. Pentzer Corp., 252 F.3d 28, 32 (1st Cir. 2001) (quoting Moses H. Cone Mem’l

Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 (1983)). In this case, any doubts over whether the

parties should mediate this matter must be resolved in WBO’s favor.

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A. WBO did not waive its right to arbitrate by seeking to move this case to a proper
forum in order to properly decide arbitrability.

Plaintiff does not present any new arguments in support of his waiver theory. Instead, he

simply restates issues that he briefed in response to the motion to compel. This is not a proper use

of a motion for reconsideration. Plaintiff again argues the WBO implicitly waived its right to

participate in arbitration by removing this matter to federal court, filing a motion to dismiss for

improper venue, and ultimately for succeeding in having this matter transferred to this district.

(Mot. at 5). As the Court properly noted in its Opinion and Order, the WBO filed its motion to

compel arbitration as soon as was practicable once this matter was brought to the proper forum.

(Doc. 71 at 9.) Plaintiff’s Motion cites nothing that changes this outcome and instead is merely a

rehashing of arguments from his response to the motion to compel, which he has now lost. “[I]t

is well-established that a party does not waive its right to arbitrate merely by filing a motion to

dismiss.” Sharif v. Wellness Intern. Network, Ltd., 376 F.3d 720 (7th Cir. 2004) (quoting Creative

Solutions Group, 252 F.3d at 33). None of the motions filed by the WBO went to the merits of

this matter, and the WBO never filed dispositive motions such as summary judgment motions.

Plaintiff argues that the WBO spent 21 months invoking the jurisdiction of the federal court

(Mot. at 8), but wholly overlooks that the purpose of this was to move the Complaint to a proper

forum so that the correct court could evaluate whether the matter was subject to arbitration.

Regardless, a party does not waive its right to arbitrate by filing motions solely directed to

jurisdiction and venue. Williams v. Cigna Financial Advisors, Inc., 56 F.3d 656 (5th Cir. 1995).

It can “hardly be said that ‘the litigation machinery had been substantially invoked and the parties

were well into preparation of a lawsuit by the time an intention to arbitrate was communicated.”

Creative Solutions Group, 252 F.3d at 33 (quoting Jones Motor Co., Inc. v. Chauffeurs, Teamsters,

and Helpers Local Union No. 633, 671 F.2d 38, 44 (1st Cir. 1982)). By the time WBO moved to

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compel arbitration, no discovery or motions on the merits had transpired. See FPE Found. v.

Cohen, 801 F.3d 25, 31 (1st Cir. 2015) (“Even if, arguendo, they had submitted a new motion,

such a filing would still have been a far cry from the type of action that we have deemed sufficient

to constitute a conduct-based waiver.”); J & S Constr. Co. v. Travelers Indem. Co., 520 F.2d 809,

809-10 (1st Cir. 1975) (no waiver where the defendant waited 13 months to request arbitration and

actively participated in discovery). This Court should resolve any doubts in favor of the strong

policy encouraging arbitration and deny Plaintiff’s Motion. FPE Found. v. Cohen, 801 F.3d 25,

29 (1st Cir. 2015).

B. The WBO has not taken any action inconsistent with arbitration.

The WBO has not taken any positions inconsistent with arbitration. As soon as the WBO

ensured that this matter was moved to the proper venue to decide the scope of arbitrable issues,

WBO filed an answer containing a motion to compel arbitration. (Doc. 27.) Thus, as soon as was

practicable in the proper forum, WBO communicated to Plaintiff that it intended to arbitrate this

matter. See Creative Solutions Group, Inc., 252 F.3d at 32. When that occurred on August 28,

2017, no merits litigation or discovery had transpired. This Court did not rule on the motion to

compel arbitration until September 30, 2018, which was 13 months after WBO filed its motion.

Clearly, WBO could not have simply decided not to participate in litigation given the approaching

discovery and dispositive motions deadline and the fact that the Court had not yet decided the

motion to compel. WBO would never refuse to abide by the Court’s scheduling orders. Plaintiff

has cited to no authority mandating the WBO to sit idly and let litigation run its course simply

because the Court had not yet ruled on its motion to compel arbitration.

Plaintiff’s argument misses the mark entirely because he focuses on the exchange of

discovery that took place only after the WBO filed its motion to compel arbitration. In assessing

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whether a defendant has impliedly waived its right to arbitrate, courts look to whether the

defendant has “substantially” invoked “the litigation machinery … by the time an intention to

arbitrate was communicated by the defendant to the plaintiff.” Id. This is critical, because all of

Plaintiff’s arguments bear on whether the WBO was actively participating in litigation at a much

later time, many months after the WBO filed its motion to compel arbitration. (See Mot. at 8-11)

By the time WBO filed its answer and motion to compel arbitration on August 28, 2017 in the

proper venue, WBO had not participated in litigation other than its motions concerning venue.

Regardless, this Court already carefully considered all of these issues on the briefing on the motion

to compel. Plaintiff has not raised any new arguments. A motion for reconsideration “may not be

used by the losing party ‘to repeat old arguments previously considered and rejected, or to raise

new legal theories that should have been raised earlier.’” Villanueva-Mendez v. Nieves Vazquez,

360 F. Supp. 2d 320, 323 (D. P.R. 2005) (quoting National Metal Finishing Com. v.

BarclaysAmerican/Commercial, Inc., 899 F.2d 119, 123 (1st Cir. 1990)).

C. Plaintiff has not shown prejudice.

Plaintiff has made no plausible showing that he suffered any prejudice. In order to prevail

on his waiver argument, Plaintiff “must show prejudice.” Creative Solutions Group, 252 F.3d at

32. “Waiver is not to be lightly inferred, and mere delay in seeking arbitration without some

resultant prejudice to a party cannot carry the day.” Benitez-Navarro v. Gonzalez-Aponte, 660 F.

Supp. 2d 185 (D. P.R. 2009) (quoting Creative Solutions Group, 252 F.3d at 32). As this Court

aptly found, Plaintiff failed to show prejudice. Although Plaintiff cites authority stating that the

required showing of prejudice is “tame at best” (Mot. at 13), the authority is inapposite. In Joca-

Roca Real Estate, LLC v. Brennan, 772 F.3d 945, 949 (1st Cir. 2014), the plaintiff sought

arbitration in a lawsuit that the plaintiff filed. The defendant asserted waiver of the intention to

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arbitrate because the plaintiff had filed a lawsuit, and prejudice because the defendant was forced

to spend considerable resources in defending the suit. Id. In stark contrast here, Plaintiff is the

one who filed this suit – not the WBO. The WBO has spent time and resources in defending

Plaintiff’s claims. That Plaintiff has incurred some litigation costs can hardly be surprising given

that Plaintiff is the one who filed suit. Plaintiff contends that he suffered prejudice because he

“designed a legal and financial strategy that envisioned the case to be litigated in court, be it state

or federal.” (Mot. at 14.) However, by the time WBO filed it answer in August of 2017, the intent

to arbitrate was made explicitly clear to Plaintiff via the motion to compel filed concurrently

therewith. As the Court already noted (Doc. 71 at 9), Plaintiff’s incurred legal expenses are hardly

persuasive grounds for waiver when Plaintiff is the one who filed this lawsuit.

II. SECTION 35(d) DOES NOT OVERRIDE THE ARBITRATION CLAUSE.

Plaintiff’s argument under Section 35(d) of the Regulations is simply an attempt at another

bite at the apple. “It is settled that ‘[a] motion for reconsideration does not provide a vehicle for

a party to undo its own procedural failures and it certainly does not allow a party to introduce new

evidence or advance arguments that could or should have been presented to the district court prior

to the judgment.’” Silva Rivera v. State Insurance Fund Corp., 488 F. Supp. 2d 72 (D. P.R., 2007)

(quoting Marks 3 Zet-Ernst Marks GmBh & Co. KG v. Presstek, Inc., 455 F.3d 7, 15-16 (1st Cir.

2006)). A motion for reconsideration “must either clearly establish a manifest error of law or must

present newly discovered evidence.” Silva Rivera, 488 F. Supp. 2d at 77.

Plaintiff already presented (and lost) his argument that Section 35(d) of the Regulations

overrides Section 35(e) of the Regulations. (Doc. 40 at 9-11). Indeed, his arguments in this regard

in the present Motion are virtually identical to those he presented in his response to the motion to

compel arbitration. Regardless, the validity of the forum selection clause does not invalidate the

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arbitration clause contained in the same regulations. It is well established that forum selection

clauses “are prima facie valid and should be enforced unless enforcement is shown by the resisting

party to be unreasonable under the circumstances.” Rivera v. Centro Medico de Turabo, Inc., 575

F.3d 10, 18 (1st Cir. 2009). An agreement to arbitrate is a “specialized kind of forum-selection

clause.” Scherk v. Alberto-Culver Co., 417 U.S. 506, 519 (1974). The clauses here are not mutually

exclusive. One clause—Section 35(d)—dictates applicable law and a chosen location for possible

lawsuits involving WBO, and the other—Section 35(e)—dictates the selected procedure for

disputes regarding WBO regulations. The Court cannot give weight to one clause more than

another. Plaintiff has not provided any new argument or any error of law or fact justifying the

Court to reconsider its Opinion and Order.

III. THE CLAIMS UNDER THE ALI ACT ARE SUBJECT TO ARBITRATION.

Again, Plaintiff already raised the issue of the Muhammed Ali Act (“Act”) being subject

to arbitration in his briefing on the motion to compel arbitration. (Doc. 40 at 29-30.) A motion for

reconsideration “may not be used by the losing party to repeat old arguments previously considered

and rejected, or to raise new legal theories that should have been raised earlier.” Silva Rivera v.

State Insurance Fund Corp., 488 F. Supp. 2d at 77 (internal citation and quotation marks omitted).

Even if this argument was new, it still fails. As the Court correctly found, Plaintiff’s fraud,

negligence, and contract claims are inextricably intertwined within his claims under the Act.

A party who has agreed to arbitrate has, in effect, relinquished the “right to a court’s

decision about the merits of its dispute.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938,

942 (1995). The scope of issues subject to arbitration is determined by the agreement itself. See

id. at 945. “Issues will be deemed arbitrable unless it is clear that the arbitration clause has not

included them.” Id. (citing G. Wilner, 1 Domke on Commercial Arbitration § 12.02, p. 156)

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(internal quotations omitted) (emphasis added). The Section 35(e) arbitration clause applies to

“any claim, appeal, grievance or contest that arises from any right or status that is or could be

subject to [the WBO] regulations or which result or could result from or relate to the interpretation

or application of [the WBO] regulations.” Defendant’s compliance with or breach of the Act

relates to the interpretation or application of WBO’s regulations, and thus falls within the scope of

arbitration that Plaintiff agreed to. Moreover, the Act itself does not prohibit the use of arbitration

for the resolution of a claim arising under it. See 15 U.S.C. § 6309. As such, Plaintiff’s claims

under the Act should be arbitrated pursuant to the parties’ agreement.

IV. CONCLUSION

Plaintiff has failed to demonstrate any manifest error of law or fact requiring this Court to

reconsider what it has already carefully considered. Plaintiff’s Motion for Reconsideration merely

presents the exact same arguments that he has already presented and lost. A motion for

reconsideration is not a vehicle to relitigate old issues. This Court should not reconsider its Opinion

and Order.

Respectfully submitted,

JOSEPH LAWS PSC

By: /s/ Joseph C. Laws, Jr.

Joseph C. Laws, Jr.
Post Office Box 10143
San Juan, Puerto Rico
Telephone: 787-754-7777
Email: lawofficesofjosephlaws@gmail.com
Attorneys for Defendant
Organization Mundial De Boxeo, Inc.

CERTIFICATE OF SERVICE

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I hereby certify that on November 6, 2018 I filed the foregoing pleading electronically through the
CM/ECF system, which caused all parties or counsel to be served by electronic means, as more
fully reflected on the Notice of Electronic Filing.

Miguel J. Ortega Núnez

USDC 220609
CANCIO, NADAL, RIVERA & DÍAZ,PSC
PO Box 364966
San Juan, PR 00936-4966
403 Ave. Muñoz Rivera
Hato Rey, PR 00918-3345
Tel. (787) 767-9625
Fax (787) 622-3461
Email: mortega@cnrd.com
Attorneys for Plaintiff Austin Trout

JOSEPH LAWS PSC

By /s/ Joseph C. Laws, Jr.

Joseph C. Laws, Jr.