In a forecasted—but nonetheless stunning—development, U.S. District Judge Richard Boulware denied motions by UFC and fighters for preliminary approval in their $335 million settlement.
Boulware made the order late Tuesday night and provided no details or explanation. The judge set a status conference for Aug. 19 and a trial date for Le v. Zuffa for Oct. 28.
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Setting a trial date does not necessarily mean a trial will occur on that date or at all. UFC and the fighters’ attorneys could negotiate a new settlement preliminary approval in the coming days or weeks. That development would stay the case as Boulware reviews the new settlement and, at a minimum, postpones the trial date.
The gist of the case is that UFC has allegedly used anti-competitive tactics to suppress fighters’ compensation, but UFC is armed with several defenses that, if they fail to persuade jurors, might resonate more with appellate judges. Put bluntly, the risk that fighters end up with nothing from this class action settlement is real.
It is very rare for an antitrust class action settlement to be rejected at the preliminary approval stage (as opposed to the final approval stage). It means the judge has rejected the settlement proposal even before the class members had a chance to weigh in at a fairness hearing or before opting out. The development is a reminder to those following the NCAA antitrust class action settlement for the House, Carter and Hubbard lawsuits that the filing of a settlement with a judge doesn’t mean it will be approved or approved in the form it was submitted.
As Sportico detailed, Boulware has voiced objections to UFC settling two class action lawsuits, Cung Le et al. v. Zuffa and Kajan Johnson et al. v. Zuffa—the two cases cover about 2,000 UFC fighters. Le involves fighters who were in one or more UFC bouts that took place, or were broadcast, in the U.S. from Dec. 16, 2010, to June 30, 2017. Le was scheduled to go to trial in April before the parties struck a deal in March and now has a trial date in October. Johnson was brought in 2021 and represents those who fought in UFC bouts from July 1, 2017, to the present. Johnson is earlier in the litigation process and would not go to trial for years (if at all).
Attorneys for UFC and the fighters have modified settlement terms in response to objections raised by Boulware over the last few months. Boulware believes fighters in Johnson, many of whom (unlike those in Le) are subject to arbitration and class action waiver clauses, might want to separately challenge the legality of those clauses. Boulware has also opined $335 million seems too low given that if UFC went to trial and lost Le (and lost appeals), UFC could potentially have to pay more than $3 billion if damages were, as antitrust law allows, trebled.
The downside for fighters to Boulware rejecting the settlement—it denies them what would be large payments made in the near future and creates risk that they (and their families) will end up with nothing from these cases.
Fighters in Le would receive, on average, $200,000, with a median recovery of $73,000 and a minimum of $13,000. About 500 fighters were set to receive more than $100,000 and 36 would have taken home more than $1 million.
If the litigation doesn’t settle, it could remain in court for years, given that the losing side would likely exhaust appeal options. Attorneys for the fighters have acknowledged their legal arguments might not withstand appeals.
Don’t be surprised if UFC and attorneys for Le strike a separate deal, with Johnson remaining on the docket. Separating the two cases would seem to comport with Boulware’s wishes. About 90% of the projected damages from the two cases are in Le, with Johnson regarded, even by fighters’ attorneys, as a weak case. That doesn’t mean a revised settlement figure would be 90% of $335 million ($301.5 million) for Le alone, as UFC likely paid a premium to settle both cases at once. But a settlement figure in the ballpark of $280 million to $300 million seems possible.
The fight goes on.
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