Affliction, Fedor/M-1 Settle Federal Lawsuit

By J.R. Riddell Sep 2, 2011

On August 23rd, Fedor Emelianenko and M-1 Global filed a notice of settlement in their federal lawsuit against courtroom adversary Affliction Entertainment. With a trial scheduled to commence in a Los Angeles federal courtroom in less than two months, Emelianenko and M-1 asked the judge to vacate the trial date and all associated pre-trial deadlines.

“The Last Emperor” and M-1, a promotional/management group with which the fighter is closely aligned, filed suit two years ago seeking to recover damages they claimed to have suffered after Affliction cancelled the co-promoted “Trilogy” event. Their complaint alleged that after Josh Barnett was refused licensure by the California State Athletic Commission because of a reported positive steroids test, Affliction breached its contract by refusing to promote the third and final fight called for under their “Fight Agreement.” They claimed Affliction did not undertake “all reasonable efforts” to find a fighter to replace Barnett and alleged that Affliction lost interest in promoting this third bout partly because it was trying to repair its soured relationship with the UFC.

In May 2010, Affliction filed a counterclaim against M-1, contending that one of the documents governing their relationship, a “Consulting Agreement,” was a “sham contract designed to avoid tax obligations.” Affliction asked the court to declare the Consulting Agreement unlawful and require M-1 to refund the $2.4 million it initially collected for the two events. Shortly after first reported the news, Affliction voluntarily dismissed its counterclaim, without prejudice to re-file at some later date. The court’s docket reflects that Affliction has never re-filed its counterclaim.

Over the past two years, the courtroom foes engaged in substantial discovery, taking depositions of key witnesses including Zuffa (through its President Dana White and General Counsel Lawrence Epstein), Affliction (through co-founder Todd Beard, Vice President Tom Atencio and attorney Michael Bassiri) and Strikeforce CEO Scott Coker.

More recently, in March and April 2011, both sides filed motions for summary judgment, arguing that the judge should decide some or all of the legal issues in their favor, without sending the case to a jury for trial. The judge denied the parties’ motions on June 7th, forcing the parties to either gear up for an August jury trial or to settle their differences. The judge also ordered the parties to engage in further mediation, and directed stakeholders and key witnesses Todd Beard (Affliction) and Vadim Finkelstein (M-1) to attend the mediation discussions.

In June and July motion practice continued at a vigorous pace as both sides geared up for trial and filed various motions in limine seeking to exclude from trial evidence on issues such as Brett Rogers’ -- a potential replacement for Josh Barnett -- weight, lay person testimony from members of the MMA industry regarding Rogers’ weight, certain expert witness testimony, and previous offers of compromise between the parties.

According to the docket, court-ordered settlement discussions took place on June 17 and 29. Of course the docket does not reflect any other settlement discussions that may have taken place between the parties before or after those two sessions. On July 11th, the federal judge held a final pretrial conference with counsel for the parties and continued the trial date from August 16th to October 11th.

Citing confidentiality provisions included in the settlement, counsel for the various parties were unable to provide further comment or details regarding what transpired between the July 11th pretrial conference and the filing of the notice of settlement on August 23rd.

Having received Emelianenko and M-1’s August 23rd notice regarding settlement of the case, Judge Margaret Morrow dismissed the case on August 24th. The dismissal was entered without prejudice, specifically contemplating any party may move to re-open the action within 30 days if the settlement between the parties is not consummated within that time frame.

J.R. Riddell is an attorney at the global law firm Orrick, Herrington & Sutcliffe, and represents various clients within the MMA industry. More background regarding Riddell’s experience can be found at his lawyer profile found here. 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 his law firm. Riddell can be reached at [email protected]
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