Affliction Files Motion to Dismiss Fedor Litigation, Plus an Examination of Allegations in Suit

November 12, 2009

MMAPayout previously discussed the basic facts surrounding the Emelianenko v. Affliction litigation and has now learned that Affliction filed what is known in federal court as a Rule 12(b)(6) motion to dismiss the case on the ground that Emelianenko and M-1 (to simplify, “Fedor”) have failed to state a claim upon which relief can be granted, basically arguing that even if the court looks at all the facts in the light most favorable to the plaintiffs, Fedor still has not made a legitimate case.

Affliction’s motion to dismiss in essence argues that the lawsuit is frivolous.

Affliction’s Tom Atencio told MMAPayout.com:

“Affliction landed a serious blow to the Fedor and M-1 lawsuit by filing a motion to dismiss in federal court in response to the Russians’ complaint only eight days after being served. . . . The counter by Affliction goes to show Affliction does not intend to rollover and be extorted by the Russian visitors and how frivolous and meritless Affliction considers the allegations of their complaint.”

Before examining the nature of Affliction’s motion to dismiss the lawsuit, it’s worth providing a basic analysis of Fedor’s allegations.

Although the complaint itself is quite complex, it actually can be easily summarized in lay terms.  Fedor had a three-fight contract with Affliction, and fought two of the three fights, and agreed to fight Josh Barnett to close the contract.  Barnett failed a steroids test, Affliction had discussions with prospective replacements for Barnett (e.g., Vitor Belfort and Brett Rogers) but ultimately reached an agreement with UFC that would permit Affliction to once again sponsor UFC fighters so long as it agreed to exit the promotion game.

All contracts have what is called an implied covenant of good faith, and Fedor argues that Affliction, instead of satisfying its obligation of booking a third fight for Fedor by finding a suitable replacement for Barnett, chose the path of least resistance by returning to UFC and cancelling the third show altogether, leaving the contracts with Fedor unsatisfied.

The substantive issues in the lawsuit are interesting: in contract law there is what’s known as the excuse of impossibility, and here the argument would be that Barnett’s failing the steroids test rendered impossible the satisfaction of Affliction’s obligations on the Fedor contracts, with Fedor arguing that Barnett’s negative drug test was used as a mere pretext to allow Affliction to exit the promotion end of MMA and stiff Fedor.

But then we come to Affliction’s motion to dismiss, which throws a monkey wrench into the entire substantive analysis.  You see, Fedor argues that Affliction breached its contracts by cancelling Affliction: Trilogy and reaching agreement with UFC in July 2009.

Affliction’s motion to dismiss, however, points to the language of the contracts, which calls for termination of the agreements on either (i) March 31, 2009; or (ii) the conclusion of the third fight, with the contracts specifically stating that they terminate upon the earlier of the two dates.  Since there was no third fight, the earlier date was March 31, 2009, and Affliction argues in its motion to dismiss that it cannot be alleged to have breached a contract in July 2009 that had expired four months earlier.

Although this is an attractive argument, there are many complexities to the suit, including issues of equity (i.e., fairness) in which Fedor could conceivably recover foreseeable damages suffered by his reasonably relying upon promises made by Affliction, so I do not expect this motion to dismiss to entirely end the matter.

Moreover, the language Afflcition points to in its motion to dismiss has wriggle room that could be favorable to Fedor: the contract cancels on the earlier of the two dates “unless the term of the promotion agreement or any extension thereto is . . . extended further pursuant to this Agreement or pursuant to a separate writing . . . .”  I would expect some — perhaps very creative — arguments from Fedor that indeed the contract term had extended either through explicit writing, oral agreement, or even something known in contract law as course of conduct of the parties.

Stay tuned for an examination of Fedor’s upcoming response to Affliction’s motion to dismiss Emelianenko v. Affliction.

19 Responses to “Affliction Files Motion to Dismiss Fedor Litigation, Plus an Examination of Allegations in Suit”

  1. Atencio On M-1 Lawsuit: ‘Affliction Does Not Intend To Rollover And Be Extorted By The Russian Visitors’ on November 12th, 2009 11:20 AM

    [...] officially responded to the lawsuit M-1 Global and Fedor Emelianenko filed against them last week. They’ve filed a motion to dismiss essentially claiming M-1 has no grounds to sue them. Affliction’s Tom Atencio fired back with [...]

  2. Joe on November 12th, 2009 1:53 PM

    David:

    Great analysis. As a law student, it’s great seeing all the concepts learned in first year’s contracts class such as: excuse of impossibility, implied covenant of good faith, and equity. It made me smile.

    Keep up the good work, and can’t wait for more legal issues on mmapayout.com

    Joey

  3. Affliction’s side of the Fedor lawsuit - Fightlinker - MMA, UFC, and other funny fight crap on November 12th, 2009 2:15 PM

    [...] sued or not. I’d say the latter is probably more true, but I’m gonna keep covering it. Here’s MMA Payout sharing the dry dull details of Affliction’s legal strategy: All contracts have what is [...]

  4. David Wolf on November 12th, 2009 2:22 PM

    Joey, thanks, much appreciated.

    I was thinking as I read through the complaint that it wouldn’t make a half-bad contracts final.

  5. Affliction Files Motion to Dismiss Fedor Litigation. - Sherdog Mixed Martial Arts Forums on November 12th, 2009 4:15 PM

    [...] Affliction Files Motion to Dismiss Fedor Litigation. Affliction Files Motion to Dismiss Fedor Litigation, Plus an Examination of Allegations in Suit : MM… [...]

  6. Joe on November 12th, 2009 5:26 PM

    Precisely on point with the contracts exam final idea. But we all know that a 12b6 motion for failure to state a claim is almost automatic in this instance wouldn’t you say. obviously, Affliction isn’t going to obstruct to their attorneys filing such a motion as it very well maybe granted (who knows what that judge may think, esp since Fedor’s Russian ties)

    It should be interesting to see what happens.

    Joe

  7. The Phantom on November 12th, 2009 5:59 PM

    Ummmm….a 12b-6 which is brought in Federal Court. Isn’t that failure to state a claim upon which relief can be granted? Its a legal standard in which all of the facts are presumed to be in favor of the non-moving party. Isn’t the basis of this 12b-6 a factual argument? Hence, the motion will be denied.

    More importantly, why was the briefing schedule accelerated? This looks more to me like Affliction wanting to publicize the contracts. Was there a duty to keep them confidential within the agreements?

    The Phantom

  8. eJiuJitsu » Atencio On M-1 Lawsuit: ‘Affliction Does Not Intend To Rollover And Be Extorted By The Russian Visitors’ on November 12th, 2009 8:36 PM

    [...] officially responded to the lawsuit M-1 Global and Fedor Emelianenko filed against them last week. They’ve filed a motion to dismiss essentially claiming M-1 has no grounds to sue them. Affliction’s Tom Atencio fired back with [...]

  9. Dan on November 12th, 2009 9:35 PM

    Phanton – Affliction isn’t disputing the facts. A 12(b)(6) motion concedes the facts and says “Fine, everything you said is true, but it doesn’t give you a legal case for relief!” For example, I can bring my roommate to court and in my complaint state, “Matt wore a white shirt today. I wanted him to wear a yellow shirt.” Matt can respond to the complaint by saying, “Yes, everything he said is true, but even conceding those facts, I haven’t broken a law. He has not stated a claim upon which relief can be granted, so I move to dismiss.” This is what Affliction is doing. The court can view the facts in favor of the non-moving party all they want – it still doesn’t seem to give Fedor a claim here (unless his lawyers pull off a good equity argument)

  10. Rob Maysey on November 13th, 2009 3:46 AM

    Fedor-Barnett was scheduled for August 1, 2009.

    That is pretty convincing evidence that Affliction had agreed to “extend the contract.”

    To put the point another way, if Fedor, after Affliction began promotional efforts, had signed a contract to fight with Strikeforce in the US and disregarded the Barnett fight, would Affliction have sued him?

  11. mma guru on November 13th, 2009 9:57 AM

    I don’t know much about law and contracts, but it does appear that Affliction are going to be in a bit of trouble unless there is some other contract documents that pertain to the Josh/Fedor fight that overrode what was written in the above agreement. Fights get canceled all the time, so perhaps there is some clause in the fight agreement that would wave Afflictions responsibilities.

    On a side note, I wonder if the reason M1 has decided to take on Affliction in court is due to them not getting such a lucrative agreement with Strikeforce. It would be a hard sell to believe that Coker would make such an agreement where he would pay M1 1.2 million plus giving M1 the global distribution rights. If Coker has made such a move, than the longevity of Strikeforce as company will be in serious jeopardy. Banking on a PPV to redeem that type of money would be an extremely bad business decision even with CBS promoting Fedor to the masses.

  12. Steve on November 13th, 2009 10:01 AM

    Could the bout agreement be used as evidence perpetuating the original agreement past March, thus extending it?

    Also, can M-1 estimate potential earnings of the event to determine remedy? Or are they limited to Fedor’s show money?

  13. MMA Pound 4 Pound Champ » Atencio On M-1 Lawsuit: ‘Affliction Does Not Intend To Rollover And Be Extorted By The Russian Visitors’ (Update) on November 13th, 2009 10:48 AM

    [...] officially responded to the lawsuit M-1 Global and Fedor Emelianenko filed against them last week. They’ve filed a motion to dismiss essentially claiming M-1 has no grounds to sue them. Affliction’s Tom Atencio fired back with [...]

  14. Hockey » Blog Archive » Details of Fedor Emelianenko's Affliction Contract and M-1's … on November 13th, 2009 5:27 PM

    [...] Wolf of MMA Payout broke the story earlier today that Affliction filed its motion to dismiss in response to the M-1 lawsuit I discussed on Bloody Elbow last week.  Needless to say, a motion [...]

  15. mko on November 13th, 2009 8:37 PM

    damn, not the first law student to show up.

  16. David Wolf on November 14th, 2009 2:35 AM

    Steve, I would expect Fedor to argue that any agreement related to the Barnett fight acted as an extension of the original agreement, rendering the March 31 date meaningless. Definitely an argument I’d expect to see.

    Regarding potential earnings of the event as damages: in this case I think a court would rule potential earnings as too speculative to determine for those purposes.

    I’m now getting ready to fight in NAGA, NJ. Hit me up on Facebook if you want to read updates. I probably won’t be posting anything on Payout until Thanksgiving week.

  17. dojo on November 14th, 2009 6:36 AM

    M1 definitely has legs in regards to whether or not the agreement was extended past march. However they are complaining against a worthless (and probably non-existant now) company “Affliction Entertainment”

    The “Affliction said they would also sponsor m1 events” complaint pertains to affliction “clothing” (the company that actually has money) and this is claim is nothing as they dont even have an agreement for it.

  18. Monday Morning Link O Matic Device | squabbles.com on November 16th, 2009 9:07 AM

    [...] – Affliction files motion to dismiss Fedor, M-1 lawsuit. (MMA Payout) [...]

  19. Mixed Martial Arts Law Blog on November 30th, 2009 3:27 PM

    M-1 and Affliction Face the Music…

    Although I’ve not yet commented on the case, most MMALB readers are probably aware that M-1 and Fedor Emelianenko sued Affliction for its cancelation of the Affliction: Trilogy event that had been scheduled for August 1, 2009. (For a good……

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