Department of Recreation and Sports of Puerto Rico v. World Boxing Ass'n

• Decision Date: 09 May 1991
• Docket Number: Nos. 90-2166,s. 90-2166
• Citation: 942 F.2d 84
• Parties: DEPARTMENT OF RECREATION AND SPORTS OF PUERTO RICO, et al., Plaintiffs, Appellants, v. WORLD BOXING ASSOCIATION, et al., Defendants, Appellees. Julio GERVACIO LIND, et al., Plaintiffs, Appellees, v. WORLD BOXING ASSOCIATION, et al., Julio GERVACIO, et al., Defendants, Appellants. Julio GERVACIO LIND, et al., Plaintiffs, Appellants, v. WORLD BOXING ASSOCIATION, et al., Defendants, Appellees. to 90-2168. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 84

942 F.2d 84

DEPARTMENT OF RECREATION AND SPORTS OF PUERTO RICO, et al., Plaintiffs, Appellants, v. WORLD BOXING ASSOCIATION, et al., Defendants, Appellees.

Julio GERVACIO LIND, et al., Plaintiffs, Appellees, v. WORLD BOXING ASSOCIATION, et al., Julio GERVACIO, et al., Defendants, Appellants.

Julio GERVACIO LIND, et al., Plaintiffs, Appellants, v. WORLD BOXING ASSOCIATION, et al., Defendants, Appellees.

Nos. 90-2166 to 90-2168.

United States Court of Appeals First Circuit.

Heard May 9, 1991.

Decided Aug. 21, 1991.

Anabelle Rodriguez, Asst. Sol. Gen., with whom Jorge E. Perez Diaz, Sol. Gen., Guaynabo, P.R., was on brief for Dept. of Recreation and Sports of Puerto Rico and the Puerto Rico Boxing Com'n.

James J. Binns, with whom Conrad O'Brien Gellman DeStefano & Rohn, P.C., Philadelphia, Pa., Morris M. Goldings, and Mahoney, Hawkes & Goldings, Boston, Mass., were on brief, for The World Boxing Ass'n., F. Gilberto Mendoza and James J. Binns.

Before CAMPBELL and SELYA, Circuit Judges, and COFFIN, Senior Circuit Judge.

COFFIN, Senior Circuit Judge.

The instant appeal arises from the district court's grant of summary judgment to the World Boxing Association ("WBA") on the consolidated diversity claims of a boxer, Julio Gervacio Lind, and his managers and promoter ("Gervacio" or "the Gervacio plaintiffs") and the Puerto Rico Professional Boxing Commission and the Department of Recreation and Sports of Puerto Rico (collectively, "the Commission"). Both sets of plaintiffs sought relief from the WBA's refusal to strip Bernardo Pinango of the world junior featherweight championship title because of drug use, a refusal that the plaintiffs alleged violated WBA rules and regulations. The district court granted summary judgment on the ground that the plaintiffs had failed to exhaust their internal remedies. We affirm the grant of summary judgment as to the Gervacio plaintiffs, but vacate as to the Commission and remand that action with instructions to dismiss the complaint for want of jurisdiction.

I. Background

The Department of Recreation and Sports is the department of government of Puerto Rico charged with regulating and promoting sports within the Commonwealth. The Puerto Rico Professional Boxing Commission is an entity created by the Department with responsibility for supervising professional boxing. The Commission is a member of the WBA with authority to enforce WBA rules as well as its own in prize fights held in Puerto Rico.

In February 1988, a WBA-sanctioned world championship match between then world champion Gervacio and challenger Pinango was held in San Juan, Puerto Rico. Following a referee decision for Pinango, two urine samples were taken from each of the contestants, in accordance with WBA rules. Each was signed by a physician and a representative of the boxer. The results of Pinango's first urinalysis showed traces of cocaine metabolites.

Upon receipt of the results, the Commission sent a letter to the president of the WBA, defendant Francisco Gilberto Mendoza, informing him of the laboratory findings and urging the WBA to disqualify Pinango. Mendoza launched an investigation that led to some questions about the taking, custody and testing of the urine samples. The Commission thereafter sent the second sample for analysis without informing Pinango of his right under WBA rules to have the second sample tested in his presence.

Mendoza invited the parties to attend the WBA executive committee meeting in Madrid on March 25-26, 1988. The Commission attended the meeting; the Gervacio plaintiffs did not. The WBA adopted an interim decision making drug tests mandatory and requiring Pinango to defend his crown against Gervacio within 120 days. It refused, however, to strip Pinango of the title, ostensibly because of the procedural imperfections in the urine sampling.

Both sets of plaintiffs filed suit challenging the fairness of the hearing they received in Madrid. They alleged that Mendoza informed them prior to the meeting that his mind already was made up. They also claimed that two of their important witnesses were not allowed to testify. Thus, they asserted that the hearing was a sham and that the WBA violated its own requirement that a boxer found to use drugs be disqualified. ¹

The district court held that the plaintiffs had not exhausted the internal grievance procedures of the WBA and therefore were not entitled to judicial review of the procedural fairness of the hearing afforded them. ² We shall address the claims of the two sets of plaintiffs separately.

II. The Gervacio Plaintiffs

On appeal, the Gervacio plaintiffs have not filed a separate brief or appeared for argument and have indicated their intent to rely on the arguments raised by the Commission. Neither the Commission nor the WBA has objected to the standard the district court applied in reviewing the procedural fairness of the actions of a voluntary organization. Under that undisputed standard, the complaining party must have exhausted the internal remedies afforded by the organization or show that it would have been futile to do so. See, e.g., Watkins v. Clark, 85 Misc.2d 727, 380 N.Y.S.2d 604, 608 (1976). See also Opinion and Order at 8-9.

The WBA provides two separate procedures for challenging the outcome of a fight. See World Championships Regulation 23, Appendix at 186; WBA By-Law 6, Appendix at 202-203. Gervacio admitted that he never attempted to invoke the remedies available to him under the rules and bylaws of the WBA. Based on this admission, the district court ruled that Gervacio had failed to exhaust his remedies.

In light of the undisputed facts, this decision clearly was correct. Moreover, the Gervacio plaintiffs have failed to contest the ruling on appeal or to present any reason for their failure to exhaust internal remedies. Even if, as the Commission contends on appeal, a letter it directed to the president of the WBA fulfilled its obligation to exhaust, this possible preservation of the Commission's rights is of no help to the Gervacio plaintiffs. It is undisputed on the record that the Commission did not, and indeed could not, represent any individual boxer. Consequently, we affirm the district court's grant of summary judgment to the defendants based on the Gervacio plaintiffs' failure to exhaust internal WBA remedies.

III. The Commission

The WBA argued to the magistrate and the district court two possible bases for disposing of the Commission's complaint. It argued that the complaint should be dismissed for want of subject matter jurisdiction. In the alternative, it argued that it was entitled to summary judgment because the Commission failed to exhaust internal remedies.

The magistrate recommended that the district court dismiss the Commission's complaint because it failed to indicate an adequate amount in controversy to create federal jurisdiction. ³ The district court, however, did not decide the question of its jurisdiction, holding that, in any event, the Commission had not exhausted its internal remedies. Because we believe that the court's jurisdiction was not properly pleaded, we decline to address the merits of the exhaustion claim. ⁴

The Commission invoked jurisdiction under 28 U.S.C. § 1332, for diversity of citizenship. ⁵ The complaint makes a general allegation that the amount in controversy exceeds the $10,000 requirement, independent of costs and interest. See Complaint at p 8. And paragraph fifteen of the complaint also asserts that "due to defendant's concerted and misguided efforts to thwart application of WBA regulations, plaintiff has expended public funds in excess of $10,000." But the complaint is devoid of any specific allegations supporting an amount in controversy in excess of $10,000.

Unless challenged by the opposing party or the court, a plaintiff's general allegation that the dispute exceeds the jurisdictional minimum is sufficient to support jurisdiction. Gibbs v. Buck, 307 U.S. 66, 72, 59 S.Ct. 725, 729, 83 L.Ed. 1111 (1939). Once challenged, however, the party seeking to invoke jurisdiction has the burden of alleging with sufficient particularity facts indicating that it is not a legal certainty that the claim involves less than the jurisdictional amount. Id.; St. Paul Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 & n. 10, 58 S.Ct. 586, 590 & n. 10, 82 L.Ed. 845 (1938); McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936). A party may meet this burden by amending the pleadings or by submitting affidavits. See Diefenthal v. Civil Aeronautics Bd., 681 F.2d 1039, 1052 (5th Cir.1982).

The WBA challenged the amount in controversy and propounded interrogatories concerning the basis for the Commission's claim that the value of the suit exceeded $10,000. The Commission's reply was vague. After the WBA demanded that it supplement its answer, the department responded that the funds in issue were

$8,412.00 in airline tickets for plaintiff's representatives to the meeting wherein the matter now under litigation was supposed to have been resolved. $552.03 for lodging and miscellaneous expenses. $11,900.00 for the handwriting expert retained to demonstrate to the now defendants the authenticity of the signature on the original urine sample containers.

Appendix at 300-301.

In an action for declaratory judgment, "the amount in controversy is measured by the value of the object of the litigation." Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333, 347-48, 97 S.Ct. 2434, 2443-44, 53 L.Ed.2d 383 (1977). See also McNutt, 298 U.S. at 181, 56 S.Ct. at 781 (if the object of litigation is to be free of certain regulation, amount in controversy is the loss that would follow the enforcement of that regulation). In its complaint, the Commission sought a declaratory judgment under 28 U.S.C. § 2201 requiring the WBA "to enforce its own World Championship Regulations and Safety Code thereby disqualifying defendant...