Celebration, relief, anger, frustration – A wide range of emotions were expressed after UFC reached a settlement in a pair of class action antitrust lawsuits earlier this year, with the type of reaction depending on what outcome you hoped the cases would receive.
Those on UFC’s side thought that the promotion won by paying a small fee – relatively speaking – to avoid going to court for two different cases that could have caused huge damages. Some who wanted to see UFC get greatly punished viewed the settlement as too weak and unable to implement long-term changes in how they operate. Others wanted this case to go to trial, meaning a settlement of any kind would have caused disappointment.
But all of the reactions might have come a little too soon. A recent courtroom twist has put UFC’s potential settlement with a pair of class action groups in question, opening up the possibility of renegotiated settlement terms or a deal falling apart altogether.
It all started last week when Judge Richard F. Boulware cited “concerns” about the terms of the agreement, per reporting from Paul Gift. The pending agreement would excuse a pair of class action lawsuits representing fighters who argue that UFC violated antitrust laws to “dominate the market of MMA.”
Judge Boulware pointed out the disparity in the $335 million settlement against the lofty damages previously discussed, which went as high as the billions. The judge called for all parties to reconvene next week and further discuss the deal.
The plaintiff and defendant agreed to a settlement. Why is the judge concerned?
An agreement was reached between the plaintiff and the defendant. That should settle things, right? Nope. As expert Erik Magraken said on a recent episode of Pollock & Thurston, there’s an important third party who must sign off on the deal: The Judge.
“The court has a duty to make sure class action settlements are fair to the class members,” explained Magraken, a practicing lawyer and writer of Combat Sports Law. “If you read the certification decision, it’s very clear we’re dealing with a judge that thinks the fighters have an incredibly strong case here … [He] Basically raised some real concerns about how little money the fighters are getting [and] how much they’re compromising to get this deal done.”
The older of the two class action lawsuits, Cung Le et al. v. Zuffa, covers fighters who fought for the promotion from 2010 to 2017. They were seeking between $800 million to $1.6 billion in financial damages, along with injunctive relief. These figures alone are much larger than the amount of money that the class is now looking to earn alongside the Kajan Johnson et al. case, which covers fighters from 2017 to 2023.
Magraken explained why the settlement number that was reached, while in the nine figures, would still give pause for Judge Boulware.
“The judge is saying he certified it on the basis that the damages for the fighters are anywhere between $800 million and $1.6 billion just for the Le class alone, not even talking about the Johnson class,” he said. “And if the fighters get those awards, the number then gets tripled because of how U.S. antitrust law works. So you could be talking about $4.8 billion. So the judge is basically saying, ‘You’re taking $335 million when you could be getting $4.8 billion, and that’s not even factoring in how much more money the Johnson fighters could be getting. Why is this fair? I’ve got some questions about this.'”
Why did the fighters agree to the settlement?
When putting the numbers of the proposed settlement beside the possible damages that could be awarded through a trial, it might be hard to understand why the fighters would take such an agreement. Many would argue that they’re leaving a lot of money on the table.
Magraken stressed that there is an inherent risk on all sides when taking a case to a jury trial. A verdict not going the plaintiff’s way could result in zero damages being handed out to fighters at all.
“That risk is always there… It’s easy to look at the high number, $4.8 billion, wonderful result, but dismissal is always possible and you walk away after a decade of hard-fought litigation.”
It’s impossible to get inside the minds of the attorneys representing the fighters to understand how they reached their proposed settlement deal. Magraken, however, has some theories. Among them is the idea that the plaintiffs likely ran jury focus groups and mock trials in an attempt to understand what verdict they could receive, causing them to determine that it might be better to settle than take the case to court. “You don’t run a billion-dollar antitrust case without consulting with these jury focus groups,” he said.
What’s next?
It’s still hard to tell what will happen next in the case. Judge Boulware, while sounding concerned about the agreement, hasn’t decided on whether he will approve the settlement or not.
Magraken noted that the case is still in the preliminary period of approval from a judge, which is just the first part of a layered process that has the end game of finalizing a settlement. Once the judge approves, everyone involved in the class action case will be notified and given the chance to raise any concerns they have about the agreement. After the judge hears arguments in this stage, which is known as final approval, they have the choice to finalize the agreement.
“If some fighters think it shouldn’t be approved and they’ve got concerns they want to raise to the court, they’ve got a chance to tell that to the court and the judge has to weigh all of the evidence before giving the final seal of approval to this or not.”
The development from last week could be the beginning of a whole new chapter in the lawsuit, or it could be a small bump in the road which ultimately doesn’t mean a whole lot. There’s still a possibility that a settlement, including even the current one proposed by both parties, gets approved. But then again, everything else is on the table too, including the case gearing up for a jury trial once again.
