February 14, 2024
After five-and-a-half long years, the judge overseeing the antitrust lawsuit against the UFC finally released his order granting class certification status to the plaintiff fighters seeking up to $1.6 billion in damages.
Last Wednesday, U.S. District Judge Richard Boulware of Las Vegas, NV certified a “bout class” of over 1,200 fighters who fought for the promotion between December 16, 2010 and June 30, 2017 with claims the UFC anticompetitively foreclosed rival MMA promoters and suppressed fighter pay through the use of long-term exclusive contracts, coercive conduct, and the elimination or acquisition of competitors. Boulware also declined to certify an “identity class,” which claimed the same UFC conduct had anticompetitively reduced licensing rights compensation, resulting in the removal of former middleweight title challenger Nate Quarry from the case.
Boulware’s order was the first real sign of life the case had seen in nearly three years since a December 2020 hearing in which the judge told participants they would have his order “on Monday.”
Well after what turned out to be a very long weekend, the judge’s official reasoning for granting class certification was finally published. This is important since UFC attorneys have two weeks to dissect all 80 pages, find any issues to raise on appeal with the Ninth Circuit, and file their Rule 23(f) petition. This should put their deadline at Wednesday, August 23.
Judge Boulware’s Rebukes
In reviewing Boulware’s order, it’s apparent that while he may have become proficient on the business side of the sport, he’s still a novice when it comes to the MMA fight game. When describing the sport of MMA, he neglected to mention chokes – by far the most common method of submission – in the list performance factors that can lead to a tapout. But on the business and legal side of his order, he didn’t pull any punches, so much so that it felt at times as if we were reading the plaintiffs’ complaint or one of their expert witness reports.
Boulware methodically went through each element of the Daubert and class certification standards plaintiffs had to overcome to show that their expert testimony was “relevant and reliable” and their evidence “capable” of resolving common issues related to the plaintiffs’ claims. He was meticulous as he described his reasoning for finding the plaintiffs had satisfied their burden with the elements required for class certification: Numerosity, Commonality, Typicality, Adequacy, and then also Predominance.
In describing the mechanisms by which the UFC purportedly acquired and maintained monopsony power in the fighter labor market, Boulware agreed with plaintiffs that the relevant market is “for Elite Professional MMA Fighter services” in the United States, or possibly North America. He concluded the UFC had dominant market shares in this market, ranging from 71-99% depending on the time frame and how they were measured.
The UFC has consistently argued its business acumen is one of the key elements leading to its success and high market shares, but Boulware wasn’t remotely persuaded. He seemed to show disdain and almost appeared to make fun of this “nebulous factor” and “less cogent alternative explanation” for how the UFC’s market power was obtained.
In explaining how the UFC’s power was allegedly maintained, Boulware described “ruthless” and “brutal coercive tactics” such as putting a fighter “in a prelim against a really tough guy for his last fight” if he turned down a contract renewal offer.
He noted former UFC matchmaker Joe Silva’s testimony, “I always renegotiate before the last fight,” and former welterweight title challenger and named plaintiff Jon Fitch’s that “they do that to everybody. We’re going to hold your bout agreement until you sign your extension. We won’t allow you to become a free agent.”
But the most damning excerpt from the record may have come from the UFC’s former Vice President of Business, Legal and Government Affairs, Michael Merch, when he wrote, “if a fighter is successful under a 4 fight deal, we typically negotiate a new agreement after the 3rd fight so he never will see the end of his contract and, assuming the fighter is successful, or at least competitive, that is the process that will continue thereafter.”
As a result, Boulware found the UFC had made its fighters’ exclusive contracts “effectively perpetual.”
“Record evidence indicates both that these tactics were intentionally and consistently used by management to maintain contractual control of fighters and to send a message to fighters that they were essentially stuck with UFC for the life of their careers,” Boulware wrote. “The structure of these deals, particularly the fact that the fighter was only paid when they fought, meant that these tactics were a credible threat to every fighter under contract with [the UFC].”
One puzzling part of Boulware’s analysis is that it was mostly observational from testimony and emails. Hard data has also been made public in the case showing the UFC doesn’t systematically bench fighters who refuse to renegotiate on the last fight of their contract, and Boulware made no mention of it. The reason is unclear but it may have something to do with the standard used for class certification.
While Boulware’s findings were harsh, he also repeatedly emphasized his determinations were made by a preponderance of the evidence “at the class certification stage,” where “factual and merits-based” UFC counterarguments were not considered.
Read Judge Rebukes UFC In Antitrust Class Certification Order, Leaves Openings For Appeal.