Don King Productions, Inc. v. Douglas

742 F. Supp. 778, 1990 U.S. Dist. LEXIS 7968, 1990 WL 95955
District Court, S.D. New York·Decided June 29, 1990·No. 90 Civ. 1203 (RWS)·Published·Cited by 19 cases

Opinion

OPINION

SWEET, District Judge.

Don King Productions, Inc, (“DKP”) moves for partial summary judgment against defendants James “Buster” Douglas (“Douglas”) and John P. Johnson (“Johnson”) striking these defendants’ affirmative defense of unconscionability and dismissing their counterclaims for slander and intentional infliction of emotional distress. The motion is granted for the reasons set forth below.

The Parties and Prior Proceedings

Facts and past proceedings relating to this action are set forth in the court’s prior opinion of May 18, 1990 742 F.Supp. 741 (the “May 18 Opinion”) which determined the parties’ cross-motions for summary judgment, familiarity with which is assumed. The present motion, which followed the submission of defendants’ answer and counterclaims and their responses to interrogatories in connection therewith, originally was made returnable on June 19, 1990. That same day several additional motions in limine were argued and, with the parties’ blessing, argument of this partial summary judgment motion was adjourned until June 22 to provide the parties additional preparation time. The motion was argued on that date, after which a supplemental submission was received from DKP on June 27, 1990.

Standards Applicable to Summary Judgment Motions

Summary judgment is authorized if “there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). The moving party bears the burden of proving that no genuine issue of material fact exists. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986); Corselli v. Coughlin, 842 F.2d 23 (2d Cir.1988). All ambiguities are resolved against the moving party, and all favorable inferences are drawn in favor of the party against whom summary judgment is sought. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 1608-09, 26 L.Ed.2d 142 (1970); Ramseur v. *780 Chase Manhattan Bank, 865 F.2d 460, 465 (2d Cir.1989); Eastway Constr. Corp. v. City of New York, 762 F.2d 243, 249 (2d Cir.1985), cert. denied, 484 U.S. 918, 108 S.Ct. 269, 98 L.Ed.2d 226 (1987).

However, courts should not be reluctant to grant summary judgment in appropriate cases. “One of the principal purposes of the summary judgment rule is to isolate and dispose of factually insupportable claims,” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986), thereby permitting courts to avoid “protracted, expensive and harassing trials.” Meiri v. Dacon, 759 F.2d 989, 998 (2d Cir.), cert. denied, 474 U.S. 829, 106 S.Ct. 91, 88 L.Ed.2d 74 (1985).

The Unconscionable Contracts Defense

Douglas and Johnson plead as an affirmative defense that the contracts they entered into with DKP are unconscionable. Under New York law (which previously has been found to govern the validity of these contracts, see May 18 Opinion at 759), a determination of unconscionability

requires a showing that the contract was both procedurally and substantively unconscionable when made — i.e., “some showing of an ‘absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.’ ”

Gillman v. Chase Manhattan Bank, N.A., 73 N.Y.2d 1, 10, 537 N.Y.S.2d 787, 791, 534 N.E.2d 824, 828 (1988) (citations omitted and emphasis supplied). The factual contentions set forth in the Douglas/Johnson interrogatories to support the unconsciona-bility defense — that the Tokyo conduct of King was unconscionable, that King is a powerful promoter, and that exclusive, extendable terms of the contracts are unreasonably favorable to King — are as a matter of law insufficient.

The Douglas/Johnson contention that the contracts “became unconscionable” after their inception owing to King’s conduct during the Tokyo fight is unavailing, as the underlined language in Gillman illustrates. The doctrine of unconscionability implicates the circumstances and terms of a contract at the time of formation — not the parties’ subsequent performance under it. See State v. Avco Financial Service of New York, Inc., 50 N.Y.2d 383, 390, 429 N.Y.S.2d 181, 185, 406 N.E.2d 1075, 1079 (1980) (referring to “circumstances existing at the time of the making”). The Tokyo performance by King is, of course, relevant to whether King breached his obligations of good faith and fair dealing under the contracts, an issue discussed at length in the May 18 Opinion and which has been reserved for trial to a jury. That conduct has, however, absolutely no bearing on the defense of unconscionability, which relates to substantive and procedural fairness of a contract “when made.” . Gillman, 73 N.Y.2d at 10, 537 N.Y.S.2d at 791, 534 N.E.2d at 828.

Douglas/Johnson next contend that King so dominates promotion of heavyweight fights that the Douglas-King contracts are inherently procedurally unconscionable. That assertion, if true, sounds more probative of an antitrust claim for monopolization than it is demonstrative of the particularized showing of an unfair bargaining process that is requisite to the defense of unconscionability. Douglas/Johnson make no allegation here that deceptive or high-pressure tactics were employed in concluding the contracts, that contract terms were concealed in fine print, or that there was a gross asymmetry in the experience and education of the parties, each of whom was represented by counsel throughout the course of their arms-length negotiations. See May 18 Opinion at 747; cf. Gillman, 73 N.Y.2d at 11, 537 N.Y.S.2d at 791, 534 N.E.2d at 828 (identifying relevance of these and other factors to establishment of procedural unfairness).

At least as stated in the responses to the contention interrogatories, the unconsciona-bility defense does not here implicate its primary use as “a means with which to protect the commercially illiterate consumer beguiled into a grossly unfair bargain by a deceptive vendor or finance company.” Marvel Entertainment Group, Inc. v. Young Astronaut Council, No. 88-5141, 1989 WL 129504 (S.D.N.Y. October 27, *781 1989), 1989 U.S. Dist. LEXIS 12803, at 11 (quoting Gillman v. Chase Manhattan Bank, N.A., 135 A.D.2d 488, 491, 521 N.Y. S.2d 729, 732 (2d Dep’t 1987), aff'd, 73 N.Y.2d 1, 537 N.Y.S.2d 787, 534 N.E.2d 824 (1988)).

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Don King Productions, Inc. v. Douglas, 742 F. Supp. 778, 1990 U.S. Dist. LEXIS 7968, 1990 WL 95955 (S.D.N.Y. 1990).

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