Where do you want to be judged, Northern California or Nevada? If you're the 11 named plaintiff fighters presently suing the UFC for monopolization under the antitrust laws, the answer is Northern California. If you're the UFC, you sure would love to get the hell out of NorCal and have the case proceed in your backyard.
The first major hearing in this monumental case is scheduled to begin sometime in the 12pm ET (9am PT) hour and should be finished by the hour's end. The judge might already have a decision in mind or could be on-the-fence. He'll likely probe both sides with questions and we should have a ruling by the end, although it's possible he'll want to take more time to decide.
There will be live updates to this article at the bottom so stay tuned for the outcome. First, let's briefly go through the arguments of both sides. If you're not sure what the case is about, click the following link for a detailed breakdown of the original allegations in the fighters' complaint.
The UFC's primary argument is that its fighter contracts are a "crucial" (as quoted by plaintiffs) part of the alleged anticompetitive scheme to exclude rival MMA promoters by foreclosing their access to elite MMA fighters. Therefore, those contracts will need to be examined and interpreted since the UFC intends to challenge plaintiffs' claims that certain clauses result in "perpetual" or "indefinite" exclusion of other MMA promoters.
The UFC then cites a forum selection clause from its contracts stating that any action to interpret any provision of the contract must be brought in Nevada. More specifically, "ZUFFA and Fighter hereby (a) expressly consent to the exclusive personal jurisdiction and venue of the state and federal courts located in Clark County, Nevada for any action brought by either party to interpret or enforce any provision of this Agreement." (emphasis added)
Three plaintiffs, Nate Quarry, Dennis Hallman and Javier Vazquez, have old UFC contracts with a forum selection clause that only addresses state court, not federal. The plaintiffs argue that the freedom of these fighters to choose a location to file their antitrust lawsuit should win out. The UFC believes the eight other fighters with the federal court forum selection clause shouldn't be able to get out of their contractual responsibilities just by filing suit with those with old contracts.
The UFC finishes by arguing that convenience and fairness factors also dictate the case should be transferred to Nevada.
- All of the UFC's senior executives are based in Nevada.
- The UFC has no offices or employees in Northern California.
- Plaintiffs would suffer little inconvenience because, outside of two late additions to the lawsuit, there are as many plaintiffs located in Las Vegas, Nevada as there are in Northern California.
- Nevada is more convenient for many of the likely witnesses.
- The plaintiffs' choice of Northern California should get little weight since so few of them have a connection to the area.
- Nevada courts are more familiar with the law governing interpretation of the contracts.
The UFC made two filings to argue its points about venue transfer while the plaintiffs only had one. Their job is to attack like crazy and keep the case in Northern California.
Plaintiffs argue that this is an antitrust case not an action "to interpret or enforce" any contract. From the plaintiffs' perspective, they "do not allege breach, non-performance, or any other claim based on the law of contracts." They also argue that any ambiguity should go against the party who drafted the contract (i.e., the UFC). Many of the arguments on both sides with respect to interpretation may turn into a legal citation battle.
In attacking the UFC's convenience and fairness factors, plaintiffs note:
- Multiple plaintiffs resided in or have ties to Northern California.
- Strikeforce, a former rival MMA promoter purchased by the UFC, was based out of San Jose.
- The Court has previously found that San Jose to Los Angeles is not geographically inconvenient. San Jose to Las Vegas is of similar distance.
- The UFC themselves have selected Northern California multiple times for litigation activities (citing cases against Pappy's Grill and Sports Bar and BAM! Entertainment).
- Convenience of documents and witnesses is insufficient as electronic transfer of documents and cloud computing allow for efficiency. Depositions of witnesses can be taken in Las Vegas, so they would only have to travel to San Jose for trial purposes.
This was only a fraction of the numerous arguments made that the judge will work through. That's the beauty (or nightmare) of a major antitrust trial. Stay tuned for live updates of the hearing.
Live updates will begin sometime within the 12pm ET (9am PT) hour.
8:48am - Lawyers are starting to file into the hallway. Kyle Kingsbury's at least one fighter in attendance today...I think.
8:54 - Make that Hallman, Fitch, Le, Kingsbury, Vera, Quarry, and Vazquez in the house.
9:00 - Everybody switching sides! Musical chairs with fighters and attorneys.
9:03 - Everyone looks ready to go. We're just waiting for the judge now.
9:05 - The judge is here. Time to get things started. UFC case is first.
9:06 - Fighters being introduced to the judge. There's a lot of "morning" going on here. Reminds me of "Doctor, Doctor."
9:09 - UFC's up first. Showing judge the forum selection clause. Seven of 11 fighters have that clause in their contracts. They're showing the judge a map with fighter locations and selection clause status.
9:12 - Handed the judge a PowerPoint printout that we can't see. Focusing on venues in Las Vegas and fighters who've fought there. Now moving on to legal precedent.
9:15 UFC lawyers are talking to the judge about the "crucial" component of the case and making their argument that contracts must be interpreted, "extensive interpretation." Judge is saying that plaintiffs arguing there's no interpretation. UFC responds that whether they say it or not, crucial contracts will have to be interpreted.
9:17 UFC: "Supreme Court argues that seven of these plaintiffs absolutely belong in Nevada. There's no sense splitting the case."
9:18 UFC: "All the plaintiffs have to hang their hat on is to say, 'We chose this forum.'" Judge asks shouldn't we give some deference to that. UFC: "A little."
9:20 Judge questioning the UFC about why plaintiffs shouldn't be allowed to choose a location that's inconvenient for them.
9:22 UFC's making an argument about convenience. "Which is exactly why we have clauses like this when we're doing business.
9:23 Plaintiffs are up now.
9:24 Everybody's getting handouts, except us in the back. Saveri starts by attacking the UFC's legal cases. "They all go our way."
9:25 There's a back and forth now about an LCD price fixing case. Judge is questioning plaintiffs about the horizontal nature of the price fixing scheme and how that affects venue selection.
9:29 Plaintiffs: "This is not a contract case...there is no claim contracts were breached." Judge is questioning Saveri about confusing language in his transfer filing.
9:30 Plaintiffs: "The provisions of the contract are relevant but more relevant are the effects in the world."
9:32 Saveri's arguing that it doesn't matter what the Champion's Clause says, what matters is the effect.
9:33 Judge: "I appreciate that this is not a contract case." Then he asks Saveri don't we have to interpret the contracts to determine their anticompetitive effect?
9:35 Judge asks don't we have to look at clauses to see if an effect is generated by the clauses?
9:36 Saveri says the contractual provisions will be looked at and are relevant to the case, but they're not asking to interpret or enforce the contract.
9:37 The conversation now moves to the UFC's old forum selection clause and their new one that seven plaintiff fighters are under.
9:39 Plaintiffs are now arguing for their legal citations and against the UFC's. These parts put me to sleep.
9:43 Plaintiffs are focusing specifically on one old case with very broad language. They compare it to the old venue selection clause and argue that since the UFC leans on that case, it doesn't apply.
9:45 Judge is questioning Saveri again about the possible need to interpret contracts during the course of the case.
9:46 Judge: "You're saying it's not going to happen." Saveri: "The closest we're going to come to that is evidence about what the effect of that is in the market." Judge asks if there won't be a question of "What did you mean by this?" Saveri: "We don't reasonably anticipate that to happen."
9:47 Saveri: "Even if an interpretation needs to occur, that doesn't bring it within the cause of action or the reason we brought the claim."
9:49 The discussion finally turns to convenience and fairness factors. Plaintiffs are still up. Saveri says the UFC's argument that Nevada can better interpret the contracts is a wash because we're talking antitrust law. Judge says he tends to agree.
9:51 Saveri's now arguing that they have plaintiffs who live here, who chose this location, and that deserves deference.
9:52 Saveri's now arguing that fights happen here, Strikeforce was here, Twitter's here. "They're all important."
9:54 They're now discussing the differences in costs of litigation in the two areas. Saveri argues the world is getting smaller. UFC execs can be brought here.
9:56 Saveri calls it a "remarkable claim" that NorCal could be inconvenient for Zuffa since they've initiated litigation here in the past. "To me that speaks volumes."
9:58 Plaintiffs final two minutes. Argue: No forum selection case goes their way. Judge interrupts and says he's looking most closely at the contract interpretation issue. Saveri says the action was not brought to "interpret."
10:00 UFC's up last and they focus right on the interpretation issue now that the judge mentioned his interest in it. The UFC's now quoting an old Amazon antitrust case that they argue supports their position.
10:01 Judge: "Is there any other way to resolve that (interpretation issue)?" UFC: "No...I mean yes. You can say 'Case dismissed!'"
10:03 UFC quoting plaintiffs' complaint language and saying it's "plain wrong" under the contract and the Court will be asked to interpret the contract. Quarry just burst into laughter. Made UFC lawyer pause and mumble about respect in the courtroom.
10:04 And now we're back to legal case wrangling.
10:05 UFC reveals that plaintiffs asked in discovery for "All documents from 1993 to present discussing, evaluating, or analyzing the contractual provisions at issue in this case."
10:07 UFC arguing about interpretation. If the Court says it's a harmless provision, there's no anticompetitive effect. Economists got their first mention.
10:08 The UFC's attacking plaintiffs' arguments about Scott Coker and Twitter.
10:11 UFC just wrapped.
10:14 And that's it. Everyone just left and the judge didn't decide, which was always a possibility. There's another hearing later today. We'll see what happens then.
Update: The other hearing was postponed to another day. The judge didn't rule today and will share his decision whenever he feels like it. It could be days, could be weeks. It sounded like he had one primary focus, whether fighter contracts would need to be interpreted. Once he determines his position on that issue we should find out whether this case will proceed in San Jose or Las Vegas.
Paul is Bloody Elbow's analytics writer and former provider of expert witness support in antitrust cases. Follow him @MMAanalytics.