Kondrath v. Arum

• Decision Date: 27 March 1995
• Docket Number: Civ. A. No. 94-217-JLL.
• Parties: Mark T. KONDRATH and Dave Tiberi, Plaintiffs, v. Bob ARUM, Top Rank, Inc., Bob Lee, International Boxing Federation, Inc., Ron Katz, Larry Hazzard, Robert Palmer, Frank Garza, Bill Lerch, Industria Reyes, S.A., and Does 1 Through 8, Defendants.
• Court: U.S. District Court — District of Delaware

881 F. Supp. 925

Mark T. KONDRATH and Dave Tiberi, Plaintiffs, v. Bob ARUM, Top Rank, Inc., Bob Lee, International Boxing Federation, Inc., Ron Katz, Larry Hazzard, Robert Palmer, Frank Garza, Bill Lerch, Industria Reyes, S.A., and Does 1 Through 8, Defendants.

Civ. A. No. 94-217-JLL.

United States District Court, D. Delaware.

March 27, 1995.

David P. Cline, Wilmington, DE (Edward Brigham, Towson, MD, of counsel), for plaintiffs.

David A. Jenkins, and Michele C. Gott, of Smith, Katzenstein & Furlow, Wilmington, DE (Ike Lawrence Epstein, of Beckley, Singleton, DeLanoy, Jemison & List, Chtd., Las Vegas, NV, of counsel), for defendants Bob Arum, Top Rank, Inc., and Ron Katz.

David A. Jenkins, and Michele C. Gott, of Smith, Katzenstein & Furlow, Wilmington, DE (Walter R. Stone, and Sherry A. Giarrusso, of Adler, Pollock & Sheehan, Providence, RI, of counsel), for defendants Intern. Boxing Federation, Inc., Robert Palmer, Frank Garza, and Bill Lerch.

OPINION

LATCHUM, Senior District Judge.

I. INTRODUCTION

Plaintiffs bring this action alleging violations of the federal RICO statute, the New Jersey Racketeering statute, violations of various fiduciary duties, fraud, breach of contract, and are also seeking a declaratory judgment under 28 U.S.C. § 2201.

Presently before the Court are defendants Arum, Top Rank, Inc. ("Top Rank"), Lee, International Boxing Federation, Inc., ("IBF"), Katz, Garza, and Lerch's motion to dismiss, or in the alternative, to transfer, (Docket Item "D.I." 20), and defendant Palmer's motion to dismiss, or in the alternative, to transfer (D.I. 35).¹ The defendants have filed their opening and reply briefs. (D.I. 21 & 27.) The plaintiffs filed their answering brief as well. (D.I. 24.) The Court heard oral argument on the issues raised in the motion and these briefs on March 2, 1995.²

Also before the Court are the plaintiffs' motion for limited early discovery, (D.I. 32), with an accompanying brief in support of that motion, (D.I. 33), defendants' answering brief, (D.I. 34), and the plaintiffs' reply brief (D.I. 36).

For the reasons below, the Court will grant the defendants' motion to transfer and will dismiss as moot plaintiffs' motion for limited early discovery and an evidentiary hearing.

II. FACTS

The plaintiffs allege that the defendants have been members of a "RICO Enterprise" ("Enterprise") for at least the last ten years. Garza, Lerch, and Palmer have been members of the Enterprise for fewer than ten years, however. (D.I. 6, ¶ 22.) They further allege that the Enterprise "fixes" IBF fights so that the IBF champion will retain his title in order to increase popular interest in the current champion, which, in turn, increases the profitability of fights involving that champion. (Id., ¶¶ 41-47.)

A. The Parties

Plaintiff Dave Tiberi is a professional boxer who is a citizen and resident of Delaware. (Id., ¶ 9.) Plaintiff Mark Kondrath is a manager of professional boxers, including Tiberi, and is a citizen and resident of Pennsylvania. (Id., ¶ 8.)

Defendant Bob Arum is a professional boxing promoter and is a citizen of Nevada, residing in Las Vegas, Nevada. (Id., ¶ 10.) Top Rank is a corporation engaged in the business of promoting professional boxing. It is incorporated in Nevada and has its principal place of business in Las Vegas, Nevada. (Id., ¶ 20.) Bob Lee is the president of the IBF and is a citizen of New Jersey, residing in East Orange, New Jersey. (Id., ¶ 17.) The IBF is an organization which sanctions professional fights. It is incorporated in Rhode Island and has its principal place of business in East Orange, New Jersey. (Id., ¶ 15.) Ron Katz is a matchmaker employed by Top Rank and is a citizen of New York, residing in New York City. (Id., ¶ 16.) Larry Hazzard is the Commissioner of the New Jersey State Athletic Control Board ("NJSACB"), a state agency functioning as the official boxing commission of New Jersey. He is a citizen of New Jersey, residing in Atlantic City, New Jersey. (Id., ¶ 13.) Robert Palmer is a referee of professional boxing matches and is a citizen of New Jersey, residing in Atlantic City, New Jersey. (Id., ¶ 19.) Frank Garza is an IBF fight judge and is a citizen of Michigan, residing in Southgate, Michigan. (Id., ¶ 12.) Bill Lerch is also an IBF fight judge and is a citizen of Illinois, residing in Des Plaines, Illinois. (Id., ¶ 18.) Industria Reyes, S.A. ("Reyes") is a manufacturer of boxing gloves and other boxing equipment. It is incorporated in Mexico and has its principal place of business in Mexico City. (Id., ¶ 14.) Does 1-8 are presently unidentified, but the plaintiffs do state that none is a citizen of or resides in Delaware. (Id., ¶ 11.)

B. The Events

The defendants alleged wrongs can be divided into three discreet classes: (1) events before the Toney-Tiberi fight; (2) events which occurred during the fight; and (3) events after the fight.

1. Before the Fight

Sometime in December 1991, the Enterprise decided it wanted to promote a title fight between the IBF champion Toney and another, as yet, undetermined fighter. (Id., ¶¶ 55-57.) The purpose of this fight was to generate interest in two fights that had been scheduled between Toney and two other fighters for April and September, 1992. (Id., ¶ 54.) The Enterprise directed a matchmaker, Katz, to find an opponent that Toney could beat, and he chose Tiberi. (Id., ¶¶ 57, 62.) In order to recruit Tiberi for the fight, Katz, who was in Garden City, New York, phoned Tiberi's manager, Kondrath, in Pennsylvania, who agreed that Tiberi would fight Toney on February 8, 1992 in Atlantic City, New Jersey. (Id., ¶¶ 63-64.)

At that time, Tiberi was the IBC (a Florida-based boxing organization) middleweight champion. In order to conform to the IBF rules, Katz instructed Kondrath that Tiberi would have to relinquish his IBC title in order to fight in an IBF-sanctioned match. (Id., ¶ 67.) Tiberi relinquished that title via a letter to the IBC mailed on December 18, 1991. (Id., ¶ 68.) Also on that day, Tiberi and Kondrath sent a letter to the IBF requesting that they rank Tiberi among the IBF's "top 10" fighters so that he would be eligible to fight in an IBF-sanctioned title bout. (Id., ¶ 69.) Over the next several days, pursuant to various communications between Katz, in New York, and IBF Commissioner Lee, in New Jersey, the IBF ranked Tiberi in its top 10. (Id., ¶¶ 70-73.) And on December 20, Arum, on behalf of Top Rank, faxed to Kondrath's business office in Pennsylvania a contract which would obligate Tiberi to fight in a succession of title defenses in the event he won the Toney-Tiberi fight. Tiberi and Kondrath executed that contract in Pennsylvania. (Id., ¶¶ 73-74.)

Plaintiffs also allege a series of communications among members of the Enterprise and various advertisers of products whose commercials were scheduled to be shown during the Toney-Tiberi fight, although the plaintiffs do not say where they believe the participants in these conversations were located. (Id., ¶ 75.) They further allege that various members of the Enterprise engaged in another series of communications, all with at least one party in New Jersey and none in Delaware, in order to allow Garza and Lerch to serve as fight judges for the Toney-Tiberi fight, even though neither is licensed in New Jersey. (Id., ¶¶ 76-78.) On February 3, 1992, Arum, from Las Vegas, telephoned a reporter for The News Journal in Delaware and told him that Tiberi had a good chance of beating Toney. (Id., ¶¶ 80-83.)

Finally, plaintiffs allege that, from December 10, 1991 through February 8, 1992, Katz, from his office in New York, made a series of phone calls to Kondrath in Pennsylvania and New Jersey to monitor Tiberi's training and condition for the Toney-Tiberi fight. (Id., ¶ 84.) Based on these conversations, Katz concluded that Tiberi could win the fight by a knockout, and alerted the Enterprise that they would have to sabotage Tiberi's gloves to prevent this. (Id., ¶¶ 85-86.) After communications among various members of the Enterprise, the Enterprise communicated with Reyes employees in Mexico and sought their advice and help in sabotaging the gloves Tiberi would be using in the Toney-Tiberi fight. (Id., ¶ 87.)

2. Events During the Fight

First, plaintiffs allege that Commissioner Hazzard illegally allowed Garza and Lerch to judge the fight even though they were not licensed in New Jersey, and that Garza and Lerch used the IBF scoring system, illegal in New Jersey, to declare Toney the winner. (Id., ¶¶ 89-90, 96.) Second, they allege that members of the Enterprise sabotaged Tiberi's boxing gloves, and that the referee, Palmer, impermissibly allowed Toney to rest while Tiberi changed gloves. (Id., ¶¶ 93-94.) Third, they allege that Palmer incorrectly penalized Tiberi for a low blow which did not occur. Last, Palmer further afforded Toney a rest by stopping the fight in the eleventh round to remove a loose piece of tape from Tiberi's gloves. (Id., ¶ 94.)

3. Events After the Toney-Tiberi Fight

The post-fight events the plaintiffs complain of all relate to the Enterprise's efforts to conceal the fact that the Toney-Tiberi fight was fixed. First, Mr. Arum held a press conference in New Jersey where he made several fraudulent misrepresentations concerning the fight and Tiberi's reaction to a proposed rematch. (Id., ¶¶ 102, 109.) Second, the Enterprise caused Hazzard to testify falsely before a Senate Subcommittee investigating professional boxing. (Id., ¶ 110.) Third, the Enterprise caused the IBF and the NJSACB to fail to investigate the fight. (Id., ¶¶ 111-23, 139.) Finally, the plaintiffs allege the Enterprise caused letters signed by Lee to be sent to then-Governor Castle and then-Representative Carper concealing the IBF's role in fixing the fight. (Id., ¶¶ 126-30, 134-37.)

III. DISCUSSION

Because the Court disposes of this motion by transferring the case pursuant to 28 U.S.C. § 1404(a), defendants' motion to dismiss pursuant to...