Schulz v. United States Boxing Ass'n

Opinions of the United
1997 Decisions States Court of Appeals
for the Third Circuit
1-24-1997
Schulz v. US Boxing Assn
Precedential or Non-Precedential:
Docket 96-5200,96-5239
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1997
Recommended Citation
"Schulz v. US Boxing Assn" (1997). 1997 Decisions. Paper 18.
http://digitalcommons.law.villanova.edu/thirdcircuit_1997/18
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 1997 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_______________
Nos. 96-5200 and 96-5239
_______________
AXEL SCHULZ; CEDRIC KUSHNER PROMOTIONS, LTD.;
DER FIRMER SAUERLAND PROMOTION, A.G.;
WILFRIED SAUERLAND
v.
UNITED STATES BOXING ASSOCIATION; INTERNATIONAL BOXING
FEDERATION, a Division Thereof; FRANCOIS BOTHA; MICHAEL MOORER,
Francois Botha,
Appellant in 96-5200
United States Boxing Association and International Boxing
Federation,
Appellant in 96-5239
______________
On Appeal from an Order
of the United States District Court
for the District of New Jersey
Granting a Preliminary Injunction
D.C. No. 96-1076
_______________
Argued October 30, 1996
Before: SCIRICA and COWEN, Circuit Judges,
and POLLAK, District Judge*
(Filed January 24, 1997)
* Honorable Louis H. Pollak, United States District Judge for the
Eastern District of Pennsylvania, sitting by designation.
Eckley M. Keach (argued)
Oscar B. Goodman
Goodman, Chesnoff & Keach
520 South Fourth Street
Las Vegas, Nevada 89101
Rosemary Alito
McCarter & English
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Attorneys for Botha
Walter R. Stone (argued)
Adler, Pollock & Sheehan, Inc.
2300 Hospital Trust Tower
Providence, Rhode Island 02903
Linda P. Torres
Carpenter, Bennett & Morrissey
Three Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Attorneys for United States Boxing Association
and International Boxing Federation
Joel J. Reinfeld (argued)
171 East Ridgewood Avenue
P.O. Box 297
Ridgewood, New Jersey 07451
Attorney for Appellees in 96-5200
Jay Goldberg, P.C.
250 Park Avenue, 14th Floor
New York, New York 10177
Attorneys for Appellees in 96-5239
Patrick C. English (argued)
Dines & English
685 Van Houten Avenue
Clifton, New Jersey 07013
Attorneys for Appellee Moorer
______________
OPINION OF THE COURT
_______________
POLLAK, District Judge.
This case involves a court's authority to order a private
organization that sponsors prizefights to strip a champion of his
title. Defendant Francois Botha defeated plaintiff Axel Schulz
in a fight for the International Boxing Federation (IBF)
heavyweight championship. Botha then tested positive for use of
steroids. After a hearing, the IBF declined to disqualify Botha,
allowing him to retain his IBF crown. Schulz sued and the
district court issued a preliminary injunction mandating that the
IBF disqualify Botha. Botha, the IBF, and the IBF's parent
United States Boxing Association (USBA) now appeal the grant of
the preliminary injunction.
I. Background
Three major bodies regulate and promote the sport of
professional boxing: the World Boxing Association, the World
Boxing Council, and the International Boxing Federation with its
parent United States Boxing Association. Each of these
organizations classifies boxers by weight class, ranks the boxers
within each class, and, for a participation fee, sponsors -- or
"sanctions" -- both championship and non-championship bouts. The
IBF was formed to provide a mechanism through which the United
States Boxing Association, a national organization, could crown
world champions. According to its literature, the IBF was
organized "by representatives of various athletic commissions and
other interested persons for the purpose of obtaining greater
efficiency and uniformity in the supervision of professional
boxing and to encourage and assist professional boxing." App.
274.
The IBF has promulgated a set of rules and regulations
governing IBF-sanctioned bouts. Rule 20, entitled "Anti-doping,"
requires boxers to provide a urine specimen after each fight to
be tested for, among other substances, anabolic steroids and pain
killers. This rule adds that "[s]hould that specimen prove
positive, disciplinary action will follow." App. 284. In
addition, Rule 26, entitled "Penalties," provides as follows:
Should anyone be found in violation of the rules and
regulations of the IBF or USBA by any Committees
impaneled by the President, they may be subject to
fine, forfeiture of monies, vacation of title or any
other discipline directed by the Committee and approved
by the President for the good of the organization.
App. 291.
On December 9, 1995, Francois Botha of South Africa fought
Axel Schulz of Germany in Stuttgart for the vacant IBF
heavyweight championship. Before the bout, each fighter paid the
IBF more than $45,000 in "sanctioning fees" and other fees. Each
boxer's representative also signed a document entitled "Rules for
IBF/USBA & Intercontinental Championship Bouts" ("Bout Rules").
The Bout Rules were also signed by Robert W. Lee, president of
the IBF/USBA, and by a representative of the local boxing
commission, the German Boxing Federation. The Bout Rules begin
by stating that "[t]he Championship fight will be governed by the
rules and regulations of the IBF/USBA and local Boxing Commission
. . . ." App. 83. The Bout Rules then set out four pages of
2
detailed requirements. The last of these is entitled "Anti-
Doping" and reads as follows:
Each boxer is required to take a urinalysis immediately
following the bout. Said specimen must be taken with a
Ringside Physician and Commission Inspector on hand.
The specimens should be taken in a plastic container
and properly marked by the physician and boxer. It
should be divided into two parts for each boxer, with
bottles [sic] #1 being submitted to the laboratory.
Should either boxer's specimen be positive for drugs,
etc., all parties will be notified and another test
made at a laboratory selected by the boxer and the
local Commission. Should that specimen prove positive,
disqualification and disciplinary action will follow.
Specimens will be tested for the following drugs:
There follows a list that includes anabolic steroids and pain
killers. App. 87.
An identical "Anti-doping" rule appears in an IBF/USBA
document titled "Ring Officials Guide and Medical Seminar
Outline." This Guide's introduction states that "[t]he major
purpose of this Ring Officials Guide is to establish criteria to
be followed in all IBF/USBA boxing matches so that uniformity in
actions, responsibilities, duties and total performance of ring
Officials can be attained . . . ." App. 65.
In the Stuttgart fight, Botha defeated Schulz in a split
decision to win the IBF heavyweight championship. Each fighter
then gave a urine specimen. Botha's specimen was sent to a
German laboratory, where it tested positive for anabolic
steroids. In accord with the anti-doping Bout Rule, Botha was
then allowed to choose where the sample would be tested a second
time; his choice, the UCLA Olympic Analytical Laboratory, also
3
found anabolic steroids in his urine. During this period, Botha
vigorously denied using steroids.
The German Boxing Federation -- the local boxing commission
that signed the Bout Rules -- recommended on February 15, 1996
that the IBF disqualify Botha and that Schulz be designated IBF
world champion. The Federation also barred all the boxers,
promoters, referees, and trainers whom it licensed from taking
part in Botha's bouts for two years.
On Saturday, February 24, 1996, upwards of two months after
the Stuttgart bout, the IBF held a hearing in Elizabeth, New
Jersey, to determine what action would be taken as a result of
the positive steroid tests.1 The hearing was conducted by the
IBF's Executive Committee and its subcommittee, the Championship
Committee; the Championship Committee was to make a
recommendation to the Executive Committee, which had final
authority. All persons having an interest in the outcome of the
Botha/Schulz bout were notified of the hearing and given an
opportunity to be heard. The committees heard testimony from
Botha, from his attorney and two of his doctors, and from
representatives of Schulz, the German Boxing Federation, and
Michael Moorer.
Moorer was at the time a former IBF and World Boxing
Association heavyweight champion. In September 1995, Moorer had
1. Presumably the hearing was held in New Jersey because the
IBF's principal place of business is in that state.
4
sued the IBF in federal court in New Jersey over the IBF's
rankings, seeking to block the Botha/Schulz bout because, he
argued, he was entitled to fight next for the title. A
settlement agreement signed later that month provided that Moorer
would dismiss his action in return for a guarantee that he would,
within 180 days of the Botha/Schulz bout, fight the winner for
the IBF title. At the IBF's February 24, 1996 hearing, Moorer's
counsel reminded the IBF of its agreement with Moorer.
Botha's testimony at the hearing was a surprise: he
admitted for the first time that he had taken the drug found in
his urine. He argued, however, that he had not known that what
he took was a steroid. Botha stated that he had injured his arm
in 1988 and his South African doctor had given him two
prescriptions for the pain and swelling. In March 1995, after
Botha had moved to California, his South African doctor had sent
him a third medication for his continuing arm stiffness, which
was the steroid (Deca Durabolin) that turned up in his urine.
(There is a good deal of controversy about the steroids' possible
impact on Botha's capacity as a fighter, but the controversy --
the main elements of which are summarized in the annexed
footnote2 -- does not appear to bear upon the issue before this
2. At its February hearing, the IBF heard testimony from two of
Botha's California doctors -- neither of them pharmacologists --
that the drugs had no effect on the outcome of the fight.
The principal evidence that the drugs prescribed for Botha
were taken in a deliberate attempt to increase his muscle mass is
an affidavit of Dr. Robert Voy, an expert in drug use by
athletes. This affidavit, submitted by Moorer's counsel, was not
before the IBF at its hearing but was before the district court
5
court, namely the appropriateness of the district court's
preliminary injunction.)
After hearing all the testimony, the IBF Championship and
Executive Committees recessed to deliberate. When they returned,
IBF President Robert W. Lee announced the IBF's decision:
We will not vacate the title of Francois Botha. There
are mitigating circumstances which cause us to feel
that we should not vacate the title of Francois Botha.
However, what we will do is we will fine Francois Botha
in the amount of $50,000 for having taken these
substances into his system that were in violation of
our rules.
Secondly, we will order a rematch between Francois
Botha and Axel Schulz to take place within 180 days of
today or not later than August 24, 1996.
Thirty days prior to that fight taking place Francois
Botha must give a urinalysis to show that he no longer
has these substances in his system.
The winner between Francois Botha and Axel Schulz will
be obliged to fight Michael Moorer within 120 days of
the date that they fight . . . .
App. 210-11.3 This announcement triggered vehement protests in
at the preliminary injunction hearing. The affidavit provides
the following information: The two drugs prescribed for Botha in
South Africa were anabolic steroids. Botha's use of the two
steroids together indicates that they were taken in a fashion
known as "stacking," which is a technique to prevent
"aromatization," a process by which the body rids itself of the
drugs. This technique is used only by experienced steroid users
to enhance their performance. Finally, Deca Durabolin -- the
only steroid found in Botha's urine -- has very few legitimate
medical uses; it does not, for example, relieve pain. No
evidence was presented to the district court that Botha had any
of the conditions that would indicate legitimate use of the
steroid.
3. At the hearing, the IBF did not explain the "mitigating
circumstances" that led it to decline to disqualify Botha. After
this suit was initiated, IBF President Lee stated in a
"certification" submitted to the district court that the
mitigating circumstances were: (1) that the steroid was
prescribed by a doctor for a 1988 injury; (2) that Botha admitted
6
the hearing room, but, after some wrangling, the hearing was
adjourned with the IBF's decision unchanged.
Over the weekend, however, the members of the IBF Executive
Committee conferred over the phone. On Monday, February 26, the
Executive Committee issued an amended ruling in writing, stating
that its members had not previously given sufficient
consideration to the IBF's commitment to Moorer.4 The amended
ruling preserved the $50,000 fine against Botha but restructured
the scheduled fights: Moorer would challenge Botha for the title
before June 9, 1996, with Schulz to fight the winner of this bout
within 120 days.
Schulz, together with his promoters Cedric Kushner
Promotions and Der Firmer Sauerland Promotion, and his manager
Wilfried Sauerland, brought suit in the District of New Jersey,
naming the USBA and IBF as defendants, with Botha and Moorer
joined as necessary defendants because their rights were
affected. Moorer filed a counterclaim and crossclaim seeking
specific performance of his settlement agreement with the IBF.
taking the medication but denied knowing that it was a steroid;
(3) that Botha exhibited none of the typical signs of prolonged
steroid use; (4) that the Executive Committee believed the
steroid use did not appear to have affected the outcome of the
fight; (5) that Botha had ceased taking the medication; and (6)
that the championship should, in the Committee's view, be decided
in the ring rather than on the sidelines. App. 298.
4. Moorer apparently relied on the settlement agreement with the
IBF, refusing a match with George Foreman that would have earned
him $2.7 million in order to be available for his title bout with
the winner of the Botha/Schulz fight. App. 340.
7
The district court had jurisdiction pursuant to 28 U.S.C. §
1332.5
After a hearing, the district court found that Schulz and
his co-plaintiffs had met the criteria for preliminary injunctive
relief.6 On March 29, 1996, the court accordingly ordered that
(1) the USBA and IBF "amend their decision of February 26, 1996
so as to disqualify Francois Botha"; (2) Moorer and Schulz
"proceed to a bout prior to June 9, 1996 as set forth in the
September 19, 1995 settlement agreement" between Moorer and the
USBA and IBF; (3) the USBA and IBF "determine the consequences of
the order with respect to the ratings of the various boxers in
conjunction with the IBF rules"; and (4) plaintiffs post a
$100,000 bond.
The IBF/USBA and Botha separately appeal the issuance of the
preliminary injunction, which Schulz and Moorer seek to have
5. Plaintiffs Schulz and Sauerland are citizens of Germany,
Cedric Kushner Promotions, Ltd. is incorporated and headquartered
in New York, and Der Firmer Sauerland Promotion, A.G., is
incorporated and headquartered in Switzerland. Defendant Botha
is a South African citizen living in California. Defendant
Moorer is citizen of Florida. The USBA is incorporated in
Michigan and headquartered in New Jersey. The IBF, originally a
voluntary non-profit corporation organized under the laws of
Rhode Island, became a for-profit Oregon corporation in 1986; its
headquarters are in New Jersey.
6. In district courts within this circuit, "[i]n order to
support a preliminary injunction, plaintiff must show both a
likelihood of success on the merits and a probability of
irreparable harm. Additionally, the district court should
consider the effect of the issuance of a preliminary injunction
on other interested persons and the public interest." Bradley v.
Pittsburgh Bd. of Educ., 910 F.2d 1172, 1175 (3d Cir. 1990).
8
upheld. This court has jurisdiction pursuant to 28 U.S.C. §
1292. A motions panel of this court denied the IBF's motion for
a stay and Botha's motion for an expedited appeal.
On June 22, 1996, Moorer and Schulz fought the bout mandated
by the preliminary injunction.7 Moorer won, regaining the IBF
championship belt. On November 9, 1996 (some ten days after the
argument of this appeal), Moorer fought Botha, successfully
defending his title with a twelfth-round TKO.
II. Analysis
We review a district court's ruling on a preliminary
injunction to determine if there has been an abuse of discretion,
an error of law, or a clear mistake of fact. See Louis Vuitton
v. White, 945 F.2d 569, 574 (3d Cir. 1991). In this appeal, the
parties dispute whether the district judge was correct in finding
that Schulz and his co-plaintiffs (hereinafter "Schulz") were
likely to succeed on the merits of their claim. No party
challenges the district court's findings regarding irreparable
harm or the effect of the injunction on third parties and the
public interest.
A.
Without discussing specific precedents, the district court
summarized the law governing this case as follows:
7. "Moorer Beats Schulz to Reclaim IBF Crown," Phila. Inquirer,
June 23, 1996, at D3.
9
We are dealing here with a private association, albeit
one in which the public has a substantial interest.
Under New Jersey law a private association has the
right to adopt, administer and interpret its internal
regulations and is granted substantial deference when
judicial review is sought. When, however, an
association departs from its own prescribed procedures,
or where its actions are in total violation of its own
rules and regulations, a court will intervene to
protect the property rights and other substantial
interests of those who are subject to its rules.
. . .
The critical question is whether the IBF violated its
rules when it failed to disqualify Botha for his drug
use.
App. 533-34.
After reviewing the Bout Rules and the IBF rules and
regulations, the district court concluded:
It is abundantly clear to me that IBF and USBA have
established a policy that has been made crystal clear
to the boxers who fight under their aegis that no boxer
is to take the drugs proscribed in the rules, and that
if a boxer does take such drugs he will be disqualified
regardless of what other disciplines may be imposed.
The broad general language which appears in Rule 26
cannot trump the unmistakably clear language of the
Bout Rules which the IBF and the boxers sign and the
Ring Officials Guide which IBF and USBA promulgate. It
is hard to imagine how the two organizations can adopt
any other policy if they were to retain the confidence
of the public and the fighting profession.
App. 536-37. On this basis, the district court concluded that
Schulz had a high likelihood of succeeding on the merits.
B.
With the opinion of the district court as predicate, we
proceed to examine whether the court had the authority to set
aside the IBF's decision not to disqualify Botha. As the court
properly observed, the courts of New Jersey (and like courts in
10
other jurisdictions) will ordinarily defer to the internal
decisions of private organizations. Indeed, "[c]ourts have been
understandably reluctant to interfere with the internal affairs
of [private] associations and their reluctance has ordinarily
promoted the health of society." Falcone v. Middlesex County
Medical Society, 170 A.2d 791, 796 (N.J. 1961).8
1.
In Rutledge v. Gulian, 459 A.2d 680 (N.J. 1983), the New
Jersey Supreme Court identified the limited occasions when a
court may set aside the determinations of private organizations
regarding discipline of their members.9 Rutledge was a former
8. All parties agree that New Jersey law applies to this action
challenging a decision made at a hearing held in New Jersey by
the IBF, which is headquartered in New Jersey. Indeed, the IBF's
rules and regulations specify that in litigation involving the
activities of the IBF, "the laws of the State of Rhode Island
and/or New Jersey shall apply." App. 285. (As previously
mentioned, the IBF was originally incorporated in Rhode Island.
See supra note 5.)
9. The district court and the parties have treated this case as
one involving judicial intervention in the affairs of a private
voluntary organization. Within this framework, Rutledge controls
our decision in this case. We observe, however, that the IBF is
more than simply a voluntary social association: it is a profit-
making corporation which wields substantial economic power over
the careers of boxers fighting under its aegis. Moreover, as the
district court noted, the public has a substantial interest in
the IBF's actions and in its integrity. The judicial interest in
protecting those who may be detrimentally affected by an
organization like the IBF is greater than the judicial interest
in protecting members of purely social organizations. Indeed,
New Jersey's courts have a long tradition of intervening to
protect the rights of those affected by organizations which
possess near-monopoly power or which strongly affect the public
interest. See, e.g., Matthews v. Bay Head Improvement Ass'n, 471
A.2d 355, 367-68 (N.J.) (holding that a beachfront association's
limitation on membership to borough residents violates public
policy), cert. denied, 469 U.S. 821 (1984); Moore v. Local Union
11
Grand Master of a Masonic Grand Lodge who had been found guilty
of misappropriation of lodge funds by a Masonic trial panel under
the Masonic Code for Trials. A successor Grand Master suspended
operation of the Code for Trials procedures by which the local
lodge would ordinarily have imposed punishment, ordering instead
that a special "Lodge of Judgment" convene to determine
Rutledge's punishment. Rutledge challenged the Masons'
unwillingness to discipline him according to their established
procedures.
The Rutledge court began by setting out the applicable
standard:
In Higgins v. American Soc'y of Clinical Pathologists,
51 N.J. 191, 238 A.2d 665 (1968), this Court analyzed
judicial intervention into the affairs of a private
organization as follows: (1) does the plaintiff have
an interest sufficient to warrant judicial action, and
(2) has that interest been subjected to an
unjustifiable interference by the defendant?
459 A.2d at 682.
In examining the first prong, the court concluded that
Rutledge's "status, attributable to membership in a prestigious,
No. 483, Int'l Ass'n of Bridge, Structural and Ornamental
Ironworkers, 334 A.2d 1, 5-6 (N.J. 1975) (requiring a union to
reconsider plaintiff's application for membership fairly and
reasonably); Falcone, 170 A.2d at 799-800 (striking down a
medical society's membership requirement of four years'
attendance at an A.M.A.-approved medical college as violative of
public policy). Cf. New Jersey Coalition Against War in the
Middle East v. J.M.B. Realty Corp., 650 A.2d 757, 768, 775-777
(N.J. 1994) (recognizing a state constitutional right to
distribute political leaflets at a privately-owned regional
shopping center, "the functional equivalent of yesterday's
downtown business district"), cert. denied, 116 S. Ct. 62 (1995).
12
socially-active fraternity, merit[ed] protection from
unreasonable discomfiture." Id. at 683.10
With respect to the second prong of the test articulated in
Higgins, the Rutledge court concluded that an organization
subjects a plaintiff's interest to "unjustifiable interference"
in either of two circumstances: when the organization's conduct
is driven by principles that violate public policy, or when the
procedures employed by the organization offend principles of
fundamental fairness. 459 A.2d at 683-84; see also Brounstein v.
American Cat Fanciers Association, 839 F. Supp. 1100, 1110-12
(D.N.J. 1993) (summarizing the Rutledge test). The Rutledge
court determined that, although Rutledge's membership in the
Masons was an interest that merited judicial protection, the
convening of the Lodge of Judgment did not violate either public
policy or fundamental fairness.
2.
Following the Rutledge test, and undertaking to assess the
issues as of the time the district court issued its preliminary
injunction, we must therefore ascertain, first, whether Schulz
10. In addition to membership interests in social organizations,
courts following New Jersey law have also protected a member's
economic and status interests in belonging to a professional
society, see Higgins v. American Society of Clinical
Pathologists, 238 A.2d 665, 670 (N.J. 1968) (protecting
plaintiff's interest in certification as a medical technologist),
and in retaining a professional license, see Brounstein v.
American Cat Fanciers Association, 839 F. Supp. 1100, 1110
(D.N.J. 1993) (protecting plaintiff's interest in a license to
judge cats).
13
had "an interest sufficient to warrant judicial action," and --
if the answer to the first question is in the affirmative --
second, whether "that interest [was] subjected to an
unjustifiable interference" by the IBF. In considering the first
prong, we observe that Schulz's status in the boxing community,
as well as his public reputation, were clearly affected by the
IBF's decision not to disqualify Botha. In addition, although
Schulz would not have become the champion on Botha's
disqualification,11 he had an economic interest in being declared
the winner of his bout with Botha.12 We therefore conclude that
Schulz had an interest in the IBF's decision sufficient to
warrant judicial action.13
3.
In determining whether Schulz's interest was "subjected to
an unjustifiable interference" by the IBF, we must inquire
11. The IBF's Rule 10 provides that a champion loses his title
if he is disqualified, but a losing challenger does not thereupon
become champion; rather, the title becomes vacant. Schulz and
Botha were fighting for the title vacated by George Foreman when
he retired, so both boxers had the status of challenger.
12. The winner of the Botha/Schulz fight would next fight Moorer
for the vacant title. Although the purse split between a
champion and a challenger is usually negotiated, if the parties
cannot agree the IBF holds a "purse bid" with the champion
receiving 75% of the total bid and the challenger receiving 25%.
See IBF Rule 23, App. 285. Hence it was financially more
advantageous for Schulz to fight for a vacant title, with a
background norm of a 50/50 purse split between the two
challengers, than to challenge a champion.
13. The interests of Schulz's co-plaintiffs in this action --
his manager and his promoters -- are derivative of Schulz's
interest and likewise merited protection.
14
whether the IBF's refusal to disqualify Botha violated either
public policy or fundamental fairness. If the refusal offended
either of these principles, then the Rutledge standard was met
and judicial intervention was warranted.
We turn first to public policy. The Rutledge court made
clear that public policy on its own can justify judicial
protection of a plaintiff's interests.14 In determining New
Jersey public policy, we turn to the enactments of the state
legislature as an authoritative source. See Higgins, 238 A.2d at
671 ("The grant of a license to a laboratory director found by
the State Board of Medical Examiners to be qualified in
compliance with [N.J.S.A. 45:9-42.1 et. seq.] evinces a
legislative policy determination that the operation of
bioanalytical laboratories by qualified non-doctors, as well as
by physicians, is in the public interest."); see also Desai v.
St. Barnabas Medical Center, 510 A.2d 662, 666-67 (N.J. 1986).15
14. The court cited two examples of unreasonable interferences
based on principles violating public policy. In Higgins, the
court struck down as violative of public policy a rule of the
American Society of Clinical Pathologists forbidding its members
to associate with a laboratory not run by a licensed physician.
See 238 A.2d at 671. In Zelenka v. Benevolent and Protective
Order of Elks, 324 A.2d 35, 37 (N.J. Super. Ct. App. Div.), cert.
denied, 331 A.2d 17 (1974), the court held that the Elks' ban on
its members publicly criticizing the organization's racial
restrictions violated public policy.
15. In Desai, the court reasoned that
[t]he judicial understanding of the public role of a
hospital is firmly supported by considerations of
public policy. The Legislature itself has expressly
declared in the Health Care Facilities Planning Act . .
. that "hospital and related health care services of
15
The New Jersey legislature has declared, as "the public
policy of [the] State," that
it is in the best interest of the public . . . that boxing .
. . should be subject to an effective and efficient
system of strict control and regulation in order to . .
. [p]romote the public confidence and trust in the
regulatory process and the conduct of boxing . . . .
N.J. Stat. § 5:2A-2. Moreover, the regulations of the state
Department of Law and Public Safety implementing this statute
also evince a purpose to instill public confidence in the sport.
Cf. Desai, 510 A.2d at 667 (relying in part on agency
regulations to ascertain New Jersey's public policy). The
Department's 1995 proposal for readoption of its regulations
noted that "[t]he rules in this chapter have helped New Jersey be
recognized as a leader in the area of boxing regulation" and
observed that a primary purpose of the rules was "furthering the
trust and confidence of the public." 27 N.J.R. 2096 (June 5,
1995).
Both the legislative and executive branches of the New
Jersey state government have, therefore, made it clear that they
consider it to be the public policy of the state to inspire the
the highest quality, of demonstrated need, efficiently
provided and properly utilized at a reasonable cost are
of vital concern to the public health." . . . Through
the Facilities Act, the State exercises extensive
supervisory and regulatory control over hospital
functions. . . . The breadth and depth of this
regulatory jurisdiction reflect and illustrate the
State's profound concern with public health care.
510 A.2d at 666-67 (citations omitted).
16
"trust and confidence" of the citizenry in boxing. The public's
confidence that the outcome of a prizefight is fair rests
squarely on the assumption that the result was not improperly
influenced -- by illicit equipment,16 by gifts,17 or by the
involvement of managers convicted of crimes of moral turpitude.18
The regulations of the state Department of Law and Public
Safety also make clear that "the public confidence and trust" in
boxing are promoted by banning the use of substances that can
affect a boxer's performance. See N.J. Admin. Code tit. 13:46 §
12.3(a) (1995). The regulations provide that "[t]he use of any
drug . . . by a boxer either before or during a match, shall
result in the immediate disqualification of the boxer from the
match and indefinite suspension from boxing." Id.
This express statement of public policy by New Jersey's
political branches is mirrored in the Bout Rules that the IBF
drafted and required the pugilists to sign before the Stuttgart
16. See N.J. Admin. Code tit. 13:46 § 3.3 ("In all bouts, the
gloves shall be inspected by the Commissioner's inspector and the
ringside physician prior to the fight.") The gloves must also be
placed on the boxer's hands under the supervision of the
inspector. See id.
17. See N.J. Admin. Code tit. 13:46 § 23A.4 ("No appointee [of
the State Athletic Control Board] shall solicit, receive or agree
to receive . . . any gift, favor, service or other thing of value
whatsoever . . . .").
18. See N.J. Admin. Code tit. 13:46 § 6.18 ("A license of any
manager shall be suspended for an arrest for or revoked on a
conviction of any offense in this or any other jurisdiction which
would be under New Jersey law a crime of moral turpitude or any
other offense which indicates that licensure would be inimical to
the conduct of the sport of boxing in this State.").
17
fight.19 Given the strength of New Jersey's public policy, we
concur in the district court's observation that the IBF could not
have established a less demanding protocol. See supra at 10. Of
course, the bout took place not in New Jersey but in Germany;
however, to the extent we have any information regarding the
policy of the fight venue, we observe that the German Boxing
Federation not only recommended that Botha be disqualified for
his steroid use, but banned all persons whom it licenses from
participating in Botha's bouts for two years.
New Jersey has adopted an express policy of promoting the
public trust and confidence in boxing, and has specifically
mandated disqualification of boxers who use drugs. The IBF
itself has adopted, and reaffirmed shortly before the contest at
issue here, an identical rule mandating disqualification for drug
use. The public's trust and confidence in boxing is undermined
if one of the sport's major sanctioning bodies flouts its own
19. We agree with the district court that the mandatory
disqualification language in the Bout Rules takes precedence over
the IBF's rules and regulations. The Bout Rules contain both
specific language that "disqualification will follow" and general
language that the IBF regulations apply. It is well established
that within a particular document containing conflicting specific
and general provisions, the specific provisions control. See,
e.g., Wilson v. Unsatisfied Claim and Judgment Fund Board, 536
A.2d 752, 756 (N.J. 1988). In addition, the Bout Rules
specifically govern the Botha/Schulz fight in Stuttgart, whereas
the rules and regulations are generic. Again, where two sources
of law conflict, familiar rules of construction dictate that the
more specific controls over the more general. See, e.g., New
Jersey Transit Corporation v. Borough of Somerville, 661 A.2d
778, 782 (N.J. 1995).
18
rule which comports with the state's public policy.20 We
conclude, at this preliminary stage, that the IBF's failure to
disqualify Botha likely violated New Jersey's public policy.
4.
We now return to the standard for judicial intervention in
the workings of a private organization, as set forth in Rutledge.
Under that standard, a reviewing court should invalidate a
private organization's decision affecting a plaintiff's interest
only if (1) the plaintiff's interest is sufficient to warrant
judicial action, and (2) that interest has been subjected to an
unjustifiable interference by the defendant -- that is, violates
public policy or fundamental fairness. We have determined that
Schulz's interest in the IBF's decision merited judicial
protection and that the IBF's decision likely violated public
policy as expressed by New Jersey's legislature and executive
branch. Therefore, at this preliminary stage, both elements of
the Rutledge test were met, and judicial intervention was
warranted.21
20. The district court made an identical finding: "Protecting
the integrity of a sport in which there is wide interest is
important. The reputation for integrity is threatened if there
is a rule against drug use but the organization permits the
fighter to retain a victory notwithstanding that use." App. 539.
21. Because we decide this case on the basis of the "public
policy" prong of the Rutledge test, we need not reach the
question whether the IBF's decision not to disqualify Botha was a
violation of "fundamental fairness."
The IBF/USBA's argument that the district court's
preliminary injunction exceeded the court's authority is without
19
C.
We note, finally, that this case might have been decided on
alternate grounds. The district court did not address whether
the Bout Rules constitute a contract, and none of the parties has
briefed this question in any detail. Rather, almost all argument
has centered on whether the IBF violated its own internal rules
and, if so, whether a court may then intervene to mandate that
the IBF disqualify Botha. Because this case is still at a
preliminary stage, however, we think it appropriate to point out
that the Bout Rules themselves may well be deemed a contract, and
that application of contract law may therefore constitute an
independent basis for the district court's decision.
As the New Jersey Supreme Court has stated:
A contract arises from offer and acceptance, and must be
sufficiently definite 'that the performance to be
rendered by each party can be ascertained with
reasonable certainty.' . . . Thus, if parties agree on
essential terms and manifest an intention to be bound
by those terms, they have created an enforceable
contract.
Weichert Co. Realtors v. Ryan, 608 A.2d 280, 284 (N.J. 1992)
(citations omitted). Of course, "[n]o contract is enforceable .
merit. In ordering the fight between Schulz and Moorer, the
court did not "unwittingly set the purses for the fighters for
future bouts." IBF/USBA Br. at 22. The IBF's settlement
agreement with Moorer mandated that Moorer's fight with the
winner of the Schulz/Botha bout be for the IBF title. It is this
agreement, and not the district court's order enforcing it, that
may have set the purses for future bouts. Moreover, the parties
agreed at the preliminary injunction hearing that if Botha were
disqualified, Schulz would fight Moorer. App. 528.
20
. . without the flow of consideration -- both sides must 'get
something' out of the exchange." Continental Bank of
Pennsylvania v. Barclay Riding Academy, Inc., 459 A.2d 1163, 1171
(N.J.), cert. denied, 464 U.S. 994 (1983) (citations omitted).
The Bout Rules were signed by representatives of Botha and
Schulz as well as the IBF and the German Boxing Federation; the
signatures manifested an intention to be bound by these rules.
The provisions of the Bout Rules were definite, so that "the
performance to be rendered by each party can be ascertained with
reasonable certainty." Each party's agreement to abide by the
Bout Rules provided consideration for the other parties'
agreements. Moreover, each boxer's payment of more than $45,000
for the privilege of fighting under the IBF's aegis constituted
additional consideration for the IBF's agreement to enforce the
Bout Rules. And, as we have seen, the Bout Rules expressly
provided that, if one of the boxers violated the anti-doping
rule, that boxer would be disqualified.
Therefore, it appears likely that application of the law of
contract to this case would yield a result identical to that
reached in the main body of this opinion.
III. Conclusion
The district court was correct in finding that Schulz was
likely to prevail on the merits, and therefore appropriately
granted the preliminary injunction ordering the IBF, in
21
accordance with its own rules, to disqualify Botha.
For the reasons stated, the judgment of the district court
is affirmed.
22