Lawyer E-Mail – Zuffa Bought Pride “to shut the business down and acquire its fighters for the UFC”

This week UFC parent company Zuffa, who is deep in the defence of an anti-trust lawsuit, was ordered to disclose a lawyer’s e-mail discussing the company’s business strategy for purchasing their biggest rival at the time, Pride FC.

At the heart and soul of an anti-trust lawsuit lie allegations that a Defendant unlawfully stomps out competition to retain market share.  An e-mail that the Plaintiffs will surely argue meets this agenda, and which Zuffa will argue reveals nothing more than a normal business practice, was ordered to be produced despite Zuffa objections.

In the recent judgement (Le v. Zuffa) Magistrate Judge Peggy Leen provided the following insightful comments in ordering production of an e-mail Zuffa tried to keep confidential with claims of legal privilege:

Applying these principles, the court finds the majority of the redacted paragraphs in dispute in this motion are not privileged. The first redacted paragraph relates Pride FC’s negotiating positions, the fact the Pride did not trust Zuffa anymore than Zuffa trusted Pride, and that Pride did not want its business tied up any longer in negotiations. The paragraph reports the parties’ negotiating positions and contains no legal analysis or advice. The second paragraph relates Zuffa’s business purpose for the acquisition—to stop others from buying Pride and to acquire Pride to shut the business down and acquire its fighters for the UFC. It relates Pride’s negotiating position that resulted Zuffa’s business decision to set a low threshold for due diligence before the deal became binding on both sides. However, a portion of the last sentence of the paragraph relates the client’s concern about a legal matter. In context, it appears to be a legal issue the client and counsel discussed in the expectation it was a confidential communication. The remaining communications do not relate to legal advice sought by or given to Zuffa. Mr. Pachal relates Pride’s communications to him during the course of business negotiations. Mr. Paschal was merely serving as a conduit of this information from Pride to his client, Zuffa. The other communications relate to the negotiating parties’ commercial strategies and tactics. As such, they are not privileged. For the reasons explained,

IT IS ORDERED Plaintiff’s Motion to Challenge Privilege is GRANTED, and Zuffa shall produce the Milbank email to Plaintiffs unredacted of the paragraphs in dispute with the exception of the last sentence of disputed paragraph two which may remain redacted from “and you had expressed” through the end of the sentence.

 

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