310 F. Supp. 3d 426
S.D. Ill.2018Background
- Wilder (WBC champion) and promoter DBE contracted with WOB (promoter) and challenger Povetkin to stage a WBC heavyweight title bout May 21, 2016 in Moscow; Bout Agreement incorporated WBC Rules/CBP (anti-doping) and gave the WBC discretion over decisions relating to the bout.
- WOB placed $4,369,365 in escrow under an Escrow Agreement requiring disbursement to Wilder if the bout occurred and to WOB if the bout was canceled/postponed; either party could object within two days, and a bad-faith objection would trigger $2.5M liquidated damages.
- Povetkin tested positive for meldonium from a sample dated April 27, 2016; the WBC postponed the bout May 15, 2016 and investigated; later mixed WBC rulings left discretion about culpability.
- Wilder/DBE sued WOB/Povetkin for breach and declaratory relief; WOB/Povetkin counterclaimed for breach and sought escrow funds and liquidated damages; the consolidated actions proceeded to trial limited to whether Povetkin ingested meldonium on or after Jan 1, 2016 — a jury found he did.
- Despite the jury verdict, the WBC ultimately maintained it could not ascertain ingestion after Jan 1, 2016 and issued subsequent rulings; the parties cross-moved for summary judgment on breach, escrow entitlement, and the $2.5M liquidated-damages clause.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Povetkin breach the Bout Agreement by testing positive for meldonium? | Wilder: Povetkin violated CBP/WBC rules and thus breached the Bout Agreement. | WOB: Bout Agreement and CBP vest anti-doping adjudication in WBC; WBC determination controls. | Court: No breach — parties agreed WBC has discretion on anti-doping matters and its ruling is conclusive. |
| Did WOB breach the Bout Agreement by failing to stage the May 21 bout? | Wilder: WOB failed to provide Povetkin or stage the bout on that date. | WOB: WBC postponed/cancelled the bout and the Agreement gave WBC exclusive authority over such decisions. | Court: No breach — WBC decision superseded WOB’s obligation to stage a WBC-recognized title bout on May 21. |
| Did Wilder/DBE breach the Bout Agreement / cause WOB/Povetkin’s damages (e.g., by canceling, not traveling, publicity)? | WOB/Povetkin: Wilder’s conduct (public statements, not traveling, suing) caused the bout not to occur and caused damages. | Wilder: Bout non-occurrence was caused by Povetkin’s positive test and WBC action, not Wilder’s conduct. | Court: No proximate causation — WOB/Povetkin’s damages trace to Povetkin’s positive test and WBC postponement, so their breach claims fail. |
| Who is entitled to escrow funds and are $2.5M liquidated damages owed for Wilder’s objection? | Wilder: Escrow should not be released to WOB; objection was in good faith so no liquidated damages. WOB: Escrow should be released to WOB and Wilder’s objection was not in good faith, so $2.5M owed. | WOB: Escrow conditions met; Wilder’s objection was bad faith to retain funds. Wilder: Had reasonable basis to object pending WBC process and litigation. | Court: WOB entitled to escrow disbursement; Wilder’s objection was objectively reasonable and in good faith — no $2.5M liquidated damages; interest denied because no judgment entered against Wilder. |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (procedural standard for summary judgment)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (standard for genuine issue of material fact at summary judgment)
- Leberman v. John Blair & Co., 880 F.2d 1555 (subjective good-faith standard in Second Circuit)
- Dalton v. Educ. Testing Serv., 87 N.Y.2d 384 (implied covenant of good faith and fair dealing under New York law)
- Greenfield v. Philles Records, 98 N.Y.2d 562 (contract interpretation — enforce plain meaning when unambiguous)
- World of Boxing LLC v. King, 56 F. Supp. 3d 507 (distinguished — earlier case about promoter liability where sanctioning body rules mandated suspension)
- Scotto v. Almenas, 143 F.3d 105 (nonmoving party may not rely on conclusory allegations to defeat summary judgment)
- Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc., 487 F.3d 89 (burden of proving breach and issues of damages/causation)