A few times a year combat sports expert and lawyer Jason Cruz provides updates on the latest legal happenings in mixed martial arts, boxing, and everything else combat sports.
Heavyweight Champ Deontay Wilder Tied up in Legal Issues Again
Heavyweight Title Holder Deontay Wilder is a champion in the ring and is dealing with plenty of legal issues outside of it. In February, he prevailed in a lawsuit against former heavyweight challenger Alexander Povetkin and his promoters (pending a pending motion for JNOV, or in the alternative, motion for new trial). Wilder has been sued again, this time, it is contender Dominic Breazeale and his trainer that have filed suit against Wilder, his brother and Marriott Hotels for a scuffle at a hotel after an event in Alabama.
In February, Wilder successfully defended his title against former USC football star turned boxer Gerald Washington. Breazeale fought on the undercard of the same event. According to the lawsuit filed by Breazeale and his trainer, Wilder’s brother verbally abused Breazeale at the event while he was sitting with his family. The fighter left with his family to avoid any incident at the venue. However, Wilder and his brother ran into Breazeale at the Westin later on that night.
The video obtained by TMZ appears to show the two entourages in a confrontation that spilled out into the hotel parking lot. Breazeale said that he was the victim of being “sucker-punched,” by Wilder’s entourage. The police were summoned to break up the fracas and neither Wilder or Breazeale were arrested.
However, Breazeale filed a civil lawsuit as a result of the altercation. Breazeale and trainer Manny Robles sued the Wilder brothers and Marriott International in the U.S. District Court of Central California on April 13, 2017. The Complaint alleges the Wilders of the tort of assault and battery and claim that the Westin lacked enough security to deal with the situation.
The video shows a ton of people and not a lot of security which could have handled the situation and kept the two entourages from confrontation. There is no trial date yet.
Securities Lawsuit Filed Against MMA Company
Alliance MMA became the first publicly traded mixed martial arts company. The company is on the NASDAQ exchange (AMMA). The goal of the company is to be a secondary market in MMA for the UFC. The company’s business strategy is similar to that of the World Wrestling Federation (now Entertainment) course of expansion in the late 20th Century when it acquired regional promotions. In addition, it acquired business support units including a fighter representation firm, an electronic ticket company, and a video production company.
AMMA had its IPO in September 2016 and went live on the NASDAQ in October. On April 12, it filed a Form 8-K with the Securities and Exchange Commission that stated that its quarterly financial results from its Form 10-Q for the quarter ended September 30, 2016 “should no longer be relied upon because of an error in recognizing as compensation transfers of common stock by an affiliate of the Company to individuals who were at the time of transfer, or subsequently became, officer, directors or consultants of the Company [Alliance MMA].”
A week after the 8-K was released, a lawsuit was filed by an investor in AMMA. The lawsuit filed in New Jersey federal court is seeking class action status as they believe that there is potential that other plaintiffs were affected by the information.
Related: Link to a PDF of the full AMMA lawsuit.
Alliance MMA’s CEO, Paul Danner responded to the lawsuit including the following:
These revisions did not adversely affect our cash position, our balance sheet, the number of shares of our common stock outstanding, or the previously stated beneficial ownership of the officers and directors of the Company. Moreover, the stock-based compensation charge is a one-time, non-recurring item that will not be reflected in any periods subsequent to December 31, 2016.
AMMA stock traded at a 52-week-low, on the day it announced its 2016 financial results. AMMA has retained the law firm King & Spaulding and stated that the lawsuit has no merit.
Update on UFC Antitrust Lawsuit
The UFC antitrust lawsuit is in the discovery phase and attorneys of former UFC fighters are deposing some very big names including Dana White, former owners Lorenzo and Frank Fertitta, and Bellator MMA president Scott Coker.
A non-party to this lawsuit, former UFC contracted fighter’s Viacom-owned Bellator, lost a battle in court with the UFC as subpoenas for certain documents including actual fighter contracts were demanded of Bellator by UFC. Bellator sought to quash the subpoena by filing a motion in federal court in Los Angeles.
As one might surmise, as a non-party to the lawsuit, Bellator claimed that the requests were overbroad, burdensome and requested confidential information. Bellator had sought to accommodate the requests made by the UFC but the company claimed it needed the information. Not doing the California-based company any favors, the federal magistrate in California sent the matter to the Nevada federal court handling the matter citing that it had previously dealt with the discovery matters and would be better suited to address Bellator’s motion.
As for the lawsuit itself, Zuffa is seeking to dismiss one of the plaintiffs, Nathan Quarry, claiming that the statute of limitations on his allegations have passed. The motion for summary judgment was filed after Zuffa attorneys had the chance to depose Quarry and determined that the contract with the UFC that he based his antitrust allegations were banned by the four-year statute of limitations. Quarry last fought for the UFC in 2010. Based on the contracts he signed with the UFC, they argue that his claim for antitrust injury has exceeded the statute of limitations.
In his opposition to the motion for summary judgment, Quarry argues that the antitrust injury he claims are not time-barred despite his contract. He claims he can show “affirmative overt acts” taken by Zuffa where his image or likeness was used without fair compensation.” Specifically, Quarry noted that his fights are still on UFC’s online digital media platform. UFC also licensed Quarry’s likeness and image for UFC trading cards in 2011 and 2013 and sells Quarry autographed merchandise on its web site. Quarry contends that Zuffa did not compensate him for this.
The UFC has requested a hearing although the Court has yet to respond or rule on the matter.