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.

Proposed dates for further UFC Antitrust hearings won’t happen until August or September

January 21, 2019

If you were hoping for a resolution to the UFC Antitrust Lawsuit in 2019, we have some bad news for you.  It’s unlikely to happen.

A letter filed by the plaintiffs on Friday indicates that both sides won’t make an appearance in the courtroom until this fall.

Letter Re Scheduling by on Scribd

In December, Zuffa filed its Motion for Summary Judgment but prior to any decision, the Judge wanted to understand more of the information offered by the experts, specificially plaintiffs’ expert, Hal Singer.  The parties were to meet and confer on available dates.

As one might expect, lawyer calendars (as well as the Court’s) are packed.  Thus, the first available scheduling option proposed is for August 26-30, 2019 with Dr. Singer and UFC’s expert, Dr. Topel.  In the alternative, they proposed an evidentiary hearing which would start September 9th or 16th.

Payout Perspective:

Clearly, the Court moves at a glacial (without global warming) pace.  Clearing schedules for attorneys, the Court and the experts is quite hard and if you thought this was going to end this year, you (and I) were wrong.  Even with these hearings, there are the prospects of renewed motion for summary judgments and the class certification hearing (to determine if the case deserves class action status).  MMA Payout will keep you posted.

MMA Payout Year in Review: No. 10 – The UFC Antitrust Lawsuit rolls on

December 26, 2018

MMA Payout is doing its annual review of top business stories for the year.  The first story we take a look at is the ongoing Antitrust lawsuit which had several key developments this year.

First, Judge Boulware denied Zuffa’s Motion for Summary Judgment on Friday, December 14th.  It did not decide on class certification on the day as the Court made it clear it wanted to hear from the experts in the case for him to determine if there was a viable case on the part of the Plaintiffs.

Earlier this year, experts for Plaintiffs and Zuffa issued the experts reports in this case.  The reports assessed things such as the liability of Zuffa and potential damages.  Zuffa, of course, shot down these arguments asserted by Plaintiffs’ experts.  They, then filed a motion to exclude Plaintiffs’ expert citing (in general) that the opinions did not follow traditional scientific opinions.  A bulk of the reports were sealed as the experts reviewed confidential information.

Plaintiffs also filed for Class Certification, a requisite of Class Action status.  Zuffa opposed the motion.  At this time, this motion is on hold pending Judge Boulware hearing more on the subject from the experts.

As discussed about on Show Money in December, it appears that the lawsuit will come down to Plaintiffs’ expert’s assertion that the way to determine antitrust injury is based on “wage share” versus “wage level.” Wage share, adopted by Plaintiffs’ is looking at the wages of athletes in comparison with the revenues of the company.  Wage level, adopted by Zuffa, is looking at the wages over a period of time and not in comparison with company revenues.  Clearly, a wage share outlook would favor Plaintiffs if they are asserting that their salaries have been artificially depressed due to anticompetitive measures by Zuffa.  Wage level would favor Zuffa since its clear that salaries have increased over time.

Payout Perspective:

Do not look for the resolution of this case in 2019.  Even if Judge Boulware were to dismiss this case, Plaintiffs would seek to appeal the decision.  Zuffa would do the same if there would be an unfavorable ruling for its case.  The only way this case would end in 2019 is if the parties decided to settle the issue short of trial.  While this would be out of the question, if the Judge were to impose his will on the parties to settle, I would foresee this happening.

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.

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

Zuffa files Reply Brief supporting its right to seal docs in Antitrust case

October 29, 2018

In its latest filing, Zuffa has filed its reply in support of its motion to seal parts of the opposition brief filed by the plaintiffs in response to the company’s motion for summary judgment in the Antitrust lawsuit.

Zuffa filed a Motion to Seal certain documents that are being used in support of its Motion for Summary Judgment.  The promotion included justifications for sealing each of the documents it requests.

Zuffa Motion to Seal by on Scribd

Plaintiffs argue that the documents are not commercially sensitive information.  In its brief, Plaintiffs cite testimony from Zuffa’s attorney Michael Mersch about a hypothetical contract, testimony related to Lorenzo Fertitta’s deposition concerning financial information and wage share.  Plaintiffs argue that there is no confidential information contained in the testimony sought to be sealed. Zuffa also requests portions of expert reports to be redacted.  This includes plaintiffs’ expert report from Hal Singer and its own expert Robert Topel.

Plaintiffs Opposition by on Scribd

Perhaps one of the more salient arguments in Plaintiffs argument is that many of the passages that Zuffa seeks to redact are old.  Essentially, the information that Zuffa seeks to seal are remnants of the past and do not contain trade secrets because they no longer contain information that is subject to the current business landscape.

The Reply is its response to the Plaintiffs’ seeking to unseal certain documents filed in support of the brief filed by the fighters suing Zuffa. Plaintiffs’ opposed the motion for summary judgment filed by Zuffa seeking to dismiss the fighters’ claims against the promotion.  But, although Zuffa has unsealed and unredacted certain documents, there still remains a giant portion still unavailable for viewing.

Zuffa Reply ISO Motion to Seal by on Scribd

In its Reply Brief it reaffirms that it properly identified documents that it was sealing and met the legal burden for documents needed to preclude.

Additionally, they claim that the documents sought to seal are specific and would pose competitive harm to the company as they would divulge confidential business information and strategy.  Zuffa also rejects Plaintiffs argument that the information sought to seal is old and already public knowledge.

The Court will decide whether Zuffa carries its burden to show that the records it seeks to seal “articulate compelling reasons supported by specific factual findings,” providing ‘articulable facts’ that favor secrecy and that those interests outweigh the presumption of public access to judicial records.

While it has been underscored in this briefing, the right of access by the media is a viable argument for the Court to look at the sealing of documents critically.  The Reply includes several tweets from John Nash and articles for Paul Gift which discuss the Zuffa antitrust lawsuit.  Certainly, the attorneys have taken just a survey of the reporting going on here as media here is just an afterthought from both legal sides.

The recent reversal in ruling in the Hunt-Zuffa lawsuit which sealed Bout Agreements.  In the Order which granted the sealing of documents, the Court stated, “[D]efendants claim that the agreements contain proprietary information, and that competitive standing with MMA promoters.  The court finds that defendants have identified compelling reasons that warrant sealing the exhibits…”  This does not seem compelling at all.

How will this all shake out?  If you take the Hunt ruling into consideration, it would seem that despite the “compelling” standard for sealing documents, the Courts skew toward finding any excuse to seal a document.

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