In UFC Antitrust lawsuit, plaintiffs’ economic expert report compares UFC to pro leagues

February 20, 2018

MMA Payout takes a look at the 158-page expert report provided by plaintiffs’ economic expert Andrew Zimbalist.  Its Dr. Zimbalist’s opinion that Zuffa is attempting to exclude from the case at hand as they take issue with his calculation of damages.

As with most of the filings containing sensitive information about Zuffa contract and financial information, there are parts of the report that include heavy redactions.

In addition to a review of the NBA, NHL, NFL and MLB, Dr. Zimbalist reviews the history of boxing’s payment scale.  He identifies “at least five different boxing promoters who are prominent enough to promote major championship fights each year, and probably more than ten.”

In estimating damages, Dr. Zimbalist explained his methodology:

“For each sport that I use as a benchmark, I apply the athlete compensation share of revenue to the reported Zuffa bout revenues to arrive at what Zuffa’s fighters would have been paid if they received the same share as the athletes in these other sports where competitive labor markets prevail.  I then take the mean of these but-for compensation levels from the different sports and compare it to the total event-related fighter compensation paid out of Zuffa’s athletes.  The difference is the basis for my estimate of the total amount members of the bout class were underpaid due to the challenged conduct.”

In the next paragraph Dr. Zimbalist gives his explanation for using player share rather than the actual pay levels.  He believes that it would control the state of the industry and differences between the popularity and thus demand for each benchmark as compared to MMA.

Dr. Zimbalist includes Golden Boy Boxing Revenues and Expenses in his report as a comparison to MMA.  The information was disclosed in the Al Haymon-Golden Boy antitrust lawsuit.

Notably, the Fighter share of revenue was over 55% of the total revenue in 2014, 2015, and 2016.

He also provides a table reflecting share of revenue in the NFL and MLB.

Dr. Zimbalist includes a quote Zuffa LLC’s then CEO and co-owner Lorenzo Fertitta gave to ESPN’s Outside the Lines in a story on fighter pay in 2012.  Fertitta stated fighter pay was “not far off what the other sports leagues pay as a percentage of revenue.”  When informed that the players share in the big 4 leagues was around 50 percent, Fertitta agreed that the UFC’s fighter pay was comparable.  Dr. Zimbalist notes that this was an untruth.

He then gives his estimate and damages calculations.

Below, I calculate annual damages to the bout class by comparing UFC athlete share of event-based revenue to the average athlete share of revenue in the selected benchmarks discussed above: the NFL, MLB, NBA, NHL, and boxing. For those leagues whose competitive seasons nm between two calendar years, the year identified is the fiscal year. Hence, the 2014-15 NBA season corresponds to fiscal year 2015 and is represented as 2015. My source for Zuffa’s revenues and fighter compensation are Zuffa’s annual financial statements.

 

We don’t exactly know his damage estimate since it is redacted from the public report.  Dr. Zimbalist did base UFC fighter pay and revenues based on Zuffa annual financial statements (likely) provided in discovery.

Payout Perspective:

While Dr. Zimbalist believes his calculations are conservative, it’s clear that Zuffa thinks otherwise.  The “yardstick method” is at issue here as Dr. Zimbalist comes to the conclusion that the UFC used anticompetitive conduct which would lead to anticompetitive effects for a firm with monopoly or monopsony power.  He also believes that the rationale given for the conduct are not procompetitive are invalid, do not theoretically apply to MMA and there less restrictive conduct in its labor market.  Utilizing the “Big 4” sports and boxing to come up with a comparable estimation for damages is contested by Zuffa here as they make the assertion that the 4 sports leagues have unions which facilitate athlete compensation.  But, UFC fighters do not.  The data used from boxing is based on 2.5 years from Golden Boy Boxing so the argument there is that the analysis is incomplete and from a short span of time.

MMA Payout will have more on this and Dr. Zimbalist’s rebuttal report in the near future.

UFC attempts to exclude expert, Plaintiffs file for class certification in latest antitrust lawsuit filings

February 18, 2018

New filings in the UFC antitrust case filed Friday included plaintiffs’ request for class certification and Zuffa seeking to exclude the testimony of plaintiffs’ expert Andrew Zimbalist.  As is customary in litigation, a glut of pages of legal filings were made on a Friday, just in time for the three day President’s Day weekend for lawyers for the UFC and plaintiffs to sift through.

Both filings were anticipated.  Plaintiffs’ have been angling toward certification.  Zuffa’s motion to exclude plaintiffs’ expert is a strategic motion to discard or curb the testimony of Zimbalist based on his reports.

Zuffa’s Motion to Exclude plaintiffs’ expert economist Andrew Zimbalist is based on his expert reports and deposition testimony.  The basis for the request to exclude Dr. Zimbalist is that his method of coming up with his conclusion for plaintiffs’ damages is not premised upon a general accepted method of practice.  Zuffa categorizes Dr. Zimbalist’s reports and testimony as “junk science” that does not meet the Federal Rules of Evidence reliability standards. The “Daubert test” which is premised upon a court case, enables the court to perform a “gatekeeping” function to ensure that expert testimony admitted “both rests on a reliable foundation and is relevant to the task at hand.”

Zuffa argues that Dr. Zimbalist’s claim that he utilizes the “yardstick method” when assessing damages is incorrect.  “Instead, he compared Zuffa to other firms chosen based on his selecting comparison firms that had as much in common as possible.”  Zuffa takes issue with Dr. Zimbalist using a “damages method” with no standards.  The claim is that Zimbalist chose to compare UFC fighter pay with those of the NBA, NFL, NHL, MLB based on his previous work within those sports.  Zuffa describes Dr. Zimbalist’s testimony as one which lack standards without following the generally accepted “yardstick method” of assessing damages in comparing a market or firm similar to the plaintiffs’ situation for the impact of antitrust violations.  The issue taken with Dr. Zimbalist’s method and the accepted “yardstick method” is the comparability of markets.  Zuffa argues that Dr. Zimbalist did not make a comparison of the MMA market with a comparable other market.  Dr. Zimbalist argues that he used a model that had “as much in common as possible.”  But, as outlined by its motion, this does not follow the “yardstick method.”  Zuffa also claims that Dr. Zimbalist created a “selection bias” as he essentially used comparators he felt comfortable with to get to the desired result as opposed to determining whether the selection were the most appropriate.

If the Court agrees with Zuffa, this would deal a big blow to the plaintiffs’ case as one of its main experts would not be able to testify at trial and any evidence produced would not be used to prove damages as plaintiffs had planned.

Plaintiffs’ motion for class certification is a perfunctory motion necessary to attain class action status.  The requirements for the court to grant class status is based on four primary elements (which most attorneys know for studying the bar exam):  1) numerosity, 2) commonality, 3) typicality, and 4) adequacy.

The first element is the number of potential class member affected by the issues claimed in the lawsuit.  The second element is based on the common questions of law or fact in the lawsuit.  Third, the claims or defendants of the class representatives are typical of those of the class.  Finally, the class representatives (i.e., the lawyers involved in the current lawsuit) will adequately protect the interests of the class.

The plaintiffs move for an order certifying a Bout Class and an Identity Class.  The Bout Class encompasses all persons who competed in one or more pro UFC-promoted MMA bouts in the US between December 16, 2010 and June 30, 2017.  The Identity Class is based on each and every UFC Fighter whose Identity was expropriated or exploited by the UFC from December 16, 2010 and June 30, 2017.

In its motion, plaintiffs reiterate the “Scheme” outlined in their lawsuit.  The Scheme used by Zuffa in which it established and maintain market dominance in which it allows payment of fighters less than it would be in a more competitive market.  The three categories of the Scheme include its “long-term exclusive” “Contracts,” the “Coercion” of fighters to re-sign contracts, making them perpetual and the “Acquisitions” of other MMA promotions.

The motion for class certification is heavily-redacted especially when the motion relates to UFC contracts.  Looking at the class certification elements, its clear that there are many UFC fighters that may be affected by this lawsuit.  The overall argument for class certification is that too many people have been affected by the subject cause of actions that separate lawsuits would not make sense.  Secondly, the plaintiffs argue that there are common issues of law involved including:  1) whether Zuffa violated antitrust laws; 2) whether Zuffa possessed market power; 3) whether Zuffa’s Scheme had anti-competitive effects; 4) what injunctive relief is appropriate; and 5) the aggregate amount of damages caused by Zuffa’s unlawful Scheme.

Payout Perspective:

Both of these motions were likely to happen and we will see how the Court decides each.  With respect to the Motion to Exclude, the arguments asserted by Zuffa are valid but it’s the opposing party’s job to poke holes in the expert’s testimony.  The best-case scenario for Zuffa is that the testimony is limited in some way on the damages estimate.  It would be highly unlikely that the Court would exclude a witness in their entirety.  Dr. Zimbalist is an experienced expert and is used to attacks on his report and more importantly, knows how to craft a report.  Additionally, the reports are done in concert with plaintiffs’ attorneys so, overall, plaintiffs agree to what is being opined in the report.

More importantly for plaintiffs, class certification is a big deal for the plaintiffs and plaintiffs’ lawyers.  If the Court certifies class status for this lawsuit, then you will see more fighters joining the lawsuit and plaintiffs’ attorneys could collect a windfall if they are eventually successful at the end of the case either via settlement or verdict.

MMA Payout will keep you posted.

Top Rank and Plaintiffs in Antitrust Lawsuit Resolve Discovery Dispute

October 2, 2017

Top Rank and the Plaintiffs in the UFC Antitrust Lawsuit have resolved their discovery dispute regarding a motion to compel production of documents and for the attendance of the deposition of Bob Arum.

A notice of resolution was filed late last week.  The agreement between the parties avoids a motion to compel brought by Plaintiffs in the Zuffa Antitrust lawsuit seeking financial information and the deposition of company head Bob Arum.

Resolution Re Top Rank Motion to Compel by JASONCRUZ206 on Scribd

Originally, the motion was to be heard in early September but was continued until later in the month, but the parties came to an agreement.

Top Rank argued that a subpoena for the production of documents from the company was not relevant to the Zuffa lawsuit.  It also argued that the Plaintiffs failed to show a “substantial need” for Top Rank’s information. It also stated that the Plaintiffs’ document request were overly burdensome.

Top Rank Oppo to Motion to Compel by JASONCRUZ206 on Scribd

Plaintiffs argued that they were entitled to the discovery as it is relevant to their lawsuit against Zuffa, there is a substantial need for the documents and believe the discovery is not overly burdensome.

Reply to Opposition to Top Rank MTC by JASONCRUZ206 on Scribd

Top Rank noted in its opposition that it “cannot have it both ways.”  It argued that in its lawsuit it claimed that the “relevant market” was limited to the sport of MMA and noted that it was different from boxing.  Yet, it was requesting “ten years’ worth of revenue, profit, loss and payment information.”  Yet, Top Rank claimed that However the Plaintiffs lawsuit against them, claimed that it had differentiated itself from pro boxing and thus its financial information was not relevant to the instant lawsuit.

Top Rank argues that the document requests are intrusive and it is a way for Plaintiffs’ experts to “compare financial data from Top Rank’s promotion of boxing events to Zuffa’s promotion of MMA events and create “benchmark percentages of revenues.”  Moreover, it claims that Plaintiffs do not explain why they are unable to obtain this information from other sources.  Top Rank’s opposition brief claims it has told Plaintiffs where it might obtain public data about the company.

Top Rank lists some of the requests in its brief:

REQUEST NO. 1: Your Company’s Income Statements, including event-level profit and loss statements for the Relevant Time Period [defined to be from January 1, 2005 to present], including without limitation All Documents, including depositions, declarations, affidavits, or other statements under oath, You produced in any lawsuits or arbitrations, or to any governing athletic commission or sanctioning body, relating to TOP RANK’s accounting of its revenues, expenses, and profits.

• REQUEST NO. 2: Data in as granular form as it is maintained (itemized ledger entries, if they exist) sufficient to show all bout-related revenues and expenses (including for championship bouts, bouts where victory leads to championship, and all other Professional Boxing Events), payments made to individual Professional Boxers (including purses, bonuses, pay-per view, and any other event and non-event related payments), and non-bout related revenues and expenses.

• REQUEST NO. 3: To the extent not included in Your response to Request Nos. 1 and 2 above, documents sufficient to substantiate Bob Arum’s statement that TOP RANK pays 80% of event revenue to the Professional Boxers who participate in bouts promoted by TOP RANK….

• REQUEST NO. 4: A Representative Sample of All Agreements between TOP RANK and any Boxers, relating to participation in a Professional Boxing Fight or Professional Boxing Event, and any Documents and Communications relating to the negotiation, termination, cancellation or transfer thereof. Responsive Documents include, without limitation, executed Agreements, draft Agreements, side letters, all negotiations between TOP RANK and any Boxer, including any Professional Boxer,
or their agents, managers, promoters, or other representatives (regardless of whether such negotiations resulted in an executed Agreement), copies of any form agreements; and all Documents relating to the effects any such actual or potential Agreements between TOP RANK and any Athlete, including any professional Boxer, had on TOP RANK’s revenues, valuation, or ability to operate profitably as a Boxing Promoter.

Zuffa Plaintiffs claim that the information is vital for their case and that the UFC denied the differences between boxing and MMA in its answer to the lawsuit with the inference that they were interchangeable.  Notably, in its Reply brief it claimed that the business of promoting fights is the same for all combat sports.

Payout Perspective:

Plaintiffs Reply Brief includes quotes from Lou DiBella and Dana White’s deposition but most of the citations are redacted.  The order which spells out what Top Rank and the Plaintiffs had agreed upon is heavily redacted so we specifically do not know what the parties agreed to provide and whether or if the deposition of Bob Arum will take place.  It could be that Top Rank agreed to provide a portion of documents so long as Arum is not deposed and/or someone else within the company is deposed.

Nevada Court denies Zuffa’s Motion for Partial Summary Judgment dismissing Nathan Quarry…for now

September 26, 2017

Judge Richard Boulware has denied Zuffa’s Motion for Partial Summary Judgment to dismiss plaintiff Nathan Quarry from the lawsuit.  However, the Court has indicated that Zuffa may refile at the close of discovery.

In a minute order issued on Tuesday, the Nevada Court determined that the motion for summary judgment to dismiss one of the plaintiffs in the Zuffa antitrust lawsuit was premature.

“The arguments raised in these motions would be more properly considered with the full set of motions that will be filed at the close of discovery,” stated the minute order issued by the Court in denying the motion at this time.  “IT IS THEREFORE ORDERED that Motions for Partial Summary Judgment are DENIED without prejudice to being refiled at the close of discovery.”

In this context, without prejudice is legal terminology which indicates that a party’s rights are not precluded from refiling.

Oral arguments were heard on September 21st for a little over an hour.  Zuffa claimed that due to antitrust statute of limitations, Quarry’s alleged claims of injury were barred by his promotional agreement.  The former UFC fighter argued that his claims still exist as the UFC still use Quarry through the selling of merchandise on its web site and showing his fights on UFC’s Fight Pass.

Payout Perspective:

It appears that Judge Boulware would like to see all of the facts that may come out in fact discovery prior to hearing the dispositive motion set forth.  It’s also clear that he anticipates Zuffa to file a motion for summary judgment on all of the plaitniffs.  At this point, he believes that the motion was premature.  In my opinion, dismissing a plaintiff on summary judgment prior to the close of discovery is rare considering the information that may surface during the fact-finding process.  It’s not clear if there will be any further opinion released past this minute order.  MMA Payout will keep you updated.

Zuffa to hand over 6 documents previously privileged in Antitrust lawsuit

August 9, 2017

The Court in the UFC Antitrust Lawsuit has reviewed 86 documents from the company’s privilege log which identifies documents that it is withholding due to Attorney Client Privilege.  Of the 86, it has ordered it hand over 6 documents from the list.

The Order, dated August 4, 2017, relates to an Emergency Motion to Compel Production of Documents Withheld on Privilege Ground and for Other Relief.  Plaintiffs had requested the motion be decided before depositions scheduled in mid-July and early August.  The Court could not comply with the request but required Zuffa to produce 25% of Dana White’s documents withheld on the basis of privilege for “in camera” review.  This essentially means that the Court reviews the withheld documents to determine whether or not they are privileged.  Due to the voluminous amount of documents, the Court requested a sliver of the documents.  Of 86 total documents reviewed, 6 were deemed not privileged.

Order re In Camera Review by JASONCRUZ206 on Scribd

In general, documents that are cited as Attorney client privilege are those in which ask an attorney for its legal impression, opinion or asking for legal advice.

The Order below details the documents.  Briefly, they are:

  1. An August 16, 2011 press release which UFC claimed was reviewed by legal counsel. The release was about an agreement reached with Fox.  Likely, the news of the rights agreement with the network.
  2. An October 3, 2006 email chain between Kirk Hendrick (UFC legal counsel) to Lorenzo Fertitta which appears to be about a bonus for Mirko CroCop for signing a contract.
  3. An October 8, 2007 email chain regarding a “Joe Hand Update.” Hand is the PPV distributor for the UFC.  It appears to be negotiations between the two sides related to a new deal.
  4. A May 23, 2003 email which claims to be providing legal advice regarding broadcasting agreements. It is an email from Hendrick to Lorenzo Fertitta and Dana White regarding “iN Demand and DirecTV paying for Lindell (sic) vs. Ortiz?”  According to the Order it requests, “input from the recipients about Mr. Hendricks’s proposal for “aggressively” telling Zuffa’s PPV partners to reduce their fees for major fights.  The last paragraph of the email does include legal advice which the Court will require Zuffa to redact prior to disclosing.
  5. A September 29, 2008 email from Hendrick to Lorenzo Fertitta, Dana White, Lawrence Epstein and John Mulkey regarding “our final draft” of an agreement with Affliction. It relates to an agreement “Zuffa believes it reached with Affliction.”  It is hard to decipher whether the acquisition was related to the clothing brand or short-lived fight promotion or something else.
  6. An October 10, 2005 email chain which discusses the dollar amount of a media buy Zuffa will purchase from DirecTV. There were portions of the chain that was produced but an email between Bonnie Werth of the UFC and Hendrick were not disclosed.  The Court determined that Werth did not ask for legal advice from Hendrick and privilege does not apply.  Werth discusses Zuffa’s evaluation of DirecTV net revenue from 2003 to 2005 without UFC media buys and provides the media buys Zuffa is willing to purchase.

Payout Perspective:

In certain instances, in the discovery process, when documents which include an attorney on them or in the email chain, it is flagged by attorneys as the potential as having attorney-client privilege.  Did the UFC withhold documents on purpose or were they being aggressive with its protection of possible privileged information?  Maybe both.  Notably, the Court could only review a smattering of documents and thus there might be documents UFC has in its possession that are still withheld that should not be.

Hume-OneFC and Plaintiffs in UFC Antitrust Lawsuit file briefs regarding subpoenas

August 7, 2017

Attorneys representing Matt Hume and Group One Holdings PTE LTD., the holding company for OneFC has filed a response to Plaintiffs Motion to Compel the Deposition of Matt Hume.  Plaintiffs have also filed its response to Hume’s Motion to Quash or Modify its Subpoena to Hume, a OneFC executive.

Hume is an officer in the Asian-based MMA promotion, OneFC.

Hume’s attorneys argue that Plaintiffs in the Antitrust lawsuit are trying to pull an end around into improperly attempting to obtain OneFC’s “confidential and proprietary business information.”  They argue that Group One is a Singaporean company that is not subject to jurisdiction in the United States.  Hume’s attorney assert that it the Plaintiffs seek to obtain documents from the company, it “must follow the procedures adopted by the Hague Convention.”  Moreover, they claim that Hume does not have access to the financial information sought by Plaintiffs.  This process does not have a specific timeframe as to when letters of request must receive a response but it is understood (within the context of European regulation) that it is 90 days.  Yet, there does not seem to be a hard and fast rule.  The average time according to one procedure manual is that it is 6 months to a year for a response which creates problems with US discovery schedules.

Opposition to Subpoena Filed by Hume by JASONCRUZ206 on Scribd

Hume argues that Mr. Hume’s deposition, if taken, cannot be used to obtain Group One’s confidential information.  The concern is that a “fishing expedition” would take place in which the Plaintiffs would be able to ask Hume, under oath, specific financial, business and confidential information about OneFC without using the proper channels to obtain the information.  Hume’s attorneys conceded that if a deposition were to take place, the Court should prohibit inquiry into Group One’s competitively-sensitive business information.  It also opposed any fees needed to be paid by Hume or OneFC as a result of this motion.  Plaintiffs claimed in excess of $21,000 for having to file the motion to compel.

Plaintiffs oppose Matt Hume and One FC’s Motion to Quash or Modify the Subpoena. Plaintiffs cite a declaration Hume submitted on behalf of Zuffa in the Antitrust Lawsuit which states “Group One Holdings compete with Zuffa to sign professional MMA fighters” and “One Championship is not a minor league or feeder league for the UFC.” Based on the fact that Hume’s title at OneFC is that of “Vice President,” Plaintiffs suggest he should have access to business documents – a statement Hume’s attorneys deny.

Plaintiffs’ Opposition to Motion to Quash Hume Subpoena by JASONCRUZ206 on Scribd

Despite the Nevada Court’s stating that OneFC should submit to the subpoena, Hume’s attorneys claim that it is misrepresenting the Court’s statements. Notably, a minute order stated that Plaintiffs could issue a subpoena to OneFC but Hume’s attorney stated that it would not accept service citing that it must abide by The Hague Convention on the Taking of Evidence Abroad.

In addition, Hume’s attorneys are opposing a motion to transfer this issue to the District Court of Nevada. You might recall that the District Court of Los Angeles transferred a discovery dispute to Nevada involving Bellator.

Payout Perspective:

The dispute is not a sexy substantive issue but an important procedurally issue if Plaintiffs believe that OneFC’s information is helpful for their case. Despite the Nevada Court granting the right for Plaintiffs to issue a subpoena, it does not give specifics in its order. As attorneys for Hume and OneFC, they saw the issue with the order and the fact that to ascertain the information from its foreign client, it must go through a process and not through Hume. The motion to transfer the case to Nevada makes sense for Plaintiffs but Hume’s attorneys will try to keep it in Washington state where they might receive a more favorable ruling. MMA Payout will keep you posted.

Zinkin Entertainment ordered to produce more documents to Plaintiffs in Zuffa Antitrust Lawsuit

August 3, 2017

Last week a Federal Court in Fresno, California has ordered MMA Fighter Management firm to hand over more documents in the UFC Antitrust Lawsuit.  The fighters suing the UFC had requested documents from the company related to Zinkin’s clients within the requisite period of time related to clients’ “image and likeness.”

Plaintiffs have offered to provide a third party discovery vendor to Zinkin to collect this information at Plaintiffs’ expense per Court Order.  The MMA Management firm which currently represents Luke Rockhold and Daniel Cormier was served a subpoena by Plaintiffs in 2015.

Zinkin Entertaintment – Order to Produce Docs by JASONCRUZ206 on Scribd

Payout Perspective:

Zinkin had produced documents to the Plaintiffs but based on the motion Plaintiffs believed the documents to be insufficient.  The documents are being produced as “Attorney Eyes Only” which means that only the Plaintiffs’ Attorneys, and not their clients – the fighters, will be able to have knowledge of these documents.  This designation usually occurs where sensitive and confidential information is provided.  It provides some security that the discovery documents are not disclosed to a broad group of people.  It is a condition that Zinkin’s attorneys likely wanted if they had to produce documents.

Parties stipulate to legal briefing schedule contesting Matt Hume deposition

July 31, 2017

The Motion to Compel the deposition of Matt Hume and have him produce documents has been given dates for legal briefing.  But, Plaintiffs seeking the deposition will also face a Motion to Quash from Hume’s attorneys and OneFC.

The parties in the discovery dispute agreed to a briefing schedule.  Originally, the Motion to Compel was to be submitted on July 28th.  However, Hume’s attorneys also filed a Motion to Quash the Deposition as they believe that the deposition notice and subpoena are not valid despite the Nevada court ruling.  With a looming discovery deadline and the parties having dueling motions, they came together to stipulate to when the oppositions and replies would take place.

The briefs will be due July 31st with the reply briefs due August 4th.  It does not appear that there will be oral argument although its not clear.

Plaintiffs are seeking over $21,000 (and perhaps more) in legal fees in addition to commanding Hume sit for a deposition and produce documents.  Hume’s attorneys are seeking to invalidate the subpoena and request for documents.  Hume’s attorneys had offered him for deposition on a limited number of documents.  But, Plaintiffs did not agree to the limited scope.

Order on Stipulation between Plaintiffs and Matt Hume by JASONCRUZ206 on Scribd

Payout Perspective:

One would assume that the Court will have a decision shortly after submission of the briefs since the discovery deadline for fact discovery was/is today, July 31st.  Expect an order which will allow the deposition with some disclaimers.  MMA Payout will keep you updated.

Plaintiffs in Antitrust Lawsuit seek $21K in fees in Motion to Compel Matt Hume’s deposition

July 25, 2017

Plaintiffs attorneys in the Zuffa Antitrust Lawsuit have filed a Motion to Compel the Deposition of Matt Hume in the federal court in Washington state.  As a result of the filing, Plaintiffs are seeking sanctions against Hume and his attorney in the amount of $21,000 for having to draft and file the motion.  In addition, they request Hume sit for his deposition and produce documents as requested in Plaintiffs’ subpoena.

Hume, who coaches UFC flyweight champ Demetrious Johnson, also is Vice President for Operations and Competition for Group One Holdings Pte. Ltd., (dba One Championship), the Asian MMA Promotion based out of Singapore.  Hume lives in Washington State where he trains Might Mouse.

In the UFC Antitrust lawsuit, the Court granted the parties the right to seek the deposition and documents from OneFC.  Plaintiffs issued a deposition notice and subpoena for documents related to One Championship’s financial data relating to its promotion of live MMA events.

Hume’s lawyer has opposed the subpoena and request for documents citing the subpoena is not valid and the documents request information from a foreign corporation.  Hume argues that he “is not authorized to comment on behalf of One Championship” or that he “lacks personal knowledge.”

Hume’s attorneys have filed a Motion to Quash the Subpoena in federal court in Washington state.

The Plaintiffs are interested in taking Hume’s deposition as he produced a declaration in which he stated “One Championship is not a minor league or feeder league for the UFC” and “competes with Zuffa to sign professional MMA fighters.”  According to Plaintiffs’ motion, “[t]he purpose of these averments, made on One Championship’s behalf, is to controvert elements of Plaintiffs’ claims and to support Zuffa’s defenses.”

Despite extensive meet and confers, the parties are at an impasse.  Hume’s lawyers had offered Hume to be deposed on limited issues and not requiring Hume to produce any documents but Plaintiffs have denied.

Plaintiffs attorneys in the Zuffa Antitrust Lawsuit have filed a Motion to Compel the Deposition of Matt Hume in the federal court in Washington state. As a result of the filing, Plaintiffs are seeking sanctions against Hume and his attorney in the amount of $21,000 for having to draft and file the motion. In addition, they request Hume sit for his deposition and produce documents as requested in Plaintiffs’ subpoena.

Hume, who coaches UFC flyweight champ Demetrious Johnson, also is Vice President for Operations and Competition for Group One Holdings Pte. Ltd., (dba One Championship), the Asian MMA Promotion based out of Singapore. Hume lives in Washington State where he trains Might Mouse.

In the UFC Antitrust lawsuit, the Court granted the parties the right to seek the deposition and documents from OneFC. Plaintiffs issued a deposition notice and subpoena for documents related to One Championship’s financial data relating to its promotion of live MMA events.

Hume’s lawyer has opposed the subpoena and request for documents citing the subpoena is not valid and the documents request information from a foreign corporation. Hume argues that he “is not authorized to comment on behalf of One Championship” or that he “lacks personal knowledge.”

The Plaintiffs are interested in taking Hume’s deposition as he produced a declaration in which he stated “One Championship is not a minor league or feeder league for the UFC” and “competes with Zuffa to sign professional MMA fighters.” According to Plaintiffs’ motion, “[t]he purpose of these averments, made on One Championship’s behalf, is to controvert elements of Plaintiffs’ claims and to support Zuffa’s defenses.”

Despite extensive meet and confers, the parties are at an impasse. Hume’s lawyers had offered Hume to be deposed on limited issues and not requiring Hume to produce any documents but Plaintiffs have denied.

Motion to Compel Depo of Matt Hume by JASONCRUZ206 on Scribd

Payout Perspective:

The motion is filed in federal court in Washington state (as this is where Hume lives) and the ordered issued from federal court in Nevada. While it is custom to abide by another jurisdiction’s subpoena, Hume and his attorneys believe that they have a legitimate reason to oppose the subpoena and document requests. It also presents the issue of what Hume may or may not have access to as an officer of OneFC. Certainly, the request for documents is of a corporation outside the jurisdiction but Plaintiffs assert that they have a viable right to the documents and that Hume must produce them. The hearing is set for this Friday (July 28th) so barring a last-minute agreement by the parties we will see what the Washington court rules.

The $21,000 in legal fees reflects the fact of how expensive this litigation is and the fact that Hume’s attorneys believe that they have a legitimate argument to object to the subpoena.

Ex 18 re Fees for Matt Hume Motion to Compel Deposition by JASONCRUZ206 on Scribd

Zuffa responds to Plaintiffs’ Emergency Motion to Compel Documents in Antitrust Lawsuit

July 16, 2017

Zuffa has filed its response for Plaintiffs Emergency Motion to Compel Documents as the fact discovery nears an end.  The Defendants argue in part that the Plaintiffs’ motion is moot as Zuffa has provided the Plaintiffs with the documents it requests.

In its opposition brief, Zuffa argues that it has worked with Plaintiffs in providing discovery even accommodating some of Plaintiffs requests.  It also states that its privilege log complies with the appropriate rules.

Zuffa argued that due to the fact that its senior executives in its legal department communicate with outside counsel and internal clients there should be no surprise that the company withheld and logged many documents on the basis of attorney-client privilege and attorney work product.  Zuffa maintains it has correctly identified its privilege determinations on its log and has not waived privileged as claimed by Plaintiffs.  Moreover, Zuffa argues that the case cited by Plaintiffs relying on this waiver of privilege due to a purported insufficient privilege log does not support their contention.

Zuffa contends that it provided Plaintiffs with its log in April 2017, two months after “substantially” completing production to Plaintiffs’ Second Request for Production in February 2017.  It notes that upon a meet and confer with Plaintiffs it revised its log on a little over two weeks after producing it.  Plaintiffs focused on “documents pertaining to acquisitions and contract negotiations with fighters.”

Overall, the response brief takes on the tone that it has worked with Plaintiffs with producing documents to the extent they are not protected by the attorney-client privilege or attorney work-product.  Also, they have complied with the rules of producing a privilege log and they have not waived their right.

Zuffa's Response to Emergency Motion by JASONCRUZ206 on Scribd

Payout Perspective:

In motions to compel documents, the party that is being accused of withholding documents on not playing by the rules usually paints themselves as the reasonable party complying with requests and working with the other side.  Here, Zuffa argues that it has been a willing participant in the discovery process and has taken initiative in reviewing documents to determine whether to send to Plaintiffs.  But it has a right to withhold documents based on privilege.  As a starting point, it argues that the issue of compelling documents is moot because “Zuffa has not completed the process that the parties agreed would fully address Plaintiffs’ concerns.”  We will see if Plaintiffs agree.  Usually, in discovery fights, the party seeking documents, gets some but not all of what they seek.  The parties appear to be continuing to work on the issue but with a pending deadline you may look for Plaintiffs to press this issue.  MMA Payout will keep you posted.

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