Potential flaw in new UFC lawsuit in New York

October 4, 2015

A new wrinkle may surface in the quest to legalize professional MMA in New York.  With a new lawsuit filed by the UFC, a preliminary injunction request filed to hold an event this April, a nuanced detail may trip up the legal strategy.

In its new court filings, the UFC indicates that it has licensed with the World Kickboxing Association (“WKA”) to hold the event in April.  The WKA is an exempt organization under the Combat Sports Law (“CSL”) which bans the sport in the state.  As an exempt organization under the law, it may promote events notwithstanding the law.  Basically, it may hold an event in the state despite the ban.

As indicated by Jim Genia, if a law legalizing professional MMA is passed in Albany prior to an anticipated UFC at MSG this April, the UFC may have some issues.  The reason being is that if the law banning professional MMA in the state is repealed, the exempt organization carve out allowing organizations, such as the WKA to sanction events will also fall by the waysideIf this happens, the UFC’s event in April may be in trouble since the UFC has stated that it is working with WKA to sanction the event.

The legislative session begins in January and there is no way to know when, or even if, an MMA bill legalizing the sport and/or repealing the ban will ever matriculate its way through the various committees, state senate and eventually to the state Assembly for a vote.  If it finds its way to the Governor’s desk for signing, the UFC may have a problem.

Payout Perspective:

There are two big “ifs’ here (among other questions).

  1. The UFC must pass a hurdle of getting the court to grant its preliminary injunction request.  Look for stern opposition from the state of New York and an appeal if it loses.  The big news on this, is that if an appeal occurs, there may be a stay in the lawsuit until the appeal is heard.  Thus, it would freeze the new lawsuit until resolution from the Court.  Something like that could take us past the UFC’s intended April event date.
  2. If the UFC wins its preliminary injunction (and for some reason there is no appeal and/or resolves in the UFC’s favor), the MMA law in Albany would have to get through before the UFC’s April 23, 2016 date at MSG.

Let’s face it.  I don’t bank on a law passing prior to April 23rd based on what we’ve seen in recent years from New York lawmakers.  MMA supporters have waited for a law to pass legalizing MMA in the state.  The past several years we’ve waited and waited until the final days of the legislative session in June for a vote in the state assembly (the last hurdle before reaching the governor’s desk).  Yet, none has occurred.  Even if a law is passed this year, I doubt it occurs prior to April’s UFC event.

I would suspect that if the UFC wins its preliminary injunction (and any appeal that might occur), it may ask pro-MMA supporters within the legislature (and its lobbyists) to push an MMA bill, but have it occur after the April event.  In the alternative, they could always request the UFC be grandfathered into the MMA law.  Essentially, allowing the WKA to sanction the event but after the event, the MMA law would come into effect.  This assumes that the legal process is swift, which it is not.

First things first, a court will consider the UFC’s preliminary injunction request and at some point the UFC must win for an April event to happen.

The reason for the new UFC-NY lawsuit

September 30, 2015

The UFC surprised many with another lawsuit in federal court in New York challenging the constitutionality of the state’s ban on professional MMA.  This time, the UFC is seeking a preliminary injunction to hold an event in the state this April.

The news of a new lawsuit comes when the original lawsuit is in the Second Circuit Court of Appeals.  Paul Clement, the renowned appellate lawyer and former U.S. Solicitor General is representing Zuffa and filed their appeal brief this past August. New York’s response is set for the beginning of November.

But perhaps the road map for the lawsuit filed this week was provided by Judge Kimba Wood, the trial court judge that dismissed Zuffa’s case.

In deciding to dismiss Zuffa’s case, it offered the following in its conclusion (click to enlarge):

Kimba Wood opinion

The opinion is mere “dicta” meaning that Judge Wood’s suggestion is not law or precedent which others may cite as guiding authority. Yet, it created the opportunity for the UFC to open up another line of action in attempting hold an event in New York.

Unlike the November 2011 lawsuit, the UFC is the only plaintiff. The UFC focuses on the claim that the New York law, the Combative Sport Law (“CSL”), violates due process rights as it is unconstitutionally vague as to its application.

UFC Complaint p10

The UFC points out that the CSL exempts “martial arts” from its ban stating that “martial arts shall include any professional match or exhibition sanctioned by any” of the organizations listed in the statute.

It notes in the Complaint that “standing,” the right to bring an action in the court, “could not be clearer.” This directly addresses the previous lawsuit in which Judge Wood determined that there was no standing due to the fact that the UFC had not suffered injury and did not contact a promoter to hold an event in New York. In its Complaint, it now states that it is working with WKA.

Screenshot 2015-09-30 17.27.53

Based on setting a UFC event for April 2016, the UFC states that it will lose “millions of dollars in ticket sales.”  It also will lose a source of marketing for its UFC-branded gyms in New York, as well as for the DVDs, consumer products, video games and other products that it sells.

Notably, the UFC indicates that it has “lost sponsorships and has suffered reputational damage around the world because of its inability to hold professional MMA events in New York.”  It will be interesting to see what evidence it may bring to prove these allegations if it comes to that point.

The UFC Complaint cites the differences from the beginnings of the CSL indicating that the legislature was concerned with “no-holds-barred fighting.” In her opinion Judge Wood states “MMA has changed substantially since the Ban was enacted.”  This provides some guidance as to what a court may decide with respect to the CSL.

Payout Perspective:

It’s clear that the roadmap was provided by Judge Wood for this lawsuit with the exception that it has filed the lawsuit in federal court as opposed to state court as suggested in her opinion. The lawsuit is premised upon the determination by the prior court as this filing is tighter and a shorter (only 37 pages as opposed to 100 plus pages) complaint. It appears that there is a better chance for the UFC in this lawsuit although you should expect stiff opposition from New York. The state will likely argue what it did in the prior lawsuit which is that laws need not change over time.  And despite the change within the sport of MMA, it will focus on the intent of the law with its primary purpose to ban MMA.

UFC files preliminary injunction in New York case

September 30, 2015

The UFC filed its motion for preliminary injunction on Tuesday.  It argues that the UFC is likely to prevail on its claim and should be granted the injunction to hold its event at Madison Square Garden this April.  Notably, it has already spent a non-refundable $25,000 for the anticipated event in April.

No hearing date has been set and we’ll likely see opposition from New York.

Similar to its complaint filed on Monday, it stresses the contention that the statute banning professional MMA in the state is inherently vague.

“Much of the law’s problems stem from its failure to explain with any reasonable degree of clarity what exactly a “combative sport” is,” reads the moving papers submitted by the UFC.  “Rather than define the term expressly, the statue attempts to reverse engineer a definition by exempting from its prohibitions certain sports, including “martial arts.””

Again the UFC stresses its belief that any issues on standing are now answered: “Whatever uncertainty may have existed on the matter in the past, it is now crystal clear that the estate interprets the law to prohibit Plaintiff from doing so.”

The UFC utilizes deposition from the Jones v. Schneiderman lawsuit to provide evidence that even NY officials provided contrary testimony to how they interpreted the statute.

In addition, the UFC notes that it has contracted with the World Kickboxing Organization, an “exempt organization” allowed to hold events in the states.  The motion states, “To eliminate any potential concerns about the imminence of its injury, Plaintiff has contracted to host a live professional MMA event sanctioned by an Exempt Organization.”

It also indicates that it has committed $25,000 as a non-refundable deposit and stands to lose millions of dollars in ticket sales and media revenue.

As we’ve learned from previous injunction requests in MMA, there are hurdles the injunction-seeker must prove that “the probability of his prevailing is better than fifty percent.”

  1. “a likelihood of success on the merits [of the lawsuit],”’
  2. That it will suffer “irreparable harm” with a preliminary injunction, and
  3. “that a preliminary injunction is in the public interest.”

We should also note that the UFC also challenges NY Liquor Law as it did in the November 2011 lawsuit as that law mirrors the Combative Sports Law (or “CSL” as it is referred to in the pleadings).

Payout Perspective:

This will be an interesting, and an important injunction for the UFC in its fight to hold an event in New York.  I believe that the first element, “likelihood of success on the merits,” is the biggest hurdle for the UFC.  Obviously, the monetary investment in holding an event reflects the “irreparable harm.”  You can argue the “public interest” element.  Despite the ban, and the inability to get a law passed in Albany to legalize MMA, there is still a lot of support for the sport in the state.  The “likelihood of success” could be a toss-up and based on the court’s interpretation of the CSL ban.

NV state senator speaks out against Diaz suspension

September 21, 2015

TMZ Sports reports that Nevada state senator Tick Segerblom is speaking out against the NSAC suspension of Nick Diaz.  He calls the 5 year ban “totally inappropriate.”

Senator Segerblom‘s (D) district includes a portion of Las Vegas and is within Clark County, Nevada.  Per the Nevada state senate web site, he is on the Senate Health and Human Services committee, Senate Judiciary committee and Natural Resources committee.

“[marijuana] is a recognized medicine in the Nevada constitution so how can you punish someone for taking medicine, particularly since it doesn’t enhance your ability to fight?” The state senator also noted, “[T]hey [NSAC] need to rethink this punishment and then ultimately change their rules.”

In addition to Senator Segerblom, Diaz has received support from Ronda Rousey, Henry Cejudo and Leslie Smith.  The latter two (Cejudo and Smith) have vowed not to fight in Nevada until something is done with the commission ruling.  Also, a White House petition started on Diaz’s behalf has grown to over 50,000 signatures.

Payout Perspective:

Senator Segerblom appears to be a progressive politician as he has co-sponsored a bill in favor of recognizing gay marriage and a bill that would allow a person addicted to a prescription drug to sue either the manufacturer of the drug or a medical provider.  He also has entertained the thought of running for Governor of the state of Nevada.  Notably, the Governor appoints the members of the NSAC.  Will the swell of support help with overturning Diaz’s suspension.  Probably not.  Although a lawsuit could change it.  But, it could facilitate change for the future.  Having a state senator involved might be the first step in creating a change to the current laws and/or current commissioners.

Rousey and Cejudo express support for Nick Diaz

September 16, 2015

Ronda Rousey and Henry Cejudo have expressed support of Nick Diaz in light of his 5 year suspension and fine by the Nevada State Athletic Commission.  Cejudo has made the statement that he will not fight in Nevada due to the commission ruling.

According to MMA Fighting, Cejudo sent a letter to the web site stating his displeasure with the commission’s handling of the Nick Diaz discipline.

A portion of the letter reads:

I am absolutely appalled at how the NAC handled the Nick Diaz matter. The issue here is not the magnitude of the penalties assessed to Nick Diaz, it is the process, or lack thereof, in determining Nick Diaz’s guilt or innocence.  Significant discrepancies existed between the test samples, and the NAC has an absolute obligation to resolve those discrepancies before the penalty phase of the disciplinary hearing was heard. What the NAC did was ignore due process and go straight to the penalty phase. 

Cejudo goes on to applaud the UFC for hiring USADA for its anti-doping program.  But, he believes that the NAC testing process is flawed:

Until the NAC testing process can be independently reviewed, its findings made public, and corrective action taken, I personally do not believe it is a safe or credible place to conduct business. That includes a review of the recent actions and competencies of Commission members. 

Cejudo also requested that the UFC intercede in the Diaz case.

Rousey spoke out about the Diaz discipline as part of a press conference for UFC 193.

“I’m against them testing for weed at all. It’s not a performance-enhancing drug, it has nothing to do with the competition and it’s only because of political reasons they say ‘oh it’s only for your safety to keep you from hurting yourself because you’re out there.’ You know what, then why don’t they test for all of the other things that could possibly hurt us, that we could be under the influence of while we’re out there? There’s no reason for them to be testing for weed.”

Payout Perspective:

The good news is that fighters are speaking up about what they perceive is a wrong.  Although you may argue that Diaz should be culpable for at least his actions, the fact remains that the suspension is not in line with discipline.  Certainly, if Wanderlei Silva could get a Nevada court to reverse and remand the commission’s fine and suspension against him, Diaz has a good shot.  Judge Kerry Earley determined that the NSAC’s punishment against Wanderlei was “arbitrary, capricious and not supported by substantial evidence.”  Based on this, Diaz attorneys are probably drawing up the lawsuit now (if it hasn’t already).

Cejudo’s statement is bold and shows a sense of awareness as a fighter with respect to the alleged unevenness by the commission.  Obviously, if Rousey were to make the same proclamation this would absolutely cause the UFC to stir.  While she will fight outside of Nevada three straight times, Vegas is still key for the UFC and any big fight will occur in the state.  Cejudo is not a big name yet and while implementing a self-ban is nice, unless more fighter join in, it might not amount to much.

Wanderlei Silva files appeal with Nevada State Supreme Court

September 15, 2015

Wanderlei Silva has filed its brief with the Nevada State Supreme Court seeking to overturn a lower court ruling which allowed discipline over him despite the fact he was not licensed by the Nevada State Athletic Commission at the time.

You may recall that Silva sought judicial review in the Nevada Superior Court of the NSAC’s ruling that Silva be banned indefinitely and fined him $70,000 as a result of allegedly evading a drug test leading up to UFC 175.  The state court reversed and remanded the commission’s lifetime ban and fine, but ruled that the NSAC had jurisdiction over Silva.  The order can be found here.

Silva’s attorney, Ross Goodman, argues, as it did in the underlying proceedings, that Silva did not fall within the jurisdiction at the time the commission claims he ran out on the drug test since he was not licensed at the time.

The brief argues that since Silva was not licensed, he could not be disciplined for a violation of NRS Chapter 467 (the chapter which promulgates authority for the commission).  As cited by Goodman, the Chapter only applies to licensees of Nevada citing NAC 467.885.

The Commission may suspend or revoke the license of, otherwise discipline or take any combination of such actions against a licensee who has, in the judgment of the Commission:

3. Violated any provision of this chapter;

Goodman also argues for the plain meaning of the words within the statute.  Thus, according to the interpretation, Silva could not be disciplined by the commission, since the commission’s authority is limited to that within the regulations of NFS Chapter 467.

The brief states that since agencies, like the NSAC, are “creatures” of statute, it cannot attempt to expand jurisdiction over subject matter not conferred by the legislature.  Thus, any rulings outside of the statutory authority should be void.

Silva State Supreme Court – Appellant Brief

Payout Perspective:

It will be an interesting appeal that Silva’s attorney hopes focuses on the statutory interpretation of the jurisdiction of the NSAC.  This case highlights the problem with commissions and if you were to look at the plain meaning of the rules, Silva has a viable argument.  While the commission argues (and the state district court agreed) that it has jurisdiction over unarmed combat in the state and the fact that Silva was scheduled to fight in Nevada it had authority over Silva, the governing administrative rules do not reflect that fact.  If Silva wins, we could see retooling of rules for combat sports within the state.

Silva claims sexual performance drug caused drug test failure

August 11, 2015

MMA Fighting reports that Anderson Silva will claim that “sexual performance” medication was the cause for positive drug tests before and after UFC 183.

Silva and his attorneys will put on their defense on Thursday when Silva goes before the Nevada State Athletic Commission.  Despite the positive drug tests, Silva claims that he did not knowingly take any kind of steroids.  He will claim that he took sexual performance medication was part of the reason for the inaccurate drug tests. Specifically, he claims that the use of the sexual performance drug caused the finding of Drostanolone Metabolite.

Silva’s legal team is requesting no punishment for Silva.

Payout Perspective:

It will be interesting to see whether Silva’s strategy will work.  The defense can be seen as embarrassing and credible simply because it is so extraordinarily private.  His explanation does not account for the pre-fight questionnaire which addresses the types of supplements a fighter has taken.  Since this is the first we have heard of Silva’s defense, we might assume the sex enhancement drug was not on the pre-fight questionnaire.  Of course, if you recall the Manny Pacquiao situation prior to the Mayweather fight, this can be easily explained away.  We shall see whether the commission buys the argument or takes a hard line with Silva.

Palhares and Shields temporarily suspended by NSAC

August 5, 2015

MMA Fighting reports that the Nevada State Athletic Commission have temporarily suspended Rousimar Palhares and Jake Shields after their fight at WSOF 22 this past Saturday.  Additionally, WSOF has stripped Palhares of the WSOF welterweight title and suspended him indefinitely.

The news of Palhares’ punishment from WSOF was issued on Tuesday.

Via WSOF press release:

“After taking the time to review the footage from Saturday’s bout between Rousimar Palhares and Jake Shields in its entirety, we decided that stripping Rousimar of his title and issuing him a suspension until this issue is resolved, was necessary,” said World Series of Fighting President, six-time world champion and two-time Hall of Famer Ray Sefo.

Palhares and Shields were temporarily suspended by the NSAC due to Palhares’ eye gouging of Shields’ eyes as well as holding on to his submission for too long.  Shields is being suspended for hitting Palhares after the match was over.  He also is being suspended for “disparaging remarks” made to the fight’s referee Steve Mazzagatti after the fight.

The fighters will have a quick turnaround to defend themselves as the matters will be discussed at the August 13th NSAC meeting with disciplinary hearings likely occurring in September.

Payout Perspective:

It’s a messy situation for the NSAC to address.  Clearly Palhares’ past actions may affect the potential punishment in the present situation.  Shields’ actions may be understandable when you consider Palhares may have held onto the submission too long which could have caused long-term injury to Shields.  His remarks to Mazzagatti were a result of not stepping in sooner even though he knew of Palhares’ past.  We shall see what the NSAC decides to do with each.  Also, we shall see if the WSOF issues a suspension longer than the commission for Palhares or if it suspends him so long as the commission advises.  For better or worse, Palhares is sort of a draw now considering his reputation.

With no vote in Assembly, MMA Bill dead in New York

June 25, 2015

A bill to legalize mixed martial arts in the state of New York has failed to reach an Assembly vote once again this year.  Despite a concerted effort to attempt to push the bill through, which included revamping the bill to attempt to appease legislators, it appears that it will not make it to a vote on what is the last day of an extended legislative session in Albany.

Jim Genia relayed the bad news.  Genia among other New York MMA supporters gave up to the minute details on the sausage making in Albany and relayed the news to MMA fans that hoped to see the UFC in Madison Square Garden this December.

This year seemed different in Albany due to the removal of Speaker Sheldon Silver and a more MMA-receptive speaker in Carl Heastie.  But once again, the MMA bill was not brought before the Assembly for vote despite an extended session which many thought would produce one.

Assembly Majority Leader Joseph Morelle, the sponsor of the MMA bill, indicated that it needed 76 votes in the Democratic conference for a bill to come to the floor.  Prior to the revamp of the MMA bill a couple weeks ago, they had 70.

Payout Perspective:

MMA Payout will have more on this as more information comes out but this is a definite blow for MMA and the UFC.  Many believed that this would be the year that MMA would become legal in the state.  But, politics once again rears its ugly head.  As for options, we must wait another year in Albany but the Zuffa lawsuit against New York continues.  Its appeal of the dismissed lawsuit claiming the bill prohibiting MMA in the state is unconstitutional is in the Second Circuit and Zuffa’s briefing is due by August 4th.

Shlemenko suspended 3 years and fined $10K by CSAC

June 24, 2015

Alexander Shlemenko was suspended three years and fined $10,000 by the California State Athletic Commission as it is the harshest penalty against an MMA fighter since it began regulating the sport.  In addition, Shlemenko’s win against Melvin Manhoef at Bellator 133 has been overturned.

The commission voted unanimously by a 7-0 vote in favor of the penalty.  Although Shlemenko’s attorney, Howard Jacobs, argued that there was a lack of a “B” sample and a possible violation for not splitting the urine sample.  The commission did not agree with Jacobs’ arguments.

But the commission did not agree.  The fact that Manhoef was knocked out by Shlemenko may have played a role in his penalty.  Of course, Shlemenko’s tests were another reason.  Per MMA Junkie, the tests revealed the steroid oxandrolone and oxandrolone metabolites as well as a testosterone-to-epitestosterone (T/E) ratio of 50-1 in Shlemenko’s post-fight urine test (the commission’s limit is 4-1).

It is not known if Shlemenko will appeal but if he does not, at 31 years old, it’s unlikely we’ll see him fight again.

UPDATED:  According to Combat Sport Law’s Erik Magraken, Shlemenko will seek judicial review of the commission ruling.  I would expect that this will happen more if commission’s seek to dole out these stiff penalties.  Realistically, what does Shlemenko have to lose?  His career is likely over if he accepts the punishment.

Payout Perspective:

One would think that if Shlemenko has a compelling case, his attorney could still appeal the commission decision by seeking a judicial review in a California Superior Court.  The heavy-handed penalty reflects a newfound position by athletic commissions in light of the UFC’s stance on PEDs.  There is an argument that the penalty is unjust but the commission can point to the glaring test results and the T/E ratio to justify its suspension.  Moreover, the TKO victory might have persuaded commissioners to allow the penalty as one commissioner put it that Shlemenko could have killed Manhoef.  We shall see if this decision will be appealed.

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