By Rick Reeno
Golden Boy Promotions has scored the first victory in their contract dispute with former champion Robert "The Ghost" Guerrero. Last week, BoxingScene.com reported that Guerrero's lawyer initiated the process to break his promotional contract with Golden Boy through an arbitration with the California State Athletic Commission. Guerrero, through his attorney, claims the contract he signed prior to last May's fight with Floyd Mayweather Jr. - is illegal and violates the Muhammad Ali Act.
The CSAC denied Guerrero's request for an arbitration. However, the battle is just warming up. The CSAC directed both parties to settle their dispute in New York - because in their opinion the contract agreement is governed under New York law.
The CSAC issued the following in their ruling, which BoxingScene obtained:
"At this time, the California State Athletic Commission declines to accept Mr. Robert Guerrero’s Request for Arbitration to determine the validity of the “Term Sheet” dated January 15, 2013, between Robert Guerrero (Boxer) and Golden Boy Promotions, LLC, (Promoter).
The “Term Sheet” provides that the parties agree to be governed by the laws of the State of New York. Without making any express or implied findings, the California State Athletic Commission directs the parties to resolve their differences in New York."
Golden Boy's CEO Richard Schaefer had previously told BoxingScene that he was confused as to why Guerrero was pursing the arbitration in California - and he expected the CSAC to redirect both parties to the East Coast.
"The guy who filed the papers, he's the same one who negotiated the deal on the contract and he is listed on the contract as the legal representative. The contract is under New York law. So they go to the California commission to ask them to void a New York contract. The California commission has no jurisdiction over a New York contract," Schaefer said.
"They were happy with everything [on the new contract]. Their attorney negotiated everything. The managers, Luis and Santos negotiated it. [Their attorney] discussed the New York law provisions, he even explained it in the contract and the specific language in there and everything . Everything was okay and now suddenly it is illegal. I am speechless. I do not understand it."
Attorney Bruce Zabarauskas of California-based firm Thompson & Knight LLP, who represents Guerrero, was disputing Schaefer's position.
"He is 100% wrong on that. The choice of law provision is not enforceable. They violated California law on numerous grounds here. The arbitration filed with the commission is that Golden Boy violated three rules of the California State Athletic Commission. It is our position that California law applies. The New York choice of law provision is illegal and unenforceable. California commission rules require that a contract is not enforceable unless the parties appear in person and the commission approves the agreement - they didn't do that. California commission rules require, specially there is a California form addendum to promotional contracts which not part of the agreement. The third thing is, the California commission rules prohibit the extension of promotional agreements beyond five years. When it was signed, Robert's original agreement was still in effect. So the extension violates the commission rules," Zabarauskas told BoxingScene.com.
Now that the CSAC kicked their dispute to New York, and the fact that most of Guerrero's claims were based on the violation of California state laws - the boxer's legal team will need a new plan of attack.
When reached for comment, Zabarauskas told BoxingScene - "the fight has just begun" - but he declined to comment further on the CSAC's ruling or his next course of action in trying to break Guerrero free of his promotional agreement.