The discovery battle is on! Attorneys for the UFC, alongside attorneys representing current and former fighters engaged in a class-action, antitrust lawsuit were required yesterday to submit proposals for the protection and confidentiality of discovery materials. They disagree on one major area - what Rob Maysey should be allowed to see.
Maysey is an attorney-of-record for the plaintiff fighters and is also the founder of the Mixed Martial Arts Fighters Association (MMAFA), an organization aiming to "maximize the influence and earning capacity of its members in the sport of mixed martial arts." The UFC has a big problem with Maysey putting eyes on its most sensitive and confidential trade secrets, revenue/cost documents and strategic information. It wants to insert a "HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY" provision in the protective order to prevent Maysey and others (another attorney at a plaintiff law firm and the fighters themselves) from viewing extremely sensitive corporate information.
The plaintiffs believe this provision is unnecessary, would burden them and create opportunities for the UFC to behave strategically. To them, the UFC is overreaching and attempting to put them at a disadvantage, "...in particular one of Plaintiffs' attorneys who has been an outspoken advocate for MMA fighters..."
The UFC wants to impose a two-tiered system of confidentiality: Confidential and Highly Confidential. Confidential items will not be public but can be viewed by all attorneys as well as plaintiff fighters, so long as it is reasonably necessary for the litigation and the fighters have signed an Acknowledgment and Agreement to Be Bound .
Highly Confidential documents are the extremely sensitive corporate documents containing trade secrets, revenue and cost information, strategies, etc. This information would only be viewable by certain qualified attorneys, administrative staff and expert witnesses.
HIGHLY CONFIDENTIAL—Attorneys' Eyes Only Information or Items: extremely sensitive, highly confidential, non-public information, consisting either of trade secrets or other highly confidential information directly concerning business plans, strategies, revenues or costs, disclosure of which to another Party or Non-Party would create a substantial risk of significant competitive or business injury to the Designating Party that could not be avoided by less restrictive means.
HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY information or items shall not be disclosed to: (1) the Receiving Party or a Receiving Party's officers, directors, managers, and employees, other than In-House Legal Department Personnel who shall be permitted to view such information; (2) anyone who has served or anticipates serving as an agent for any athlete in contract negotiations with any sports promoter or league; or (3) anyone who has served in any capacity with, or has attempted to form, any entity, association, or organization that has sought to or does collectively represent athletes in licensing, or in the formation of a union or association, including but not limited to the entity that calls itself the Mixed Martial Arts Fighters Association.
In making its request for two tiers of confidentiality, the UFC argues, "...the Court adopt this two-tier confidentiality designation system to protect the parties' competitively and commercially sensitive information from being shared with their competitors and other persons to whom disclosure would create a substantial risk of significant competitive or business injury."
To the UFC, a key factor in determining the level of confidentiality is whether Mr. Maysey is involved in competitive decision making.
Here, the risk of inadvertent disclosure of Zuffa's highly confidential information is very high because Robert Maysey is indisputably a "competitive decisionmaker" at the Mixed Martial Arts Fighters Association ("MMAFA"). Mr. Maysey founded the MMAFA in 2005 and has since held himself out as the head of the association and a member of the "executive team." Mr. Maysey, under the auspices of the MMAFA, seeks to organize and/or represent MMA athletes for the purposes of group licensing, merchandising, and collective bargaining. For example, Mr. Maysey stated:
"In terms of the MMAFA, organization is the precursor to group licensing, branding and effective lobbying . . . . Talent isn't even in the market for the vast majority of these revenue streams at all, because they don't have a group to present to the corporate sponsors and gear providers, and they don't have a group vehicle on the web to present to advertisers."
In other words, Mr. Maysey intends to compete with Zuffa for those "revenue streams" from corporate sponsors, gear providers, and advertisers. Further, Mr. Maysey has used the threat of an antitrust suit to attempt to induce Zuffa to recognize his organization as a negotiating authority on behalf of MMA athletes.
The UFC believes that if Maysey were to gain access to highly confidential information, "...it would be impossible for him ‘to compartmentalize and selectively suppress information once learned' in his work on behalf of the MMAFA, including, for example, in advising the MMAFA on decisions regarding pricing, contract terms, and marketing of licenses when approaching actual and potential customers of Zuffa, including sponsors, advertisers, and merchandisers."
The UFC even points to this tweet by Mr. Maysey as an "expressed interest in seeing highly confidential information":
I wonder--what do fighters get paid under the Merchandising Agreement? Why do many suppose the split is vastly different for bouts?— Rob Maysey (@MMAFA) August 19, 2015
To the UFC, anyone who hopes to promote collective bargaining would want to obtain its private business information, but they have no legal right to do so "under the guise of an antitrust lawsuit in federal district court." It believes excluding Maysey from highly confidential material will not impair the plaintiffs' ability to prosecute since many other experienced attorneys are involved in the litigation.
Naturally, the fighters and their attorneys have a different take on the matter. Plaintiffs' position is that the designation of material as confidential is enough of a protection.
The [Proposed] Protective Order otherwise agreed to by the parties already contains a restriction that prevents any party or attorney from using Protected Material for purposes other than litigating this case: "A Receiving Party may use Protected Material that is disclosed or produced by another Party or by a Non-Party in connection with this case only for prosecuting, defending, or attempting to settle this litigation."
Plaintiffs argue the UFC has to show that its interests are "actually threatened" and that trade secrets aren't an issue in this case. The UFC instead wants to discourage Maysey's advocacy for fighters.
This antitrust litigation is not an action between competitors, nor are there trade secrets or intellectual property rights at issue in this litigation that could place any of Plaintiffs at a competitive advantage to Zuffa after this litigation has concluded...Rather than protect some identifiable business interest, intellectual property, or information, Zuffa seeks to use this protective order to chill Mr. Maysey's advocacy for fighters' rights and unduly burden Plaintiffs' prosecution of this matter.
Plaintiffs also point out that Maysey does not own, head or profit from the MMAFA. A letter from a plaintiff attorney to a UFC attorney notes, "Mr. Maysey is not ‘the head' of the MMAFA. Rather, ‘the head' of that organization, if any, will be duly elected and Mr. Maysey is, by no means, guaranteed to be elected should he seek election. Even so, the MMAFA, as an association, does not now nor does it propose in the future to engage in commercial activity such as group licensing and its conduct is protected speech, not commercial activity were that even possible. We have conferred with Mr. Tabacnick regarding Zuffa's belief that he has served as an 'agent' for MMA fighters and understand that although he has occasionally been retained as counsel for MMA fighters, he has never been retained as an agent."
The UFC attorney then retorts, "...the critical issue is whether these individuals or others similarly situated could inadvertently use or rely on confidential information in making decisions or advising others in a way that would be adverse to Zuffa's commercial or business interests...With regard to fighters and their representatives who negotiate contracts for them, neither are entitled to see Highly Confidential information that relates to Zuffa or other fighters...Further, other individual plaintiffs may be working with Zuffa's competitors and are not entitled to receive Zuffa's most highly confidential competitive and business information."
A Highly Confidential designation would also keep such information from the eyes and ears of Jon Fitch, Cung Le, Nate Quarry and the other eight plaintiff fighters in this case. The UFC wants to keep fighters from using confidential information against them in contract negotiations or providing such information to competitors. Meanwhile, the plaintiffs believe the UFC has provided no basis for this restriction and it would interfere with their attorneys' "duty to engage their clients and keep them informed about the litigation."
A related but separate issue still in dispute is that of electronically stored information (ESI). In the same letter from attorney to attorney, it's revealed that the plaintiffs are seeking ESI all the way back to the year 2000. The UFC allegedly only wants to provide ESI back to 2010. The parties believe they can come to an agreement by Sept. 2, so we'll have to wait a few days and see what happens.
The discovery element of this case has been highly debated in public forums. Will the UFC settle out prior to turning over any sensitive documents or putting Dana White under oath in a deposition? Will sensitive UFC information be leaked to the public? It's abundantly clear that proprietary business information matters much to the UFC and the fight is officially on to keep it away from the eyes of "competitive decisionmakers" and the public.
While every antitrust lawsuit is unique in its own way, I used to regularly work these cases as a provider of expert witness support. Seeing "HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY" stamped on page after page of discovery documents wasn't unusual in the slightest. We should know soon what the outcome will be and maybe once this issue is settled we can finally get down to the impending major order of business known as the motion to dismiss...sometime in the next few months.
Bloody Elbow has led the coverage of this case and will continue to keep readers updated as new events unfold.
Paul is Bloody Elbow's analytics writer and former provider of expert witness support in antitrust cases. Follow him @MMAanalytics.