Last week, the UFC officially answered the Complaint of the six plaintiff fighters who remain in the class action, antitrust lawsuit alleging monopolization of the market for promoting live Elite Professional MMA bouts and monopsonization of the market for Elite Professional MMA fighter services.
As the discovery process continues, a new status update released on Friday reveals that the UFC has recently produced 17,909 documents totaling 239,923 pages "containing the production of the first tranche of Zuffa's electronic fighter files." This is in addition to the more than 108,000 documents reported in November to have already been turned over including fighter, venue, and sponsor contracts, financials, and documents that were previously produced in connection with the Federal Trade Commission's (FTC's) investigation of the Strikeforce acquisition.
In Friday's update, both sides claim to have been working diligently to, as the UFC puts it, "make progress in discovery," and as the fighters put it, "attempting to make progress in discovery." (Emphasis added) The two sides, however, cannot come to an agreement on six issues. The first two issues deal with UFC document production while the last four relate to fighter document production or protection.
1. Custodians: Whether Plaintiffs should be permitted to add 3 custodians to replace Bryan Johnston, Sonja McKinney and Michael Pine.
2. Search Terms: Whether and to what extent search terms should be used.
3. Relevant Time Frame: What Relevant Time Period should apply to four of Zuffa's Requests for Production.
4. Non-MMA Related Income/Compensation: Whether Plaintiffs should be required to produce documents regarding income and compensation from activities unrelated to Mixed Martial Arts.
5. Medical and Drug-Test Records: Whether Plaintiffs should be required to produce documents relating to the reasons for any tolling or extension of their contracts, including suspensions for the use of performance-enhancing drugs or extensions for injuries.
6. Protective Order: Whether the Revised Protective Order should allow a designation of "Highly Confidential - Attorneys' Eyes Only" for documents of a medical or highly personal nature from the files of athletes.
Here's what each side had to say on each of the issues over 116 pages of filings and exhibits.
The UFC and fighters previously argued over the designation of custodians whose documents and Electronically Stored Information (ESI) would be searched. The parties eventually agreed to a list of 16 custodians (including Dana White, Lorenzo Fertitta, Lawrence Epstein, Reed Harris, Sean Shelby, and Joe Silva among others) and the Court then allowed the fighters to choose six more for a total of 22 custodians.
The current dispute is that three of the original 16 custodians (Bryan Johnston, Sonja McKinney, and Michael Pine) previously left the company and have no e-mails, ESI, or documents in custodian-specific folders on the UFC's network drive. The UFC didn't retain their devices or computers and destroyed their e-mails before the start of the current lawsuit based on document retention policies.
The fighters want to name three more custodians, "Based on Zuffa's representation that documents and ESI existed for Johnston, McKinney and Pine..." while the UFC claims the fighters were fully informed that the three custodians had no documents. "Plaintiffs made it clear in the last status report that three of the sixteen agreed-upon custodians at issue here had no documents, yet Plaintiffs specifically proposed that they still be included as custodians."
The fighters believe this is the "rare case" that doesn't warrant the use of search terms to narrow the scope of discoverable documents. They believe the UFC should be required to conduct a linear review of documents from central files and custodians' ESI. This would entail a manual, page-by-page review of hundreds of thousands of documents, a process that can be extremely expensive.
In case the Court rules against linear review, the fighters also submitted an eight-page list which, by Bloody Elbow's count, contains 2,044 search terms including traditional antitrust words and phrases such as "monopoly," "monopsony," "dominat*," and "exclusiv*" along with not-so-traditional terms such as "*fuck*," "kill*," "grim reaper," "world fucking domination," "shit loads of money," "shithole," "strikefarce," and "LMFAO." The first page of the request is shown below.
The fighters believe such a broad list of search terms is necessary because the UFC's custodians "are prone to using idioms" and many third parties "are referred to by unusual nicknames." As examples, they note that one of the plaintiff fighters, Nate Quarry, is commonly referred to as "Rock" while the promotion M-1 Global is frequently referred to as "M1." From FTC documents that have already been produced, the fighters also note that Tom Atencio and Todd Beard of Affliction were often referred to as "T-shirt Guy" instead of their real names and that Lorenzo Fertitta and others sent e-mails sometimes referring to the promotion Strikeforce as "Strikefarce."
The UFC believes search terms are necessary because the fighters have already made requests "calling for essentially all documents relating to any communication with or about any actual or potential venue, sponsor, merchandiser, retailer or TV distributor."
According to the UFC, the volume of documents in this case is already "massive" and when the collection process is complete, the number of documents collected "will likely be in the millions." The fighters' proposal for a linear review is "an attempt to have Zuffa review every document that it collects" and will be prohibitively expensive. Even if the Plaintiffs' search terms are used, the UFC believes they'll capture every document that referred to a fighter, manager, venue, sponsor, or TV network and will be so expansive that it can't be taken seriously.
In the meantime, the UFC proposes a much-condensed list of 128 search terms by Bloody Elbow's count (first page shown below).
Relevant Time Frame
The UFC has asked plaintiff fighters to produce all of their contracts in connection with combat sports (competition, commentating, personal appearances), sponsorship agreements, documents sufficient to show all compensation (base salary, bonuses, discretionary payments, signing bonuses, broadcast royalties, PPV shares, merchandise payments, appearance fees, etc.), and documents sufficient to show extensions or tolling of contracts.
The UFC wants these documents to be produced all the way back to Jan. 1, 2000 as "...obtaining the contracts, extensions, and compensation data for the period between January 1, 2000 and January 1, 2005 is vital for Zuffa's defense, including because for at least half of the Plaintiffs, it is likely to be the only way to obtain any of their pre-UFC contracts with Zuffa's competitors."
This touches on a point I raised last year about how we should expect the UFC to use the contracts of competitors in its defense. The UFC makes the exact argument Bloody Elbow readers have already seen.
Plaintiffs have alleged that a wide spectrum of Zuffa's contractual provisions and practices are anticompetitive. That other MMA or combat sports promoters, who Plaintiffs must concede lacked market power, used the same or similar provisions or practices (e.g., exclusivity provisions, certain rights "in perpetuity," or tolling or extension terms) tends to show that such provisions or practices serve legitimate business purposes and are not anticompetitive.
The UFC goes on to essentially argue that it's hard for the fighters to claim they were coerced to agree to these terms through abuse of monopsony power if they voluntarily agreed to the same terms with other promoters. It also touches on a before-and-after comparison that Bloody Elbow readers have been exposed to before, that if the alleged scheme to monopolize/monopsonize began in 2006, "Information and data on Plaintiffs' compensation before this time is necessary to test the before-and-after effect."
The fighters think the UFC's proposal is "unreasonable and disproportionate to the needs of the case." They note that fighters aren't corporations "with sophisticated filing systems" and argue that counsel would need to review all of the fighters' documents, creating a substantial burden. Instead, the UFC is free to issue third-party subpoenas to obtain documents from other promoters.
The fighters propose handing over documents for Nate Quarry from Apr. 9, 2004 and later, for Jon Fitch and Brandon Vera from Oct. 3, 2004 and later, and from Jan. 1, 2005 and later for Cung Le, Kyle Kingsbury, and Javier Vazquez as this "corresponds more closely to the time frame the Court has applied to the vast majority of Plaintiffs' document requests: ‘a uniform time period of January 1, 2005, through June 30th of 2015.'"
Non-MMA Related Income/Compensation
In this section, the UFC wants plaintiff fighters to produce documents relating to non-MMA activities in order to counter some of the claims in their Complaint.
The UFC notes that fighters have alleged "exclusive and perpetual worldwide personality and Identity Rights...locking UFC Fighters out of revenues generated by the exploitation of their Identities, including after the term of the contract." This therefore puts at issue "if Plaintiffs were compensated for an appearance in a movie or had a DVD workout video that used their name or likeness..."
The UFC also wants non-MMA contracts to see if there are other professional sports fighters could turn to, if simultaneous full-time employment is truly "nearly impossible," and if other revenue opportunities might've been enhanced through exposure in the UFC (e.g., more gym memberships because the owner is a UFC fighter).
The fighters believe they will already be handing over any relevant information sought by the UFC (such as movie appearances, DVD workout videos, etc.) "so long as the opportunities came about at least in part as a result of Plaintiffs' MMA careers. Information regarding income entirely unrelated to Plaintiffs' MMA careers is simply irrelevant, and triggers substantial privacy concerns."
Medical and Drug-Test Records
Readers' minds will probably immediately wander to all sorts of sinister theories upon seeing the words: Drug test records.
According to Friday's status update, the UFC believes it needs such records to challenge the assertion that it can extend a fighter's contract "all but indefinitely" and show "that such short-term extensions or tolling are necessary in order for Zuffa to have the opportunity to promote bouts for fighters when they are healthy and to gain the benefit of its bargain under the contract."
The UFC specifically cites the Cung Le drug test debacle. "This is not an abstract issue. After the Complaint was filed, one of the named Plaintiffs specifically accused Zuffa of mishandling his drug test results and engaging in other bad faith activities to improperly extend his contract and/or to prevent him from engaging in other competitive activities."
The fighters argue that the UFC's proposal is broad and not just tied to MMA careers. And beyond that, "Medical records and drug test results - of any type - have no relevance to any claim or defense in this case."
The UFC also sets up a future argument we might potentially see during class certification, the next major hurdle in the Plaintiffs' case. Issues of commonality and typicality will be relevant to whether the lawsuit is certified as a full-blown class action or will remain just six fighters suing the UFC. It looks like the UFC wants to use drug test failures by plaintiff fighters to show uniqueness and conflicts with other fighters in an effort to deny class certification down the line. The fighters think this "strains credulity."
Revised Protective Order
According to the status report, both sides have served discovery requests on third parties which could potentially include other MMA promoters, fighter agents, venues, broadcasters, sponsors, and media outlets.
Outside parties such as FOX, Bellator, MGM Resorts, Harley Davidson, and probably even Dynamic Fastener don't want to turn over documents which could contain financial information or trade secrets without being extremely well protected. Therefore both sides have agreed to a designation of "HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY" (AEO) for such documents. Readers may recall that last year the UFC tried to get an AEO designation for its sensitive corporate documents (excluding Plaintiffs' attorney Rob Maysey due to his link to the Mixed Martial Arts Fighters Association) but was rebuffed by Magistrate Judge Peggy Leen.
The UFC is also seeking an AEO for "documents of a medical or highly personal nature" for all athletes outside of the six Plaintiffs in the case. This would seem to make sense to protect the privacy of the hundreds or even thousands of fighters not involved in this case.
The UFC says it has found documents with medical and other sensitive personal information in its fighter contract files and "intends to produce documents from the contract files that reflect the reasons for the extensions. These documents are in the contract files because they relate to extensions."
Plaintiffs oppose the AEO designation not because they don't care about the privacy of their fellow fighters, but out of necessity to their argument that medical and drug-test records aren't relevant in the first place. "These records are not relevant to Plaintiffs' allegations, they are not relevant to Plaintiffs' damages calculation..., they are simply irrelevant to any claim or defense raised in this litigation."
So this is where the UFC antitrust lawsuit currently stands. Hundreds of thousands of documents have already been produced and turned over, which could turn into millions when all's said and done.
The UFC's pressing plaintiff fighters for medical records as well as documents from the early days of the Unified Rules and non-MMA activities to try to use against them. The fighters are pushing for a linear document review or exhaustive search terms up to and including "shit loads of money."
With a search term like "*fuck*," it looks like fighter attorneys might just be targeting colorful, internal statements made by a certain UFC executive who likes to ask people if they want to be f#@king fighters.
And so the antitrust cage fight continues. If the two sides remain at impasse, Magistrate Judge Leen will have to sort it all out.
Paul is Bloody Elbow's analytics writer and former provider of expert witness support in antitrust cases. Follow him @MMAanalytics.