A surprising twist has unfolded in the case between the Ultimate Fighting Championship (UFC) and several fighters, as U.S. District Judge Richard Boulware declined to give early approval to their proposed $335 million settlement. The judge issued this decision late on Tuesday night, providing no additional detail or insight into his reasoning. He scheduled a status conference for the case on Aug. 19 and reserved a date for the upcoming trial, Le v. Zuffa, on Oct. 28.
However, the establishment of a trial date does not definitively signify that a trial will take place, either on that designated date or at all. There lies a probability that attorneys representing both the UFC and the fighters could reach another provisional settlement agreement in the forthcoming weeks or days. This eventuality would hold the case in abeyance during Judge Boulware’s study of the revised settlement and, at the least, delay the originally set trial date.
The crux of the issue revolves around allegations that the UFC has engaged in unfair practices to keep fighters’ remunerations under check. Nevertheless, UFC has a robust set of defenses at its disposal, which if unable to convince the jury, might find more traction among appeal court judges. To state it unequivocally, the risk of fighters ending up empty-handed from this class action settlement is a distinct possibility.
It’s indeed a rare occurrence for a preliminary approval of an antitrust class action settlement to be declined, particularly at the initial approval stage rather than the final one. It suggests that the judge dismissed the proposal for settlement even before class members could participate in a fairness hearing or decide to opt out.
As mentioned in more detail by Sportico, Judge Boulware has previously articulated reservations regarding UFC concluding two class-action suits, namely – Cung Le et al. v. Zuffa and Kajan Johnson et al. v. Zuffa; collectively concerning about 2,000 UFC fighters. The Le case comprises fighters who participated or had their fights broadcast in the U.S. from Dec. 16, 2010, to June 30, 2017. Originally set for trial in April, the Le case parties agreed upon a settlement in March, and now share a trial date in October.
On the other hand, the Johnson case, which was initiated in 2021, essentially represents the fighters who participated in UFC competitions starting July 1, 2017. Being relatively recent in the judicial proceedings, it isn’t predicted to reach trial phase for a few more years, if it even gets there.
In light of objections voiced by Judge Boulware in the past few months, attorneys for both UFC and the fighters have proceeded to make alterations to the settlement conditions. The judge assesses that the fighters involved in the Johnson case, a majority of whom, unlike their counterparts in the Le case, are bound by arbitration and class action waiver clauses, may want to independently challenge these clauses’ legal validity.
Judge Boulware has also spoken on how the proposed $335 million settlement seems insufficient when considering the possibility that if the UFC is found guilty in court and loses the Le case (and subsequent appeals), it may have to pay upwards of $3 billion, as per the provisions of the antitrust law, in trebled damages.
On the other end of the spectrum, the fighters face a significant drawback due to Judge Boulware’s refusal of the settlement, as it would deny them a large, immediate payout and entail a risk that they and their families would garner no gain from these lawsuits.
The fighters involved in the Le case were poised to receive an average payout of $200,000, with the median recovery hovering around $73,000 and the least amount being $13,000. Roughly 500 fighters were expected to receive more than $100,000, and 36 of them could have pocketed over $1 million.
In case the litigation doesn’t arrive at a settlement, the process could potentially drag out for years in court, as it is likely that the losing party would exhaust all available appeal opportunities. The fighters’ attorneys themselves have conceded that their legal assertions might not withstand rigorous appeals.
Given the current scenario, don’t be taken aback if UFC and attorneys representing fighters in the Le case strike a different deal, leaving Johnson on the docket. Splitting the two lawsuits would seem to align with Judge Boulware’s preferences.
A significant amount of the projected damages from these two cases, approximately 90%, lies within the Le case, with Johnson seen as a weaker claim even by the fighters’ attorneys. However, this doesn’t necessarily imply that a modified settlement amount would be 90% of $335 million ($301.5 million) only for Le, as UFC likely paid additional to resolve both lawsuits simultaneously.
Despite this possibility, it appears likely that a revised settlement in the range of $280 million to $300 million would be a feasible proposition. As this lengthy legal battle continues, the situation continues evolving, with all parties awaiting the next move in this complex game of legal chess.
The lawsuit, albeit complex, is being closely watched nad keenly awaited. The outcome may have significant implications for the way the fight sports industry is structured and how athletes are compensated in the future.
Thus, with the judge’s refusal to approve the proposed settlement, UFC and the fighter’s attorneys now need to reassess and potentially renegotiate the settlement amount or prepare for what could be a grueling trial. Regardless, the fight, both within and outside the octagon, continues.