In 2017, two years before his Major League Baseball debut at age 20, Fernando Tatis, Jr. (below) entered into an agreement (the Agreement) with Big League Advance Fund I, L.P. (BLA Fund). In exchange for an upfront payment of $2 million, Mr. Tatis promised the BLA Fund 10% of his Professional Baseball Earnings for the next 25 years. Mr. Tatis would not have been obligated to pay back any of the $2 million if he never played professional baseball. For better or worse, he is a three-time All Star and has twice won a Gold Glove Award. He is fast, he hits for average and power, and he’s a defensive star. So, he makes a lot of money as a baseball player.
The Agreement provided for dispute resolution through JAMS, an arbitral body, in the District of Columbia. Mr. Tatis paid until 2024 and then stopped doing so. The BLA fund initiated a JAMS proceedings that same year. In June 2025, Mr. Tatis filed suit in the California Superior Court, seeking declaratory relief, and alleging unfair competition and fraudulent concealment. He also moved to stay the arbitral proceedings pending the outcome of his state court claims. The arbiter refused to stay proceedings and in September, 2025 issued a final award of nearly $4 million, including the contract price, plus interest and attorneys’ fees and costs. Two weeks later, the BLA Fund asked a D.C. Court to confirm the award. Mr. Tatis then petitioned the California Court to vacate the arbitral award.
In Tatis Jr. v. Big League Advance Fund I, L.P., the Court begins by noting that the Agreement provides for jurisdiction in the District of Columbia to enforce an arbitral award, but neither party contests jurisdiction in California state court, so the Court proceeds. On the merits, Mr. Tatis contends that the Agreement is illegal under the California Financing Law (CFL) and that the arbiter therefore exceeded his authority in enforcing the Agreement.
The Agreement provides that it is governed by Delaware law. However, California law provides that “an agreement designating applicable law will not be given effect if it would violate a strong California public policy.” In order to enforce a choice of law clause, a court must determine whether (1) the chosen state has a substantial relationship to the parties or their transaction, or (2) there is any other reasonable basis for the parties’ choice of law. Even if that test is met the court must inquire into whether the chosen state’s law is contrary to a fundamental California policy. Even then, the choice of law provision will be enforced unless California’s interest outweighs the interest of the chosen state.
Here, the BLA Fund is a Delaware corporation, so the first part of the test is satisfied. However, California courts have determined that the CFL does express a fundamental California policy, and there is no comparable law in Delaware, so the Court’s decision comes down to the question of which state has a materially greater interest in resolving Mr. Tatis’s claims. Under the relevant California five-part test, the Court determined that Delaware’s interest in the enforcement of the Agreement was minimal. Delaware’s only connection to the Agreement was that the BLA Fund was incorporated there. So that’s good news for Mr. Tatis.
Unfortunately, under California case law, where a challenge is to the legality of a contract as a whole, it must be raised before the arbitration begins. In this case, Mr. Tatis paid under the Agreement, participated in the arbitral proceedings in D.C., and only raised his challenges to the legality of the Agreement in 2025, after the arbitral proceedings had concluded. Mr. Tatis thus forfeited his opportunity to challenge the Agreement under the CFL. Mr. Tatis’s attempt to challenge the agreement as violating California’s anti-usury laws fails for the same reason. Nor did the arbiter prejudice Mr. Tatis by refusing to stay his decision pending his action filed in June 2025. Because Mr. Tatis needed to challenge the legality of the Agreement before arbitration commenced, he had already forfeited any such challenges by the time he raised them and thus could not have been prejudiced.
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