Update: Zuffa Gains Legal Edge on Bellator

By Tracey Lesetar Jan 16, 2011
Bellator Fighting Championships suffered a setback last week in Zuffa LLC’s lawsuit against them when a Nevada Federal District Court judge stymied an attempt to put the brakes on factual discovery in the case until the court gets a chance to decide Bellator’s motion to dismiss.

Originally filed in Nevada’s Clark County Court, Zuffa’s complaint accuses Bellator and prominent fighter agent Ken Pavia (MMAagents) of conspiring to use documents that Zuffa considers “trade secrets” for their personal gain in the MMA market -- namely, “promotional documents, bout agreements, sponsorship forms, extension letters, injury forms, and the like ...” Bellator and Pavia scored an early victory in the case when Bellator successfully petitioned to get the case kicked from state court over to the Nevada Federal District Court, an often-exercised option by defendants and a way of avoiding litigation in front of politically elected state judges. Federal judges are appointed, not elected.

Shortly after the case moved to federal court, Bellator sought to get Zuffa’s claims sacked entirely with its motion to dismiss, arguing that Bellator does not have sufficient ties to Nevada for the Nevada federal district court judge to exercise personal jurisdiction over the Chicago-based fight promotion. Put simply, if Bellator does not have enough connection to Nevada, it could be unconstitutional for the court to exercise legal jurisdiction or authority over the company. In its motion, Bellator stresses that it has never been licensed or applied for a license in Nevada; it owns no property and has no offices there; and, notably, has never promoted an MMA event taking place in Nevada. According to Bellator, New Jersey would be a much better forum for this case. Zuffa and Bellator are both licensed there, have extensive contacts in New Jersey and are already embroiled in a lawsuit in New Jersey Federal Court over Zuffa’s use of former Bellator fighter Jonathan Brookins for Season 12 of “The Ultimate Fighter.” In fact, Zuffa’s own motion to dismiss, based on grounds other than personal jurisdiction, is currently pending in that case.

Zuffa vehemently opposed Bellator’s motion to dismiss, arguing that Bellator has “substantial and continuous” contact with Nevada. According to the Las Vegas-based Zuffa, Bellator actively reaches out to Nevada customers, “advertising and encouraging them to purchase tickets to events on its Web site,” contracting with fighters who are Nevada residents, soliciting Nevada entrants -- and a Nevada winner -- for its “Bellator Girls” contest and attending the MMA Awards in Las Vegas in December. Zuffa further accuses Bellator of repeatedly and purposefully targeting Zuffa’s “intellectual property” and “trade secrets” for a competitive advantage -- information Zuffa laments took “countless hours, millions of dollars, and nearly a decade to perfect.”

Although the court has not yet made any moves on its motion to dismiss, Bellator asked the court to put the brakes on expensive, time-consuming discovery in the meantime -- depositions, document production and the like. This discovery would undoubtedly rack up attorney fees and other costs for litigation that, hypothetically, Bellator might not be a part of if it succeeds in getting dismissed. Zuffa, however, fought the attempt to put discovery on ice, pointing out that Bellator and MMAagents have been able to “delay” discovery for months already. Zuffa is apparently champing at the bit to get more information and even called into question Bellator’s financial stability in assuring the court that time is of the essence. In the end, the court sided with Zuffa and denied Bellator’s move to put expensive discovery on hold.

MMAagents has thus far stayed out of the fray. It did not join Bellator in moving to dismiss or staying discovery. Pavia, a key figure in the suit, maintains: “Zuffa’s procedural victory has no bearing on the facts in this case. Zuffa won a motion as to whether or not discovery should be held. But eventually, you have to get to what actually occurred. And we are confident that ultimately, when discovery is undertaken, everyone will see that at the crux of these claims, Zuffa was given some bad information out of context.”

Bellator CEO Bjorn Rebney has his own theories about Zuffa’s motives for initiating this trade secrets litigation.

“Since day one, this argument has been about the UFC’s having unlawfully used Jonathan Brookins -- a fighter under exclusive worldwide promotional agreement with Bellator,” he said. “We are very confident in our position in the case.”

Regardless, it appears for now that the UFC parent has every intention of pressing the defendants for more information. According to Zuffa attorney, Donald Campbell, “The judge has granted us the opportunity to go forward with discovery in the case. And we certainly intend to do so with all haste.”

If Bellator succeeds on its motion to dismiss, the court could cut the promotion out of the case entirely, leaving MMAagents to fend for itself against Zuffa. In fact, the court’s decision on whether Bellator remains in the case could hold important indications about how non-Nevada promotions and MMA-related companies will be treated in the future.

For now, in light of the court’s refusal to put a hold on discovery, the litigation may proceed full steam ahead through at least June, unless the court grants additional time or grants Bellator’s motion to dismiss. With the schedule the court has currently set, expect a trial in late 2011 or early 2012.

Tracey Lesetar, an attorney at the global law firm Orrick, Herrington & Sutcliffe, an attorney at the global law firm Orrick, Herrington & Sutcliffe, is experienced in various matters related to the business of MMA. A more detailed background regarding her experience is available through her lawyer profile at www.orrick.com. This article does not provide legal advice, and any opinions expressed in this article are solely those of the author and do not reflect the views of her law firm. Lesetar can be reached at [email protected] J.R. Riddell ([email protected]) also contributed to this article.
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