Friday, September 10, 2010

Bellator Files A Motion to Dismiss Zuffa's Complaint

Following up on my posts, "My Take on Zuffa's Lawsuit Against Pavia and Bellator" and  "Bellator Removes Zuffa's Nevada Action to Federal Court," on September 9, 2010, Bellator filed a motion to dismiss Zuffa's complaint in the Pavia action for lack of personal jurisdiction.

The crux of Bellator's motion is that the courts in Nevada do not have personal jurisdiction over it because:
Bellator is not authorized to do business in Nevada.
Bellator is not and never has been licensed in Nevada, nor has it ever applied for a license in Nevada.

Bellator has no offices in Nevada.

Bellator owns no real property in Nevada and has no bank accounts in Nevada.

Bellator has never promoted an MMA event in Nevada.

Bellator has never advertised in Nevada.

Bellator has entered no contracts with any person or entity based in Nevada.

Bellator sells no merchandise in Nevada and conducts no other business in Nevada.
Specifically, Bellator argues that general jurisdiction is not appropriate because:
Bellator's only contact with Nevada consists of the occasional televising of MMA events that are broadcast on channels that can be viewed in Nevada as well as other states, and the accessibility of its website to Nevadans. This type of contact comes nowhere near the 'substantial' or 'continuous and systemic contacts' required to approximate Bellator's 'physical presence' in the State of Nevada to warrant the exercise of general jurisdiction over Bellator.
In this regard, Bellator compares this case to Zuffa, LLC v. Showtime Networks, Inc., and ProElite, Inc. d/b/a Elite XC, a case in which Bellator asserts "[t]his Court found that Showtime's broadcasting of events in Nevada could not be imputed to ProElite as ProElite's contacts with Nevada, and that ProElite's website by itself was not enough to establish general jurisdiction. [] Said the Court, '[a]side from ProElite's website, there is no evidence of other traditional contacts that ProElite has had with the forum. Without such evidence, the Court finds that general jurisdiction does not exist.'"

Bellator also argues that the Court's assertion of specific personal jurisdiction over Bellator would be unconstitutional.  Bellator sets forth what it believes to be the test for specific jurisdiction as follows:
'(1) The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws. (2) The claim must be one which arises out of or results from the defendant[']s forum-related activities. (3) Exercise of jurisdiction must be reasonable.' (internal citation omitted) 
It then argues that these factors weigh against a finding of specific jurisdiction.  Finally, Bellator argues that the Court's exercise of jurisdiction over it would not be reasonable.

A couple of points to note. 

First, Bellator argues that it does no business in Nevada, but I wonder how many fighters it has signed in Vegas and how many sponsors it deals with in Vegas--my guess is that there would be at least some.  Whether this is enough to support general jurisdiction would depend on the amount etc. 

Second, Bellator argues that the actions complained of have nothing to do with Nevada because it argues that the "one" alleged email to Pavia originated in Chicago and went to California.   However, as alleged in the Complaint, Pavia allegedly responded to the email for the so-called seminal documents by texting that he was "'still I [sic] Vegas.'" [Note, Pavia and MMA Agents answered the Complaint on September 9, 2010 and in the answer they admit the allegations concerning this text message.]

Moreover, Bellator's argument that it "had no reason to know that even if its actions were harmful to Zuffa that the harm would be felt in Nevada" because "Zuffa operates its business as a 'leading promoter of Mixed Martial Arts (MMA) contests ... in the world'" seems particularly weak.  It seems highly likely that Bellator knew that Zuffa was based in Nevada and that its contracts were likely drafted and executed in Vegas.

Finally, and as an aside, in its brief in support of the motion, Bellator does take the opportunity to address what it claims "really" happened and what the email at issue in the complaint was describing:
However, if this case proceeds to trial, Bellator will show that what actually prompted the simple request from Rebney to Pavia was not the sinister plot Zuffa has alleged but rather a straightforward desire for basic information that Pavia was able to provide. Moreover, the result of that one e-mail exchange was not the widespread sharing of confidential information as alleged by Zuffa. Instead, very limited information was provided by Pavia to Bellator, and Bellator is prepared to show that none of the information sent by Pavia contained any confidential, proprietary or trade secret information. Moreover, Bellator has taken no action with respect to any of the documents obtained. Zuffa has unfairly taken one misleading e-mail and used it as the premise for a far-reaching Complaint seeking punitive damages and injunctive relief against Bellator, one of its primary competitors. What's worse, Zuffa's Complaint acknoweldges [sic] that Zuffa does not even know what documents Bellator allegedly obtained and merely surmises that Bellator must have been provided with all documents any UFC fighters could have made available to Pavia. []  Zuffa's claims are at worst factually defective and at best afford Zuffa no basis for any damages or other relief against Bellator.
Fight Lawyer