Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Fighters’ suit against UFC promoter headed to Vegas, (Jun 3, 2015)

By Jeffrey May, J.D.

Five separate actions filed in the federal district court in San Jose, California, by professional athletes who claim that the promoter of “Ultimate Fighting Championship” or UFC bouts has engaged in an “overarching anticompetitive scheme” to maintain its monopoly power in the professional mixed martial arts (MMA) promotional market and its monopsony power in the MMA fighter services market have been transferred to the federal district court in Las Vegas. The defending promoter, Zuffa, LLC, successfully contended that transfer was appropriate based on a forum-selection clause contained in some of the plaintiffs’ contracts with it and on convenience considerations under 28 U.S.C. § 1404(a) (Le v. Zuffa, LLC, June 2, 2015, Davila, E.).

Generally, the plaintiffs, who have achieved “elite” fighter status and have fought in a bout promoted by UFC, allege that their compensation has been artificially suppressed below competitive levels by the defendant’s business practices and market prevalence. In an effort to avoid the impact of the forum-selection clause, which directed that disputes be brought in Nevada, the plaintiffs argued that their antitrust claims fall outside its purview.

Forum-selection clause. The court concluded that the antitrust claims fell squarely within the clause. Based on the language of the clause, the parties intended that all actions to enforce or interpret the provisions of any of the contracts bearing the clause be brought in Nevada, it was decided.

The relevant clause appears in certain “Merchandise Rights Agreements,” “Bout Agreements,” and “Promotional and Ancillary Rights Agreements” signed by some of the plaintiffs. Under its terms, the signatories “expressly consent[ed] to the exclusive personal jurisdiction and venue in the state and federal courts located in Clark County, Nevada for any action brought by either party to interpret or enforce any provision” of the agreement. According to the court, the language was unambiguous.

The cases were actions “to interpret” contracts that indisputably contained a forum-selection clause designating the Nevada venue for the resolution of disputes. Rejected were the plaintiffs' assertions that the forum-selection clause should only apply to claims sounding directly in contract and that there would be no need to interpret the challenged contractual provisions because only the effect of those provisions was relevant to a monopoly claim.

Convenience considerations under § 1404(a). The § 1404(a) convenience considerations also favored a Nevada forum. With respect to convenience for the parties and relevant witnesses, Nevada was far more convenient for the defendant and its corporate witnesses since they were all based in Las Vegas and would need to travel to San Jose in order to participate in significant litigation events, and the plaintiffs had not convincingly shown that Nevada was any less convenient for them. The court noted that the California forum “has little local interest in adjudicating Plaintiffs’ claims.” Thus, the plaintiff’s choice of forum generally was not afforded the usual deference. The plaintiffs’ choice of forum was outweighed by the significant connection these cases have to Las Vegas. Lastly, although the legal process in Nevada would generally take longer than it would in the Northern District of California, that was simply not enough to overcome the other factors showing why this specific litigation was appropriately venued in Nevada.

These are Case Nos. 5:14-cv-05484-EJD; 5:14-cv-05591-EJD; 5:14-cv-05621-EJD; 5:15-cv-00521-EJD; 5:15-cv-01324-EJD.

Attorneys: Andrew Michael Purdy (Joseph Saveri Law Firm) for Cung Le. John F. Cove, Jr. (Boies Schiller & Flexner LLP) for Zuffa, LLC.

Companies: Zuffa, LLC

Cases: Antitrust CaliforniaNews