In a stunning reversal, a California Superior Court judge tossed out a $5.1 million jury verdict in a breach of contest case against legendary boxer Manny Pacquiao in favor of Paradigm Sports Management, writing in a tentative decision on Wednesday that Paradigm wasn't properly licensed in California as a manager as required by state law.
On May 2, 2023, an Orange County jury returned 10 verdicts against Pacquiao and awarded Paradigm Sports $3.3 million for Pacquiao's breach of contract and $1.8 million for breach of the implied covenant of good faith and fair dealing. That made the entire jury award for Paradigm $5.1 million.
The verdict came months after Pacquiao had ordered his attorneys to settle the case. Pacquiao offered $4 million to settle the case before it went to trial, but Paradigm declined and took the case to trial.
On May 17, 2023, Pacquiao's attorneys filed a motion for Judgment Notwithstanding the Verdict, arguing that Paradigm wasn't properly licensed as a manager under California law. On Wednesday, California Superior Court Judge Walter P. Schwarm, writing in a tentative ruling, agreed with Pacquiao and vacated the judgment.
Schwarm rules, "The court finds for Mr. Pacquiao on the Declaratory Relief cause of action and declares the Contract void due to illegality."
Paradigm attorney Judd Burstein said the company would appeal.
"I have great respect for this judge but I disagree with him in this decision," Burstein told KevinIole.com. "I disagree with him on the fundamental issue, but he's the judge. ... I have won a lot of appeals in cases that I have lost at trial and I believe this will be one of those."
In a statement, Pacquiao attorney Jason Aniel praised the judge's ruling.
"Although the judgment is not presently final, we are pleased that the Court made its tentative decision on the legal issues in Mr. Pacquiao's favor," Aniel said. "The Court decided the contract that Paradigm Sports Management sought to enforce against Mr. Pacquiao was illegal as Paradigm was not properly licensed."
Section 18642 of the California Business and Professions code states, " ... No person shall participate in any contest or service in the capacity of a booking agent, manager, trainer or second, unless her or she has been licensed for that purpose by the commission."
Schwarm cited a 1974 case involving former boxer George Foreman, which read, " ... one of whose primary goals is to 'provide safeguards for the protection of persons engaging in the activity.' The statute and regulations indicate a clear purpose to safeguard boxers against the temptation to mortgage their futures in exchange for relative meager present consideration; ... "
Pacquiao and Paradigm first signed an agreement on Feb. 8, 2020. On Oct. 11, 2020, Paradigm and Pacquiao entered into a partnership contract. In that, Pacquiao agreed that Paradigm Sports Management was " ... MP's exclusive worldwide partner with respect to the procurement, negotiation, execution, and management of all employment opportunities, agreements, and the like for MP's professional fighting and promotion services with foreign and domestic fighting organizations."
The judge in his ruling noted that Paradigm's Audie Attar testified that he did not have a manager's license for boxers in California in 2019 sand did not recall if he had such a license in 2020 and 2021. It noted that Attar was licensed in a manager in California from April 14, 2016, through April 30, 2017, but "his license expired after he did not complete the required annual renewal."
Pacquiao fought once in 2019, against Keith Thurman, and once on Aug. 21, 2021, against Yordenis Ugas. Both of those fights were in Nevada, at the MGM Grand Garden in Las Vegas.