N.J. Sports Prods., Inc. v. Don King Prods., Inc., Et A

15 F.Supp.2d 534 (D.N.J. 1998)

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Nature of the Case

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Facts

N.J. Sports (P) entered into a contract with McCall and his manager Jimmy Adams for a fight between McCall and Lennox Lewis. The purse was to be $3,075, 500. As part of one of the contracts, McCall agreed to refrain from using drugs and agreed to cooperate and assist P in promoting the bout. Subsequently, McCall was arrested on drug charges. P alleged a breach of its contract for the drug charges and for McCall’s failure to promote the bout. P and McCall entered into a second contract, that if McCall did not engage in honest competition or give an honest exhibition of his skills McCall would not be entitled to the purse if the Nevada Athletic Commission made such a determination. That contract allowed P to deposit the purse with NAC and that NAC had the discretion to make determinations with respect to McCall’s conduct and the purse and that NAC had full discretion and authority to determine what should be done with the purse in the event of any breaches of the laws of the State of Nevada. Don King Prods (D) then demanded that a letter of credit be provided to D in McCall’s name. P procured the letter of credit but it expired on March 7, 1997, and no parties have drawn upon it. P alleged in its complaint that McCall simply stopped fighting after the third round and the referee stopped the bout 55 seconds into the fifth round and that these actions by McCall breached both of P’s contracts with him. NAC notified P that McCall breached his contract and that the monies should be withheld pending action by the NAC. A disciplinary action was initiated and 20 days after the complaint was filed, McCall and the NAC entered into a settlement agreement wherein McCall was fined $250,000, and the remaining amounts of the purse less the fine should be paid over. The settlement had to be approved by NAC and P was aware of all the proceedings involved. P alleges that it was not a party to the settlement negotiations and that parties other than McCall and NAC were not privy to the negotiations but might still have claims against the funds. D and McCall oppose P application to place the funds on deposit with the court. D argues that this court lacks subject matter jurisdiction over P’s interpleader, that the interpleader claim is improperly venued, that this court should abstain from exercising its interpleader jurisdiction in favor of the action before NAC, that the court lacks personal jurisdiction over McCall and that the terms of the contract hold that NAC is the exclusive forum to hear the claims of the parties.