American Broadcasting Companies, Inc. v. Ali

Decision Date22 July 1977
Docket NumberNo. 77 Civ. 1866 (MP).,77 Civ. 1866 (MP).
Citation434 F. Supp. 1108
PartiesAMERICAN BROADCASTING COMPANIES, INC. and ABC Sports, Inc., Plaintiffs, v. Muhammad ALI, Defendant.
CourtU.S. District Court — Southern District of New York


Graubard Moskovitz McGoldrick Dannett & Horowitz, New York City, for plaintiffs, by Emanuel Dannett, Michael W. Sculnick, New York City, of counsel.

Freeman, Meade, Wasserman & Schneider, New York City, for defendant, by David W. Cohen, Herbert M. Hellman, New York City, of counsel.

POLLACK, District Judge.

An application has been made in this suit by plaintiffs for a preliminary injunction against defendant to restrain him from proceeding with the arbitration he has demanded of a labor dispute that has arisen between the parties. The plaintiffs contend on a variety of grounds that neither are they obligated to arbitrate with defendant nor is the dispute arbitrable because it was embraced in and disposed of in a prior litigation between the parties. For the reasons shown hereafter the application for a preliminary injunction is denied.

Jurisdiction of this suit is asserted under Section 301 of the Labor Management Relations Act, as amended, 29 U.S.C. § 185(a), 28 U.S.C. § 1331 and is posited as well on diversity of citizenship and requisite amount, 28 U.S.C. § 1332.

The plaintiffs, American Broadcasting Companies, Inc. and ABC Sports, Inc., (collectively referred to hereafter as "ABC") are signatories to collective bargaining agreements with a labor organization, the American Federation of Television and Radio Artists (AFTRA) of which defendant, Muhammad Ali, is a member in good standing. The arbitration was instituted with the express written consent of AFTRA pursuant to the AFTRA 1973-1976 National Code of Fair Practise for Network Television Broadcasting (the "Code") which sets forth in detail the terms, rates and conditions of employment for those who perform on television. In the attempted arbitration Ali seeks to recover the attorneys' fees, costs and expenses he incurred in his successful defense of a libel action in this Court, Perez v. Ali, which arose out of Ali's appearance as a commentator on a publicly broadcast ABC show in which Ali was interviewed by Howard Cosell in connection with the Ali-Wepner heavyweight championship fight on March 24, 1975. Ali received $5,000 for his appearance, described on the check as "Reimbursement of expenses for WWOS."

Following the broadcast, Anthony Perez, Jr., the referee in the fight, commenced an action against Ali, alleging, inter alia, that statements made by Ali during the Cosell interview were, as to Perez, malicious, false and defamatory. Ali subsequently commenced a third party action against ABC seeking indemnity and contribution from ABC based on Ali's reliance on ABC to delete prior to publication and broadcast any statements that could expose Ali to liability. The claims over were made with respect to any judgment entered in favor of Perez and against Ali, "together with costs and disbursements plus the expenses incurred in defending the principal action, including attorneys' fees."

The case was tried on the merits before a jury, and after all parties had rested the trial Judge dismissed Ali's claim for indemnity against ABC. The case was submitted to the jury, which returned a verdict in favor of Ali. The claim over against ABC was contingent on the jury's finding for Perez and, as such, was never decided, for the jury was instructed that: "If and only if you find for Mr. Perez against Mr. Ali, you must then consider Ali's claim against ABC and ABC Sports." After the jury verdict against Perez, the trial Judge dismissed Ali's remaining third-party claim against ABC for contribution. All parties appealed and the judgment entered was affirmed on appeal by the Court of Appeals with a minor exception not relevant here.

Paragraph 75 of the Code provides that "This Code also applies to all ... commentators and analysts and persons who criticize, review and/or comment on ... sports;" and "This Code also applies to professional performers appearing as interviewees on entertainment programs. ..." The standard contract set out in the Code furthermore states, ¶ 68 subd. 2(a), that the producer of a program agrees to indemnify the performer against "any and all claims, damages, liabilities, costs and expenses (including reasonable attorneys' fees)" arising out of "acts done or words spoken by Performer at Producer's request".

The standard contract governing parties to the collective bargaining agreements provides for arbitration as follows:

All disputes and controversies of every kind and nature arising out of or in connection with this agreement shall be determined by arbitration with the procedure and provisions of the said AFTRA Code of Fair Practise." ¶ 68 subd. 7-d.

Moreover, the general section of the Code in respect to Arbitration is contained in paragraph 95 by which parties to the collective bargaining agreements have agreed to arbitrate

all disputes and controversies of every kind and nature whatsoever between any Producer ... and any member of AFTRA, arising out of or in connection with this Code, and any contract or engagement ... in the field covered by this Code, as to the existence, validity, construction, meaning, interpretation, performance, nonperformance, enforcement, operation, breach, continuance, or termination of this Code and/or such contract or engagement.... Code, ¶ 95. (Emphasis supplied)

Plaintiffs claim that there is no agreement to arbitrate the dispute herein since (a) Ali was not paid, hence not employed by them, in connection with the Cosell interview — the $5,000 merely being to cover expenses — and (b) Ali's participation in the Cosell interview does not fall within ¶ 75 of the Code, which defines the "People Covered" by it.

The role of the Court in a case such as this is to decide whether the parties have agreed to submit a specific dispute to arbitration. United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 n.7, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409, 1417 (1960); ABC, Inc. v. American Federation of Television and Radio Artists, 412 F.Supp. 1077, 1082 (S.D.N.Y.1976).

The rule governing this determination is that

an order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage. United Steelworkers, supra, at 582-583, 80 S.Ct. at 1353, 4 L.Ed.2d at 1417-18.

It is clear that plaintiffs' argument that there was no contract or engagement between themselves and Ali with respect to the Cosell interview is an issue expressly reserved by the parties for resolution by the arbitrator (if there is to be an arbitration), and not this Court; for this is a dispute as to the "existence . . . meaning, interpretation of . . . such contract or engagement. . . ." Code, ¶ 95 (Emphasis supplied).

The arbitration provision leaves it to the arbitrator to decide whether the contract or engagement between the parties, if ...

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