Court denies Zuffa Motion for Summary Judgment in Antitrust lawsuit

December 14, 2018

BE/Forbes’ Paul Gift reports that the Court has denied Zuffa’s Motion for Summary Judgment.  It apparently was anti-climactic.  Like most law is.  But, the Court apparently did not take long to deny the request to dismiss the lawsuit.

MMA Payout will have more on the ruling once a minute order and/or official order is issued by the Court.  It does seem that there could be a possibility to resubmit a motion based on more determination of the information.

One last motion before the Class Cert-Summary Judgment hearing in the UFC Antitrust Lawsuit

December 13, 2018

In light of Friday’s big hearing in the Zuffa Antitrust lawsuit in Federal court in Nevada, the parties have filed a joint motion to stipulate how they will deal with references to trade secret or confidential information.

The joint motion was filed on Thursday and is agreed to by the parties.  It’s unlikely that the Court will disturb the agreement.  The parties believed the agreement was necessary as the Protective Order which dictates how to deal with confidential information does not address hearings.

Parties for the Plaintiffs that have filed an Antitrust lawsuit against Zuffa will argue for Class Action status while Zuffa has a Motion for Summary Judgment which may dismiss the case in full on Friday in Federal District Court in Nevada.

It does appear that Plaintiffs reluctantly joined in on the motion as the overarching issue deals with the mention of documents Zuffa believes are confidential and/or trade secret.  A motion to seal is pending before the court.

Joint Motion by on Scribd

 

Payout Perspective:

Both parties had a chance to provide statements to the Court in this Joint Motion.  The Plaintiffs cited Kevin Iole’s Yahoo story from Wednesday in which Dana White gave him the payouts of Chuck Liddell since 2011.  This would seem to run contrary to the claim that Zuffa salaries should be confidential.

The Court could rule on the Motion to Seal documents that were fought over during the pleading process but it has yet to do so.  Tomorrow will be a big day because not since the Motion to Dismiss will this case hinge upon being dismissed.

Zuffa Reply Brief argues its provided Court with ample evidence for sealing requests

December 10, 2018

Zuffa has filed its Reply Brief in Support of its request to seal portion of its Reply Brief in its Motion for Summary Judgment.  Essentially, this reply brief is supporting its motion to seal portions in its Motion for Summary Judgment so that the public will not be able to see it.

Zuffa argues that while it provided detailed and “narrowly tailored” reasons for sealing requests, Plaintiffs argued with broad, “boiler-plate arguments” from other opposition briefs.  It also claims to have declarations including from Bellator to support its motion to seal whereas Plaintiffs do not.

In its Reply, Zuffa argues that the Court has found that the documents which included confidential business strategy information, including revenue and profit information regarding Zuffa’s Fight Pass product, Zuffa contracts and promotional agreements to be sealed.  Plaintiffs did not object at the time.  In Plaintiffs defense, they cite to the Order of the Court in this case which states there is no waiver if a party does not object.

It also argues that Plaintiffs’ Opposition does not address the “substantial evidence of the commercial sensitivity of its promotional agreements and negotiations regarding those agreements.”  Essentially, they suggest that Plaintiffs’ fail to meet their burden through extrinsic evidence such as declarations or cited testimony.  There is no rebuttal evidence to Zuffa’s declarations which is usually the tact in these motions.

Zuffa also contends that the information it seeks to seal is not public knowledge as claimed by Plaintiffs.  They try to make a distinction between the contract disclosed in the Eddie Alvarez litigation and widely written about versus its request to seal its contract.  Zuffa makes the argument that while some agreements may be public, the negotiations about those agreements and business strategy were properly filed under seal.

As for the argument that some of the information that Zuffa seeks to seal is too old, Zuffa claims that there would still be “highly sensitive information” that should be disclosed from public disclosure due to its commercial sensitivity.

Zuffa’s Reply Brief ISO… by on Scribd

Payout Perspective:

There are multiple motions to seal going on here so its kind of confusing to keep up but basically this Reply Brief supports its Motion for Summary Judgment.  It looks like that Zuffa attorneys are watching John and Paul’s twitter timeline for support for their brief to indicate that all is well with the disclosure of information since they have been able to access PACER for these documents.  Notably, they do not cite to John’s request for the court to unseal documents and the subsequent response by Zuffa. There seems to be an argument made here that the underlying issue of business strategy and confidential information that is seen underlies the reason for these documents to be sealed.  So, does that mean that due to the fact you can extrapolate a business decision based on the contents of a contract, it should not be disclosed to the public?  We shall see.

Child porn charges causes dismissal of BE writer

December 8, 2018

MMA web site Bloody Elbow issued a statement on Friday regarding Iain Kidd.  In July, Kidd along with a business partner were charged with having child pornography in their possession.

The contents of the statement from John Ness is below:

On Friday, Bloody Elbow became aware of news reports linking one of our writers to criminal activities including possession of child pornography. As a result, Bloody Elbow and SB Nation terminated his contract that same day.

SB Nation and Bloody Elbow strongly condemn the types of activities reported and encourage our readers and listeners to visit Protect Children in Canada, Stop It Now in Scotland, and Darkness 2 Light in the United States for more information to support victims.

In July, the 30-year old Kidd was charged with having downloaded child pornography as well as humans having sex with animals.

Kidd did not receive any jail time despite having in his possession 984 still images and 496 videos of child pornography and 7,689 pictures of extreme pornography after a search warrant seized his computers and were able to decipher the contents.

Via MMA Junkie:

Kidd, a resident of Glasgow, Scotland, is also required to register as a sex offender, obey a curfew from 7 p.m. to 7 a.m., and is restricted from using the internet browser Firefox; he must also disclose his browsing history upon request.

Kidd appeared on Bloody Elbow podcasts and wrote articles focused on the UFC Anti-Doping Program and USADA.  Since this information came to light, he has deactivated his social media account on twitter.

What is most surprising here is that the investigation began in August 2017 and the news story in Scotland came out in July 2018.  Yet, no one in the MMA community knew of Kidd’s indiscretions.  This was clearly the right move by SB Nation to terminate Kidd’s contract and it is surprising (and thankful) that no one was physically hurt here.

Leslie Smith NLRB Appeal is denied

December 4, 2018

Leslie Smith’s appeal of the dismissal of her NLRB complaint has been denied.  According to the NLRB web site a denial letter was issued on November 27, 2018.

In May, Smith filed a labor complaint against Zuffa last May citing the company took adverse action against Smith due to her involvement in a protected activity.  As we know, Smith is an ardent supporter of Project Spearhead, a group supporting athlete’s right and the need for an association/union.  The NLRB investigator found merit in her claim and there was an indication in June that the NLRB would file a complaint against Zuffa based on the evidence provided by Smith.  But the case was sent to Washington D.C. for review by the Division of Advice.

After it was turned over to the Washington D.C. office, the NLRB reversed course and in September dismissed Smith’s claim citing that the UFC’s conduct actually benefited Smith.

In light of the dismissal, Smith’s attorney, Lucas Middelbrook, filed an appeal, requesting that the same Investigator that initially was assigned to the matter to reconsider the dismissal.  It also requested the recusal of NLRB’s General Counsel Peter Robb and Deputy General Counsel John W. Kyle.  Middlebrook asserted that Robb and Kyle were directly involved with the decision to dismiss Smith’s case.

The latest news looks as though the NLRB has reviewed the appeal and has upheld the dismissal.

Payout Perspective:

Bad timing for this news as Smith will appear on Samantha Bee’s “Fully Loaded,” talking about her quest for better fighter rights.  It airs Wednesday night.  If there is an appeal of this board decision it will go to the United States Court of Appeals.  This denial is not too surprising based on the decision this past September.  MMA Payout will have more information on this matter.

 

 

Court in UFC Antitrust Lawsuit decline legal “hot-tub”

December 2, 2018

The Court in the UFC Antitrust lawsuit has ruled that there not be an evidentiary hearing on the admissibility of expert reports and testimony prior to the December 14th Motion for Summary Judgment and Class Certification hearing.

The Court issued a Minute Order late last week:

The Court has considered the Request [ECF No. [617]] for an evidentiary hearing. The Court DENIES this request at this time. The Court will the hear arguments of counsel and make a determination at the hearing on December 14, 2018 whether an evidentiary hearing is necessary to decide the Motion To Certify [ECF No. [518]].

As we explained in this post, the hearing requested by Zuffa was to determine expert testimony and the admissibility of the same.  The Plaintiffs argued that Zuffa was asking for a reconsideration of a evidentiary hearing to determine the expert testimony.  As Plaintiffs point out, the Motion to Certify the Class occurs on December 14th and would require a delay in that decision if they were to entertain such a hearing.

Payout Perspective:

A minor victory for the Plaintiffs here as it does not have to prepare for another hearing in this lawsuit.  It also prevents a determination on the evidence prior to the class certification hearing.  While the Court may still request an evidentiary hearing at some point, it saw no reason to do it prior to next Friday’s big day.  One might take this as good news for Plaintiffs if you think that the Court was concerned about the information that it needed another day to decide the evidence in this case.  Of course, the court’s calendar could be so full, there was just not enough time to slot it in before the 14th.  MMA Payout will keep you posted.

Seeking to save Ali Act case, Trout files Motion for Reconsideration

November 22, 2018

Attorneys for Austin Trout have filed a Motion for Reconsideration in light of the District Court ruling which dismissed Trout’s lawsuit against the WBO and sent his case to arbitration.

In its motion, Trout argues that hat the WBO waived any right to arbitration, pointed to the promotion’s own guidelines with respect to jurisdiction and claims that the Ali Act cannot be subject to arbitration.

As you might recall if you have been following this lawsuit, Trout filed a lawsuit against the promotion as he believed he was passed over a chance to fight for the title.  The case was moved to Puerto Rico where the WBO is located and the promotion filed a motion to dismiss the case and compelling it to arbitration per the terms of the contract.  The Court determined that Trout’s promotional agreement with the WBO with its arbitration agreement ruled the day and dismissed the case to go to arbitration.

Trout is now moving for the court to reconsider the ruling.  The Court will have to be persuaded that its original ruling was in error.

Trout argues that by the WBO having moved the case to Puerto Rico it requested the case to be litigated and waived its right to arbitration.  Trout also claims that the parties have engaged in discovery which would be considered litigating the case.  Moreover, they state that Trout’s claims under the Ali Act cannot be determined by arbitration.

In opposing the motion to reconsideration, the WBO notes that there is no error of law which Trout points to that was decided in error.  This may be the strongest argument for denial by the WBO here.  The WBO claims that the motion is merely an attempt to relitigate the points the Court has already decided. In its opposing brief, the WBO claims it did not waive its right to arbitration. WBO states that despite discovery taking place, it did not substantially involve itself in litigation.  It also suggests that even though the contract indicates a jurisdiction and venue for possible litigation it does not “override” the arbitration clause.

The WBO noted that the Ali Act was subject to arbitration.  Although this issue has not been decided, it argues that the “scope of issues subject to arbitration is determined by the agreement itself.”

Motion for Reconsideration by on Scribd

Opposition to Motion by on Scribd

Reply by on Scribd


Payout Perspective:

As we’ve discussed when the Court ruled that this case go to Arbitration, this decision has big implications for those seeking to litigate under the Ali Act.  The WBO claims, citing case law, that any issue in the contract is subject to arbitration.  However, there has not been a legal challenge where a boxer has sued under the Ali Act and it has gone to arbitration.  The WBO makes a compelling case that there has not been an error of law for the Court to overturn its original decision.  An appeal may be necessary if Trout wants to overturn this decision.  MMA Payout will keep you updated.

Plaintiffs in UFC Antitrust Lawsuit try to avoid “hot tubbing”

November 16, 2018

Plaintiffs in the UFC Antitrust lawsuit have filed a letter to the Court arguing that there should not be an evidentiary hearing on expert testimony.  The legal slang of “hot tubbing” where “concurrent expert evidence” is being offered and heard by the court at the same time.

Letter November 16 by on Scribd

Plaintiffs see a request by Zuffa to hold an evidentiary hearing regarding the expert testimony as an end-around to exclude expert testimony.  The Court denied Zuffa’s Daubert motions without prejudice in late September per Plaintiffs. It’s the position of Plaintiffs that this is a way to ask for the Court to reconsider at this late date.  Plaintiffs also argues that the format of each side presenting its experts on direct and then cross examines the other side would take multiple days.  Notably, this would run into the rescheduled date for the Motion for Summary Judgment of Friday, December 14, 2018.  It would most certainly delay the hearing date once again if the Court were to entertain the hearings.

There is also the argument that evidentiary hearings on class certification are not required.  Plaintiffs cite cases where the Court suggests that evidentiary hearings for these types of complex cases are unnecessary.  Finally, Plaintiffs also argue that evidentiary hearings for summary judgment almost never happen and there’s no extraordinary reason brought up by Zuffa why one should take place now.

Notably, “hot tubbing” is not prohibited, but its not specifically addressed.  There are various opinions on its use and affect.  Judges have wide latitude when it comes to admitting expert witness testimony.  Of the factors a court may consider, the most important tends to be whether or not the testimony is a waste of the court’s time.

Payout Perspective:

And we are now introduced to the term of “hot tubbing” which is a term that originates from Australia according to some research.  It’s the “battle of the experts” and the purpose seems to be a way to flesh out some of the theories asserted by the parties in hopes of scaling down the arguments for the court at trial.  Plaintiffs believe that Zuffa is asking for this type of hearing as either a second bite at attempting to exclude their experts or stall.  I would think that it’s the former rather than the latter.  Zuffa likely believes that if they can knock out some of Plaintiffs experts, there will be little left of Plaintiffs claims.  MMA Payout will keep you posted.

ShowMoney talks UFC Antitrust Lawsuit and ONE business

November 14, 2018

Show Money is back once again as I discuss the business of MMA with Bloody Elbow’s John Nash and Paul Gift (also of Forbes).

This show’s topics includes the upcoming Motion for Summary Judgment in the UFC Antitrust Lawsuit and the business moves made by ONE Championship.

Zuffa Reply Brief in support of dismissing antitrust lawsuit takes aim at Plaintiffs’ claims

November 5, 2018

On Friday, Zuffa filed its Reply in Support of its Motion for Summary Judgment in dismissing all claims against it by former fighters in the antitrust lawsuit.

In its Reply Brief, it argues that Plaintiffs have now changed its theory of liability since its original claims are no longer viable.  Zuffa argues that Plaintiffs have failed to define relevant markets and in turn have not proven its monopsony and monopoly claims.

In a more of a procedural argument, Zuffa argues that Plaintiffs failure to rebut certain Statement of Undisputed Facts in its Motion and are therefore admitted as true.  Alternatively, Zuffa states Plaintiffs have failed to raise any genuine factual disputes in its counterstatement of facts.

Zuffa argues that Plaintiffs’ Opposition to its Motion for Summary Judgment relies heavily on Dana White’s puffery.  But, as Zuffa argues, “strong statements praising your own business and demeaning your competitors are evidence of competition, not an antitrust case.”

This past September, Plaintiffs filed its Opposition Brief to Zuffa’s Motion for Summary Judgment.  The main argument by Plaintiffs is that the UFC is the “major league” of MMA and it has done so through anticompetitive behavior.  Plaintiffs claim that Zuffa used its market leverage to extend exclusivity over its fighters through coercion, intimidation and other means of forcible persuasion.  The claim is that the evidence supplied shows Zuffa abused its market power.

Zuffa claims that Plaintiffs have provided a new category for fighters: “marquee,” citing marquee fighters as the most important input for MMA promoters and that Zuffa violated the antitrust laws by preventing competitors from having a “critical mass” of the fighters.  Zuffa argues that this theory of the need to have a “critical mass” of “marquee” fighter does not appear in its Amended Complaint nor is there discussion of this theory in its discovery responses.  Moreover, Zuffa argues that Plaintiffs fail to define this term.

Moreover, Zuffa states that the relevant markets in which Plaintiffs allege Zuffa has power over have not been properly identified.  Zuffa notes that Plaintiffs failed to provide an evaluation of the “marquee” query and that their expert, Dr. Hal Singer, does not include the Significant Non-transitory Decrease in Price test.  Zuffa also takes issue with the lack of defining an output market for a monopoly claim.  This is due in part to its assertion that Dr. Singer failed to properly conduct a SSNIP test.  Zuffa cites to Singer’s admission that he did not test whether cable networks, broadcast networks and sponsors (the output market according to Dr. Singer) would switch to sports entertainment.

Zuffa also states that Plaintiffs cannot dispute that other promotions are viable competitors of the UFC.  They cannot dispute the testimony of the promoters which claim that the UFC has not been an obstacle to them signing fighters.  In this argument, they negate the testimony of Kurt Otto and Jeremy Lappen because they promoted MMA events before the class period and before Plaintiffs claim Zuffa had monopsony power which deems their testimony irrelevant for purposes of this lawsuit.

One of the other claims asserted by Zuffa in its Reply is that the Plaintiffs cannot show relevant direct evidence of lower compensation as a result of the claimed monopsony power.  Zuffa argues that Plaintiff cannot solely rely on their expert’s reports alleging the correlation.  Here, Zuffa argues that the practical market facts do not show that the company suppressed compensation due to its share of the market.  Zuffa also argues that Plaintiffs’ are making a “predatory hiring” claim as Plaintiffs describe a marketplace where the UFC retains fighters it does not need in order to keep them away from other promotions.  But, Zuffa argues it simply offered fighters more money.  This would seemingly fly in the face of Plaintiffs claim that wages were suppressed.

Furthermore, Zuffa states that Plaintiffs have failed to show its foreclosure theory based on the UFC’s use of exclusive contracts.  Basically, despite the inference, Plaintiffs cannot show intent that the contracts foreclosed competition.

These are the main arguments asserted in Zuffa’s Reply Brief which rebuts Plaintiffs’ Opposition and supports the promotion’s contention that the Plaintiffs’ lawsuit contains no general issues of material facts and as a result must be dismissed.  The strongest arguments in my opinion seem to be the argument that other promotions do not appear to be harmed by Zuffa’s business practices.  Plaintiffs point out how the purported scheme may still impact other MMA competitors.

It is clear that Plaintiffs do not respond to Zuffa’s Statement of Undisputed Facts (“SUF”) in its Opposition.  Rather, they introduce their Counterstatement.  Procedurally Plaintiffs should have responded to Zuffa’s SUF.  If you do not, the statements are admitted as true.  Plaintiffs will likely argue that their Counterstatements are equivalent to a denial or rebuttal.  It would be up to the Court to determine this.  I would think that Plaintiffs would have been extra cautious with this filing and would have ensured that they would not deem anything admitted if they did not respond.  Notwithstanding this argument, the Court will need to decide this Motion.

Both sides have made strong arguments for why this case should go forward or be dismissed.  The question is whether there are material facts still to be decided with the lawsuit as it is currently framed for it to go forward to trial.  Zuffa makes strong arguments stating why it should be dismissed and premise Plaintiffs theories based on unverified assertions and a moving target of theories.  Plaintiffs maintain its basic argument that Zuffa’s market power dictated the rest of the industry and through its strategies, was able to suppress fighter rights and wages.

MMA Payout will keep you posted.

Reply Brief by on Scribd

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