Don King Productions, Inc. v. Douglas

• Citation: 742 F. Supp. 778
• Decision Date: 29 June 1990
• Docket Number: No. 90 Civ. 1203 (RWS).,90 Civ. 1203 (RWS).
• Parties: DON KING PRODUCTIONS, INC., Plaintiff, v. James "Buster" DOUGLAS, John P. Johnson, Golden Nugget, Inc., and the Mirage Casino-Hotel, Defendants.
• Court: U.S. District Court — Southern District of New York

742 F. Supp. 778

DON KING PRODUCTIONS, INC., Plaintiff, v. James "Buster" DOUGLAS, John P. Johnson, Golden Nugget, Inc., and the Mirage Casino-Hotel, Defendants.

No. 90 Civ. 1203 (RWS).

United States District Court, S.D. New York.

June 29, 1990.

Sidley & Austin, New York City, for plaintiff; Robert W. Hirth, of counsel.

Hunterton & Naylor, P.C., Las Vegas, Nev., for defendants James "Buster" Douglas and John P. Johnson; C. Stanley Hunterton, of counsel.

Warshaw Burstein Cohen Schlesinger & Kuh, New York City, for defendants The Mirage Casino-Hotel and Golden Nugget, Inc.; Robert Fryd, of counsel.

OPINION

SWEET, District Judge.

Don King Productions, Inc. ("DKP") moves for partial summary judgment against defendants James "Buster" Douglas ("Douglas") and John P. Johnson ("Johnson") striking these defendants' affirmative defense of unconscionability and dismissing their counterclaims for slander and intentional infliction of emotional distress. The motion is granted for the reasons set forth below.

The Parties and Prior Proceedings

Facts and past proceedings relating to this action are set forth in the court's prior opinion of May 18, 1990 742 F.Supp. 741 (the "May 18 Opinion") which determined the parties' cross-motions for summary judgment, familiarity with which is assumed. The present motion, which followed the submission of defendants' answer and counterclaims and their responses to interrogatories in connection therewith, originally was made returnable on June 19, 1990. That same day several additional motions in limine were argued and, with the parties' blessing, argument of this partial summary judgment motion was adjourned until June 22 to provide the parties additional preparation time. The motion was argued on that date, after which a supplemental submission was received from DKP on June 27, 1990.

Standards Applicable to Summary Judgment Motions

Summary judgment is authorized if "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R. Civ.P. 56(c). The moving party bears the burden of proving that no genuine issue of material fact exists. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986); Corselli v. Coughlin, 842 F.2d 23 (2d Cir. 1988). All ambiguities are resolved against the moving party, and all favorable inferences are drawn in favor of the party against whom summary judgment is sought. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 1608-09, 26 L.Ed.2d 142 (1970); Ramseur v. Chase Manhattan Bank, 865 F.2d 460, 465 (2d Cir.1989); Eastway Constr. Corp. v. City of New York, 762 F.2d 243, 249 (2d Cir.1985), cert. denied, 484 U.S. 918, 108 S.Ct. 269, 98 L.Ed.2d 226 (1987).

However, courts should not be reluctant to grant summary judgment in appropriate cases. "One of the principal purposes of the summary judgment rule is to isolate and dispose of factually insupportable claims," Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986), thereby permitting courts to avoid "protracted, expensive and harassing trials." Meiri v. Dacon, 759 F.2d 989, 998 (2d Cir.), cert. denied, 474 U.S. 829, 106 S.Ct. 91, 88 L.Ed.2d 74 (1985).

The Unconscionable Contracts Defense

Douglas and Johnson plead as an affirmative defense that the contracts they entered into with DKP are unconscionable. Under New York law (which previously has been found to govern the validity of these contracts, see May 18 Opinion at 759), a determination of unconscionability

requires a showing that the contract was both procedurally and substantively unconscionable when made—i.e., "some showing of an `absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.'"

Gillman v. Chase Manhattan Bank, N.A., 73 N.Y.2d 1, 10, 537 N.Y.S.2d 787, 791, 534 N.E.2d 824, 828 (1988) (citations omitted and emphasis supplied). The factual contentions set forth in the Douglas/Johnson interrogatories to support the unconscionability defense—that the Tokyo conduct of King was unconscionable, that King is a powerful promoter, and that exclusive, extendable terms of the contracts are unreasonably favorable to King—are as a matter of law insufficient.

The Douglas/Johnson contention that the contracts "became unconscionable" after their inception owing to King's conduct during the Tokyo fight is unavailing, as the underlined language in Gillman illustrates. The doctrine of unconscionability implicates the circumstances and terms of a contract at the time of formation—not the parties' subsequent performance under it. See State v. Avco Financial Service of New York, Inc., 50 N.Y.2d 383, 390, 429 N.Y.S.2d 181, 185, 406 N.E.2d 1075, 1079 (1980) (referring to "circumstances existing at the time of the making"). The Tokyo performance by King is, of course, relevant to whether King breached his obligations of good faith and fair dealing under the contracts, an issue discussed at length in the May 18 Opinion and which has been reserved for trial to a jury. That conduct has, however, absolutely no bearing on the defense of unconscionability, which relates to substantive and procedural fairness of a contract "when made." Gillman, 73 N.Y.2d at 10, 537 N.Y.S.2d at 791, 534 N.E.2d at 828.

Douglas/Johnson next contend that King so dominates promotion of heavyweight fights that the Douglas-King contracts are inherently procedurally unconscionable. That assertion, if true, sounds more probative of an antitrust claim for monopolization than it is demonstrative of the particularized showing of an unfair bargaining process that is requisite to the defense of unconscionability. Douglas/Johnson make no allegation here that deceptive or high-pressure tactics were employed in concluding the contracts, that contract terms were concealed in fine print, or that there was a gross asymmetry in the experience and education of the parties, each of whom was represented by counsel throughout the course of their arms-length negotiations. See May 18 Opinion at 747; cf. Gillman, 73 N.Y.2d at 11, 537 N.Y.S.2d at 791, 534 N.E.2d at 828 (identifying relevance of these and other factors to establishment of procedural unfairness).

At least as stated in the responses to the contention interrogatories, the unconscionability defense does not here implicate its primary use as "a means with which to protect the commercially illiterate consumer beguiled into a grossly unfair bargain by a deceptive vendor or finance company." Marvel Entertainment Group, Inc. v. Young Astronaut Council, No. 88-5141, 1989 WL 129504 (S.D.N.Y. October 27, 1989), 1989 U.S. Dist. LEXIS 12803, at 11 (quoting Gillman v. Chase Manhattan Bank, N.A., 135 A.D.2d 488, 491, 521 N.Y. S.2d 729, 732 (2d Dep't 1987), aff'd, 73 N.Y.2d 1, 537 N.Y.S.2d 787, 534 N.E.2d 824 (1988)). Without some definite allegation of a defect in the contract negotiation process apart from King's stature in the boxing field, which alone does not suggest "inequality so strong and manifest as to shock the conscience and confound the judgment," id. (quoting Christian v. Christian, 42 N.Y.2d 63, 71, 396 N.Y.S.2d 817, 823, 365 N.E.2d 849, 855 (1977)), defendants have failed to create an issue of procedural unconscionability requiring resolution by jury.

The contention that the contracts require Douglas to fight exclusively for DKP for the extendable terms of such contracts, which could amount to the rest of the boxer's professional life, equally fails to satisfy the requirement of substantive unconscionability. Only in "exceptional cases" is "a provision of a contract ... so outrageous as to warrant holding it unenforceable on the ground of substantive unconscionability alone." Gillman, 73 N.Y.2d at 12, 537 N.Y.S.2d at 792, 534 N.E.2d at 829 (omitting citations); see also Marvel Entertainment, supra, 1989 WL 129504, 1989 U.S. Dist. LEXIS at 11 (citing Christian v. Christian, 42 N.Y.2d 63, 71, 396 N.Y.S.2d 817, 823, 365 N.E.2d 849, 855 (1977) (terms must be "such as no person in his senses and not under delusion would make on one hand, and no honest and fair person would accept on the other.").

Douglas and Johnson fail to make any proffer as to what makes this term of their contract so exceptional as to fit within in the line of cases referred to in Gillman, and they cite to no case considering or holding an exclusive services contract unconscionable on grounds of duration, notwithstanding the invitation to address that issue contained in the May 18 Opinion.¹ The court therefore declines to revisit its prior legal determinations that the contract durational terms were definite in nature and the contracts were supported by sufficiently-definite price consideration to induce Douglas' promise to fight exclusively for DKP. See May 18 Opinion at 761-64. The unconscionability defense accordingly shall be stricken, there having been no proffer or allegation sufficient to establish either its procedural or substantive elements.

Slander

The counterclaim for slander is predicated upon the following statements alleged to have been made by King: (i) after the eighth round, King's words "to the effect that the fight should be stopped and Mike Tyson be declared the winner"; (ii) shortly after the fight at close of which Douglas had been declared the winner, remarks by King that he was protesting Douglas' victory over Tyson and that "the first knockout obliterated the second knockout"; and (iii) the observations of King quoted in the margin, reportedly made a tape-recorded mini press-conference also held after the fight:

Here's a fact. Mike Tyson knocked out James Buster Douglas ... And the count went to thirteen. So now ... And the referee I ran to immediately upon saying this. I issued a protest to Mr. Mendoza and Mr. Jose Sulaiman ...

... There is a grave misjustice here. There's an injustice

...