Case 2:15-cv-01045-RFB-PAL Document 71 Filed 04/10/15 Page 1 of 36 1 Joseph R. Saveri (State Bar No. 130064) JOSEPH SAVERI LAW FIRM, INC. 2 505 Montgomery Street, Suite 625 San Francisco, California 94111 3 Telephone: (415) 500-6800 Facsimile: (415) 395-9940 4 [email protected] 5 Richard A. Koffman (pro hac vice) COHEN MILSTEIN SELLERS & TOLL, PLLC 6 1100 New York Ave., N.W., Suite 500, East Tower Washington, DC 20005 7 Telephone: (202) 408-4600 Facsimile: (202) 408 4699 8 [email protected] 9 Eric L. Cramer (pro hac vice) BERGER & MONTAGUE, P.C. 10 1622 Locust Street Philadelphia, PA 19103 11 Telephone: (215) 875-3000 Facsimile: (215) 875-4604 12 [email protected] 13 Attorneys for Individual and Representative Plaintiffs Cung Le, Nathan Quarry, Jon Fitch, Luis Javier Vazquez, 14 Dennis Lloyd Hallman, Brandon Vera, Pablo Garza, Gabe Ruediger, Mac Danzig, Kyle Kingsbury, and Darren 15 Uyenoyama 16 [Additional Counsel Listed on Signature Page] UNITED STATES DISTRICT COURT 17 NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION 18 Case Nos. 5:14-cv-05484-EJD, 5:14-cv-05591- 19 Cung Le, Nathan Quarry, and Jon Fitch, on behalf of themselves and all others similarly EJD, 5:14-cv-05621-EJD; 5:15-cv-00521-EJD; situated, 5:15-cv-01324-EJD 20 Plaintiffs, 21 PLAINTIFFS’ OPPOSITION TO THE 22 v. UFC’S MOTION TO DISMISS 23 Zuffa, LLC, d/b/a Ultimate Fighting Championship and UFC, 24 Defendant. Date: July 23, 2015 Time: 9:00 a.m. 25 Place: Courtroom 4 26 Judge: Hon. Edward J. Davila 27 28 5:14-cv-05484-EJD, 5:14-cv-05591-EJD 5:14-cv-05621-EJD, 5:15-cv-00521-EJD 5:15-cv-01324-EJD PLAINTIFFS’ OPPOSITION TO THE UFC’S MOTION TO DISMISS Case 2:15-cv-01045-RFB-PAL Document 71 Filed 04/10/15 Page 2 of 36 1 Luis Javier Vazquez and Dennis Lloyd Hallman, 2 on behalf of themselves and all others similarly situated, 3 Plaintiffs, 4 v. 5 Zuffa, LLC, d/b/a Ultimate Fighting 6 Championship and UFC, 7 Defendant. 8 Brandon Vera and Pablo Garza, on behalf of 9 themselves and all others similarly situated, 10 Plaintiffs, 11 v. 12 Zuffa, LLC, d/b/a Ultimate Fighting Championship and UFC, 13 Defendant. 14 Gabe Ruediger and Mac Danzig, on behalf of 15 themselves and all others similarly situated, 16 Plaintiffs, 17 v. 18 Zuffa, LLC, d/b/a Ultimate Fighting Championship and UFC, 19 Defendant. 20 21 Kyle Kingsbury and Darren Uyenoyama, on behalf of themselves and all others similarly 22 situated, 23 Plaintiffs, 24 v. 25 Zuffa, LLC, d/b/a Ultimate Fighting Championship and UFC, 26 Defendant. 27 28 5:14-cv-05484-EJD, 5:14-cv-05591-EJD 5:14-cv-05621-EJD, 5:15-cv-00521-EJD 5:15-cv-01324-EJD PLAINTIFFS’ OPPOSITION TO THE UFC’S MOTION TO DISMISS Case 2:15-cv-01045-RFB-PAL Document 71 Filed 04/10/15 Page 3 of 36 1 TABLE OF CONTENTS 2 Page(s) 3 I. INTRODUCTION ....................................................................................................................... 1 4 II. ALLEGATIONS ........................................................................................................................... 2 5 A. Elite MMA Fighters Are a Key Input for MMA Promotions. ............................................ 2 6 B. The UFC Engaged in Anticompetitive Conduct to Exclude Competitors and 7 Monopsonize the Market for Elite MMA Fighters. ........................................................... 2 8 C. The UFC Dominates the Relevant Markets. ...................................................................... 3 9 D. The UFC’s Scheme Caused Antitrust Injury to Plaintiffs. ................................................. 4 10 III. LEGAL STANDARD ................................................................................................................... 4 11 IV. ARGUMENT ................................................................................................................................ 4 12 A. Plaintiffs Sufficiently Plead that the UFC Has Monopoly and Monopsony Power. ............ 4 13 1. Plaintiffs Sufficiently Allege Circumstantial Evidence of Monopoly Power. .................................................................................................................... 5 14 a. Plaintiffs Have Properly Defined a Market for Elite MMA Events. ............ 5 15 b. Plaintiffs Allege a Dominant Market Share................................................. 8 16 c. Plaintiffs Allege High Barriers to Entry. ..................................................... 8 17 2. Plaintiffs Plausibly Allege Circumstantial Evidence of Monopsony Power. ............ 9 18 a. Plaintiffs Plausibly Allege a Market for Elite MMA Fighter 19 Services. ..................................................................................................... 9 20 b. Plaintiffs Allege a Dominant Market Share............................................... 10 21 3. Plaintiffs Allege Direct Evidence of Monopoly and Monopsony Power. ............... 11 22 B. Plaintiffs Plausibly Allege Exclusionary Conduct in Violation of Section 2. ..................... 12 23 1. The UFC’s Exclusionary Conduct Substantially Foreclosed Competition. ......... 13 24 a. The UFC Unlawfully Acquired and Maintains Monopoly and Monopsony Power Through Exclusionary Contracts. .............................. 14 25 i. The UFC Uses Its Exclusive Agreements with Fighters as 26 a Chokehold on Inputs to the Market for MMA Events. ............... 15 27 ii. The UFC’s Expropriation of Plaintiffs’ Identity Rights is Exclusionary and Compounds the Foreclosure. ............................ 18 28 5:14-cv-05484-EJD, 5:14-cv-05591-EJD 5:14-cv-05621-EJD, 5:15-cv-00521-EJD i 5:15-cv-01324-EJD PLAINTIFFS’ OPPOSITION TO THE UFC’S MOTION TO DISMISS Case 2:15-cv-01045-RFB-PAL Document 71 Filed 04/10/15 Page 4 of 36 TABLE OF CONTENTS (cont.) 1 iii. The UFC Enhanced Foreclosure Through Exclusive Dealing Agreements with Venues, Sponsors and 2 Distributors. ................................................................................. 20 3 b. The UFC Unlawfully Acquired and Maintained Monopoly Power Through Acquisitions. .............................................................................. 21 4 2. The UFC’s Monopolistic Boasts Are Not Indicative of Competition. ................. 22 5 C. Plaintiffs Sufficiently Allege Anticompetitive Effects. ..................................................... 22 6 D. Plaintiffs Sufficiently Allege Antitrust Injury. .................................................................. 24 7 V. CONCLUSION .......................................................................................................................... 25 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5:14-cv-05484-EJD, 5:14-cv-05591-EJD 5:14-cv-05621-EJD, 5:15-cv-00521-EJD ii 5:15-cv-01324-EJD PLAINTIFFS’ OPPOSITION TO THE UFC’S MOTION TO DISMISS Case 2:15-cv-01045-RFB-PAL Document 71 Filed 04/10/15 Page 5 of 36 1 TABLE OF AUTHORITIES 2 Page(s) 3 Cases 4 Abbyy USA Software House, Inc. v. Nuance Commc’ns Inc., 2008 WL 4830740 (N.D. Cal. Nov. 6, 2008) .................................................................................. 14 5 ACT, Inc. v. Sylvan Learning Sys., 104 F. Supp. 2d 1096 (N.D. Iowa 1999) ............................................ 15 6 Adaptive Power Solutions, LLC v. Hughes Missile Sys. Co., 141 F.3d 947 (9th Cir. 1998) ......................... 20 7 Allen v. Dairy Farmers of Am., Inc., 2014 U.S. Dist. LEXIS 81193 (D. Vt., June 11, 2014) ....................... 11 8 Allied Orthopedic Appliances Inc. v. Tyco Health Care Grp. LP, 592 F.3d 991 (9th Cir. 2010) .................... 16 9 Am. Football League v. Nat’l Football League, 323 F.2d 124 (4th Cir. 1963) ............................................ 20 10 Applied Med. Res. Corp. v. Ethicon Inc., 11 2006 U.S. Dist. LEXIS 12845 (C.D. Cal. Feb. 2, 2006) ................................................................... 15 12 Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985) ..................................................... 4 13 Ass’n for Intercollegiate Athletics for Women v. Nat’l Collegiate Athletic Ass’n, 558 F. Supp. 487 (D.D.C. 1983)......................................................................................................... 6 14 Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (2007) .............................................................................. 4 15 Broadcom Corp. v. Qualcomm Inc., 501 F.3d 297 (3d Cir. 2007) ................................................................. 5 16 Brown Shoe v. United States, 370 U.S. 294 (1962) ..................................................................................... 9 17 CareFusion Corp. v. Medtronic Spine LLC, 18 2010 U.S. Dist. LEXIS 122004 (N.D. Cal. Nov. 1, 2010) ................................................................ 24 19 Cascades Computer Innovation LLC, 2013 U.S. Dist. LEXIS 170517 (N.D. Cal. Dec. 3, 2013) .................................................................... 7 20 Castro v. Sanofi Pasteur Inc., 2012 U.S. Dist. LEXIS 190438 (D.N.J. Aug. 6, 2012) .......................... 14, 16 21 Church & Dwight Co., Inc. v. Mayer Labs., Inc., 22 2011 U.S. Dist. LEXIS 35969 (N.D. Cal. Apr. 1, 2011) ..................................................................... 20 23 City of Anaheim v. S. Cal. Edison Co., 955 F.2d 1373 (9th Cir. 1992) ....................................................... 20 24 Clarett v. NFL, 306 F. Supp. 2d 379 (S.D.N.Y. 2004) .............................................................................. 6 25 Colonial Med. Grp., Inc. v. Catholic Healthcare W., 2010 WL