Archive for January, 2017

This week a lawsuit alleging that Al Haymon and the Premier Boxing Championships were conducting business in an anti-competitive way was dismissed by the US District Court, Central District of California.  For a great breakdown of this decision along with what it may mean for the UFC anti-trust lawsuit I recommend this piece by Paul Gift.

One interesting development are the Court’s comments on the scope of the Ali Act -legislation which rarely receives judicial scrutiny.

The Plaintiff promoter alleged that one of the anti-competitive actions of the Defendant promoter was acting as as both a manager and promoter in violation of the Ali Act.  The court found that even if this allegation was true it was of no assistance as the Ali Act can only aid boxers and government agencies.  Other promoters simply do not have standing to allege harm.  In dismissing this aspect of the Plaintiff’s claim District Judge John Walter provided the following reasons:

Plaintiffs contend that Defendants have violated the Ali Act by acting as both a manager and promoter of Championship-Caliber Boxers, and that this violation has given Defendants an unfair advantage over their competitors. The Ali Act, enacted in 2000, requires a “firewall” between managers and promoters. It makes it unlawful for “a promoter to have a direct or indirect financial interest in the management of a boxer;” or “a manager—(i) to have a direct or indirect financial interest in the promotion of a boxer; or “(ii) to be employed by or receive compensation or other benefits from a promoter, except for amounts received as consideration under the manager’s contract with the boxer.” 15 U.S.C. § 6308.

A plaintiff may only pursue an antitrust action if it can show “antitrust injury,” i.e., “‘injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful.’” Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 334 (1990) (quoting Brunswick v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977)). The four requirements for antitrust injury are: “(1) unlawful conduct, (2) causing an injury to the plaintiff, (3) that flows from that which makes the conduct unlawful, and (4) that is of the type the antitrust laws were intended to prevent.” Am. Ad Mgmt., Inc. v. Gen. Tel. Co. of California, 190 F.3d 1051, 1055 (9th Cir. 1999).
“Injury of the type antitrust laws were intended to prevent” means harm to competition, not harm to individual competitors. See Brunswick, 429 U.S. at 488 (quoting Brown Shoe Co. v. United States, 370 U.S. 294, 320 (1962)) (“The antitrust laws . . . were enacted for ‘the protection of competition not competitors.’”).

Plaintiffs cannot establish antitrust injury based on alleged violations of the Ali Act because the only parties with standing to assert a violation of the Ali Act are boxers or government agencies. See 15 U.S.C. § 6309(a). As such, any alleged harm to Plaintiffs would not “flow[ ] from that which makes defendants’ acts unlawful.” Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977).  Indeed, the specific provision that Plaintiffs claim that Defendants violated, 15 U.S.C. § 6308, was intended to protect boxers from promoters and managers. As the Senate Report states:

The final protection for boxers established in this section is the prohibition of conflicts of interests between promoters and managers. Most boxers have limited educational backgrounds and, as the top promoters in the sport readily concede, are no match for experienced promoters during contractual discussions. While the role of managers has been diminished in the sport over the last decade, it remains essential that managers, if a boxer does hire a manager, that the manager serve and protect the interests of the boxer. They should not be serving the financial interests of the promoter, while simultaneously taking a 33% earnings cut from the boxer for biased representation as manager. It is not plausible for a boxer to receive proper representation and counsel from a manager if the manager is also on the payroll of a promoter. This is an obvious conflict of interest which works to the detriment of the boxer and the advantage of the promoter. The Committee received testimony about instances wherein boxers had suffered significant career and economic injury due to their manager’s clear conflicting interests. A manager must be a determined advocate for the boxer’s interests and not be influenced by financial inducements from a promoter. This provision tracks a similar regulation of many State boxing commissions.

S. REP. 106-83, at 11 (1999). The Court concludes that the conflict of interest provision in the Ali Act was not intended to compensate promoters for lost profits.

Moreover, absent some other antitrust violation (such as tying, exclusive dealing or predatory pricing), Plaintiffs’ claimed injury as a result of the Defendants’ alleged violation of the Ali Act would be exactly the same as if a new competitor entered the promotion market. In other words, Plaintiffs’ injury was caused by conduct that was beneficial to competition in the promotion market. “If the injury flows from aspects of the defendant’s conduct that are beneficial or neutral to competition, there is no antitrust injury, even if the defendant’s conduct is illegal per se.” Rebel Oil, 51 F.3d 1433.

Accordingly, the Court concludes that Plaintiffs have failed to demonstrate the requisite antitrust injury as a result of Defendants’ alleged violations of the Ali Act.

The full decision can be found here – golden-boy-v-haymon-full-summary-judgement

Today the United States Anti-Doping Agency, the UFC’s anti doping policy administrator, announced that Felipe Olivieri has been handed a 2 year suspension after testing positive for a prohibited substance in an out-of-competition urine test on January 11, 2016.  The test revealed the presence of 5α-tetrahydromethyltestosterone and 5βtetrahydromethyltestosterone, which are metabolites of methyltestosterone.

Methyltestosterone is banned at all times (both in and out of competition) under the UFC / USADA anti doping policy.  Olivieri disputed the findings and proceeded to arbitration.

An independent Arbitrator for McLaren Global Sports Solutions, Inc. adjudicated the matter and handed Olivieri a 2 year ban.

The full reasons can be found here – felipe-olivieri-usada-arbitration-decison

From the strange but true files, fighters competing at the UFC’s upcoming card in Halifax are entering an odd legal landscape.  I have previously canvassed some Nova Scotia legal peculiarities here along with legal positives for fighters but there is one regulation which deserves a stand-alone post. The fight ending groin shot.

The Nova Scotia Boxing Authority (who oversee MMA in the Province because “a combat sport is boxing” by their regulations) don’t believe a fight can end by groin shot.

Nova Scotia’s official Promoter-Boxer Contract contains the following clause –

6. (1) The Boxer agrees to use a foul-proof guard/chest protector selected by the Boxer of a type approved by the Authority.

(2) It is expressly understood that this boxing match is not to be terminated by a low blow, as any foul- proof guard selected by the Boxer is, in the Boxer’s opinion, sufficient protection to withstand any so-called low blow that might otherwise incapacitate the Boxer.

But this is MMA, not boxing you say?  It does not matter, because remember, by legal definition in Nova Scotia MMA is a combat sport and combat sports are boxing.

Still not convinced?  Nova Scotia has an ‘off the books’ regulation (which is not legally in force but apparently used by the Authority) for MMA and the Promoter-Contestant contract has an almost identical clause referring to “contestants” instead of “boxers” noting as follows:

6. (1) The Contestant agrees to equip himself/herself with a foul-proof guard/chest protector of his/her own choosing.

(2) It is expressly understood that this contest is not to be terminated by a low blow, as any foul- proof guard selected by the Contestant is, in the Contestant’s opinion, sufficient protection to withstand any so-called low blow that might otherwise incapacitate the Contestant.

OK, you say, that’s just the promoter-fighter contract and not the actual regulations.  The actual regulations must not allow this, right?  Wrong. Section 146 of current regulations (which the Province confirmed to me just last week are indeed still in force) repeats the bizarre requirement noting

Low blows
146 (1) No boxing match shall be terminated by a low blow, as the protectors that are used by boxers are sufficient protection to withstand any low blow that might otherwise incapacitate either of the boxers.

(2) If a boxer falls to the ring floor or otherwise indicates an unwillingness to continue because of a claim of a low blow foul, the boxing match shall be terminated and the referee shall award the boxing match to the opponent.

So, in short, both on the books and off the books the Nova Scotia Boxing Authority make it clear – if you can’t compete after a low-blow you lose.

Will these rules be followed?  I’m guessing not.  The Authority will likely turn a blind eye to these rules and allow the UFC to use the so-called unified rules.  However, if a fighter is disqualified after giving an illegal low-blow they would win an appeal to have the result overturned according to the actual rules. I guess my legal advice to fighters is to truly “protect yourself at all times” in the Bluenose Province.  That, or train with Master Ken!

Today I had the pleasure of appearing on the Fight Network’s MMA Meltdown with Gabriel Morency discussing some of the latest legal topics in combat sports.   You can find the full interview here:

As always I’d like to thank Gabriel for having me as a guest.

For those of you visiting here for the first time after listening welcome!  For your convenience here are some quick links to the topics we touched on in the interview.

 

Last year the UFC controversially granted Brock Lesnar an exemption to the usual rule that returning athletes be in the US Anti Doping Agency’s testing pool for at least 4 months prior to competing.  Lesnar subsequently failed both an in and out of competition test surrounding UFC 200 and this created a host of legal consequences including allegations of racketeering against the UFC.

Despite this rocky history the UFC is again exercising their discretion to waive the 4 month period for a returning athlete.  Today the UFC published the following

On December 13, 2016, UFC strawweight Angela Hill was re-enrolled by USADA into the UFC Anti-Doping Policy Registered Testing Pool (RTP). Hill had previously been part of the RTP as a contracted athlete in 2015, before she was released at the discretion of UFC and subsequently removed from the program. UFC is granting Hill an exemption to the four-month RTP requirement, which will allow her to compete against Jessica Andrade on February 4, 2017, in Houston, Texas.

Under the UFC Anti-Doping Policy section 5.7.1, in exceptional circumstances or where the strict application of that rule would be manifestly unfair to an athlete, UFC can grant a waiver to the four-month requirement. UFC determined that Hill met that criteria for the following reasons:

– Hill underwent a thorough education process on the UFC Anti-Doping Policy upon her first inclusion in the RTP in 2015.

– Upon her re-enrollment into the RTP on December 13, 2017, Hill received additional education and became immediately subject to no advance notice, out-of-competition testing by USADA, making her subject to such testing for more than 7 weeks before her competition.  Since Hill has returned to the RTP, she has undergone unannounced testing by USADA,and will continue to be subject to such testing while she remains in the RTP.

– It was not at Hill’s discretion that she was removed from the RTP in 2015. The intent of the 4-month rule is to prevent athletes from unfairly manipulating their inclusion in the RTP.

– UFC and USADA are in the final stages of refining the UFC Anti-Doping Policy. Included in that refinement, will be a change to the 4-month rule, whereby only athletes who chose at their discretion to be removed from the RTP will be required to have an extended presence in the RTP before returning to competition.

 

 

Update January 27, 2017 – this week Missouri responded to an appeal of Haga and unfortunately refused to overturn the result leaving judicial review as the only remaining legal remedy

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Tonight Celine Haga choked her opponent unconscious at Invicta 21 as her bout came to an end but instead of being declared the winner the matter went to the judges who handed her opponent a victory.

The bout took place in Kansas City and was regulated by Missouri’s Office of Athletics.

This is an unusual event and does not appear to be clearly defined in the applicable regulations.  In other words the Regulations don’t expressly say “when a figther is unconscious before the bell due to a legal submission they will be declared the loser of the bout“.  It is a result which should be self evident.

As was learned from the Tonya Evinger controversy, Missouri does have appellate rights for fighters but these are limited in scope.

Chapter 7 of Missouri’s MMA Rules sets out the following appellate rights:

Any party may contest the outcome of any bout within ten (10) days of the decision by writing all the facts and the basis for the complaint. The complaint must be forwarded to the office. If there appears to be a violation of these rules, the director or his/her designate shall investigate, and, if the claims seem to be substantial, hold a hearing and issue its findings and decision.

The next question is when can the commission overturn the result of a bout on appeal?  This is where things become a little murkier.

Clearly they can change the ‘outcome of a bout‘ but are silent on the circumstances  when they can do so. All the appellate rules reference is needing a “violation of these rules“.

There is no universal appellate standard in MMA but the most common circumstances for changing the outcome of a bout across other jurisdictions are when the following occur:

1.  The Commission determines that there was collusion affecting the result of the contest or exhibition;

2.  The compilation of the scorecards of the judges discloses an error which shows that the decision was given to the wrong unarmed combatant; or

3.  As the result of an error in interpreting a provision of this chapter, the referee has rendered an incorrect decision.

The only one of these that can be of value to Haga is #3 but without pointing to a Rule that the referee should have declared a different result a conventional appeal may lack the needed framework.

Haga may not be out of luck, however, as Chapter 8 20 CSR 2040-8.180 section 11 provides that

… Any questions or interpretations shall be referred to the office. If an immediate decision is required, it shall be referred to the inspector present. In the event a situation occurs at the contest and there are no regulations in place to cover the situation, the inspector of the event shall make a decision on the matter. The inspector’s ruling shall be final...

Haga should consider citing this rule, asking the Inspector to overturn the bout result to a win in her favor and in support cite what co-founder of the Unified Rules, Referee John McCarthey says should occur in this circumstance if the rules are silent, namely that “if the fight finishes with an athlete unconscious in a submission, the result is a submission victory for the athlete applying the submission.

If the Inspector is unwilling to do so Haga can scour the rules pointing to anything supporting her argument in a formal appeal.  One rule Haga can point to is 20 CSR 2040-8.110 which states a referee may “stop or terminate a bout” where “The referee determines that one (1) of the contestants is at substantial risk of serious harm or injury and despite such harm or injury cannot or will not submit“.  This language would clearly apply to a situation where a fighter is choked unconscious.

Missouri’s MMA regulations contain a hodge-podge of obscure rules such as requiring timekeepers to keep a “knockdown count” which applies when a fighter is “unable to defend herself” and further that a fighter cannot be saved by the bell in such a situation.  Instead if a fighter is unable to defend herself “within ten seconds of the end of the round,, the timekeeper shall not ring the bell until the referee indicates the contestant is ready“.

Overturning bout results is notoriously difficult but whatever route it takes to get there, hopefully this result will be overturned.

In the latest UFC piracy prosecution, a default judgement request of $60,000 was rejected and the Court assessed damages at $8,242.

In the recent case (Joe Hand Promotions, Inc. v. Meunier) the Defendant displayed UFC 173 at a commercial establishment without paying the commercial sub-licencing fee to the Plaintiff.  The fee would have been $1,600.

Some 50 patrons were present at the time.  The Plaintiff sued asking for $60,000 in statutory and enhanced damages.   The US District Court, N.D. New York rejected this request as disproportionate.  Instead the court awarded statutory damages of $2,747.50.  The Court arrived at this figure by taking the number of patrons and multiplying that number by the cost each of them would have paid to individually order the program on a residential basis.  The Court then took this figure and doubled it as enhanced damages.  In finding this was a fair disposition District Judge Lawrence Kahn provided the following reasons:

…courts in this circuit rarely grant the maximum allowable damages…Instead, several courts have used the following formula for calculating damages: they multiply the number of patrons who viewed the event by $54.95, which has been used as the estimated residential fee for a pay-per-view broadcast… As Plaintiff alleges that at least fifty patrons were present for UFC 173… the Court multiplies that number by $54.95 to calculate statutory damages, which amount to $2,747.50. This amount is sufficient to compensate Plaintiff for its lost revenue—Plaintiff would have charged Defendant $1,600 to purchase and display UFC 173 for its patrons…and it is in line with the statutory damages that other courts have awarded under similar circumstances…

In order to determine the proper amount of enhanced damages in such cases, courts generally consider the following factors: “allegations of: (1) repeated violations over an extended period of time; (2) substantial unlawful monetary gains; (3) significant actual damages to plaintiff; (4) defendant’s advertising for the intended broadcast of the event; and (5) defendant’s charging a cover charge or charging premiums for food and drinks.”… Here, Defendants benefitted from a ten dollar cover charge…they advertised for the event… and they received substantial monetary gains by not paying the required licensing fee and presumably by selling drinks to patrons watching the event.

Under similar circumstances, other courts in this circuit have assessed enhanced damages equal to two times the amount of statutory damages, which effectively amounts to an award of treble damages….In this case, the Court finds that an enhanced damages award of twice the statutory damages is sufficient to compensate Plaintiff and to deter Defendants from future violations.

image-mark-hunt-lawsuit

Late last year Mark Hunt threatened to sue the UFC and Brock Lesnar after the high profile fighter tested positive for banned substances following UFC 200.  He even suggested racketeering allegations.  Today Hunt made good on his promise suing Zuffa, Lesnar, and Dana White in Federal Court.

The full court filing can be found here – mark-hunt-vs-ufc-doping-lawsuit (H/T to ESPN’s Brett Okamoto who broke this story and was kind enough to provide me with a copy of the filing)

In the 27 page filing, Hunt alleges a conspiracy between the UFC, White and Lesnar to allow Lesnar to compete at UFC 200 while on performance enhancing drugs without facing repercussions until after the fact.

In a soundbite the lawsuit suggests profit over safety.

Hunt highlights the UFC’s anti doping policy’s central goal of protecting fighters

ufc-doping-policy-mission-statement

then goes on to note that, by granting Lesnar an exemption of the usual 4 month USADA testing period for returning UFC athletes, the UFC conspired to allow Lesnar to dope violating the foundation of the anti doping policy.

Hunt Conspiracy Allegation.PNG

Perhaps most troublesome for the UFC, Hunt goes on to allege that this is one incident in a history of doping coverups setting out a pattern going opening the door to the UFC’s TRT Era alleging as follows:

Hunt TRT Era Allegatiion.PNG

The lawsuit relies on 8 causes of actions (ie formal legal grounds for suing).  Hunt alleges the following

  1. Unlawful Racketeering in violation of Federal law
  2. Unlawful Racketeering in violation of Nevada state law
  3. Fraud
  4. Obtaining Hunt’s Services (to fight Lesnar) under false pretenses
  5. Breach of Contract
  6. Breach of Covenant of Good Faith and Fair Dealing
  7. Negligence
  8. Unjust Enrichment

Hunt’s likely biggest barrier to this lawsuit will be his own previous out of court statements noting that he did not care if Lesnar was doping, he would fight him anyway telling MMAJunkie

I don’t care – everyone should be on a level playing field, to be honest, but it is what it is….I don’t care if you’re cheating or not. I’ll punch your face in. That’s all I’ve got.

Zuffa will certainly throw this evidence in Hunt’s face challenging his suggestion that he is opposed to fighting PED using opponents.  Also troubling for Hunt will be the fact that Zuffa’s exemption for Lesnar’s 4 month testing period was publicly revealed prior to the bout and Hunt fought anyways.  It is difficult to suggest fraudulent concealment when the “concealed” facts were expressly known pre-fight.

Zuffa will likely attempt to rely on the waiver contained in the UFC/USADA anti doping policy which Hunt contractually agreed to and reads as follows

ufc-usada-waiver

Hunt’s allegations, however, go well beyond good faith mistakes and suggests a bad faith conspiracy so the above waiver likely will not be of value.

The UFC will also likely rely on the waiver in Hunt’s promotional contract which probably reads as follows:

Zuffa contract release 1.PNG

Zuffa contract release 2.PNG

If this lawsuit survives early attempts at dismissal based on the above waivers its game on.  The suggestions of a long running doping conspiracy going back to the TRT Era will open the door to a broad and ugly discovery process.

I suspect if this claim survives summary dismissal attempts Zuffa will be motivated to reach settlement before the sport’s TRT Era and in-house doping waivers are exposed under the bright spotlights of the judiciary.   The harm that such a process can cause their brand, even if the lawsuit is successfully defeated, can greatly outweigh the short term pain of a prompt and confidential settlement.

nsac-mcgregor-screenshot

Update January 13, 2017 – The meeting has now taken place and the NAC unanimously voted in support of item 10

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Arguably no substance has resulted in more controversial athletic commission disciplinary decisions than marijuana.  Sober fighters testing positive for marijuana metabolites which could have been consumed many days prior to competition have been handed stiff fines and penalties with much public backlash.

Interestingly, the Nevada Athletic Commission, who have been behind some of the most controversial decisions are considering outright removing marijuana as a banned substance.

In addition to voting on whether to adopt the ABC’s updates to MMA’s unified Rules, the NAC’s agenda for their January 13 meeting notes the following (item 10)

Discussion regarding whether to direct the Executive Director to initiate a regulation project under Nevada Revised Statutes(NRS) chapter 233B to possibly amend Nevada Administrative Code (NAC) chapter 467 to include the following potential changes: 1) the possible exclusion of cannabinoids from the list of Prohibited Substances and Methods pursuant to passage of Nevada Ballot Initiative Question 2 (2016); 2) incorporation by reference of the Association of Boxing Commissions and Combative Sports’ Unified Rules of Mixed Martial Arts; and 3) any other changes to NAC 467 as deemed appropriate and necessary by the Commission, for possible action.

This suggestion, if followed, would be a welcome development. Marijuana, alcohol and other so called ‘drugs of abuse’ are not performance enhancing.  Intoxicating substances are only banned in competition in the combat sports world for the safety of the fighter consuming them.  No regulator will allow a fighting athlete to compete while impaired and little argument can be made against this objective.

As previously discussed commissions can fulfill this goal by relying on the integrity of pre bout medical screenings.  Physicians are present at regulated events.  It would take little time and effort for a once over to ensure no competitor is about to fight while showing signs of impairment.  If a fighter is not objectively impaired in any way and satisfies physicians present then the regulator’s legitimate safety concerns are meaningfully met.  Allowing a bout to take place, on the other hand, and finding traces of substances that could have been consumed days or weeks prior, misses this objective and is a practice which regulators should seriously consider re-evaluating.

 

Update January 10, 2017 Interstingly Hunt has now sued the Zuffa, Dana White and Brock Lesnar.  He did not plead assault/battery as those causes of action are legally problematic as per below but did plead the following causes of action

  1. Unlawful Racketeering in violation of Federal law
  2. Unlawful Racketeering in violation of Nevada state law
  3. Fraud
  4. Obtaining Hunt’s Services (to fight Lesnar) under false pretenses
  5. Breach of Contract
  6. Breach of Covenant of Good Faith and Fair Dealing
  7. Negligence
  8. Unjust Enrichment

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After learning that his UFC 200 opponent was caught using prohibited substances Mark Hunt threatened to sue the UFC and Brock Lesnar going so far as to suggest litigation based on rackateering charges.  The “Super Samoan”also stated he likely was done fighting in the UFC given the unsafe working environment‘.

He has apparently backed down from this position now agreeing to fight Alistair Overeem at UFC 209.  

Hunt demanded stronger language added to his contracts in case a future opponent is found guilty of doping but his wishes have gone unanswered.  Hunt told New Zealand publication Stuff that he will outright sue any opponent who tests positive for steroids noting “Every fighter I fight, if he gets caught through the process then I’ll sue him personally…If I don’t get help from the company I’ll do it myself.

There is already a paper-trail of PED use for Lesnar so why not sue him?  The short answer is consent.  Hunt likely received legal advice that he shot his own chances of success in a Lesnar based lawsuit by some of his own statements.

In June 2016, prior to his bout with Lesnar who was under scrutiny for receiving a UFC hall pass from the normal 4 month mandatory testing period for returning athletes, Hunt stated he outright did not care if Lesnar was using performance enhancing drugs telling MMAJunkieI don’t care – everyone should be on a level playing field, to be honest, but it is what it is….I don’t care if you’re cheating or not. I’ll punch your face in. That’s all I’ve got.

Why would these comments undermine a potential Lesnar lawsuit?  Because lack of consent would be the cornerstone of a lawsuit against a fighter who cheated through illicit PED use.

As previously discussed a successful lawsuit against a PED using opponent would likely be based on the torts of assault/battery with the argument being that consent to fight did not exist against a doping opponent who fraudulently concealed PED use.

Despite all the risks, the fight game is allowed based on one fundamental principle, informed consent.  Adults generally can consent to engage in risky activity, even if it poses a risk of harm to themselves and their competitor.  Here the issue of ‘informed’ consent becomes crucial.  Relevant facts which can vitiate consent cannot be swept under the rug otherwise the integrity of the consent is compromised.

There is precedent that doping can undermine consent in combative sports and that concealed cheating can amount to “reckless assault” even on the criminal standard of ‘beyond a reasonable doubt’.

Hunt’s previous comments would seriously undermine a lawsuit against Lesnar.

His latest comments, on the other hand, help pave the road for a successful lawsuit should he face a future PED using opponent.  Hunt is building the framework of doping vitiating consent and will be on far stronger legal footing should he face yet another fighter testing positive for prohibited substances.