New York Commercial and Construction Lawyer Blog
Apparently, there is no fury greater than that of a person who just spent close to $100 to watch a long-awaited boxing match on Pay-Per-View (“PPV”) that did not live up to the hype.
PPV viewers in at least six states have filed putative class action lawsuits arising out of the recent “Fight of the Century” between Floyd Mayweather, Jr. and Manny Pacquiao. In the complaints, the plaintiffs all seek to recover millions of dollars in damages against various combinations of Pacquiao, his promoters/advisers, and Mayweather, as well as HBO and Showtime, the media companies televising the fight. The basis of the lawsuits are that the parties fraudulently failed to disclose to the public a significant injury to Pacquiao before the fight, and that they, and other similarly situated people, would not have ordered the fight, attended the fight, or bet on the fight if they had known about Pacquiao’s injury.
While the facts are still emerging, it is known that immediately after the largely disappointing fight concluded, the Pacquiao camp used the post-fight press conference to note that their fighter had fought with a significant injury to his right shoulder. In the days that followed, stories emerged in the press that detailed (1) that Pacquiao had apparently suffered a significant shoulder injury about a month before the fight, (2) that Pacquiao’s camp had considered postponing the fight, but declined to do so, (3) that, nonetheless, Pacquiao’s promoters had filed an official Nevada State Athletic Commission (“NSAC”) document the day before the fight stating, under penalty of perjury, that Pacquiao was not injured, (4) that the NSAC had denied a Pacquiao request, made just before the fight, to take an anti-inflammatory injection, on the grounds that it was untimely, and (5) that Pacquiao’s camp claimed that the denial of the injection by the NSAC materially affected the outcome of the fight because Pacquiao was hindered by the injury throughout the contest. Pacquiao has since reportedly had surgery to repair a torn rotator cuff in the right shoulder.
The complaints being filed appear to share basic fraud allegations, as well as use of various state consumer fraud statutes to claim that the Pacquiao camp’s alleged willful failure to reveal the injury before the fight was a fraud on the public and a deceptive trade practice. They all further allege that, if Pacquiao had revealed the true nature and severity of his injury, the class members would not have purchased the PPV or bought tickets to the fight. (Not surprisingly, Pacquiao’s attorney has denied the material allegations of the complaints in the press, stating that the NSAC cleared Pacquiao medically to fight and that Pacquiao re-injured himself during the fight.)
Consumer fraud statutes are fairly common throughout the country. The intent of these statutes is to ensure that commercial activity directed at the general public is conducted in a transparent and fair way. “Consumers have the right to an honest market place where trust prevails between buyer and seller.” See, e.g., Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20, 25 (1995) (quoting the Governor’s Memorandum approving the Bill adding a private right of action). For example, the New York version of the statute, General Business Law § 349, et seq., was designed to be intentionally broad, covering virtually all economic activity, and was intended to empower consumers against businesses engaging in deceptive practices. Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 323-24 (2002). In order to state a claim under New York’s law, a plaintiff need only allege that (1) defendant is engaging in an act or practice that is deceptive or misleading in a material way, (2) that plaintiff has been injured by reason thereof and (3) that the allegedly deceptive acts, representations or omissions are misleading to “a reasonable consumer”. Id., 98 N.Y.2d at 324. An alleged omission of a material fact, as Pacquiao is claimed to have made, is actionable “‘where the business alone possesses material information that is relevant to the consumer and fails to provide this information’” Gomez-Jimenez v. N.Y. Law School, 103 A.D.3d 13, 16-17 (1st Dep’t 2012) (citing Bildstein v. MasterCard Int’l, Inc., 2005 WL 1324972, *4 [S.D.N.Y.2005]).
It will be interesting to see how this case progresses. Defendants have indicated through the media that they find the cases without merit and will aggressively defend them. Presumably, a major point of defense, if the cases survive expected pre-answer motions to dismiss, will be that the injury, sustained well before the fight, had healed enough to allow the NSAC to declare Pacquiao capable of fighting and the injury that hampered his performance was suffered during the fight itself. (Of course, if this is the case, why did the Pacquiao camp state after the fight that the denied pre-match anti-inflammatory injection materially altered Pacquiao’s performance and the outcome of the fight? Hyping a possible rematch is an explanation, but the statement itself is problem for Pacquiao.) Another, more traditional, defense may well be the perpetually uncertain predictability of sporting contests in generally. Should an “off night” for Pacquiao, or any athlete in a sporting contest, render him liable for damages under a consumer fraud act?
The money at stake is significant. The fight is expected to shatter the previous record for PPV sales. Live ticket revenue and PPV purchases generated hundreds of millions of dollars for the fighters, their promoters, the hotel venue, Showtime and HBO. Many millions more were wagered on the fight across the country. The damages, if the class is certified and plaintiffs prevail, will also likely be in the millions of dollars.
And Pacquiao thought that fighting Mayweather was tough…..