Bellator MMA files lawsuit against Rampage

March 2, 2015

Bellator MMA has filed a lawsuit today in New Jersey against Quentin “Rampage” Jackson for breach of contract. The organization is also seeking an injunction to prevent Jackson from appearing in the UFC.

Jackson is scheduled to fight at UFC 186 against Fabio Maldonado on April 24th. It appears that today’s lawsuit and request for an injunction will seek to preclude Jackson from appearing on that card unless something can be worked out between Bellator, Jackson and likely the UFC.

Bellator issued the following release:

Today, Bellator MMA was compelled to go to court to stop Quinton “Rampage” Jackson from fighting in an April 25th bout promoted by Bellator’s competitor, Ultimate Fighting Championship (UFC).  Jackson, who has completed only three fights of his exclusive six-fight contract with Bellator, is barred by contract from fighting for any promoter other than Bellator. Our lawsuit for an injunction and related relief – filed in the Chancery Division of the Superior Court in Burlington County, New Jersey – will compel Jackson to honor his contractual agreement.   We look forward to having one of our MMA stars fighting for Bellator again.

This lawsuit had been brewing for a while after Jackson left the Viacom-owned company late last year and indicated that he had conferred with UFC lawyers and “an outside law firm” to determine if he could legitimately leave Bellator. Jackson’s story is that Bellator did not live up to his Bellator contract, Jackson gave Bellator time to cure the issues he had, but the company did not satisfy Jackson’s concerns so he decided to leave.  What may be an interesting detail here is that Jackson’s management views the contract he signed with Bellator (under Bjorn Rebney) as an entertainment contract rather than a pure sports contract.  This may come into play, as well as the fact that the contract was signed in California.  But that is speculation at this point.

Although Bellator MMA is headquartered in Irvine, California and Jackson lives in Irvine, the lawsuit is filed in New Jersey.

As you recall, Bellator prevailed against Eddie Alvarez when Alvarez sought an injunction against the organization in their contractual dispute. The lawsuit was venued in the U.S. District Court of New Jersey.

Payout Perspective:

Timing is everything when filing lawsuits as we recently wrote about. It was clear that there was going to be a legal issue when Jackson left Bellator to sign with the UFC. The timing of the filing and injunction comes close to UFC 186 and might mean that Jackson will be pulled from the card. The interesting issue here is that the UFC will be implicated here and its clear based on its actions that it thinks it had solid legal grounds to sign Rampage and actively promote him for his fight.

MMA Payout will keep you posted.

Zuffa files Motion to Dismiss in Antitrust lawsuits

March 1, 2015

The end of the week and the end of the month are always prime dates to zing your opposing counsel with motions.  On Friday, February 27th, Zuffa filed a Motion to Dismiss the four identical Antitrust Complaints filed by former UFC fighters in federal court in San Jose.  The hearing date will not be until July 23rd.

There is a looming Motion to Transfer Venue to be decided by the court that could cause the case to be move to Las Vegas and this motion to be heard before another Judge.  In the meantime, Zuffa’s lawyers have filed this Complaint seeking to dismiss the plaintiffs’ claims citing they fail to state any legal claim against the UFC.

The UFC has issued an official statement on its motion to dismiss here.

A portion of the statement reads:

While UFC vigorously contests the plaintiffs’ characterization of the facts, a court deciding a motion to dismiss generally must accept the allegations as true. Even with that high legal standard, UFC’s motion demonstrates that UFC competed in lawful ways that helped fighters and built UFC into a premiere organization in the sport of Mixed Martial Arts.

The UFC treats its fighters well, compensates them fairly, competes against other MMA promoters, and produces a product that is enjoyed by millions of fans around the world. We are confident in our legal position and expect to ultimately win this lawsuit.

As for the actual motion, Zuffa argues that the Plaintiffs have failed to state a claim per the standards set forth under two recently decided U.S. Supreme Court cases.  In Bell Atlantic Corp.. v. Twombly (2007) and Ashcroft v. Iqbal (2009), the U.S. Supreme Court heightened the pleading requirement for Federal civil cases.  The rules require that plaintiffs include enough facts in its complaint to make it plausible that they will be able to prove facts to support its claims.

The Twombly case is relevant here since it was an Antitrust case in which the court dismissed Plaintiffs Complaint citing that the pleading did not allege sufficient facts for the court to determine that there was anti-competitive behavior in violation of the Sherman Antitrust Act.  Iqbal reaffirmed the test announced in Twombly which was that a federal complaint may be dismissed if the court can “identify and disregard naked assertions and conclusory allegations, and then determine where the factual context presented by the remaining specific allegations plausibly suggest the defendant is liable under the relevant law.”

What this all means is that Zuffa is claiming that the Complaint(s) do not have sufficient facts to prove its claim that Zuffa violated Antitrust laws.  While we will not go into the specifics of the motion, it is meticulous in going through plaintiffs’ Complaint and identifying each paragraph in which it believes it is mere allegations and/or conclusory statement.

Payout Perspective:

This appears to be standard litigation playbook stuff from Zuffa.  First, it filed a motion to transfer venue seeking to move the case to Las Vegas.  Instead of responding to the Complaint in affirming or denying the allegations, it has filed a motion to dismiss.  There are at least three things that might occur from this filing.  First, the plaintiffs may amend its Complaint to be more specific in its allegations.  Second, the plaintiffs may refile its Complaint so that it conforms to the rules (i.e., provide more specific facts of its allegations).  Or, respond to the Motion to Dismiss.  The legal requirements for filing Complaints in federal court differ due to the Supreme Court cases.  Essentially, the federal rules are stricter than lawsuits filed in state courts (in state courts pleadings can allege “Upon information and belief…”, but you can’t get away with that in federal courts) due to the case law which seem to require more factual detail in allegations.  Obviously, there is risk in providing specific details in Complaints.  If the factual allegation proves not to be true or cannot be proven, you will have the allegation dismissed or end up losing.

MMA Payout will keep you posted on these developments.

Court will likely decide Zuffa’s-NY motions without oral argument

February 23, 2015

Zuffa’s lawsuit in which it sued New York for its legislation banning professional MMA in the state is still ongoing and it looks like there could be a conclusion this spring based on the dual summary judgment motions filed by the state and Zuffa. But, it appears that there will be no oral argument to persuade the judge on the matter unless attorneys for each side amend their travel schedules.

Originally, the Court of Judge Kimba Wood issued an Order a couple weeks ago in which it would grant the parties final briefing and an oral argument on whether the New York statute banning professional MMA in the state was unconstitutionally vague. The briefs would be limited and the sides would only be allowed only 10 minutes of oral argument. The Court set the hearing for March 5, 2015.

However, the state indicated that both sides had conflicts with the date provided by the Court.  Each side indicated conflicting travel schedules (with nonrefundable tickets) and unavailability for the hearing.  In a letter from attorney John Schwartz on behalf of the state of New York, he proposed a hearing date scheduled for some time the week of March 30th.

Defendants' Letter to the Court by JASONCRUZ206

Well, no go from the Court.

Court Order in response to request to move hearing date

Instead of providing the accommodation, the Court has decided to render its opinion without oral argument unless of course they are available on March 5th.  The Court indicated in an order dated February 20th that it has reserved time for March 5th “in case that date becomes viable for counsel.” This is well within the rights of the Court.

Payout Perspective:

Would the Court have been persuaded by either side’s additional briefing or oral argument? Moreover, did the sides piss off the Judge for not being available or does the Judge just want this case to either end or proceed to trial? We shall see. Based on the limited scope of what the Court was requesting, it appeared that it wanted to hear some further information but maybe not so much as to postpone the decision any further.

What will be interesting is to see if a ruling comes out prior to an anticipated vote in the New York State Assembly on legalizing professional MMA in the state. MMA Payout will keep you posted.

Punk and Cabana sued by WWE doctor

February 21, 2015

MMA Fighting reports that UFC fighter CM Punk and indy wrestler Colt Cabana are being sued by a WWE doctor for defamation among other claims resulting from Punk’s comments on Cabana’s “Art of Wrestling” podcast last year.

The lawsuit filed in Cook County Circuit Court (IL) by WWE doctor Christopher M. Amann accuses the former WWE wrestlers (Cabana had a brief stint with the company) of making defamatory statements regarding his professional duties as a medical doctor for the company.

In support of Dr. Amann, the WWE has released a statement and video which refutes Punk’s story told on Cabana’s podcast that he had a MRSA staph infection on his back and Dr. Amann misdiagnosed it.  Punk also indicated that the doctor did not treat him for a concussion.

Cabana was sued as Dr. Amann claims that he “helped Brooks falsely depict Amann as lazy and a bad doctor per the Cook County Record.

Payout Perspective:

When I first heard the much heralded podcast where Punk aired out the WWE, I wondered about whether there would be any response by the WWE on the comments made by Punk on how his injuries were addressed. It appears that the lawsuit is the response.  Certainly a physician filing a defamation claim against what was essentially a patient are unusual.  One might think that Punk may now bring a counterclaim alleging medical malpractice based on his side of the story from Cabana’s podcast.  Then again, the WWE statement (via the Wrestling Observer) includes a claim that there are no medical records documenting Punk’s condition and that Punk did not communicate his condition (i.e., lump on back) with the WWE’s doctors.

The news of Punk’s health will be interesting when he applies for a license to fight.  We will see if this lawsuit brings up additional information since it is an issue in this lawsuit.  Punk is at an “advanced age” for a first-time MMA fighter and one would think an athletic commission would look more closely at his health history when issuing him a license.

But, the Punk-WWE legal issues look to continue.

Widow of former WWE performer sues

February 20, 2015

Cassandra Frazier widow of the late WWE wrestler Nelson Lee Frazier (aka Mabel, Viscera, Big Daddy, V, King Mabel) has sued the WWE in a wrongful death lawsuit filed in the Circuit Court of Shelby County, Tennessee.

The 124 page claims that Frazier suffered multiple head injuries/concussions while he wrestled with the WWE.  The Complaint claims negligence, negligent misrepresentation, intentional misrepresentation and loss of consortium, a personal injury to Ms. Frazier among other claims asserted in the Complaint.

Frazier, who weighed near 500 pounds while wrestling for the WWE, died of a heart attack on February 18, 2014 at the age of 43.  Perhaps in honor of the anniversary of his death, the lawsuit was filed February 18, 2015.

The Complaint includes a timeline of events in which Frazier suffered injuries while working for the WWE.  It also includes a list of nearly 40 WWE wrestlers (photos of each included) that have passed due to issues related to head trauma.  Notably, the lawsuit includes some information revealed by CM Punk and Colt Cabana on Cabana’s infamous podcast last year.

Ms. Frazier claimed her husband suffered concussion symptoms, CTE, disfiguring scar tissue, head trauma

The WWE released a statement with respect to the lawsuit by Frazier (via Wrestling Observer):

“WWE has not been served with a lawsuit by Cassandra Frazier.  If served, we will vigorously contest this lawsuit brought by the same lawyers who have been soliciting people to sue WWE without merit.”

Payout Perspective:

This is the third lawsuit in less than a year against the WWE which relates to the issue of head injury/concussions that may have caused injury to former performers.  “Billy Jack” Haynes filed a lawsuit he had hoped would gain class action status in Oregon and Vito LoGrasso and Evan Singleton in Philadelphia.  As you can tell from the WWE’s initial statement, it is shifting the focus to the fact that we have “ambulance chasing” lawyers and not true claims.  The lawsuit has been filed by one of the lawyers that filed suit in the LoGrasso and Singleton case.  Hence, the statement by the WWE.  The Complaint includes information revealed by CM Punk on Colt Cabana’s podcast about the WWE medical policy.  The veracity of the statements made on the podcast are in question as a WWE doctor has filed a defamation lawsuit against Punk and Cabana.

MMA Payout will keep you posted.

Draft Kings dealing with potential class action lawsuit

February 17, 2015

Although the UFC and Draft Kings have yet to formally announce an exclusive sponsorship deal in which the fantasy sports operator will become the company’s official sponsor, the two organizations have something in common:  people filing class action lawsuits against them.

As The Legal Blitz brought to light in his ATL Redline post, the Boston-based DraftKings is being sued in federal court in Florida claiming that DraftKings violated the Florida Deceptive and Unfair Trade Practices Act.

Essentially, the lawsuit claims that Draft Kings misrepresented the term “free” in its advertisements in order to induce consumers to deposit money to the website.  Commercials and ads which indicate “free sign-up bonuses” that match up to 100 percent of deposits for the site are untrue according to the complaint.  As described in the complaint, customers must enter fantasy contests and receive bonuses “in incredibly small increments” and rather than the 100 percent deposit match, they receive just 4 percent of every dollar they play.

In this case, the named plaintiff deposited $25 and only received $1 in return when he played in the fantasy contests.  It’s likely that if this case gains momentum, there will be lawsuits all over the country simulating this according to The Legal Blitz.

But, as he points out fantasy sports players registering with DraftKings probably did not know that they agreed to mandatory arbitration.  He points out a 2013 U.S. Supreme Court case which dictates that arbitration provisions are binding and enforceable.

While this may not be the ultimate result in litigation, it’s probably a likely outcome.

Payout Perspective:

It’s always advisable to have arbitration agreements in contracts to reduce the potential of litigation as well as control the potential legal costs. Many things that people sign have these types of clauses.  The way the clause is drafted is the ultimate issue on whether it may be enforced.  The class action lawsuit filed here is an interesting take on the fantasy sports “gaming” industry and how closely it resembles actual gambling.  Obviously, the enticements about “free” are stretched and while many consumers were likely duped into thinking that they’d be getting an incentive for playing, they will probably “let it go” in order to play.  Unfortunately, Zuffa probably does not have as easy a road to resolving its class action lawsuit.

Show Money Episode 1 discussing issues in MMA business

February 11, 2015

In collaboration with Bloody Elbow, I hopped on with Paul Gift and John Nash to discuss current issues in MMA business including the UFC Antitrust lawsuit, the Reebok deal, independent contractor status and the new Bellator.

Ruediger and Danzig latest to file lawsuits against Zuffa

February 5, 2015

Former UFC fighters Gabe Ruediger and Mac Danzig are the latest to file a lawsuit in the Antitrust class action in the San Jose Division of the Northern District of California.  Captioned Ruediger et al v. Zuffa, LLC, the Complaint dated February 4th mirrors the other 3 lawsuits previously filed by the other former UFC fighters.

A new law firm has emerged on behalf of the Plaintiffs, the Philadelphia-based Spector Roseman Kodroff & Willis, P.C. appears to have its hand in representing Ruedigger and Danzig although the pleadings were signed by attorney Joseph Saveri.

Bloody Elbow has obtained the lawsuit and you can find it here.

If you’ll notice, the paginations in this lawsuit are slightly off and seem to indicate a cut and paste into the pleadings.  The observation is neither here nor there, it’s just an observation.

Ruediger was a part of TUF 5 and fought with the UFC in 2006.  After time away, he had two more fights in the UFC in August 2010 and February 2011 (specifically 4 years ago as of the date of this writing).  He also fought in the WEC.  His last fight was in May 2013 for the Bamma USA organization.

Danzig is a recognizable name as you may recall he was the TUF Season 6 winner back in 2007 and had a long career with the organization.  You may recall he fought on a UFC on Fox 9 event without taking any money from sponsors.  He announced his retirement from fighting early last year.  Danzig was critical of the UFC in an interview with MSNBC this past January.

Payout Perspective:

Ruediger and Danzig are names that many UFC fans can recognize as the number of fighters joining the lawsuit increases.  Danzig is an interesting addition to the lawsuit as he seems like an articulate individual with definite opinion.  As previously reported, Zuffa is seeking to transfer the lawsuit to Nevada.  Also, the Plaintiffs have sent subpoenas to YouTube and Twitter to obtain the accounts of several key UFC employees.

MMA Payout will keep you posted.

More on Zuffa’s motion to transfer Antritrust lawsuit to Nevada

February 3, 2015

MMA Payout gives you a little more detail in what is going behind Zuffa’s request to move the Antitrust lawsuit filed by Plaintiffs in Northern California to Nevada.  Zuffa’s biggest arguments about the reason for transferring the case is that the Plaintiffs signed contracts/agreements which had forum selection clauses and that for convenience of the litigants, much of the case deals with information and individuals residing in Nevada.

Forum Selection Clauses

Zuffa argues that four of the seven Plaintiffs agreed to “forum selection clauses” in their contracts which would avail themselves to the jurisdiction to the state court or District of Nevada.  The other three Plaintiffs “agreed to forum selection clauses” which indicated that “any disputes arising from or relating to” their agreements would be determined in the state court of Nevada.

Convenience Factors

In addition to the argument that the Plaintiffs agreed to settle legal disputes in Nevada, Zuffa argues that for “convenience of the parties” a transfer to the federal court in Nevada “unequivocally favors” the move of venue.  Zuffa contends that the “contracts and business relationships of Zuffa” are located in Nevada as well as the potential witnesses and documentary evidence is located in Las Vegas.  Zuffa also contends that non-party witnesses are located in Las Vegas which include executives from WSOF, Top Rank, the Wynn Las Vegas and Muay Thai promoter Lion Fight Promotions.  Its not clear from the pleadings whether Zuffa intends to call these witnesses or if these are examples of the argument that there’s an obvious need for the transfer of venue.

Zuffa argues Plaintiffs signed agreements with forum clauses

In its pleadings, Zuffa argues that Fitch, Garza, Le and Vera agreed to “at least one Bout Agreement, Merchandise Agreement, or Promotional and Ancillary Rights Agreement containing a “forum selection clause” which gave their consent “to the exclusive personal jurisdiction and venue of the state and federal courts located in Clark County, Nevada for any action brought by either party to interpret or enforce any provision of this Agreement.”

Plaintiffs Quarry, Hallman and Vasquez have different forum selection clauses which dictated that any dispute arising from their contracts be decided in “the Eighth Judicial District Court for the State of Nevada, sitting in Las Vegas.”

Limited contacts with San Jose

To buttress its argument that the venue should be transferred to Nevada, Zuffa also compares the amount of events it has held in San Jose (5), where the lawsuit is currently filed to Vegas where it states has staged “more than 30 major MMA events in Las Vegas.”  It also points out that only Cung Le is the only Plaintiff residing in San Jose while all the others do not reside in that forum.  It also states that while Strikeforce was based in San Jose, all of the pertinent document reside at Zuffa headquarters in Vegas.

In its legal arguments, Zuffa asserts that the District of Nevada is an appropriate forum because this lawsuit could have been filed there rather than in San Jose.  It also cites case law which it argues should be the authority to enforce forum selection clauses in contracts. Thus, since the Plaintiffs signed its contracts, they should abide by the forum selection clauses in the contracts.

One of the key legal distinctions made by Zuffa is that it claims that Plaintiffs engage in “artful pleading” when it filed its Complaint as the Plaintiffs argue that they are not individually enforcing their contracts and thus their claims fall outside of each Plaintiffs’ individual contract.  Zuffa contends that this is not the case as the contracts are “inextricably linked” and thus must avail to the forum selection clause.

Possible Zuffa Counterclaim?

It also indicates in one of the last sections of its motion to transfer pleading that it might seek to counterclaim with a breach of contract claim against the Plaintiffs.  Basically, the breach would be the Plaintiffs filing a lawsuit outside of Nevada despite signing a contract indicating that it would avail itself to the jurisdiction of Nevada.

When will this be decided?

The motion will be heard by the US District Court for the Northern District of California in San Jose – the place where the Plaintiffs filed its lawsuits.  Zuffa would like to have this motion decided sooner than later and has requested a “Motion to Advance the Hearing Date” from May 7, 2015 to March 26, 2015.  They have also indicated that the motion should be heard “on the papers” rather than oral argument.  Basically, Zuffa would like the Court to decide the motion based on the pleadings filed with the Court which may happen with the discretion of the Court.  This will obviously not sit well with the Plaintiffs who would probably want a full briefing schedule as well as oral argument.  The parties have already butted heads on these issues.

Zuffa Motion to Transfer Venue by JASONCRUZ206

Motion to Advance Hearing by JASONCRUZ206

Payout Perspective:

We are beginning to see the legal maneuvering that is occurring with the pre-discovery procedure between the parties.  Obviously, Zuffa’s motion will be met with opposition from the Plaintiffs as well as opposition to the motion to have the motion heard in advance.  So, two distinct procedural issues before we even get to Zuffa actually answering the Complaints.  This does not even consider the probability of a Zuffa Motion to Dismiss the Complaint which could occur after this initial transfer issue is decided.  Lots of paper in the next couple months before we even get to something substantive in this lawsuit.

UFC files motion to transfer Antitrust lawsuit to Nevada

February 2, 2015

On Friday, Zuffa  lawyers have filed a motion to transfer the venue of the Antitrust lawsuit in the Northern District of California in San Jose to Nevada where the Zuffa headquarters are located.  The hearing date is set for May 7th although Zuffa requests to advance the date to March 26th.

In its filing, Zuffa anticipated that the discovery process will be “contentious” as it appears that the parties already dispute a briefing schedule to file pleadings.  Zuffa also cites to subpoenas issued to third-parties for this case which Zuffa indicates violates the federal rules. Zuffa was granted an extension to address the three complaints filed by the plaintiffs.

Instead of an Answer to the Complaint, it has filed a Motion to Transfer Venue.

Payout Perspective:

We had predicted this possibility back in December when the Complaint was filed in San Jose.  Zuffa is based in Nevada and has a viable argument under the federal rules of civil procedure that it should be able to defend its lawsuit in its state.  Zuffa argues that plaintiffs signed UFC contracts with the proviso that any legal dispute is filed in Nevada.  Essentially, they agreed to the “forum selection” as part of a clause in their contract.  It also argues that for convenience purposes the lawsuit should be transferred since most witnesses are located in Nevada.

MMA Payout will keep you posted.

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