Al Haymon, officially Floyd Mayweather's adviser, is being sued for $300 million by a company fronted by Oscar De La Hoya.
The lawsuit has been filed by Golden Boy, the promotional company owned by 10-time world champion De La Hoya, and claims that Haymon functions as both a manager and promoter, a role that would be in breach of boxing legislation.
The Ali Act was brought in to "protect boxers, the boxing industry, and the public from abusive, exploitive and anticompetitive behaviour".
De La Hoya said in a statement emailed to reporters: "During my 25 years in boxing, I have watched far too many fighters be chewed up, spit out and left with nothing to sit idly by while Mr Haymon flaunts a federal law meant to protect those who put everything on the line to entertain fans of our sport.
"The Muhammad Ali Act was passed to help fighters avoid the fate that bedeviled so many of our predecessors; and I will do everything in my power to ensure this crucial piece of legislation is upheld and followed."
Golden Boy alleges that Haymon, who manages over 100 fighters, and his "myriad of companies" arrange and contract for arenas, television time, sponsors and fights, all of which are duties of a promoter, not a manager.