Parties request further clarification over discovery in UFC Antitrust case

June 21, 2017

After a June 1, 2017 conference with the Judge Peggy Leen to discuss outstanding discovery issues, the attorneys for the fighters and the UFC are at it again over what was said at the hearing.

On June 20th, Plaintiffs’ attorneys sent a letter to the Court requesting clarification on “a number of issues arising out of the Court’s order.”  The Plaintiffs sought clarification from the following:

  1. “Do Third Parties that produced documents before or just after the hearing count against the 5 document subpoenas allowed to Plaintiffs?” Plaintiffs have informed the UFC that they were intending to pursue documents from Golden Boy Promotions, Haymon, DiBella Entertainment, Inc., Top Rank, Inc. and Gary Shaw.  Plaintiffs had served documents subpoenas on 17  third parties.  The reason for the clarification is because they were to receive documents from Leon Margueles and Jakks Pacific prior to the hearing.The UFC claims that the two count as part of the maximum 5 issued by the Court.  Obviously, the Plaintiffs contend that they do not.  The UFC notes in its memo to the Court that Plaintiffs did not bring up this production to the Court.
  1. “Has the Court Authorized Plaintiffs to Depose Matt Hume?” Hume is a part of OneFC as Vice President of Operations and Competiton for the company.  According to Plaintiffs, counsel for OneFC will not accept a subpoena and since the company is headquartered in Singapore, lack jurisdiction.  The UFC did not oppose this request and takes no position.  It should be noted that both Plaintiffs and the UFC have agreed to document production from OneFC which was not counted against the 5 allowed by the Court.
  2. “Can Plaintiffs Pursue Discovery from Mercer?” The fighter pay study commissioned by the UFC’s attorneys to be done by Mercer is at issue here. Plaintiffs would like to “resume the discovery initiated in mid-2016.”  The UFC wants this counted as a third-party request.  It notes that some of the documents requested by Plaintiffs were designated as work product by the UFC in spite of the previous court ruling requiring certain documents produced by Mercer to be produced.  In addition, it is requesting clarification regarding a deposition of Mercer.  The UFC had offered to stipulate to the authenticity of documents produced by Mercer in lieu of a CR 30(b)(6) deposition.  But, according to the UFC, Plaintiffs never responded.

Payout Perspective:

The parties were ordered to meet and confer over outstanding discovery issues after the court conference but there is still conflict between the parties.  Laid out by the parties, it’s clear there might be a legitimate gripe.  It usually not a good look to be seeking clarification just after a hearing to go over discovery issues again especially when the overarching theme of the process is for the parties to cooperate.  These types of outstanding issues (i.e., what counts as 5 third-parties, etc.) must be discussed by the parties in Court in front of the judge.  There are some issues that you might not be able to think of while standing in court, but that’s why there are usually more than one (likely three or four) attorneys at the hearing so they can pass along notes to lead counsel to come up with questions to clarify.  Likely, Judge Leen will hold a teleconference but will none too pleased that the parties are coming back.

Plaintiffs Memo Re Discovery by JASONCRUZ206 on Scribd

Defendants Memo Re Discovery by JASONCRUZ206 on Scribd

Nate Diaz, Leslie Smith sued by former agency

June 21, 2017

TMZ Sports first reported that Nate Diaz and Leslie Smith are being sued by their former management group for nonpayment of commissions and conspiring with an attorney to break management agreements.

The lawsuit claims that the defendants owe them more than $1 million in damages and that they were never paid for their work on the UFC 202 fight with Conor McGregor.

Sam Awad is also named as a defendant in the lawsuit.  Awad represented Diaz this past April at a NSAC Commission hearing which reduced his fine and suspension from his UFC 202 press conference.

The lawsuit, obtained by TMZ and MMA Junkie note that Ballengee signed Diaz as a client in the summer of 2014 on recommendation from his brother Nick who was an existing client.  The lawsuit alleges that Diaz would pay based upon the same terms as Nick’s contract with the company.

If the Ballengee Group name sounds familiar, Jeff Borris is a member, he is the individual heading up the Professional Fighters Association.  Smith had a falling out with Borris after initial support for the organization.

The Ballengee Group was launched in 2014 by oil company entrepreneur James Ballangee.  He hired baseball agents and attorneys away from CSE, Perennial Sports & Entertainment and MVP Sports Group.

Payout Perspective:

This will be an interesting lawsuit to follow as we may see the inner-workings of the commission structure for Diaz and maybe Smith.  It always amazes me that a lot of the fighter-agent relationships are dependent on the fighter paying the agent after-the-fact instead of the payment going into some sort of trust account from which the agent can take its payment and leave the rest to the fighter.  The inclusion of Awad likely means that the fighters will defer to him as the reasons for nonpayment.

Update on Hunt lawsuit: parties stipulate to extend time for filing of response to First Amended Complaint

June 19, 2017

The parties in the Mark Hunt v. UFC/White/Lesnar case have stipulated to allow the defendants an extension to file a responsive pleading to Hunt’s First Amended Complaint.

Hunt filed the First Amended Complaint on June 1, 2017.  According to the Federal Rules of Civil Procedure, a party has 20 days from the filing of the complaint to respond.  The stipulation extends the response date to June 26, 2017.

Stipulation and Order Extending Time to Answer First Amended Complaint by JASONCRUZ206 on Scribd

Payout Perspective:

This is not huge news but gives defendants and extra weekend to file an Answer, Counterclaims or another Motion to Dismiss.  Since it gives defendants an extra weekend to prepare a response, I would suppose a Motion to Dismiss might be filed once again, or at least a motion to dismiss the RICO claims.  We will see.

Court issues Order on UFC Subpoena to Bellator

June 15, 2017

The Court in the UFC Antitrust case has issued its order with respect to the June 1, 2017 hearing.

Plaintiffs and Defendants submitted Proposed Orders but the Court decided to draft its own version.  Officially, the Court denied Bellator’s Motion to Quash the UFC Subpoena and the UFC’s Motion to Compel Documents but granted Bellator’s Motion to Modify the Subpoenas.

The Court ordered that Bellator will have until July 5, 2017 to produce the documents identified in the order and “all documents responsive to the subpoenas served by both parties on which agreements were reached during the meet and confer process.”

Notably, the Court requires that Bellator produce the following documents:

  1. A random sample of at least 20 percent of fighters under contract with Bellator between January 1, 2010 and the present. This will include any “amendments, modifications, side letters, or extensions that may exist with respect to any contract that is produced…”
  2. Bellator will produced “Anonymized contracts” with a unique identifier although identifying information “may be redacted.”
  3. The contracts “shall include the fighter’s gender, weight class, number of fights during term of agreements and any compensation to be paid.
  4. The Court limited and modified Bellator’s request for production to the following
    1. A list of all MMA events it promoted or co-promoted from January 1, 2010 through the present.
    2. An unaudited profit and loss statement through the quarter ending March 31, 2017 which will include Revenue, Expenses, Operating Income and Net Income.

Order on Motion to Quash and Motion to Compel 06.13.17 by JASONCRUZ206 on Scribd

Payout Perspective:

Despite the Court clarifying the order, expect the parties and Bellator to squabble over the turning over of the documents.  For Bellator, the production of documents is bad, but it could have been worse.  Still, this is an additional expense for the company as it will need to look at all of the documents, determine responsiveness and redact identifiable information and then produce them.  The unaudited profit and loss statement through March 31, 2017 seems to be the hardest business item the company must give up since the UFC and Plaintiffs’ attorneys will have a chance to see their raw data.

Discovery Plan and Scheduling Order issued in UFC Antitrust Case

June 15, 2017

On Tuesday of this week, the parties in the Zuffa Antitrust Lawsuit filed its Discovery Plan and Scheduling Order.  The order is a result of the Motion to Compel and Motion to Quash earlier this month.

The order extends fact discovery to July 31, 2017.  Expert reports and expert deposition will go through the fall of 2017 with all expert reports in by 2017.  Class certification, the motion to determine whether or not the lawsuit will be a class action will commence on January 26, 2018 and the hearing on class certification will occur on the Court’s convenience.

Summary Judgment motions, motions that could dismiss the case, will be due on July 9, 2018.  Opposition to the motions will be due a month later, on August 8, 2018 and Reply Briefs will not be due until a month later, September 17, 2018.

You can expect dispositive motions (Summary Judgment) to occur with both sides filing something either the UFC dismissing all of Plaintiffs’ claims or Plaintiffs filing summary judgment on the UFC’s defense or defenses.  Both sides will likely request oral argument and sometime thereafter there should be a ruling.  Either the Court will grant or deny or issues partial granting or denial of certain issues.

After that, there will likely be a trial in the late fall of 2018 or early 2019.  Of course, recall that it took over a year for Judge Richard Boulware to issue a written opinion.  So, the timeline may be longer dependent on when the Court issues a ruling.  There’s really no hard deadline for the Court to issue an opinion, so this could take some time.

With fact discovery extended until July 31, 2017, it appears that new discovery (i.e., written interrogatories, request for production of documents, etc.) can be served.  Zuffa had argued that Plaintiffs should not have the opportunity to request additional discovery.

Discovery Plan 06.13.17 by JASONCRUZ206 on Scribd

Judge orders UFC hand over fighter pay documents

June 12, 2017

U.S. Magistrate Judge Peggy Leen issued a 26-page ruling on Friday in the UFC Antitrust lawsuit which requires the UFC to hand over a study related to fighter pay.  There were three document requests demanded by Plaintiffs which included information related to a fighter pay study.

Order on Motion to Seal by JASONCRUZ206 on Scribd

Mercer is a third party human resources consultant.  The primary dispute is over a study commissioned by Mercer to produce a “fighter pay assessment” to guide “future compensation and benefits program design, including fighter pay (base and incentives) and benefit levels.”

The UFC produced 6 documents to requests by Plaintiffs and there are 3 documents in dispute.  Two were created by Mercer and the third was an email chain between the UFC’s in-house counsel and its outside lawyers Campbell & Williams regarding setting up a phone call with “outside consultants.”

After the documents were received by Plaintiffs, a subpoena and deposition notice to Mercer regarding the fighter pay study.  At that time, the UFC notified Plaintiffs are “clawing back” the three documents in dispute citing work product.  Clawing back is a request made of the inadvertent waiver of alleged privileged documents.  The claw back is usually dictated by the protected order the parties agree to at the start of litigation.

Of the three documents in dispute, the first is a memo from a Mercer employee regarding statement of work for the fighter pay study, the second is the aforementioned email chain between the UFC’s lawyer and Campbell & Williams and the third is a draft presentation entitled, “Fighter Pay/Project Update and Methodology Discussion dated March 18, 2014.

As the judge’s order notes:

“The presentation discusses a comparator group of other sports organizations including NASCAR, MLB, the NBA, and the NHL whose compensation practices Mercer proposed to study to “provide an external basis for understanding how UFC’s fighter pay structure and practices compares to similar companies.”

All three documents claimed that the information was work product.

The key term to understand when determining work product is whether the documents were created in “anticipation of litigation.”  The Court determined that they were not.

Notably, the UFC argued that a previous “quite contentious” interaction with Bellator as reasons why the current information was work product.  They cited the Eddie Alvarez lawsuit which produced a contract that has been used time and again.

The Court did not buy the UFC’s argument that the documents were work product.

Under the Court Order, the UFC must produce the documents.  The Court did not intervene on another issue regarding privilege log designations from UFC – a list of documents that a party must produce to show the opposing side what it is withholding and what privilege it is claiming to withhold.  The Court wants the parties to conduct a meaningful “meet and confer” prior to judicial intervention.

Payout Perspective:

This is a loss for the UFC as it wanted the documents to be privileged.  With the documents in Plaintiffs hands, they will likely conduct a deposition of the Mercer employee(s) that produced the study as well as use the information in deposing UFC officials.  Will this facilitate any settlement?  Probably not, but the information may reveal information for the overall theme of the case for the Plaintiffs.

War Machine sentenced to 36 years in prison

June 8, 2017

On Monday, War Machine received a 36 year-to-life sentence for the 2014 sexual assault and beating of ex-girlfriend Christy Mack and her boyfriend.  In March, a jury found the former Jon Koppenhaver guilty of 29 charges in the assaults and deadlocked on two charges of attempted-murder.

War Machine will have the possibility of parole after 36 years served.  He would be 71 years old when he will be eligible.

At the hearing, Christy Mack was able to testify at the sentencing prior to rendering of the sentence.  Machine had turned down to plea offers, one for 16 years to life and another for 18 to 40 years.  Instead, he decide to take the case to trial.

In an interview with MMA Junkie, Clark County District Attorney Steve Wolfson indicated that the message of the sentencing is that “domestic violence is unacceptable.”  Based on the nature of the crime, War Machine’s disrespect in court, Wolfson indicated that the harsh sentence was warranted.

Machine’s attorneys plan to appeal the decision.

Proposed Order outlines documents Bellator to produce to parties in Antitrust lawsuit

June 5, 2017

The Federal Magistrate has ruled on Bellator’s Motion to Quash the Subpoena and its Motion to Modify the UFC’s Subpoena.  According to a Proposed Order drafted by Zuffa, the Court has denied Bellator’s Motion to Quash and granted its Motion to Modify.

Although the Court has not yet signed the Order, barring an objection or request for an Amendment from the Plaintiffs and/or Bellator’s counsel as to the form of the order, it is likely that this is the Order that will be entered.  One would think that the parties would have hashed the language out prior to filing with the Court.

As you might recall, Bellator filed its motion in Los Angeles Federal Court but the magistrate granted transfer to the court in Nevada.  On June 1, the Court heard oral arguments and issued a minute order.

Outlined in Bellator’s Motion to Quash, 5 document demands which Bellator summarized below:

  1. Bellator’s confidential contracts and negotiation with MMA athletes (Plaintiffs’ Demand No. 4; UFC Demand No. 1); and
  2. Bellator’s detailed revenues and expenses from operations (Plaintiffs’ Demand No. 12: UFC Demand Nos. 7 and 12).

Zuffa had “requested unredacted contracts and documents regarding its negotiations with athletes, and limited financial information including profit/loss statements and financial projections.”  Bellator claimed that it is “confidential commercial information, that the documents are irrelevant to the claims and defenses at issue in the Nevada Action, that producing the information would be an undue burden, and that Bellator may suffer competitive harm from disclosing the information.”

The Proposed Order would require for Bellator to provide the following:

  1. “[a]ll agreements between Bellator and its athletes for a randomized sample of athletes” with the names and other identifiers (i.e., addresses, social security numbers, etc.) redacted.
  2. A database of these [in No. 1] athletes with information identifying: athlete gender and weight class by year/the number of bouts completed/any discretionary or “locker room” bonuses paid any athlete as well as any signing bonuses.
  3. Quarterly profit/loss statements covering the period from January 1, 2009 to present;
  4. Event-level profit/loss statements for all events from January 1, 2009 to present for each event which Bellator contends UFC adversely impacted its events.

Bellator will have to give up documents but the original request was modified by the Court.  These documents will be provided to the parties by June 23, 2017.

Proposed Order Re Bellator by JASONCRUZ206 on Scribd

Payout Perspective:

Obviously, a loss for Bellator as it will have to produce documents despite being a nonparty.  However, it could have been worse.  Number 4 on the Proposed Order puts some pressure on Bellator as it is essentially calling for Bellator to make a decision on which events were impacted by the UFC.  Of course, the decision on what to produce and what not to produce might impact the litigation since its the UFC’s argument that Bellator is a competitor.  In the end, Bellator is a nonparty that is now needing to incur legal expense to produce documents as well as evaluate the documents they are producing considering that the information is highly sensitive.  Moreover, the need to redacting documents is not a quick process despite the online tools to streamline the process.

MMA Payout will keep you posted.

Hunt files First Amended Complaint against UFC, White and Lesnar

June 2, 2017

Mark Hunt has filed his First Amended lawsuit against the UFC, Dana White and Brock Lesnar.

A Motion to Dismiss was granted in part and denied in part on May 22, 2017 and Hunt had 10 days to file an Amended Complaint.  It was filed on Thursday, June 1st .

Mark Hunt has filed his First Amended lawsuit against the UFC, Dana White and Brock Lesnar.

A Motion to Dismiss was granted in part and denied in part on May 22, 2017 and Hunt had 10 days to file an Amended Complaint. It was filed on Thursday, June 1st .

First Amended Complaint by JASONCRUZ206 on Scribd

Despite what most people thought about the Complaint, the First Amended Complaint contains more allegations including the RICO claim.  Only the claim for negligence appears to be the only subtraction from the original complaint.  Originally, I thought that this was due to the fact that you cannot claim tort damages out of a contract.  Yet, the First Amended Complaint cites the cause of action with Battery against Lesnar and Aiding and Abetting Battery for the UFC and White.  Battery is the intentional and voluntary bringing about an unconsented harmful or offensive contact with a person.  In its amended complaint, Hunt states that he “did not consent to about with a doping competitor.”  Thus, therein lies the claim for battery despite the fact both competitors consented to the physical contact.  The lawsuit notes that Lesnar had 137 total strikes and 51 significant strikes in their UFC 200 bout.

Claims in Hunt’s Original Lawsuit against UFC, Dana White and Brock Lesnar:

  1. RICO 18 U.S.C. sec 1961 et seq.
  2. Conspiracy to Commit Crime Related to Racketeering NRS sec 207.350 et seq.
  3. Fraud
  4. False Pretenses
  5. Breach of Contract (UFC only)
  6. Breach of Covenant of Good Faith and Fair Dealing (UFC only)
  7. Negligence (UFC only)
  8. Unjust Enrichment (UFC, Lesnar & White)

Claims in Hunt’s First Amended Complaint:

  1. RICO
  2. Conspiracy to Commit Crime Related to Racketeering
  3. Common Law Fraud
  4. Civil Aiding and Abetting Fraud
  5. Breach of Contract (UFC only)
  6. Breach of Covenant of Good Faith and Fair Dealing (UFC only)
  7. Unjust Enrichment
  8. Battery (Lesnar)
  9. Civil Aiding and Abetting Battery (UFC and White)
  10. Civil Conspiracy

The Ameded Complaint is similar to the original complaint, but with more specific facts, Hunt claims that he lost out on opportunities for his brand due to his loss at UFC 200 to Lesnar.  He also provided a list of appearance fees he earned prior to and after UFC 200.  The post-UFC 200 appearance list includes cancellation of appearances, a commercial and a movie shoot.  The estimated losses total $162,500.  $152,500 of that is in Australian Dollars.

He also notes reduced ad revenues from his website traffic.  He also claims he lost revenue from his clothing brand, Juggernaut.

The First Amended Complaint notes that in April 2016, Hunt and the UFC agreed to “an early renewal” of Hunt’s exclusive contract.  This would have occurred right after an impressive KO win against Frank Mir in March 2016.  He originally wanted $1 million per fight for 6 fights but the UFC declined.  The Amended Complaint states that he is one of the only fighters to have a contract which is paid in lockstep regardless of whether he wins or loses.  At UFC 200, his reported purse was $700,000.  At UFC 209, he made $750,000.

Payout Perspective:

Although there was no order issued by the Court in the Motion to Dismiss, the First Amended Complaint reflects the fact that only the negligence and false pretenses claims were dismissed while the other claims, including the civil RICO claims, remained unscathed in the Amended Complaint.  The First Amended Complaint provides more specific facts but does that mean that it will survive another attempt at a Motion to Dismiss?  Even though Hunt has amended his Complaint, it does not mean it is precluded from a lawsuit.  There seems to be a lot of speculation in the theories of the lawsuit for it to survive a dispositive motion (i.e, Motion to Dismiss or Motion for Summary Judgment).  Perhaps a settlement could happen considering the RICO violation (with treble damages) is still a possibility.

The phone texts will likely mean another lawsuit where Dana White’s cell phone usage will be at issue.  MMA Payout is the only source that will keep you updated with actual legal insight on the matters.

Fact discovery issues over White’s phones to be heard Thursday

May 31, 2017

On Thursday, the parties in the UFC Antitrust lawsuit will conduct a hearing to determine a number of discovery issues, most importantly, the status of Dana White’s phones.  The hearing will take in federal court in Vegas before a magistrate which hears these types of discovery disputes.

Plaintiffs have filed a Motion to Compel the Discovery of Electronically Stored Information seeking information from four phones from Dana White.  For those wondering, the phones identified are an iPhone 4, an iPhone 6 and two Nokia flip phones.  It believes that the phones all include information for which White conducted business which may be related to Plaintiffs’ claims.  The motion and reply to Zuffa’s opposition suggests that Zuffa did not comply with the discovery process, violated the Court Order regarding discovery and did not preserve evidence when it was notified that information would likely be requested.  As it appears that certain information from White’s phones are no longer available, the Plaintiffs request an order to serve subpoenas on White’s telecommunications service providers in an effort to obtain communications logs to show the “times and dates messages were sent and received in White’s devices.”

Plaintiffs Motion to Compel by JASONCRUZ206 on Scribd

Plaintiffs claim that Zuffa has used the fact discovery cut-off to “stonewall” discovery.  Fact discovery was due on May 1, 2017, but it was clear that due to the continued meeting and conferring over documents and the issues with obtaining documents from non-parties, it would not be complete.  Realistically, this may not be any parties’ fault, and therefore it is left to the Magistrate to decide what is fair.

Plaintiffs Reply to Motion to Compel by JASONCRUZ206 on Scribd

In its opposition to the Motion to Compel, Zuffa states it “has produced over 650,000 documents, including 44,928 text messages to Plaintiffs.”  The tone of the opposition is of a party that has made its best efforts to comply with discovery while making Plaintiffs appear overbearing and zealous in its request for additional discovery.  This includes Zuffa claiming to have to “re-reproduce” all text messages due to the fact that Plaintiffs claim that some text were not originally produced.  Zuffa hired vendors to conduct forensic analysis of the information from White’s phone in preparing to turn over the information to Plaintiffs.  Moreover, it states it has complied with the standing order from the Court and the Federal Rule of Civil Procedure.  It also claims that Plaintiffs failed to “meet and confer” in good faith.

Defendant’s Response to Motion to Compel by JASONCRUZ206 on Scribd

Payout Perspective:

As suggested in its Reply Brief (the seconded embedded document above), it would appear that the request to serve a subpoena on White’s telecommunications provider (e.g. Sprint, ATT, Verizon) would add another layer to the discovery process and add more time to discovery.  Moreover, one would think that with other parties objecting to the subpoenas that a telecommunications provider would object to the same.  One would think privacy matters and that the request would be overbroad and produce non-relevant information would be obstacles Plaintiffs would have to obtain the information.  Plaintiffs are hoping that the Magistrate will see that Zuffa attempted to stall discovery and will allow this request (or some version) as a way to “make things right.”  We will see on Thursday.

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