Federal judge rejects settlement in UFC monopoly lawsuits

LAS VEGAS (CN) — Weeks after hearing arguments on a $335 million settlement that would end two class actions against MMA giant UFC, a federal judge rejected the deal and set a tentative trial date for October.

The settlement, reached after 10 years of litigation, concerns two separate lawsuits. The first, Le v Zuffa, accuses the MMA giant of restricting athletes' earnings. The second, Johnson v Zuffa, challenges the company's restrictive contracts.

U.S. District Judge Richard Boulware wrote in a minute order issued late Tuesday that "for the reasons stated on the record at the hearings on these motions" — a reference to the hourslong July 12 hearing in which Boulware questioned whether the was fair to members of the second class action — the deal must be rejected. He promised a written order with expanded reasoning in the near future.

At the hearing, Boulware questioned plaintiffs about the length of the opt-out period, the absence of any active UFC fighters listed as named plaintiffs, whether class members would understand what rights they're giving up by accepting the settlement, and the fact that the settlement doesn't address UFC's arbitration clause.

One of the plaintiffs' attorneys argued that denying the settlement would put the entire process back to square one and emphasized that the settlement would be one of the largest ever reached for an anticompetitive lawsuit. He also emphasized that, after the settlement was first announced in March, class members have contacted him with a singular concern — when they would receive the money.

In a statement, UFC said Boulware’s ruling both denies the fighters’ rights to be heard and ignores established law.

With the settlement denied, the next steps for the two class actions are unclear, though Boulware did set a tentative trial date for Oct. 28 in the Le case. The rejection puts additional strain on the plaintiffs, whose attorneys emphasized at the hearing that they've expended significant resources on the case without pay for a full decade. However, they also said they would continue representing both classes as the case moves forward regardless.

In a statement, UFC said Boulware’s ruling both denies the fighters’ rights to be heard and ignores established law.

"We obviously disagree with this ruling and believe it disregards the expertise of counsel from both sides, as well as that of an accomplished and expert mediator – all of whom have decades of experience in antitrust case law,” the organization said, adding it may appeal.

One of the plaintiffs' attorneys Eric Cramer of Berger Montague said in an email a revised settlement isn't out of the question, but might have to be handled differently.

To eliminate several of the issues expressed by the court regarding the prior proposed combined settlement of Le and Johnson, plaintiffs believe the best path forward, if a new settlement becomes a possibility, is to attempt to resolve the two cases separately, focusing first on the Le case given its imminent trial date, and using the progress made to date as a jumping off point for further discussions," Cramer wrote.

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