Zuffa files opposition to Plaintiffs’ Motion for Class Certification in Antitrust Lawsuit

April 16, 2018

Earlier this month Zuffa filed its opposition to the Plaintiffs’ motion for class certification in the Antitrust lawsuit filed in Nevada.  Back from Spring Break, MMA Payout takes a look at the motion.

Zuffa Oppo to Class Cert by JASONCRUZ206 on Scribd

Under Federal Rule of Civil Procedure 23 are four elements needed to show class action status is viable: Numerosity, Commonality, Typicality, and Adequacy.  Zuffa argues against each element for class action status.

The opposition brief goes in depth on the reasons why the 6 named Plaintiffs cannot represent the two broad classes contracted by Zuffa.  They argue that the claims are not the kind that should be decided as a class.  Rather, one of their main arguments is that the factual claims set forth by each plaintiff differ and there is no “typicality” of defenses or “commonality” of evidence.  Zuffa argues that the expert reports and opinions submitted by Plaintiffs are insufficient to buttress the argument that the claims are those that can be tried through class action certification.

The two classes that Plaintiffs seek to represent are the “Bout Class,” the class of athletes who competed in UFC bouts during the class period and the “Identity Class,” those athletes alleged to have their identities “expropriated” by Zuffa.  Nathan Quarry is the only named plaintiff to be a part of the Identity class according to Zuffa.

Zuffa outlines reasons why the Bout Class is defective:

  1. Plaintiffs cannot adequately represent the class because none of them currently compete in UFC promoted bouts, and their claims are not typical of others in the putative class, such as the current athletes they seek to represent.
  2. Plaintiffs cannot establish the requisite elements of an antitrust violation with common evidence. Essentially, Zuffa argues that the class of purported affected individuals is vast and a finding that the entire class was “coerced” into exclusive contracts is unlikely.  Zuffa also cites that the existent of local markets for live MMA entertainment means that individual issues predominate for all of those markets.
  3. Zuffa does not have a pay structure or follow a policy of “internal equity” according to the legal filing. They argue that the regression theory posited by Plaintiffs “cannot distinguish whether common or individual factors account for the variations in athlete compensation.”
  4. Zuffa also claims that the putative class is “unmanageable” due to the inability for Plaintiffs to identify which athletes would still be competing for Zuffa or any other MMA Promoter

Zuffa argues that the Plaintiffs’ cases are not typical of one another.  The “test of typicality” looks to “whether other class members have been injured by the same course of conduct.” The requirement evaluates whether defendant’s defenses would be similar for the Putative class representative.  Zuffa argues that the defenses vary based upon the athlete.  It identifies having varied defenses when dealing with Plaintiff Nathan Quarry, Brandon Vera, Cung Le, Javier Vazquez, Jon Fitch and Kyle Kingsbury.

The purpose of “adequacy” is to “uncover conflicts of interest between named parties and the classes they seek to represent.”  Here, Zuffa argues that the Plaintiffs are retired or compete elsewhere.  None of the Plaintiffs currently fight in the UFC.  Thus, they would not be representative of the current class of UFC fighters as Zuffa argues that they would be more interested in money damages rather than injunctive relief.

In its argument rebutting the commonality element for class action status which allows certification if questions of law or fact common to class member predominate, Zuffa argues that Plaintiffs’ alleged theory of liability is incapable of proving liability with common evidence.  Here, Zuffa argues that the factual issues for each case differs and the commonality requirement would not apply here.  Zuffa goes on to argue with respect to the allegation that athletes were “coerced” into UFC contracts, Plaintiffs’ claims require “mini-trials for each plaintiff and class member on the issue of whether they voluntarily entered into their contracts.” Additionally, they claim that individualized evidence will be required to determine injury and show an antitrust violation.

The opposition motion includes declarations from Stephan Bonnar, Kenny Florian and Jim Miller which reflect the tone that the fighters made a choice to fight in the UFC instead of being forced to do so because of the economic market conditions.

Here are some other observations:

-Zuffa cites the U.S. Supreme Court case of Comcast Corp., et al. v. Behrend, et al. which found that the plaintiffs in that case failed to establish a sufficient connection between their alleged theory of liability and their claimed damages.  Highlighted in the opinion was the need to conduct a “rigorous analysis” to determine whether the standard has been met.  Similarly, Zuffa argues that the Plaintiffs have a similar problem with their case.

-According to an excerpt from Michael Mersch’s deposition, in order to re-sign Zuffa athletes before their contracts expire, the company offers higher guaranteed compensation for their next bout as an incentive to sign a new agreement.  Zuffa argues that the individual athlete makes the decision as to whether to sign or not and their reasons differ on the decision.

-Zuffa notes that there is “no testimony that promoters could not obtain MMA athletes during the class period.”

-The opposition argues that Plaintiffs have switched course in the argument of a combination of monopoly and monopsony allegations but a “multi-faceted “Scheme” of only monopsony-related claims.”

-Zuffa argues that Plaintiffs’ attempt to merely offer proof of harm that is widespread across the class is not sufficient as they must need to prove class wide harm.  They also state that the antitrust claims asserted here are not routine for class action lawsuits.

-Zuffa notes, “[A]lthough Plaintiffs suggest class certification in antitrust cases is routine, no court has

granted class certification in a Sherman Act Section 2 monopsonization case involving allegations

based on unilateral conduct.”

-With respect to their motion to exclude the opinions of Plaintiffs’ experts Drs. Singer and Zimbalist under Daubert, Zuffa argues that regardless of the outcome from the Court, it may still conclude that class certification should be denied.

Payout Perspective:

 The obvious objective of the opposition is to show that Plaintiffs’ claims cannot be tried as a whole and must be tried individually.  If this were to occur, the Plaintiffs would be in a bind logistically and economically as they would be left to prosecute cases for each of the athletes involved in the lawsuit.  Additionally, this would lessen their leverage of settling the cases as well as foreclosing a potential for larger award if they prevail.  Zuffa also stresses the Comcast case in its argument that under a “rigorous analysis” that Plaintiffs liability theory and damages are not tied.

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