UFC attempts to exclude expert, Plaintiffs file for class certification in latest antitrust lawsuit filings

February 18, 2018

New filings in the UFC antitrust case filed Friday included plaintiffs’ request for class certification and Zuffa seeking to exclude the testimony of plaintiffs’ expert Andrew Zimbalist.  As is customary in litigation, a glut of pages of legal filings were made on a Friday, just in time for the three day President’s Day weekend for lawyers for the UFC and plaintiffs to sift through.

Both filings were anticipated.  Plaintiffs’ have been angling toward certification.  Zuffa’s motion to exclude plaintiffs’ expert is a strategic motion to discard or curb the testimony of Zimbalist based on his reports.

Zuffa’s Motion to Exclude plaintiffs’ expert economist Andrew Zimbalist is based on his expert reports and deposition testimony.  The basis for the request to exclude Dr. Zimbalist is that his method of coming up with his conclusion for plaintiffs’ damages is not premised upon a general accepted method of practice.  Zuffa categorizes Dr. Zimbalist’s reports and testimony as “junk science” that does not meet the Federal Rules of Evidence reliability standards. The “Daubert test” which is premised upon a court case, enables the court to perform a “gatekeeping” function to ensure that expert testimony admitted “both rests on a reliable foundation and is relevant to the task at hand.”

Zuffa argues that Dr. Zimbalist’s claim that he utilizes the “yardstick method” when assessing damages is incorrect.  “Instead, he compared Zuffa to other firms chosen based on his selecting comparison firms that had as much in common as possible.”  Zuffa takes issue with Dr. Zimbalist using a “damages method” with no standards.  The claim is that Zimbalist chose to compare UFC fighter pay with those of the NBA, NFL, NHL, MLB based on his previous work within those sports.  Zuffa describes Dr. Zimbalist’s testimony as one which lack standards without following the generally accepted “yardstick method” of assessing damages in comparing a market or firm similar to the plaintiffs’ situation for the impact of antitrust violations.  The issue taken with Dr. Zimbalist’s method and the accepted “yardstick method” is the comparability of markets.  Zuffa argues that Dr. Zimbalist did not make a comparison of the MMA market with a comparable other market.  Dr. Zimbalist argues that he used a model that had “as much in common as possible.”  But, as outlined by its motion, this does not follow the “yardstick method.”  Zuffa also claims that Dr. Zimbalist created a “selection bias” as he essentially used comparators he felt comfortable with to get to the desired result as opposed to determining whether the selection were the most appropriate.

If the Court agrees with Zuffa, this would deal a big blow to the plaintiffs’ case as one of its main experts would not be able to testify at trial and any evidence produced would not be used to prove damages as plaintiffs had planned.

Plaintiffs’ motion for class certification is a perfunctory motion necessary to attain class action status.  The requirements for the court to grant class status is based on four primary elements (which most attorneys know for studying the bar exam):  1) numerosity, 2) commonality, 3) typicality, and 4) adequacy.

The first element is the number of potential class member affected by the issues claimed in the lawsuit.  The second element is based on the common questions of law or fact in the lawsuit.  Third, the claims or defendants of the class representatives are typical of those of the class.  Finally, the class representatives (i.e., the lawyers involved in the current lawsuit) will adequately protect the interests of the class.

The plaintiffs move for an order certifying a Bout Class and an Identity Class.  The Bout Class encompasses all persons who competed in one or more pro UFC-promoted MMA bouts in the US between December 16, 2010 and June 30, 2017.  The Identity Class is based on each and every UFC Fighter whose Identity was expropriated or exploited by the UFC from December 16, 2010 and June 30, 2017.

In its motion, plaintiffs reiterate the “Scheme” outlined in their lawsuit.  The Scheme used by Zuffa in which it established and maintain market dominance in which it allows payment of fighters less than it would be in a more competitive market.  The three categories of the Scheme include its “long-term exclusive” “Contracts,” the “Coercion” of fighters to re-sign contracts, making them perpetual and the “Acquisitions” of other MMA promotions.

The motion for class certification is heavily-redacted especially when the motion relates to UFC contracts.  Looking at the class certification elements, its clear that there are many UFC fighters that may be affected by this lawsuit.  The overall argument for class certification is that too many people have been affected by the subject cause of actions that separate lawsuits would not make sense.  Secondly, the plaintiffs argue that there are common issues of law involved including:  1) whether Zuffa violated antitrust laws; 2) whether Zuffa possessed market power; 3) whether Zuffa’s Scheme had anti-competitive effects; 4) what injunctive relief is appropriate; and 5) the aggregate amount of damages caused by Zuffa’s unlawful Scheme.

Payout Perspective:

Both of these motions were likely to happen and we will see how the Court decides each.  With respect to the Motion to Exclude, the arguments asserted by Zuffa are valid but it’s the opposing party’s job to poke holes in the expert’s testimony.  The best-case scenario for Zuffa is that the testimony is limited in some way on the damages estimate.  It would be highly unlikely that the Court would exclude a witness in their entirety.  Dr. Zimbalist is an experienced expert and is used to attacks on his report and more importantly, knows how to craft a report.  Additionally, the reports are done in concert with plaintiffs’ attorneys so, overall, plaintiffs agree to what is being opined in the report.

More importantly for plaintiffs, class certification is a big deal for the plaintiffs and plaintiffs’ lawyers.  If the Court certifies class status for this lawsuit, then you will see more fighters joining the lawsuit and plaintiffs’ attorneys could collect a windfall if they are eventually successful at the end of the case either via settlement or verdict.

MMA Payout will keep you posted.

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