The reason for the new UFC-NY lawsuit

The UFC surprised many with another lawsuit in federal court in New York challenging the constitutionality of the state’s ban on professional MMA.  This time, the UFC is seeking a preliminary injunction to hold an event in the state this April.

The news of a new lawsuit comes when the original lawsuit is in the Second Circuit Court of Appeals.  Paul Clement, the renowned appellate lawyer and former U.S. Solicitor General is representing Zuffa and filed their appeal brief this past August. New York’s response is set for the beginning of November.

But perhaps the road map for the lawsuit filed this week was provided by Judge Kimba Wood, the trial court judge that dismissed Zuffa’s case.

In deciding to dismiss Zuffa’s case, it offered the following in its conclusion (click to enlarge):

The opinion is mere “dicta” meaning that Judge Wood’s suggestion is not law or precedent which others may cite as guiding authority. Yet, it created the opportunity for the UFC to open up another line of action in attempting hold an event in New York.

Unlike the November 2011 lawsuit, the UFC is the only plaintiff. The UFC focuses on the claim that the New York law, the Combative Sport Law (“CSL”), violates due process rights as it is unconstitutionally vague as to its application.

The UFC points out that the CSL exempts “martial arts” from its ban stating that “martial arts shall include any professional match or exhibition sanctioned by any” of the organizations listed in the statute.

It notes in the Complaint that “standing,” the right to bring an action in the court, “could not be clearer.” This directly addresses the previous lawsuit in which Judge Wood determined that there was no standing due to the fact that the UFC had not suffered injury and did not contact a promoter to hold an event in New York. In its Complaint, it now states that it is working with WKA.

Based on setting a UFC event for April 2016, the UFC states that it will lose “millions of dollars in ticket sales.”  It also will lose a source of marketing for its UFC-branded gyms in New York, as well as for the DVDs, consumer products, video games and other products that it sells.

Notably, the UFC indicates that it has “lost sponsorships and has suffered reputational damage around the world because of its inability to hold professional MMA events in New York.”  It will be interesting to see what evidence it may bring to prove these allegations if it comes to that point.

The UFC Complaint cites the differences from the beginnings of the CSL indicating that the legislature was concerned with “no-holds-barred fighting.” In her opinion Judge Wood states “MMA has changed substantially since the Ban was enacted.”  This provides some guidance as to what a court may decide with respect to the CSL.

Payout Perspective:

It’s clear that the roadmap was provided by Judge Wood for this lawsuit with the exception that it has filed the lawsuit in federal court as opposed to state court as suggested in her opinion. The lawsuit is premised upon the determination by the prior court as this filing is tighter and a shorter (only 37 pages as opposed to 100 plus pages) complaint. It appears that there is a better chance for the UFC in this lawsuit although you should expect stiff opposition from New York. The state will likely argue what it did in the prior lawsuit which is that laws need not change over time.  And despite the change within the sport of MMA, it will focus on the intent of the law with its primary purpose to ban MMA.