The Honorable Edward Davila has granted Zuffa’s request to transfer the venue of the class action antitrust lawsuit filed by former UFC fighters to Las Vegas, Nevada. In an order dated June 1, 2015, the U.S. District Court for Northern California, San Jose Division granted Zuffa’s Motion to Transfer Venue to the U.S. District Court of Nevada, Las Vegas Division.
In an homage to the parties before it, the court offered in its order, “At the final bell, it is Defendants arguments that clinch this round because the relevant forum selection clause and the sec 1404(a) convenience considerations both favor a Nevada forum.”
The preceding paragraph of the order offered more fight references:
“…Plaintiffs allege that Defendant, now the heavyweight of the industry, has violated Section 2 of the Sherman Act…”
“Defendant now seeks to knock these cases out of the Northern District of California and into its home venue…”
As stated above, the court found in favor for Zuffa based on two arguments. First, it held that the forum selection clause in the fighters’ fight contracts/bout agreements should be recognized. With those clauses pointing to Zuffa’s home district of Nevada (or Las Vegas), the case should be decided in that forum. This finding was directly opposite to the plaintiffs’ argument that the contracts and its forum selection clauses in the underlying contracts should not be addressed in an antitrust claim such as this.
Thus, the question was whether the plaintiffs’ antitrust claim is one “to interpret or enforce” any provision of Zuffa’s agreements so that they are transferred to the contractual venue. The court held that the “substance of a claim is what matters, not its title.” It therefore decided that the lawsuit was an action “to interpret” the contracts and thus the forum selection clause should be followed.
In case you were wondering, for those plaintiffs that did not sign contracts with forum selection clauses, the court stated that since they joined this lawsuit, their claims would follow the disposition of the case. Thus, they go to Nevada too.
While most of the court order reflects on the forum selection clause, it also addressed the convenience of venue factor in deciding in favor of Zuffa. Essentially, it determined that the relevant parties and witnesses reside in Nevada and most of Zuffa’s employees would need to travel to San Jose if the case stayed in Northern California. The court did not buy the plaintiffs’ convenience of venue arguments stating it did not convince the court that “Nevada is any less convenient” for the plaintiffs despite arguing that Le and a couple other fighters resided in San Jose and that the San Jose area has a local interest in the lawsuit.
The court also shot down plaintiffs’ argument that San Jose was familiar with antitrust cases and is more efficient in getting them to trial than Las Vegas. The court acknowledged this fact but stated, “ [e]ven assuming Plaintiffs are correct that the legal process in Nevada generally takes longer than it does in this [San Jose] district, that is simply not enough to overcome those other factors showing why this specific litigation is appropriately venued there.”
The Order is below and can also be pulled of Pacer for free. Of course, if you pull it from here, please give us an h/t since we did the work for you.
Order – Motion to Transfer Venue
Payout Perspective:
The case would appear to swing in favor of Zuffa now that it is being moved to federal court in Las Vegas. The pending Motion to Stay Discovery and Motion to Dismiss will be heard in the new venue in Las Vegas. For the Motion to Stay Discovery, the parties have agreed to allow the plaintiffs to file opposition to the motion 30 days after the disposition of the Motion to Transfer. So, the pleadings will be filed by plaintiffs by the end of June with a Reply by Zuffa following 14 days after the opposition is filed.
While it may not be the end for Zuffa, the loss could be considered as significant. Its clear there was a reason why the plaintiffs filed in San Jose. They were aware of the potential risks of filing with just a small amount of its plaintiffs having ties to the district. But, the key was how much weight the court would give the forum selection clauses in the contracts. Its clear from the order that the court took a pragmatic approach to the issue (i.e., what do the underlying contracts state) rather than a theoretical one.
We shall see what transpires with the transfer to Nevada.
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