Cung Le v. Zuffa, LLC

108 F. Supp. 3d 768, 2015 WL 3488769
CourtDistrict Court, N.D. California
DecidedJune 2, 2015
DocketCase Nos. 5:14-cv-05484-EJD; 5:14-cv-05591-EJD; 5:14-cv-05621-EJD; 5:15-cv-00521-EJD; 5:15-cv-01324-EJD
StatusPublished
Cited by9 cases

This text of 108 F. Supp. 3d 768 (Cung Le v. Zuffa, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cung Le v. Zuffa, LLC, 108 F. Supp. 3d 768, 2015 WL 3488769 (N.D. Cal. 2015).

Opinion

ORDER GRANTING DEFENDANT’S MOTION TO TRANSFER VENUE

EDWARD J. DAVILA, United States District Judge

Representative Plaintiffs Cung Le, Nathan Quarry, Jon Fitch, Luis Javier Vasquez, Dennis Lloyd Hallman, Brandon Vera, Pablo Garza, Gabe Ruediger, Mac Danzig, Kyle Kingsbury and Darren Uye-noyama (collectively, “Plaintiffs”) are professional athletes. Plaintiffs each compete in a style of fighting known as mixed martial arts (“MMA”), which according to them “is a unique blend of various martial arts disciplines,” including boxing, Muay Thai, judo, wrestling, Brazilian jiu-jitsu, taekwondo and karate. MMA differs from other professional combat sports, such as boxing, because the rules of MMA allow for kicks, takedowns, chokeholds, joint-locks, or any strikes below the waist.

Defendant Zuffa, LLC (“Defendant”) is a promoter of professional MMA bouts throughout the world. It does business in the United States as “Ultimate Fighting Championship,” or UFC, and promotes live events in various venues across the country. It also promotes the broadcasts of those events through television, internet and pay-per-view (“PPV”) mediums, and licenses, markets, sells and distributes MMA merchandise and other materials, including video games, action figures, gyms, and apparel.

In five separate actions filed in this district,1 Plaintiffs allege that Defendant, [772]*772now the heavyweight of the industry, has violated Section 2 of the Sherman Act, 15 U.S.C. § 2, through an “overarching anti-competitive scheme” to maintain its monopoly power in the MMA promotional market and its monopsony2 power in the MMA fighter services market. Pursuant to 28 U.S.C. § 1404(a), Defendant now seeks to knock these cases out of the Northern District of California and into its home venue, the Las Vegas Division of the United States District Court for the District of Nevada. Plaintiffs oppose the motions.

The court has carefully considered .the parties’ briefing as well as the arguments of counsel presented at the hearing on May 7, 2015. At the final bell, it is Defendants arguments that clinch this round because the relevant forum selection clause and the § 1404(a) convenience considerations both favor a Nevada forum. Accordingly, the Motions to Transfer will be granted for the reasons explained below.

I. BACKGROUND

Since the 1990s, professional MMA has become one of the most popular and fastest growing spectator sports in North America. But unlike, other professional sports such as football, MMA fighters like Plaintiffs are not organized into teams or leagues. Instead, professional MMA fighters achieve individual “elite” status by successfully participating in events organized by promoters, where fighters under contract with the same promoter compete in bouts against each other. Fan interest in these events — and in turn the amount of money fans are willing to pay to view or support a particular event — depends on the “strength of the card,” or the level of notoriety of the fighters involved in the event. Fighters who' have reputations for winning bouts or who have otherwise become popular with the MMA fanbase can attract a wider audience.

UFC was founded in 1993. As part of its role as an MMA promoter, UFC arranges bouts in venues, such as SAP Center in San Jose, for which admission tickets are sold. In addition to these ticket sales, UFC receives additional revenue from the broadcast of its events on television, over the internet, on PPV, and on video-on-demand, as well as through sales of merchandise, event sponsorships, and the collection of MMA-related eopjiright and trademark royalties. UFC also issues championship titles to athletes that win title bouts, but follows no independent ranking criteria and has not established objective standards to determine which fighters qualify to participate in a title bout.

Plaintiffs, all of whom have achieved “elite” fighter status and have fought in a bout promoted by UFC, allege that Defendant has grown to dominate both the professional MMA promotional market and the MMA fighter services market. Plaintiffs attribute this dominance to what they term as several of Defendants’ “anticom-petitive, illicit, and exclusionary” business practices, including the acquisition or impairment of competing promoters and its [773]*773“tight-fisted control” over the supply of professional MMA fighters through various contracts which limit an athlete’s ability to work with other promoters or to enter into sponsorship agreements independent of those sanctioned by UFC. Put in more technical terms, Plaintiffs contend that Defendant exercises monopoly power over an “output market,” or the promotional end of the MMA business, and monopsony power over an “input market,” or the pool of available MMA professionals that can compete at the highest level of the sport.

Plaintiffs further believe that as a result of Defendant’s business practices and market prevalence, competitors not simply acquired by Defendant are essentially relegated to “minor league” status because their access to top venues, sponsors, broadcast outlets, and elite fighters are restricted. They allege the lack of viable competition is damaging to the fighters themselves, whose compensation is artificially suppressed below competitive levels. According to Plaintiffs, fighters receive approximately 10% to 17% of total UFC revenues generated from bouts — an amount far below that of other professional athletes — but have little choice than to accept Defendant’s terms. Fighters who have defied Defendant were subjected to intimidation and retaliation.

These purported class actions were each filed in this district between December, 2014, and March, 2015. Plaintiffs seek to represent two classes of MMA fighters: (1) a “Bout Class” which consists of “all persons who competed in one or more five professional UFC-promoted MMA bouts taking place or broadcast in the United States” from December 16, 2010, forward; and (2) an “Identity Class,” which consists of “[e]ach and every UFC Fighter whose Identity was expropriated or exploited by the UFC, including in UFC Licensed Merchandise and/or UFC Promotional Materials” in the United States from December 16, 2010, forward. Once the cases were related, Defendant filed the instant motions to transfer venue.

II. LEGAL STANDARD

Pursuant to 28 U.S.C. § 1404(a), “a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented” if such a transfer is convenient to the parties and witnesses. Aside from convenience, a motion under § 1404(a) is also the proper vehicle to enforce a forum selection clause. Atl. Marine Constr. Co., Inc. v. U.S. Dist. Ct., — U.S. —, 134 S.Ct. 568, 579, 187 L.Ed.2d 487 (2013) (“Section 1404(a) therefore provides a mechanism for enforcement of forum-selection clauses that point to a particular federal district.”).

The purpose of § 1404(a) is to “prevent the waste of time, energy, and money and to protect litigants, witnesses, and the public against unnecessary inconvenience and expense.” Van Dusen v. Barrack,

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Bluebook (online)
108 F. Supp. 3d 768, 2015 WL 3488769, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cung-le-v-zuffa-llc-cand-2015.