December 21, 2014
On Saturday night’s UFC Fight Night 58 broadcast, Jon Anik announced that the UFC had re-signed Quinton “Rampage” Jackson. The news comes with controversy as Bellator President Scott Coker stated that Jackson is under exclusive contract with the Viacom-owned company.
The signing of Jackson will likely be the start of a legal battle between the UFC and Bellator.
Let us be clear that Quinton “Rampage” Jackson is under an exclusive contract with #BellatorMMA. We will protect our contractual rights
— Scott Coker (@ScottCoker) December 21, 2014
In a Fox Sports interview, Jackson indicated that he had terminated his contract with Bellator because they did not meet their contractual commitments.
The signing comes as a surprise considering the mutual distaste Rampage and Dana White had for each other when he last fought in the UFC in January 2013. It’s clear that based on Coker’s tweet, Jackson’s departure was not granted by Bellator. And, the UFC did not clear with Bellator Jackson’s representation that he terminated his contract due to Bellator’s alleged breach. It appears that the UFC is going with the strategy of plausible deniability. It signed Jackson based on the representation that his contract was void due to the alleged breach by Bellator. This can only lead to a lawsuit for breach of contract (filed by Bellator against Jackson) and tortious interference with a contract (against the UFC).
Jackson was mentioned in the plaintiffs’ antitrust lawsuit against the UFC in regard to the UFC’s desire to obtain exclusive sponsorships with companies. The lawsuit mentioned the UFC blocked Rampage’s exclusive deals with Round 5 and Reebok. Yet, the UFC forged its own exclusive deals with each.
December 19, 2014
MMA Junkie reports that Tito Ortiz was asked, but declined to participate in the current UFC lawsuit filed by three fighters alleging violations of antitrust law.
Ortiz’s attorney, George Prajin, informed Junkie that the current Bellator fighter would not participate in the lawsuit which seeks class action status. According to the Junkie article, Prajin and Ortiz met with Rob Maysey, one of the attorneys leading the charge for this lawsuit a year and a half ago. Although intrigued by the proposed litigation at the time, Ortiz declined to be involved. Ortiz’s attorney indicated that he was contacted recently about the lawsuit but maintained to stay out. However, Ortiz indicated that he may change his mind if the class is certified by the court.
The Ortiz information is interesting and may be one of the hurdles the plaintiffs will have in getting fighters to join the lawsuit. It appears that Ortiz would most likely not want to actively participate for several reasons. He indicated in the article that he doesn’t want his name used just for publicity. Also, there is a storied past with Ortiz and White and perhaps he is looking down the road at does not want to get caught up in messy litigation. Regardless of being a named plaintiff, if this lawsuit enters the discovery stage we will see if one of the sides attempts to depose Ortiz about his past with Zuffa.
December 16, 2014
Attorneys for plaintiffs on behalf of Cung Le, Nate Quarry and Jon Fitch have filed a lawsuit in U.S. District Court in Northern California in San Jose, California on their behalf. A press conference held Tuesday afternoon announced the lawsuit which was filed earlier in the day which may add more plaintiffs to the lawsuit.
Three plaintiffs’ firms with significant experience in antitrust and class action litigation are the attorneys of record with two others assisting as well. At this point, the UFC has issued a brief statement indicating its aware of the lawsuit but has not been served with it or had a chance to review it.
Cung Le, et al. v. Zuffa, LLC is the 63 page Complaint that maps out the claims of a UFC monopoly and monopsony which is in violation of Section 2 of the Sherman Antitrust Act according to the Plaintiffs.
Below is a portion of the press release from the announcement today:
The lawsuit filed by fighters Cung Le, Nathan Quarry and Jon Fitch, who seek to represent a class of similarly situated current and former UFC professional combatants, alleges that the plaintiffs are victims of the UFC’s illegal scheme to eliminate its competition in the sport of MMA and suppress compensation for UFC Fighters from bouts and fighter identities and likenesses.
According to plaintiffs’ counsel Benjamin Brown, of Cohen Milstein Sellers & Toll PLLC, “The UFC was built on the battered bodies of MMA fighters who have left their blood and sweat in the Octagon. Those fighters are entitled to the benefits of a competitive market for their talents.”
The lawsuit targets defendants Zuffa LLC, the Las Vegas-based company that conducts business as the UFC. Zuffa is primarily owned by billionaires Lorenzo and Frank Fertitta, along with the UFC’s front-man, President Dana White. White has publicly boasted about the success of the UFC’s alleged illegal scheme, allegedly claiming that “there is no competition” because “I am the grim reaper[.]”
The lawsuit claims that the UFC’s alleged anti-competitive acts, in particular its actions over a period of years,have made and maintainedthe UFC asthe onlyoption for MMA fighters who want to earn a viable living in the profession.
“All UFC Fighters are paid a mere fraction of what they would make in a competitive market,” said Brown.“Rather than earning paydays comparable to boxers – a sport with many natural parallels –MMA fighters go substantially under-compensated despite the punishing nature of their profession.”
Above all, the lawsuit alleges thatthe UFC prevents fighters from working with other MMA promoters, mounting self-promotional efforts of their own or signing with outside sponsors – monopolistic practices that suppress fighters’ incomes.
According to named plaintiff Cung Le, of San Jose, Calif., an internationally acclaimed MMA combatant, “Because of the UFC’s coercive practices, competitive market forces have been strangled, future earnings power of the athletes is stripped away, and purses to the fighters are artificially depressed.”
The lawsuit alleges that the UFC has pursued an aggressive strategy of depriving key inputs to potential rival promoters or merging with them to maintain its monopoly position. The complaint alleges “exclusionary scheme” to impair and foreclose competition, whereby the UFC deprives potential competitors in the fight promotion market access to elite MMA fighters, premium live event venues and sponsors.
According to plaintiffs’ co-counsel Michael Dell’Angelo, of Berger & Montague, P.C., “the lawsuit alleges that the UFC has engaged in an illegal scheme to eliminate competition from rival MMA promoters by systematically preventing rivals from gaining access to ingredients critical to successful MMA promotions, including by imposing extreme restrictions on UFC Fighters’ ability to fight for rivals during and after their tenure with the UFC. The UFC also takes the rights to fighters’ names and likenesses in perpetuity. As a result of the UFC’sscheme, we allege that UFC Fighters are paid fraction of what they would earn in a competitive marketplace.”
The lawsuit alleges that as a result of these and other anti-competitive acts, including the UFC’s acquisition of rival Strikeforce, the UFC has maintained control of more than 90 percent of the revenue derived from live MMA bouts nationwide.
The lawsuit also alleges that the UFC has retaliated against fighters who have worked with or who have announced intentions to work with rival promoters or sponsors by refusing to book their bouts and/or eliminating them from key UFC promotional activities such as advertising campaigns and video games.
“UFC’s threats are taken seriously by fighters because they know that a UFC ban will substantially diminish, if not end, their ability to earn a living at their chosen profession,” said plaintiffs’ co-counsel Joseph Saveri of Saveri Law Firm, Inc.“These MMA professionals deserve the right to take back their careers.”
In their complaint, the Plaintiffs claim that the UFC has been able to suppress compensation “to a very low percentage of the revenues generated from bouts.” The Complaint claims that UFC fighters are paid “approximately 10-17% of total UFC revenues generated from bouts. They claim that all fighters “have had their compensation artificially reduced due to the anticompetitive scheme challenged in this Complaint.
In addition, the Complaint challenges several clauses that Plaintiffs’ claim exist in standard UFC contracts including the “Exclusivity Clause,” the “Champions Clause,” (allowing UFC to extend a champion’s contract for as long as they are champion), the “Right to Match Clause” (recall Eddie Alvarez lawsuit), “Ancillary Rights Clause” (granting UFC exclusive and perpetual worldwide identity rights of contracted athlete) and the “Sponsorship and Endorsement Clause” (allows UFC sole discretion on approving sponsors and endorsements of fighters).
The attorneys declined comment on how much they would be asking (likely due to the fact that the actual amount of damages has yet to be quantified by an expert) in terms of monetary relief although the statute in which they are suing under allows for treble damages (three times the actual amount of proven damages)
The press conference did not provide a lot of granular information but one must assume that was done on purpose. Since the Complaint was filed today, the lawsuit and everything that comes with it begins. The process for a lawsuit, especially one that will be detailed, complex and may involve more plaintiffs will take years and lots of money to litigate. Cohen Milstein, one of the law firms representing the plaintiffs, was selected as one of the “most feared plaintiffs’ firms for 2013 and 2014 by Law360. Suffice it to say, the attorneys filing this Complaint and litigating this matter are very good at what they do. The UFC will have good lawyers as well.
It will be interesting to see how many other fighters decide to join the class. We assume that there are more that will join based on the amount of law firms that are joining together on this matter. We will see what happens if there is a groundswell of fighters that will join the lawsuit.
MMA Payout will have more info on the lawsuit in the coming days.
December 13, 2014
Bloody Elbow is reporting that an impending lawsuit to be filed presumably by current fighters under contract by the UFC against the organization for violations of U.S. antitrust law.
Although no specifics were given in the report, the fighters that will seek class action status will seek millions of dollars along with treble damages (three times the actual amount) pursuant to relevant antitrust laws.
The report indicates that law firms renowned for its expertise in major class action litigation are attached to this lawsuit. Basically, these are serious claims filed by serious people.
From an outsider perspective, one might assume that the Reebok deal was the last straw for fighters in their decision to take legal action against the UFC. The Ed O’Bannon trial which held in favor of the plaintiffs (although currently being appealed) and the NLRB decision which held that Northwestern football players could form a union are two of the recent legal opinions which we presume have aided the plaintiffs’ decision to file this legal claim. If fighters currently under contract with the UFC are plaintiffs, it presents a really curious (also, awkward) issue. Will these plaintiffs continue with the UFC during and after this lawsuit? Moreover, will the UFC allow for them to be a part of any further cards in the UFC? Obviously, that depends on the fighters.
Once the Complaint is filed, MMA Payout will provide you with more information.
December 2, 2014
MMA Junkie reports that Wanderlei Silva will appeal the Nevada State’s Athletic Commission’s lifetime ban. Silva’s lawyer filed a petition for judicial review in Clark County, Nevada on Monday.
The process for appeal of an administrative hearing ruling such as the NSAC’s, is usually through filing for judicial review in superior court. Goodman’s lawyer believes that the legal issue was not given full review by the NSAC.
Although Silva did not appear at the NSAC hearing which handed out the ban and fine, his attorney appeared to argue Silva’s case. The legal theory asserted by Silva’s lawyer was that the NSAC could not discipline him because the commission did not have jurisdiction over an unlicensed fighter. Silva was not licensed by the NSAC at the time it attempted to take a drug test from him. You may recall that Silva eluded the test which was preceding his match against Chael Sonnen at UFC 175.
It’s interesting that Silva has decided to continue pursuit of this claim. Although it may be just to clear his name, it seems like a moot point based on Silva’s advanced age and the fact that he is likely banished forever from the UFC. Although it appears that Bellator would welcome him, due to contractual issues, he’d have to sit out for some time. Still, it’s likely Silva could work around the Nevada suspension if he wanted. According to the report, there should be a court date and briefing on the issue in the new year.
November 14, 2014
Xtreme Fighting Championships (XFC) announced that it intends to file a lawsuit against the World Series of Fighting (WSOF) as a result of Kalindra Faria’s scheduled fight on Saturday’s WSOF card. The XFC stated in a press release that it intends to file the suit in the U.S. District Court in Tampa, Florida.
Via XFC press release:
XFC has an exclusive contract with Ms. Faria which XFC provided to WSOF.
Notwithstanding the clear terms of Ms. Faria’s exclusive contract with XFC, WSOF has made it clear it intends to proceed with Ms. Faria’s bout planned for this weekend.
There is no question that XFC has a valid contract with Ms. Faria and that her fighting in a WSOF match this weekend violates XFC’s rights under that contract.
As a consequence of WSOF’s actions, XFC is filing suit against WSOF today in the United States District Court in Tamoa (sic). XFC is seeking to enforce its rights to the fullest extent of the law.
Faria is scheduled to face Jessica Aguilar on Saturday’s WSOF card. Ray Sefo told MMA Junkie that Faria would fight. Faria’s management claims that the women’s strawweight does not have a current contract with the XFC.
A quick search of Pacer does not reveal the lawsuit although that does not mean it has not been filed and served on the WSOF. Realistically, it appears that it is too late for the XFC to seek a temporary injunction which would prevent Faria from fighting at WSOF 15 tomorrow. Thus, if Faria goes through with the fight, we will see how XFC proceeds with the litigation and what types of damages that it might claim. MMA Payout will keep you posted.
November 7, 2014
Boxer Mikey Garcia has agreed to dismiss three of his causes of action against promoter Top Rank. The stipulation to dismiss his claims avoids a summary judgment motion brought by his promoter in a dispute over his fight contract.
Garcia’s attorneys and Top Rank attorneys stipulated to dismissal of 3 claims that were at issue in Top Rank’s motion filed last month. The dismissed claims related to issues that Garcia alleged were in violation of California law. The case of removed (i.e., transferred) out of state court and sent to federal court in Nevada.
Garcia still has a claim under the Muhammad Ali Act pending.
We shall see if this concession on the part of Garcia’s lawyers leads to an eventual settlement between the parties. Certainly, the stipulation prevents a loss by Garcia’s counsel and the possibility of Garcia having to pay for Top Rank’s lawyer fees for the motion if it prevails in the case. Not a lot of boxers succeed when suing under the Ali Act and we will see if Garcia intends to follow through with this lawsuit.
October 31, 2014
ESPN reports that the UFC, to no surprise, supports the expansion of legalized sports betting in the United States. UFC exec Lawrence Epstein was quoted as saying that legalized sports betting “will enhance the game as opposed to doing anything to hurt it.”
Epstein also stated to ESPN about the proposed new law allowing sports betting in New Jersey, “[t]o the extent that there’s nothing illegal about taking bets on the UFC in the state of New Jersey, we’d be absolutely fine with it.” The comments come on the heels of similar support from first year NBA commissioner Adam Silver who believes that sports betting legalization in the U.S. is “inevitable.”
Major sports leagues including the NBA have sued the state of New Jersey and have obtained a temporary restraining order preventing the state’s racetrack, Monmouth Park, from accepting bets on its games. Of note, U.S. District Judge Michael Shipp wrote in his ruling that the restraining order was not limited to the sport leagues involved in the suit. Thus, it could prevent taking bets on MMA even though no promotion is currently involved in the litigation.
The lawsuit by the leagues argues that the law passed by Governor Christie, the 2014 Sports Wagering Act, violates the Professional and Amateur Sports Protection Act of 1992 (PAPSA). PAPSA bans state-sponsored sports betting on all sports except jai alai, pari-mutuel horse and dog racing except in four states: Oregon, Nevada, Montana and Delaware. These four states have pre-existing gaming laws.
New Jersey Governor Chris Christie signed legislation that partially repealed the state’s sports betting ban. Based on this, the state would allow sports betting at casinos and racetracks, which are licensed by the state. Monmouth Park would have taken bets this Sunday if not for the temporary injunction filed by the sports leagues.
At this point, the sports leagues (NBA, NFL, MLB and NHL) have filed their reply briefs in New Jersey on the matter and now Judge Shipp will decide on whether oral argument is necessary. The TRO ends November 21st.
For those wondering, this issue is just the latest episode of a long fight for legalized sports betting in New Jersey. A similar case was denied a U.S. Supreme Court hearing last term. In arguing that PAPSA violated states’ rights, New Jersey stated that the law was unconstitutional because it fully exempts Nevada and partially exempts Oregon, Montana and Delaware from the ban. New Jersey had lost an appeal to the Third Circuit Court of Appeals to a rehearing on the case and attempted to take its case to the U.S. Supreme Court.
As a result of the denial, in August 2014, New Jersey passed the aforementioned partial repeal on the prohibition against sports wagering as a “work around.” But, this is where we get the lawsuit from the sports leagues.
While the NBA may one day support legalized gambling, the issue here is the state law in New Jersey. One would think that if a federal law is passed, the sports leagues would comply.
It’s clear that the UFC, with its heritage (and some sponsors) based in the gambling industry, would support legalized sports betting in the U.S. Certainly, the UFC might have concerns with regulation but overall it would seem like broader availability to gamble on the UFC would garner more interest in its product. Obviously, the UFC is willing considering it seamlessly offers betting lines during its events and programming. The new litigation in New Jersey will be interesting to follow as the underlying issue here is that the law seems to be a way to boost revenue for the state. Its not clear if the UFC will get involved at this point, but it will certainly be following it closely.
October 27, 2014
A lawsuit filed last week in the U.S. District Court of Oregon by former professional wrestler William Albert Haynes III (aka “Billy Jack” Haynes) citing class action status related to “head injuries occurring in former and current WWE wrestlers” per the lawsuit.
Haynes wrestled in the WWE for only two years from 1986-1988. Perhaps his most notable match was at Wrestlemania III. Most of Haynes’ career was spent in the Pacific Northwest.
The lawsuit spells out the dangers of the professional wrestling business amplified by embedded photos in its lawsuit as well as YouTube links. Essentially, WWE allowed its wrestlers to perform dangerous stunts, some of which include taking shots to the head causing head injuries. The claim made by Haynes’ lawyers is that these head injuries cause traumatic brain injuries (i.e., concussions) and chronic traumatic encephalopathy (“CTE”).
A section of the lawsuit includes: “WWE is a Fake Sport with Real Consequences to Its Wrestlers.” It also cites the numerous matches which include the use of chairs, chains, ladders and tables. It also details different wrestling moves which involve potential trauma to the head including the “Brain Buster,” “Bulldog,” and “Facebreaker.” They also bring up the case of a 13 year old that killed his 5 year old sister while performing a move he saw from the WWE.
The lawsuit accuses the WWE of not protecting its wrestlers from brain damage. Essentially, Haynes and his attorneys accuse the WWE of doing little, if anything, to protect its wrestlers. It also claims to denying or concealing injuries of its wrestlers.
The claims in the lawsuit include:
-Fraudulent Concealment and Failure to Disclose or Warn
-Declaratory and Injunctive Relief
-Medical Monitoring –this claim requests that the WWE establish a trust to pay for medical monitoring of all wrestlers as frequent as medically necessary and would pay to develop and research other methods to reduce risks
-Strict Liability for Abnormally Dangerous Activities
In addition to the requests under “Medical Monitoring,” it is requesting that the court grant it class action status and designating the attorneys as Class counsel. It also is seeking actual, compensatory and punitive damages as well as attorney fees.
In response to the lawsuit, the WWE’s Senior Vice President of Marketing and Communications provided a brief statement: “Billy Jack Haynes performed for WWE from 1986-1988. His filed lawsuit alleges that WWE concealed medical information and evidence on concussions during that time, which is impossible since the condition now called chronic traumatic encephalopathy (CTE) had not been discovered. WWE was well ahead of sports organizations in implementing concussion management procedures and policies as a precautionary measure as the science and research on this issue immerged. Current WWE procedures include ImPACT testing for brain function, annual educational seminars and the strict prohibition of deliberate and direct shots to the head.” (H/t : wrestling-online.com)
I grew up watching Haynes wrestle in the Pacific Northwest mainly in a Portland, Oregon based promotion. He had a very brief stint with the WWE. This is a lawsuit that shall be interesting to follow and see whether or not the court grants Haynes class action status. For those wondering, the essential elements a court determines when deciding whether or not a lawsuit may receive class action certification are:
-Commonality: One or more legal or factual claims common to the entire class.
-Adequacy: The parties in the class must adequately protect the interests of the class.
-Numerosity: The class must be large enough that individual lawsuits would be impractical.
-Typicality: The claims or defenses must be typical of the plaintiffs.
The four elements commonly are remembered (mainly by bar exam takers) as CANT. It will be interesting to see whether or not the law firm can attain enough members willing to be a part of this lawsuit. Certainly there are enough wrestlers out there that could establish a sufficient amount of plaintiffs. However, how many are willing to come forward? On his own, Haynes may not have a strong case considering he only spent two years with the company and much of his time wrestling was on the regional circuit where he could have been subjected to similar risks and injuries. Thus, his case may not be as strong as someone who may have spent 20 years with the company.
This will be an interesting case that the UFC should take note of for future consideration. While the ways that the participants attainhead trauma are different, there are still issues related to MMA fighter safety and blows to the head that might be a part of future legal claims.
October 20, 2014
This past Friday, attorneys for Top Rank Boxing filed a Motion for Judgment on the Pleadings in U.S. District Court in Nevada seeking to dismiss a bulk of boxer Mikey Garcia’s lawsuit.
Garcia’s lawsuit was originally filed in Riverside County (CA) Superior Court. Top Rank lawyer’s removed the case to Federal Court in Nevada via a procedural rule allowing such transfers based on the lawsuit dealing with federal legal issues (i.e., Muhammad Ali Act). Garcia alleged that his promotional contract with Top Rank violated California law and the state’s strong public policy to protect California-based boxers from being taken advantage of by promoters and managers. In the lawsuit, 3 of California’s claims relate to violations of California law. Garcia claims that the promotional contract with Top Rank violated California’s Boxing Act and Professional Boxing Rules and California Labor Code section 2855. He also claimed it was a violation of California’s restraint on competition.
Top Rank has moved for the court to make a judgment to dismiss Garcia’s claims based on the boxer’s claims under state law in California. Essentially, Top Rank argues that Garcia entered into contracts with the promotion that state that the contract was governed by the state of Nevada. Thus, any claims Garcia makes that violate California law should be dismissed since the contract is based on Nevada law.
Basically, Top Rank argues that despite the fact that Garcia is a resident of California and has had events where he fought in California; the contract dispute should be governed by the state of Nevada. As such, Garcia’s legal claims related to violations of California law should be dismissed.
Top Rank argues several reasons why Nevada law should prevail under the terms of the contract. Namely, the terms of the contract dictate it, Garcia fought in Nevada and his manager does business in Nevada. Also, Nevada law would not contradict California law. It also cited the fact that prior boxing contracts with choice of law provisions are typically enforced by boxing commissions and courts. Notably, it cited Robert Guerrero’s lawsuit against Golden Boy Promotions in which Guerrero lost his legal battle allowing the parties to settle their case in New York per the terms of the contract. Guerrero argued that Top Rank did not use the appropriate CSAC forms and the case should be heard in California.
The motion to dismiss a portion of Garcia’s lawsuit was not surprising. The legal strategy here was that Top Rank transferred the lawsuit to federal court and out of California where the state laws would seemingly favor the boxer. Once the case was in Nevada, it sought to dismiss the California-specific claims. Certainly, prior cases reflect the fact that Top Rank had the right, based on the contract, to seek out the appropriate governing law. Whether or not the Court will grant the motion this time is another issue.
MMA Payout will keep you posted.