New UFC Antitrust Lawsuit filings include Plaintiffs’ Objection to Use of Zuffa “Summary of Exhibits”

June 15, 2019

The parties in the UFC Antitrust Lawsuit have exchanged objections to exhibits previously submitted to each side.  The objections are part of the trial schedule and are lodged with the court to argue prior to the use at August’s hearing with the experts.

For context on the request, Plaintiffs included the email to Zuffa attorneys in which they inquire about the exhibits that they seek to now exclude.  Plaintiffs claim that the exhibits are “creating new metrics for analyzing the data (e.g., “Fighter Share Deviations,” Foreclosure Share Deviations,” etc.) or breaking down data in ways that neither Zuffa nor its experts has/have ever before done in this case.”

Exhibit to Plaintiffs’ … by on Scribd

Plaintiffs have objected to exhibits submitted by Zuffa which are “Summary of Exhibits.”  The argument relates to expert materials which they claim are “outside the scope of the record created by Zuffa’s economists during expert discovery.”  As explained by Plaintiffs, they are “undisclosed consultants” with new analyses and cannot form the basis of Zuffa’s expert presentation.

Plaintiffs argue that the exhibits that Zuffa would like to use include new information that they did not have possession of for their experts to render an analysis and opinion.  This would be untimely and not according to the evidentiary rules per Plaintiffs.  The reasoning behind this rule is to give each side a fair opportunity to evaluate the opposing expert’s position and prepare accordingly.  Plaintiffs contend that the information should have been provided in a “timely written report” but they did not provide the report to them per the rules of the Court. Plaintiff points to the expert discovery deadline on January 24, 2018.

Payout Perspective:

Zuffa also objected to certain exhibits provided by Plaintiffs for use and we will look at that in another post.  In this submission by Plaintiffs, they claim that Zuffa has attempted to submit new information to utilize at the hearing of the experts in late August.  Plaintiffs object because of the overarching belief that it is an unfair surprise in that they do not have an opportunity to rebut the new information.  Plaintiffs point to the expert deadline to submit reports as a reason why they are seeking to have these exhibits excluded.  If excluded by the Court, this could cause significant impact to Plaintiffs case.  Of course, its anticipated that Zuffa will argue that the information is not new expert testimony and just a summary of findings already provided to Plaintiffs.

Mark Hunt lawsuit gone, but not forgotten

May 31, 2019

It appears that the Mark Hunt lawsuit will be coming to an end in the not-too-distant future.  With the parties dismissing their appeal to the Ninth Circuit, one might anticipate a settlement.  However, his case still presents an interesting legal issue that was not addressed by the trial court which dismissed most of his claims.  The question of whether there is an assumption of risk that a fighter will step in with another that is using PEDs.

In Hunt’s lawsuit, he filed a Civil RICO claim which alleged that the UFC and Dana White devised a scheme which allowed doping fighters to fight in the UFC.  The Court concluded that the scheme was “fatally speculative.” This, along with all of Hunt’s claims (save one) were dismissed by the trial court.

The trial court which decided the merits of Hunt’s case dismissed 9 out of the 10 claims in his lawsuit.  It held that the allegations were “non-cognizable damages or failed to plead facts to show” a proximate cause to his financial losses.

There were specific problems the Court had with the majority of Hunt’s claims.  Namely, his damages with respect to his allegations.  For non-lawyers, each of the allegations must have a duty, a breach of that duty, a proximate cause resulting in damages.  Here, the Court had issues with Hunt’s claim that his loss to Brock Lesnar at UFC 200 caused him to lose out on post-event marketing deals including loss of income from his clothing brand.  The damages claimed by Hunt were speculative in nature and could not stand as concrete damages.

The Court did not side with Hunt’s notion that doping fighters like Lesnar are “bigger, strong, faster, hit harder, and can handle damaging hits better,” and ‘misses the forest for the trees.’  As the Court explains, there are ‘numerous other factors’ that could account for why Hunt lost the bout or why it was (in Hunt’s view) such a lopsided defeat.’

In one of the more interesting parts of the Court’s opinion it dismissed Hunt’s battery and aiding and abetting claims against Lesnar because Hunt consented to the fight.  Notably, the Court highlighted that there was no evidence offered that suggested Lesnar did anything outside “the range of the ordinary activity,” in an MMA bout.

When it rendered its opinion citing that Lesnar did not do anything during their bout which was outside the “range” of ordinary activity in MMA, it cited to a California case in which a pitcher intentionally threw a ball at a batter’s head which injured the batter.  In a lawsuit over the damages claimed by the batter, the Court sided with the pitcher stating that while throwing at a batter’s head is “forbidden by the rules of baseball,” it “is an inherent risk of baseball.”  By analogy, the Court states that even though Lesnar tested positive for a performance enhancing drug, there was no evidence submitted which revealed he did something outside the scope of an MMA bout.  Thus, there can be no battery claim against Lesnar.  And since there is no battery claim, the underlying claim of aiding and abetting cannot occur.

The parties have (presumably) settled their case but the notion that Lesnar’s participation while on PEDs poses the question of whether the use of illegal drugs is within the “range” of ordinary activity.  Certainly, that can be the scenario with the Court’s conclusion flipped on its head.  Specifically, if the Court interpreted the case law on the premise of whether the actions occurring were within the scope of what’s ‘normal’ within the sport.  Consequently, you might infer from the trial court ruling that PED-use is normal which it should not.

The Court seems to draw a distinction with what an athletic participant could expect as opposed to the potential for actions outside of the scope of normal athletic participation.

The tort doctrine of “assumption of the risk” is that a plaintiff should not be able to recover for injuries caused to the plaintiff if he or she willingly assumed the risk inherent in the activity.

So, is using PEDs a “risk inherent in the activity”?

There are obvious cases out there which have addressed the threshold question of a “risk inherent in the activity.”

The most notable case involving sports assumption of the risk was an impromptu football game during halftime of a Super Bowl.  In Knight versus Jewett, a football game between friends turned into a lawsuit when a man stepped on a women’s hand causing an injury which resulted in the amputation of one of her fingers.  A lawsuit was filed based on the claims of assault and battery and negligence.  The Court held that the plaintiff could not recover for her personal injuries since the injury occurred in the ordinary course of the football game.

As mentioned above, a baseball player suffered a brain injury when he was the subject of a “beanball” by a pitcher.  But the California Supreme Court stated that the “beanball” was a part of the game and any claim was barred by the assumption of the risk doctrine as it was based upon its anecdotal theory based on empirical data.  The dissent stated that assumption of the risk should be based on “what risk the plaintiff consciously and voluntarily assumed” and not what risks are inherent in a particular sport.

Arguably, Hunt could have asserted that the implementation of the UFC Anti-Doping Policy was a sign of a “risk inherent in the activity.”  It’s clear that Hunt consented to an MMA bout where he may receive bodily harm from his opponent.  But, is the inherent risk of testing UFC fighters a potential factor in the activity.  This is a broad interpretation as “activity” used by Courts is the actual activity occurring and not an ancillary part of the sport.  The Court that decided to dismiss the bulk of Hunt’s lawsuit viewed the “activity” as the bout with Lesnar and not the fact that Lesnar was subject to drug testing.  Moreover, there is no evidence that Lesnar specifically took PEDs to injure Hunt but he may have taken a banned substance to be able to compete with Hunt.  Whether taking a banned substance is “reckless” seems to be a factual claim.  On the other hand, the UFC Anti-Doping Policy anticipates the possibility of athletes using banned substances and Lesnar’s flagged tests reflects the fact that his behavior was not reckless but negligent.

With the appeal seemingly gone, the question lingers until another lawsuit occurs.  While Hunt’s RICO claims were tenuous at best, the question of assuming the risk in a sport and whether the injured person ‘consciously and voluntarily assumed’ the risk is a compelling question of law.  The dissent in the ‘beanball’ case is recognition that there are certain actions within sport that are not contemplated by an injured party.  Even if there are “inherent risks” in participating in a sport, whether a participant acknowledges the issue and voluntarily assumed the risk could be a concern in the future.

As Austin Trout heads to ring on Saturday, his legal team has been fighting WBO in appeal of lawsuit

May 24, 2019

As Austin Trout returns to the ring on Saturday, last month his lawyers submitted their appeal brief in an effort to overturn a federal court decision to arbitrate his lawsuit, including his Ali Act claims.

For background of the case, you can go here.

The Court determined that based on legal rights under the Federal Arbitration Act, that arbitration was a suitable alternative instead of having parties going to trial

Appellant’s Brief.filed by on Scribd

In addition to its claims that the WBO waived its right to arbitration, Trout argues that the Ali Act cannot be arbitrated as it would fly in the face of the spirit of the act.  Essentially, its protections highlighted in the law runs contrary to the District Court ruling.

Trout alleges that the WBO violated the Ali Act when the promotion dropped him from its rankings.  In the alternative, it claimed that the Ali Act claims should remain in federal court even if the trial court decided that his other allegations could be arbitrated.

Trout’s appeal brief relating to the Ali Act claim argues that the intent of the legislation was to protect boxers from promoters and managers.  Trial court made an error when it granted the WBO to arbitrate its claims.

As stated by Trout’s attorneys:

“If allowed, compelling the arbitration of the claims under the Muhammad Ali Act will defeat the purpose of the Act.  Leaving Sanctioning Bodies, as the term is defined in the statute which includes the WBO, free to circumvent the must of courts of law over claims alleging the WBO is violating the Muhammad Ali Act, and will be able to ventilate such claims in arbitration before a panel designated by the WBO.”

The District Court stated that arbitration was a suitable alternative when agreed upon by the parties.  That is not the case here. It would appear that Trout agreed to the contractual obligations of the WBO and its arbitration clause provision embedded in the rules of the promotion and his contract.  Yet, upon closer scrutiny, the irony of the conclusion by the District Court is that it is inapposite to the outcome that the Ali Act wish to have prevented.  Here, the appearance that a promotion is taking advantage of a boxer through a coercive contract.  In his lawsuit Trout claimed that the boxer rankings of the WBO dropped him from its rankings, depriving him of a potential title fight.  The elimination rom the WBO ranking was not explained via written statement or to the Association of Boxing Commissions as required by the Ali Act.  Trout was left without an opportunity for a title shot and economic revenue through a chance to be champion.  For Trout, the contract of the WBO, as drafted an interpreted by the promoter, states that it would internally decide any grievance made by one of its contracted fighters.  For Trout, the contract of the WBO, as drafted an interpreted by the promoter, states that it would internally decide any grievance made by one of its contracted fighters.

The District Court ruling highlighted two cases which stated that arbitrations clauses in contracts would override the right to trial.  However, there are strong dissents to those cases. As a result, the WBO appears to sweep the Ali Act into the arbitration for Trout’s other claims listed in the lawsuit.

Trout decided to sign a contract with the WBO.  There is no argument set forth by the parties that Trout did not have an opportunity to negotiate the contract he signed with the promoter.  Yet, it would seem that Trout was unaware that if he had an issue down the road with his contract, that the dispute would go to arbitration where the arbiters of the dispute were chosen by the WBO.  This would appear to be contrary to the filing of this lawsuit. Moreover, the overarching protection for boxers, found in the protections highlighted in the Ali Act, such as contractual disagreements, fraud or issues with rankings, could be usurped with one fail swoop in a contractual clause.

In its Order Compelling Arbitration of Trout’s Ali Act claim (see embedded opinion below), the Court order does not address the strong dissent in Mitsubishi Motors v. Soler Chrysler-Plymouth which it cites in its opinion.  The dissent, written by Justice John Paul Stevens, brought up strong questions regarding the arbitrability of the case and which similarly resonate with the present case here on appeal.  In Mitsubishi Motors, Justice Stevens noted that it was the first time that the Court held a statutory claim to be arbitrable.  “It is reasonable to assume that most lawyers and executives would not expect the language in the standard arbitration clause to cover federal statutory claims.”  This was premised upon the belief that the complexities of the issue in Mitsubishi – an antitrust matter – was too complex to arbitrate.  Neither party has brought up any case in combat sports which has tested the complexities of the Ali Act simply because there are few and far between.  This would seem to conclude two points.  First, it is unknown whether the issues in the Ali Act are complex for that of a private arbitration.  Secondly, the Ali Act legislative history which is included in Trout’s appellant brief, contemplates that aggrieved boxers may file a lawsuit and have those issues determined by a Court and not through arbitration.

In CompuCredit v. Greenwood, Justice Ginsburg notes in her dissent that the Federal Arbitration Act remains the Court’s “responsibility to examine carefully “the text of the [statute], its legislative history,” and Congress’ “underlying purposes.”  The District Court cites the Federal Arbitration Act as superseding Trout’s cause of action.

The passages from two dissenting opinions are not profoundly authoritative.  However, they provide shed a light on the rationale behind the Ali Act and the recognition that the District Court ruling contradicts the legislative intent of the establishment of the law which is the protection for boxers.

While we await the Answering Brief from the WBO, the Trout case seems to have gone under the radar of many boxing fans, it is a huge case for the Ali Act and the future of the law.  If promoters are allowed to skirt the meaning of the rule by utilizing arbitration clauses in its contracts deeming itself or a self-appointed arbiter as the self-binding authority, it would render the Ali Act toothless, mute and useless for the boxers it sought to protect.

MMA Payout will continue to update you.

Endeavor files paperwork for IPO

May 23, 2019

Endeavor, the company that currently owns the UFC, has filed paperwork with the Securities and Exchange Commission to become a publicly traded company on the New York Stock Exchange.

Endeavor states that it plans to raise $100 million in the offering which is a standard figure for companies until it provides an actual figure at a later date.  Proceeds from the company receives from this offering will go towards working capital and general corporate purposes.

According to the S-1 filed today, it reported revenue of $3.6 billion.  The company posted a net income of $231.3 million in the year ended December 31, 2018.

Endeavor is the combination of Ari Emmanuel’s company with Patrick Whitesell’s IMG sports and modeling agency in 2013.

According to the filing, Goldman Sachs will be the IPO’s lead banker.  KKR Capital Markets, J.P. Morgan, Morgan Stanley and Deutsche Bank are also underwriters on the IPO.

Zuffa is included in the voluminous S-1 statement.  It includes information on its finances, debt as well as information on the UFC antitrust lawsuit as a potential liability.

MMA Payout will take a look and provide a further in-depth analysis of the S-1.  But, as for now, it looks like the UFC may be a part of a publicly-traded company in the near future.  How does it affect its business?  We will see.

Criminal charges against McGregor dropped in cell phone slam case

May 13, 2019

ESPN reports that criminal charges against Conor McGregor in Florida have been dropped by Miami prosecutors.  The 22-year-old man that had his phone allegedly smashed by the UFC star outside of a hotel “has been made whole.”

Without the witness as well as others which may have aided the case, the prosecutors dropped one charge of felony robbery and one of misdemeanor criminal mischief.  An Assistant State Attorney quoted in the ESPN article cited “credibility issues” with the man’s story as he had changed sworn testimony.  The man also dropped a civil suit last month seeking $15,000 in damages.

McGregor was arrested based on an incident outside of a Miami hotel in March from the alleged destruction of Ahmed Abdirzak’s cell phone.

Payout Perspective:

A likely monetary settlement helped make the decision easier for any and all witnesses involved in the criminal matter.  The issue likely was done after Abdirzak settled his civil lawsuit.  Without witnesses willing to help and issues with the story of events that went down, it was easy decision to drop the charges.

Expert report dissects Lyman Good earnings as court case nears

April 18, 2019

The earnings of an MMA fighter can be hard and the Lyman Good case is exemplifying that the life in the cage may not be lucrative.

Good is currently suing the nutritional supplement company Gaspari Nutrition and Hi-Tech Pharmaceutical.  He claims caused him to fail a USADA drug test leaving him suspended and out of a payday.  The attorneys for the defendants retained an economic expert to assess the possible damages sustained by Good.

Through the discovery process, Dr. Henry Fuentes obtained Good’s tax return for 2011 and stated in a declaration that he was not provided any other complete returns for the fighter.  Dr. Fuentes studied Good’s returns and other information from the case in rendering the opinion that Good did not suffer economic damages based on his lawsuit.

Paul Gift’s Forbes article on Good’s breakdown of earnings also paints the picture of the meager earnings of Good.  Despite some successful years as a fighter, he’s also had some lean ones which is reflected in his tax returns and earnings (or lack thereof).

The breakdown of expenses has the most going to his agent (who is also his attorney in this lawsuit).  He also spends a lot on transportation.  The life of a full-time fighter is a hard one as they rely on paydays from fights as their main source of income.  According to the 2011 tax return, made money through fights and teaching martial arts classes. He did not have any other form of employment since 2009.  In 2011, Good had more unemployment compensation than anything and of the income, he had to spend most of it for training.

It should be noted that Good lists his Reebok royalties of $1,000.  The defense also concluded that Good made $77,236 in 2009,  That year, Good won the Bellator Welterweight World Championship. In 2017, Good made $65,471.  That year he only fought once but scored a $50,000 Fight of the Night bonus on the UFC on Fox 25 card for his bout against Elizeu Zaleski dos Santos.

Good’s attorney (who is also his manager) has filed a motion to preclude the expert report from the yet to be set trial.  If the court agrees, the expert report would not be considered as evidence in trial.

Payout Perspective:

The information is a glaring look at the unstable earnings of a fighter.  Unlike top-tier fighters, the report indicates that Good does not have steady income from sponsors or any other investments which might generate income.  This is one of the reasons why Stipe Miocic keeps his job as a fireman although its clear he could fight full-time.  Yet, for most fighters, they live from fight to fight to make a living.  MMA Payout will keep you posted on the trial.

Leslie Smith finds new home in Bellator MMA

April 16, 2019

Yahoo! Sports reports that former UFC fighter Leslie Smith has signed with Bellator MMA and plans to move to Featherweight.

Smith’s last scheduled fight was to be almost a year to the day in April 2018 when she was to meet Aspen Ladd in Atlantic City.  However, Ladd did not make weight and Smith did not take the fight at a catchweight.  As those following know, it was to be Smith’s last fight on  her contract but Zuffa decided to pay her show and win money and then call it good despite her only promotion loss to Cristiane Cyborg.

Smith and her attorney Lucas Middlebrook believe that were abrupt dismissal from the company was due to her leading Project Spearhead which sought to have a vote of UFC fighters to determine whether they were employees of the company instead of independent contractors.  Smith had made a case with the NLRB and despite initial optimism which was in favor of Smith’s claims, they were denied.

She now gets a new start after what will be over a year away from fighting.

The new situation should be good for Smith and a move to the more competitive Featherweight division should yield her attractive fights.  Julia Budd is the company’s featherweight champion at this time.

 Payout Perspective:

MMA Payout had the opportunity to speak with Smith and Middlebrook a couple months back.  Her return to fighting should help Bellator with any intent of building its women’s division.  She may be a polarizing figure depending on your view of her lobbying for fighters’ rights.  But through this, she has elevated her status as someone willing to speak her mind regardless of the ramifications.  We shall see whether she brings her Project Spearhead lobbying to Bellator.

Penn accused of verbal abuse, threats by estranged girlfriend; Penn responds

April 11, 2019

MMA Junkie reports that a restraining order has been issued against B.J. Penn by the mother of his children.  Shealen Uaiwa states that she has been verbally abused and “menaced” in front of their children. Uaiwa also claims that the former lightweight champion threatened to kill her family and sexually abused her.

In handwritten court records from Uaiwa obtained by MMA Junkie, she documents several disturbing episodes in which he verbally assaulted her mother and herself.  Although there is no claim of physical abuse, there appears to be a history of Penn’s aggressive verbal assaults against her and her family.

The retelling by Uaiwa states that she woke up one night scared “because he [Penn] got cocaine on my oldest daughter.”  She indicated that he wanted to commit suicide.

On Thursday Penn issued a statement via his web site:

“BJ is in a highly-contested child custody case involving his two young daughters. The order of protection has made serious allegations against BJ.  The allegations are so, misleading, hurtful and false that any further comment by BJ or about BJ would cause more damage to the well-being of his children and potentially further inflame the pending custody proceedings. BJ and his family ask that you respect their privacy at this very difficult time.”

Payout Perspective:

This is a tragic allegation against Penn and his response is less than clear on the situation.  While a custody battle is clearly a contentious situation, the allegations seem very specific.  One has to wonder about the former champ’s stability.  While we cannot conclude Penn has some sort of head trauma causing these actions, we also should not rule it out.  Penn has continued to fight despite being past his prime and I’m not sure if he were to stop whether he would know what to do after his MMA career.  MMA Payout will keep you posted.

The man whose cell phone was destroyed by Conor McGregor drops civil lawsuit

April 8, 2019

A lawsuit filed by the individual that had their cell phone destroyed by Conor McGregor in Miami has dropped his civil lawsuit against the UFC star.

TMZ reports that Ahmad Abdirzak, the 22-year-old man that had his phone destroyed by the former UFC featherweight and lightweight champion has likely settled his dispute with McGregor.  Tha man had sued McGregor for battery, assault and intentional infliction of emotional distress stemming from an incident earlier this month where McGregor was retained by police and subsequently released. His criminal case is still pending in Miami as he was charged with felony robbery and misdemeanor criminal mischief.

Payout Perspective:

McGregor’s team likely wanted to put this civil case to bed as the damages were minimal and settling this case out of court without a mess like the thrown can lawsuit or thrown dolly lawsuit.  As we know, McGregor has other legal troubles coming so this one was easy to put out relatively speaking.

Ahead of the biggest event of its year, WWE files TRO to protect its trademarks

April 5, 2019

As wrestling fans descend on New York for Wrestlemania weekend, the WWE has filed a preemptory complaint to ward off trademark infringers that may sell merchandise bearing trademarks owned by the company.

In a verified complaint filed in New York, it requested that the Court issue a temporary restraining order and seizure against sales of goods with counterfeit marks.  Essentially this would enable the WWE to immediately stop the bootleg sale of goods on the spot.

As a part of the request, WWE has included a schedule of its 2019-2020 live events schedule to obtain relief for the rest of the year.  It claims that it has encountered counterfeiters at other events and requests the Court’s order.

Complaint by on Scribd

The WWE brings up the fact that when it held Wrestlemania in New Jersey in 2013, it requested and was granted the same thing.

As for why it needs an order to confiscate counterfeit merchandise, the WWE cites the poor quality of the knockoffs.  Since this motion was done without naming defendants, it felt the need to let the court know of several cases that the court denied in the past.  This included the questions of why the WWE could not name defendants and the potential for a lack of jurisdiction as a result.

Payout Perspective:

As one might expect, the WWE aggressively protects its trademarks and with a huge event such as Wrestlemania, it’s clear that they do not want anything or anyone to get in their way including those that may want to make some money off of their name

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