April 25, 2015
In a brief litigation update, the parties in the Zuffa Antitrust lawsuit recently agreed to mediation to occur no later than September 30, 2015. The decision was determined as part of a pre-trial case management conference.
The parties met and conferred as to whether dispute resolution was appropriate for the case. The parties have stipulated that mediation is premature at this point due to the upcoming motions related to transferring the venue to Nevada and Zuffa’s Motion to Dismiss which will be determined in July. But, the parties agreed to mediation, and choosing a mediator, by the end of September.
Means nothing at this point since the decision is a perfunctory matter under the local court rules (see CR 16) as litigation in this matter progresses. Based on the decisions in the Motion to Transfer and Motion to Dismiss, one party may be more willing than the other to mediate the case. It would have also been likely that the Judge may facilitate (i.e., force) the parties into ADR (“alternative dispute resolution”) at some point. Even if the parties mediate the case, there is no guarantee that the case would be resolved at that stage and it may continue to trial.
MMA Payout will keep you updated.
April 24, 2015
MMA Junkie is reporting that UFC middleweight Gegard Mousasi has sued clothing company Fear the Fighter and its president UFC fighter John Makdessi for unpaid sponsorship pay. A source in the article indicates that Mousasi is owed over $25,000.
The lawsuit is filed in Canada and while it has not been disclosed, one assumes that he is seeking damages for breach of contract of the sponsorship agreement. He claims Fear the Fighter has not paid him for his last 2 fights. Also, Mousasi claims that other fighters are also owed money from Makdessi’s company.
Makdessi is a UFC lightweight fighting from Canada. According to corporate records, he is the president of the clothing brand. Makdessi is scheduled to fight Saturday at UFC 186.
This is a first of its kind lawsuit where a fighter has sued a fighter. Obviously, the circumstances are unique as Makdessi owns a company that sponsors fighters. This situation actually lends itself to the argument that UFC-Reebok deal is warranted as the fighters would be guaranteed their pay. The issue of sponsors not paying a fighter is not a new thing and the UFC sponsorship deal should help address the situation. We shall see what is to become of this lawsuit and the reaction Makdessi may receive Saturday.
April 23, 2015
The legal fight in New York is not over yet. This week, the UFC announced that it has retained former U.S. Solicitor General, Paul Clement to appeal Judge Kimba Wood’s dismissal of Zuffa’s lawsuit in New York.
Via the UFC release:
The judge’s dismissal of the UFC’s case against the State of New York in March was based on a technicality, and the decision confirms the state is misapplying the law. UFC was advised by the judge to “consider filing new vagueness claims.” Wood also stated the New York Attorney General’s “recent statements that the Ban prohibits sanctioned MMA” were made “despite [the law’s] plain language to the contrary.” UFC also believes that Judge Wood erred in failing to recognize the serious First Amendment problems with the New York law.
Clement’s job as Solicitor General required him to be the representative of the federal government before the U.S. Supreme Court. He has argued over 75 cases before the U.S. Supreme Court according to his law firm bio.
If Zuffa were to appeal the judge ruling (which we should know soon), it will go to the U.S. Court of Appeals for the Second Circuit.
The retention of Clement certainly means we shall see an appeal of Judge Wood’s dismissal. It appears that the appeal will encompass not only the recent dispositive motion dismissing Zuffa’s claim that the New York law is unconstitutionally vague but also the causes of action dismissed previously by Judge Wood which includes the UFC’s argument that the New York law violates the First Amendment.
Clement has had his share of sports law cases in his past including representing the NBA during labor negotiations in 2011, NFL v. Brady (which was filed during the NFL lockout in 2011) and NCAA v. Governor of New Jersey II (regarding the fight to legalize sports gambling in New Jersey).
April 22, 2015
After extensive oral argument on Wednesday, a Clark County District Court will issue a ruling on or before May 11th as to whether it will uphold a lifetime ban issued by the Nevada State Athletic Commission on Wanderlei Silva.
Judge Kerry Earley heard oral arguments from Silva’s attorney Ross Goodman and Nevada Deputy Attorney General Chris Eccles arguing on behalf of the NSAC. The petition for review was filed by Goodman on behalf of Silva who was not in attendance at Wednesday’s hearing. It essentially appeals the NSAC ban and fine of Silva stemming from his evading a drug test in lead-up to UFC 175.
MMA Junkie’s John Morgan, who attended and tweeted the proceedings, reported that the primary question was whether the NSAC was correct to order Silva to submit to a drug test “out of competition” although he was not licensed by the state at the time.
As maintained by Goodman in his pleadings and oral argument, the NSAC does not have jurisdiction over a fighter not licensed in the state. Therefore, it had no power to suspend or punish.
Eccles argued that Silva took part in a news conference promoting the event and was thus “an unarmed combatant and contestant who was contracted to appear in the state as such.”
While the question of the severity of the suspension was discussed, it appears that the primary issue is that of jurisdiction.
Judge Earley indicated that she wanted more time to review the relevant statutes and regulations prior to issuance of a ruling.
As always, the issue of jurisdiction must be determined first prior to discussing the substantive merits. This could be a case where the Court knows a wrong has occurred and wants to make sure that the right result is made. But, how do you do it when the law is not in your favor. The relevant statutes appear to favor Silva’s argument but the NSAC makes an artful (and maybe persuasive) argument that the law should be interpreted broadly to include Silva within the jurisdiction of Nevada. We shall see what the Court does on May 11th.
April 22, 2015
A New Jersey Appellate Court has overturned the portion of the Preliminary Injunction preventing Rampage Jackson from fighting this Saturday at UFC 186. According to the Court opinion issued Tuesday, the Preliminary Injunction, aside from his fight remains.
The rest of the issues will be determined by the trial court where Bellator sued Jackson for allegedly breaching his contract. Jackson claims it was Bellator that breached the agreement.
The trial court granted Bellator MMA’s preliminary injunction which precluded Jackson from fighting April 25th. However, Jackson filed an emergency appeal to reverse the trial court’s decision. The appeal went under the radar until the announcement of the opinion on Tuesday.
The Appellate Court determined that any irreparable harm that may be suffered by Bellator due to Jackson fighting on Saturday was just “vague speculation” which overturns the trial court’s determination that Jackson’s involvement at UFC 186 would have caused reputational harm as well as the opinion of the trial court that Bellator’s investment in Jackson was more than just monetary.
The Appellate Court’s opinion makes the ongoing lawsuit between Jackson and Bellator clear as mud. It also presents the issue that Bellator may either amend its legal Complaint to include the UFC or sue them separately. A footnote to the opinion indicates that there may be a time where the preliminary injunction would need to be further amended or eliminated altogether and that the parties return to the Appellate Court. The message does not put a lot of faith in the trial court. Sure, each party knew that they could seek relief from the appeals court but to have the court actually announce this in a footnote seems like an overseer of the trial court.
With that said, the Appellate Court opinion negates the trial court opinion on the issue of irreparable harm when it came to the issuance of the preliminary injunction. In essence, it believed that the trial court may have over-analyzed the issue with respect to Bellator’s investment in Rampage, the contractual landscape of MMA fighters and the unique value of Rampage. It also seemingly dismissed any argument or value in Bellator’s argument regarding reputation harm.
MMA Payout will continue to monitor.
April 21, 2015
In a surprising turn of events, the New Jersey court that issued the preliminary injunction preventing Rampage Jackson from fighting on Saturday’s UFC 186 card has reversed its decision. At this point, no court records have surfaced but Bellator has issued a statement indicating that it is “disappointed (the court) reversed the injunction as to the April 25 fight.
Bellator has released a statement on Rampage, saying it is “disappointed (the court) reversed the injunction as to the April 25 fight.”
— Brett Okamoto (@bokamotoESPN) April 21, 2015
Jackson released his own announcement via social media:
One can only guess the reasons for the Court to reverse its decision at this point. In its opinion issued on April 7th, it appeared that the Court seemed dead set that Rampage had breached his contract. Unless there was a procedural defect, the Court must have been persuaded by another issue it overlooked to reverse its opinion. MMA Payout will have more as the information becomes available.
UPDATED: Not surprising, the UFC is pleased with Tuesday’s ruling overturning the preliminary injunction. “We are happy with the decision from the New Jersey Court allowing Rampage to fight in Montreal this Saturday night,” UFC President Dana White said, “I am looking forward to seeing Rampage back in the Octagon.”
April 21, 2015
The third episode of Show Money talks Rampage injunction, an update on the UFC Antitrust lawsuit, Phil Davis to Bellator and the dismissal of Zuffa’s lawsuit in New York. I join Bloody Elbow’s Paul Gift and John Nash to talk, debate and discuss these issues.
April 16, 2015
Does UFC Fighter Felice Herrig have a legitimate claim against the new Mortal Kombat video game? Video game web site Kotaku reported the similarities between the UFC strawweight and Cassie Cage, a character on the Mortal Kombat video game.
Although Herrig has not indicated that she may take action, does she have a claim? Maybe. In fact, she questioned this 3 months ago in Instagram and with more promos coming out featuring Cage, Herrig is becoming more suspicious. The other question one might ask is whether the UFC also has a claim against Warner Brothers Interactive, the publishers of the video game. Although we have not looked at Herrig’s contract, we assume that it is a standard UFC fighter agreement which would include a right of publicity clause which would grant the UFC the exclusive right to use her likeness. If an entity, like the makers of Mortal Kombat, were to do this without the permission of the UFC, you might conclude that they would have a viable legal claim.
Based on the compilation produced by Herrig, one can make a valid argument that the character, Cassie Cage, looks similar to Herrig. If Herrig and/or the UFC were to sue, it would have several causes of actions from which it could choose.
First, there are state laws of right of publicity which would be applicable here. Most of these laws protect a person’s right in his or her name and likeness. Likeness is the most difficult to define as there are multiple definitions of the term but in general Courts have used the “readily identifiable” test to conclude that drawings, if sufficiently detailed, can constitute a “likeness.” In a famous case, the Court ruled a robot, if sufficiently detailed, could be a likeness. That case involved TV letter-turner Vanna White as White sued Samsung for a television ad that depicted a robot doing a similar act of turning letters like the game show hostess.
One of the threshold issues to constitute a violation of one’s right of publicity is whether the offending party “knowingly” used another’s likeness without prior consent. If there was no consent, the party violating the right of publicity shall be liable for damages.
In Herrig’s case, one might conclude that damages might include a portion of the sales of the new Mortal Kombat video game.
There are four steps under common law which courts seek out in determining whether there is a violation of one’s Right of Publicity:
- The use of the identity;
- Appropriating the use to its advantage, commercially;
- Lack of consent; and
- The use results in injury (e.g., here Herrig was not paid for the use of her likeness for the character).
Under Federal law, there is the Lanham Act in which Herrig or the UFC could argue that there was a “likelihood of confusion as to whether Herrig was endorsing Mortal Kombat.” Since Mortal Kombat did not ask Herrig if they could use her likeness, gamers may think that Herrig took part in the video game.
Obviously the makers of Mortal Kombat would claim that the character is not based on Herrig, or it is a compilation of various female characters and not necessarily Herrig.
Whether or not Herrig or the UFC files a lawsuit is solely speculation. A hurdle not mentioned above is the strength of Herrig’s mark. Basically, how well-known is Herrig? This is debatable although Herrig might cite to her many followers on social media as evidence of her notoriety. We haven’t heard from Warner Bros. yet but expect a denial that the character was based on Herrig without her consent. A lawsuit would be a long process which would be costly. So, it would be up to Herrig or the UFC whether they think its worth it.
This publicity may help Herrig’s upcoming fight this Saturday as well as the debut of the new Mortal Kombat video game.
Of course, if you want more hype for the video game, you should watch this pre-Super Bowl 49 video of Marshawn Lynch and Rob Gronkowski playing the game.
April 11, 2015
MMA Payout reported earlier in the day of Plaintiffs’ Opposition to Zuffa’s Motion to Transfer Venue in its antitrust lawsuit filed in the U.S. District Court of Northern California in the San Jose Division. We provide a little more insight into the filing by Plaintiffs on Friday.
In its opposition briefing arguing that the lawsuit should remain venued in San Jose, the Plaintiffs (i.e., Cung Le, Nate Quarry, Jon Fitch and the other fighters that filed in San Jose) argue that the forum selection clause in the UFC fighter contracts and/or bout agreements are inapplicable when it comes to this antitrust claim. Essentially, the Plaintiffs argue that the clause in the fighter contracts which Zuffa pointed to in its motion as binding the Plaintiffs to bring any legal action in Nevada does not apply when it comes to a claim violating antitrust laws. Essentially, the Court need not interpret the terms or enforce the contracts, but the contracts are evidence of Zuffa’s anticompetitive means.
Plaintiffs also argue that Zuffa fails to show that the present Court is an “inconvenient forum.” Plaintiffs argue that there are “significant ties” to the District in which they filed the lawsuit. They cite the fact that three fighters reside in the San Jose area and others train (notably, Jon Fitch) in the area. They also cite to the fact that Plaintiffs Le and Hallman fought for Strikeforce based in San Jose. Also, five of the Plaintiffs fought in San Jose while with the UFC. The Plaintiffs also cite to events that occurred in the area that are relevant to the lawsuit. The Plaintiffs bring up that EA Sports UFC, an issue raised in the lawsuit, was developed in Northern California.
In rebuttal to the Zuffa argument that the UFC’s documents and witnesses are located in Vegas and thus convenience would dictate that a transfer is warranted, Plaintiffs argue that UFC document production would not be inhibited. Essentially, with the technological advances of document discovery, the fact that Zuffa is in Vegas and the Plaintiffs are in Northern California is of no significance. The Plaintiffs argue that the depositions of UFC employees can be taken in Vegas without the need to transfer the whole case and if a trial were to take place, the relevant employees to testify at trial could be compelled to the forum at time of trial.
An interesting argument pointed out by Plaintiffs is that they cite the fact that the Court is experienced in antitrust law. The Northern District of California had 96 cases involving federal antitrust claims in 2014 whereas the District of Nevada only had 4. Plaintiffs state that from 2010-2014, the Court had “25 times the number of antitrust actions” than the District of Nevada.
Plaintiffs also point to “strong local interest in the underlying litigation” arguing that it should provide a forum to the Plaintiffs that reside and train in San Jose and the issue that UFC allegedly enforced its illegal monopoly and monopsony with Northern California-based Strikeforce is of interest to keeping the case in San Jose.
Finally, Plaintiffs argue that San Jose is relatively faster in terms of the time taken to file a lawsuit to the time a case goes to trial. Cung Le and Jon Fitch also signed declarations to support this opposition although each did not have any significant information.
After reviewing the opposition brief of the Plaintiffs, it is clear that the key argument here is whether the forum selection clause will be enforced by the San Jose court. Zuffa argues that the Plaintiffs signed the contract and thus it should be enforced and binds them to a venue in Las Vegas. However, Plaintiffs contend that the actual terms and/or interpretation of the contract are not an issue and thus the forum selection clause is not relevant. The other arguments are of lesser strength. Notably, the “significant ties” argument posed by Plaintiffs is hard to accept.
MMA Payout will keep you posted once Zuffa files its
April 11, 2015
The Plaintiffs in the Le v. Zuffa, LLC (and related) antitrust case(s) have filed its opposition to Zuffa’s Motion to Transfer Venue to Las Vegas. Its main argument is that the forum selection clauses in the plaintiffs fight contracts are inapplicable in this antitrust action.
Earlier this year, Zuffa filed a motion to transfer venue from the federal court in San Jose to the federal court in Las Vegas citing, among the issues, the contractual agreements signed by the fighters. Also, it argued that many of the witnesses are residing in Vegas thus it would be more convenient for this litigation to occur in Las Vegas.
On Friday, Plaintiffs filed opposition to the motion which states that the forum selection clauses (the contractual language in the fight contracts binding fighters to bring legal action in Vegas) are not applicable in this antitrust matter. It argues that the contractual language only related to issues “to interpret or enforce” the contracts and Plaintiffs argue that the contracts are only relevant to the effect that the UFC used them as part of its anticompetitive scheme. The Plaintiffs go on to state in its pleadings that the UFC “torture the text of the Agreements and ignore the weight of authority that defeats its Motion.” Essentially, the UFC misinterprets its own contracts in this matter.
UFC has issued its own statement in relation to the opposition filed Friday:
“As expected, the plaintiffs have filed their opposition to our motion to dismiss. Nothing in their opposition changes our view that their complaints are filled with conclusory allegations that are not adequate to support their antitrust claim. As we laid out in our motion to dismiss, UFC has competed in a lawful manner that has benefited fighters and built UFC into a premier organization in the sport of Mixed Martial Arts.
Indeed, UFC properly competes with other MMA promoters, fairly compensates its athletes and has created a product that is enjoyed by millions of fans around the world. Our legal position is solid and we intend to prevail in this lawsuit.”
The hearing date on the motion to transfer venue is set for May 7th.
In addition to this motion, Zuffa has filed a motion to dismiss with the opposition brief pending.
MMA Payout will keep you posted on this motion. Plaintiffs argue several other points in its opposition which will cover in the coming days. Essentially, the Plaintiffs argue that despite the fighters signing their fight contracts which subject them to jurisdiction in Las Vegas, the headquarters of the UFC, the claims that they bring do not relate to the enforcement of the contract. The contract is only evidence of the anticompetitive nature of the organization. In addition, Plaintiffs argue that key individuals do reside in San Jose and thus it should stay in the district. Also, they claim that based on median time of filing to trial, it is faster (25%) to trial in San Jose than Las Vegas.