Cung Le v. Zuffa, LLC

216 F. Supp. 3d 1154
CourtDistrict Court, D. Nevada
DecidedOctober 19, 2016
DocketLead Case No.: 2:15cv-01045-RFB-PAL; Member Case No.: 2:15-cv-1046-RFB-PAL, Member Case No.: 2:15-cv-01055-RFB-PAL, Member Case No.: 2:15-cv-01056-RFB-PAL, Member Case No.: 2:15-cv-01057-RFB-PAL
StatusPublished
Cited by4 cases

This text of 216 F. Supp. 3d 1154 (Cung Le v. Zuffa, LLC) is published on Counsel Stack Legal Research, covering District Court, D. Nevada 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, 216 F. Supp. 3d 1154 (D. Nev. 2016).

Opinion

ORDER

RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

Before the Court are identical Motions to Dismiss (ECF Nos. 64,16, 30,16) in the instant case and member cases 2:15-cv-01046-RFB-PAL, 2:15-cv-01055-RFB-PAL, 2:15-cv-01056-RFB-PAL, and 2:15-cv-01057-RFB-PAL, as well as a Stipulation re: Discovery of Electronically Stored Information (ECF No. 160). For the sake of clarity, the Court will refer to the Motion to Dismiss as ECF No. 64 in the lead case, Case No. 2:15-cv-01045-RFB-PAL. For the reasons discussed, the Court DENIES the Motion to Dismiss (ECF No. 64) and GRANTS the Stipulation re: Discovery of Electronically Stored Information (ECF No. 160).

II. BACKGROUND

A. Factual Background

The following allegations are common to all five cases against Defendant Zuffa and are drawn from the Plaintiffs’ Complaint (ECF No. 1) in Case No. 2:15-cv-01045-RFB-PAL.

Plaintiffs are Elite Professional MMA Fighters (“Bout Class Plaintiffs”) and those fighters called “Identity Plaintiffs” (collectively, “Plaintiffs”). Plaintiffs bring this action against Defendant Zuffa, LLC, who operates under the trademark Ultimate Fighting Championship or “UFC.” The UFC, which (through the conduct alleged herein) now controls approximately 90% of the revenues derived from live Elite Professional MMA bouts, promotes and distributes professional live MMA bouts through various venues, in the U.S. and internationally. Compl. ¶ 7.

Plaintiffs bring antitrust action under Section 2 of the Sherman Act, 15 U.S.C. § 2, for treble damages and other relief arising out of Defendant’s overarching anticompetitive scheme to maintain and enhance its (a) monopoly power (the “Relevant Output Market”) in the market for promotion of live Elite Professional mixed martial arts (“MMA”) bouts, and (b) mon-opsony power in the market for live Elite Professional MMA Fighter services (“Relevant Input Market”). Compl. ¶ 1. The relevant geographic market for both the Relevant Input Market and Relevant Output Market is limited to the United States and, in the alternative, North America. Id.

1. Input Market

By dominating the market for live Elite Professional MMA Fighter services through the scheme alleged herein (including through long-term exclusive agree[1160]*1160ments with MMA Fighters and other exclusionary and anticompetitive acts), the UFC controls the talents of Elite Professional MMA Fighters, who are popular with national audiences. Id. at ¶ 5.

The UFC denied actual and potential rivals necessary inputs to run effective professional MMA Promotion companies, raising their costs and making it impossible for them to compete effectively. As a result of the UFC’s exclusionary scheme, multiple actual or potential rivals were forced to sell to the UFC or exit the market entirely. Id. ¶ 11.

By following no objective ranking or title criteria, the UFC is able to exert control over its roster of athletes who risk losing the opportunity to be afforded “title bouts” or to earn a living as an MMA fighter. Id. ¶ 17.

2. Output Market

Defendant acquired and maintained monopoly power in the Relevant Output Market through a series of exclusionary acts, including (a) direct acquisitions of actual or potential rivals (who were forced to sell to the UFC because they found it impossible to compete profitably due to the UFC’s anticompetitive scheme), as well as (b) a multifaceted scheme to impair and foreclose competition by leveraging the UFC’s market dominance—including its tight-fist-ed control over the supply of Elite Professional MMA Fighters—to block actual or potential rivals from accessing inputs. Id. ¶ 9.

B. Procedural History

On June 4, 2015, the five above-captioned cases were transferred into this District pursuant to an order transferring them from the Northern District of California. Plaintiffs and Defendant filed a Notice of Related Cases in all five cases. ECF Order No. 101 at 2.

The Court summarizes the procedural history for the lead case, 2:15-cv-01045-RFB-PAL, below:

On December 16, 2014, Plaintiffs filed their Complaint in the Northern District-of California. ECF No. 1.

On January 30, 2015, Defendant filed a Motion to Transfer case. ECF No. 31.

On February 10, 2015, Plaintiffs filed a Motion to Consolidate Cases. ECF No. 52.

On February 27, 2015, Defendant filed a Motion to Dismiss. ECF No. 64.

On June 2, 2015, the Northern District of California GRANTED the Motion to Transfer Case to the District of Nevada. ECF No. 93.

On September 25, 2015, the Court held a hearing on the parties’ outstanding motions in the various cases. ECF No. 186. The Court issued a minute order stating the following:

• Case no. 2:15-ev-01045-RFB-PAL .
• Motion to Dismiss (ECF No. 64) is DENIED;
• Stipulation of Electronically Stored Information (ECF No. 160) is GRANTED;
• Case no. 2:15-cv-01046-RFB-PAL, Motion to Dismiss (ECF No. 16) is DENIED;
• Case no. 2:15-cv-01055-RFB-PAL, Motion to Dismiss (ECF No. 39) is DENIED;
• Case no. 2:15-cv-01056-RFB-PAL, Motion to Dismiss (ECF No. 39) is DENIED;
• Case no. 2:15-cv-01057-RFB-PAL, Motion to Dismiss (ECF No. 16) is DENIED.

[1161]*1161III. LEGAL STANDARD

A. Sherman Act, Section 2
1. Monopoly

Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fíne not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court. 15 U.S.C. § 2.

“To succeed on its claim for actual monopolization under § 2, [plaintiff] must prove [defendant]: (i) possessed monopoly power in the relevant markets; (ii) willfully acquired or maintained its monopoly power through exclusionary conduct; and (iii) caused antitrust injury. Am. Profl Testing Serv., Inc. v. Harcourt Brace Jovanovich Legal & Prof'l Publications, Inc., 108 F.3d 1147, 1151 (9th Cir. 1997) (citing Movie 1 & 2 v. United Artists, 909 F.2d 1245, 1254 (9th Cir.1990), cert. denied, 501 U.S. 1230, 111 S.Ct. 2852, 115 L.Ed.2d 1020 (1991)).

a. Monopoly power

“Monopoly power is defined as ‘the power to control prices or exclude competition.’ Mere proof of exclusionary conduct is not sufficient to prove [defendant’s] dangerous probability of success; other proof of market power is required.” Harcourt, 108 F.3d at 1154 (internal citations omitted).

“Market power may be demonstrated through either of two types of proof.

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Bluebook (online)
216 F. Supp. 3d 1154, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cung-le-v-zuffa-llc-nvd-2016.