UFC Antitrust Lawsuit Granted Partial Class-Action Status
A judge has granted partial class-action status to a group of fighters suing the UFC, a critical ruling that should extend the antitrust legal battle against the MMA promoter.
In a decision that the UFC parent Zuffa will surely appeal, U.S. District Judge Richard Boulware on Thursday partially certified six plaintiffs’ claims as a class action. The certification was mentioned in a conference call with the judge, with a written ruling expected early next week.
The case, Cung Le et al. v. Zuffa, has been in court since 2014. It will likely remain there for several more years.
The fighters, none of whom is currently in the UFC, maintain the company has abused monopoly power to preclude competition in the hiring market for MMA fighters’ services. Diminished employment opportunities have allegedly stifled fighters’ wages.
Class certification changes the trajectory of the case. Instead of a handful of fighters suing, thousands could soon become class members. Should the fighters ultimately prevail on the merits, the potential monetary damages could rise to many millions of dollars.
The fighters sought certification for two classes, a “bout class” and an “identity class.” The former would constitute fighters who appeared in UFC bouts from Dec. 16, 2010, to June 30, 2017. The latter—the identity class—wouldn’t hinge on participation in fights but rather on UFC engagement in so-called “expropriation” and “exploitation” of their identities in various promotional materials. Judge Boulware certified only the bout class.
While class certification has been determined, the merits of the case remain far from settled.
As explained more fully in a Sportico legal primer, the plaintiffs assert that the UFC has engaged in varying types of anti-competitive practices. The promoter is accused of mandating that venues only host UFC-affiliated bouts. It is also portrayed as buying out MMA companies before they become viable competitors.
Under this theory, talented MMA fighters have no meaningful choice but to sign with the UFC. This lack of bargaining power supposedly leads to artificially low wages and repressive employment conditions, such as fighters forgoing name, image and likeness rights. The fighters stress that while the UFC controls about 90% of revenues generated by “elite MMA bouts,” only about 20% of those revenues land in the hands of fighters.
Zuffa, which was purchase by Endeavor in 2016 for $4 billion, has forcefully rejected the plaintiffs’ legal arguments and purported facts. The MMA promotion company stresses that it regularly competes with rival leagues, including Bellator and Legacy Fighting Alliance, for fighters’ services, TV airtime, media attention and sponsorship deals. Zuffa also points out that exclusive arrangements with venues are a common, and lawful, practice in the entertainment industry.
Zuffa further depicts the plaintiffs’ calculations as intentionally deceiving. While the fighters complain about purportedly low wages, average compensation per bout now exceeds $100,000, and total compensation has increased by over 600% since 2005. Zuffa also asserts that the UFC pays appreciably better than other MMA organizations, and its percentage of revenue paid to athletes relative to other sports leagues (shares in the NBA, NFL, MLB and NHL range from 48% to 50%) reflects the give-and-take of collective bargaining between unionized athletes and their respective leagues. UFC fighters, in contrast, negotiate contracts individually.
Zuffa likely expected this result given Judge Boulware’s previous comments, and will almost certainly appeal the class certification ruling to the U.S. Court of Appeals for the Ninth Circuit. Although federal appeals courts normally reject “interlocutory” appeals—an appeal before the case has a final judgment—the Federal Rules of Civil Procedure permits appeals of class certification orders for up to 14 days. But unlike an appeal after final judgment, a class certification cannot be appealed as a matter of right; the Ninth Circuit would have discretion to hear a class certification appeal.
In an appeal, the UFC would fashion an argument around the required elements of certification, claiming those criteria haven’t been met. Those elements are numerosity (whether there are enough fighters to constitute a class); commonality (whether the questions of law and fact are similar among fighters); typicality (whether the fighters involved in the lawsuit have offered typical claims) and adequacy (whether the fighters’ interests are aligned with others who would be in the class).
If granted by the Ninth Circuit, an appeal would lead to review by a three-judge panel. Ninth Circuit data indicates 15 to 32 months typically elapse from the filing of a civil appeal to a decision, so the review process in this case would likely extend into 2022 or 2023. A Ninth Circuit ruling could then spark a petition to the U.S. Supreme Court, or the case would be returned to Judge Boulware to review its merits for summary judgment. His ruling could then spark another round of multi-year appeals. All told, it is conceivable the litigation could continue into the second half of the 2020s.
That is, unless the parties settle.
(This story has been corrected to show that Judge Boulware certified the six plaintiffs’ claims, not lawsuits, in the second paragraph.)
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